← CNBC's "Fast Money"
CNBC's "Fast Money"
Stocks Reverse On Tariff Updates… And Billionaire Investor Stays Plugged Into Tesla 3/11/25
00:46:32
Stocks climbing back from more losses as investors get some tariff headline relief. The latest on U.S.-Canada relations, and how the tariff suspension will impact the markets from here. And Staying Plugged In. Why billionaire investor Ron Baron is standing firm on Tesla, and refusing to sell shares, even with shares of the EV maker more than 50% off its 52-week high. Fast Money Disclaimer
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- [00:00]
Melissa Lee
Say you've always wanted to take a spontaneous trip to the Caribbean. Here's the thing.
- [00:04]
Dan Nathan
If you get smart with your money.
- [00:06]
Melissa Lee
You can do things like that. With Empower, you can start making the most out of your money so you can get out and live a little.
- [00:12]
Guy Adami
Isn't that why we work so hard.
- [00:14]
Melissa Lee
To have some fun with our money? Like treating yourself to something special or spontaneously doing something extra for a loved one? So use Empower and get good at money so you can be a little bad. Join their 19 million customers today@empower.com not an empowered client, paid or sponsored. What counts most to you? Maybe it's spending more time with the ones you love. Or maybe doing more of what you love to do. The key to being rich is knowing what counts. At Edward Jones, our dedicated financial advisors are people you can count on for financial strategies to help support what truly matters to you. Let's find your rich Edward Jones Member SIPC live from the NASDAQ MarketSite in the heart of New York City's Times Square. This is fast money. Here's what's on tap tonight. A roller coaster ride on Wall street today. The S and P briefly falling more than 10% from its closing record. Rallying on potential tariff relief and progress on a Ukraine Russia cease fire and then selling again into the close. Where do we go from here? We'll debate that. And is Apple the most interesting chart in the market? The iPhone maker officially erasing all of post election gains by the move has one of our traders intensely watching this name. Plus Novo Nordisk hits levels not seen in more than a year. Two airline stocks move in very different directions and how market volatility is impacting retirement planning. I'm Melissa Lee, come to you live from Studio B at the nasdaq. On the desk tonight, Bono and Ice and Dan Nathan, Gai Adami and Mike Koh. We start off with that wild ride for the market. Stock staging a mid afternoon comeback after Canadian officials temporarily suspended a 25% surcharge on electricity put on in response to U.S. steel and aluminum tariffs. News that Ukraine agreed to a U S led cease fire if Russia accepts bolster the rebound as well. But the major averages couldn't hold their gains into the close. The NASDAQ S&P and Dow all ending in the red. The Dow finishing down nearly 480 points. We are expecting more comments from the President this hour on tariffs and potentially the markets when President Trump speaks at the Business Roundtable's quarterly meeting in just a few minutes. In the meantime, let's get to Megan Casella live at the White House to wrap up all today's news. Megan?
- [02:27]
Megan Casella
Melissa, a day of remarkable back and forth, but at least on the trade front here at the White House, we are ending up pretty much where we started, despite all the turmoil throughout the day. So this started early in the day when President Trump threatened to raise those steel and aluminum tariffs on Canadian imports up to 50% from 25% where they had already been slated to take effect starting tomorrow. He said he was doing this in response to Ontario's move to charge a 25% surtax on electricity imports to three US states. There was then sort of a stalemate between the two sides, but then a deal struck between Commerce Secretary Lutnick and Ontario saying they would suspend that electricity sur tax in exchange for the threat going back down to 25%. But I will say a White House spokesman clarified just a few minutes ago in a statement to me that according to the executive order that had already been signed a few weeks ago, all of these tariffs, 25% on all steel imports and 25% on all aluminum imports will still take effect tomorrow. Melissa, so could help explain some of this market reaction, a little bit of a tepid reaction here that yes, the 50% threat is off the table, but this is still a vast escalation of those metal tariffs from the first term and a lot more to come there. On the Ukraine front, this was a big source of optimism as well. Marco Rubio after a day of talks in Saudi Arabia, along with National Security Adviser Mike Waltz announcing that the Ukrainians are open to this cease fire, saying that they expressed readiness to accept an immediate 30 day cease fire. He also announced the US will immediately lift the pause on intelligence sharing and resume its security assistance to Ukraine. They also say that the two sides are looking to conclude that deal on critical minerals last week. So a major step forward there, although crucially they still do have to bring this to the Russians, which the president suggested would happen either later today or sometime tomorrow. And they say the ball now is in Russia's court. And finally, Melissa, as you mentioned, we are waiting for the president to depart from the South Lawn. They say they're waiting now. Reporters are in the motorcade waiting now for him to depart for that meeting with CEOs or we don't know yet quite how much we're going to see on camera. Some of that will be open to reporters, some of it will be closed press. But I was told the president is just looking here to have an open conversation With American executives obviously coming amid a major tumultuous time for the markets.
- [04:39]
Melissa Lee
Melissa, Megan, thank you, Meghan Casella. And what an interesting conversation that should be. Just after we've heard CEOs speak to their own investors about the change on a dime basically in consumer confidence, in terms of corporate confidence, etc.
- [04:53]
Mike Koh
Guy, you see how quickly consumer confidence can turn. In the last reading we out was really miserable and we have one this Friday, which is important, CPI tomorrow, which I think is going to be vitally important. But you know, people are sitting around probably saying is it over yet? And as much as I'd like to say it is over, the selling, I don't think it is. You saw the Vix at 27 and I'll give you an example of what you were looking for today. At 130 the market went from about 5529, 5530 in the S&P and rallied 100 handles. You would have wanted to see continuation. And by the way, we've seen things like that before. He obviously didn't see it today. In the last hour of the day we sold off again like we did in the middle of last week. So we're still in the midst of, I think a market that wants to sell rallies, one that wants to buy dips.
- [05:36]
Bono
And the headlines, you know, this week, I guess for the last couple of weeks, when you think about cpi, PBI and consumer confidence, yeah, they're all backward looking. But when you think about what's going on here, it's not going to help those going forward. Even if we keep going back and forth 25 or 50, if we keep leaning into our biggest trading partners and our biggest allies, that sort of thing. So again you have the potential weakening just in the back and forth in the valleys here. And the other thing I'll just say is like look at American Express and then look at Capital One and you think about these two different consumers that are customers of these two companies. They are pricing in a recession right now. Look at what led to the downside.
- [06:12]
Melissa Lee
In the banks of their stock moves.
- [06:13]
Bono
Yes. Yeah. You know American express was Trading327. This was just a month ago and right now it closed at 255. I mean it literally is for sale. Capital One is the same thing, JP Morgan leading to the downside today it was acting much worse relative to the other money center banks. So, you know, I'm really focused on that group. And I'm not telling you just because those stocks are selling off, it means we're going into a recession, but investors are pricing them for a recession.
- [06:39]
Melissa Lee
It was Stuart Kaiser we had on just yesterday from Citi saying, you know, the bank trade is really an institutional trade. So you can see the money coming out of the Mag 7 for instance, money will go back to the Mag 7 just because of who wants to hold it. Everybody wants to hold it. But the bank trade is really an institutional trade. So when you see the likes of a JP Morgan go down and feel the pressure and continue feel the pressure, that's probably institutions voting with their feet.
- [07:00]
Stuart Kaiser
I definitely agree. I will say equity exposure amongst, amongst institutions still has not rolled over and I think that will go hand in hand. And not only us being probably 10 handles higher on, on the hybrid of the VIX today, but us probably coming back down to that 35, 37 type of level. We still haven't really seen those intraday spikes that really to me would suggest like utter and relentless capitulation. You know, and I think, you know, a lot of the stuff, you know, we focus a lot on the Max 7 and the growth area because clearly there's higher beta and we have seen those exacerbated moves. But to Dan's point, you look at the banks, you look at Kohl's, you look, you look across the spectrum, we're starting to see these type of moves in names that suggest that they are lower beta, that they are more value or economically oriented. And so while I do think recession fears are a bit overblown, I do think it's a, it's a bit of a misconception to assume that being out of growth, a rotation out of growth necessarily saves you from the volatility that we're seeing in the market.
- [08:01]
Melissa Lee
Yeah. Mike, what's your take on where we are in the sell off?
- [08:04]
Mike Schumacher
Yeah, I mean to Bonwin's point, if you take a look at the VIX and we're trying to determine are we in a period of fear or are we in a period of panic? And I don't think we've quite entered that area of panic yet. You know, the top decile for VIX readings going back to January of 1990 is probably a close on the high side of 29. And that's usually when you start to see that kind of capitulation that you might be looking for. And look, the S and P isn't exactly cheap here. If we figure a slower growth, which I think is a very reasonable expectation, what are we looking at? 265, 270 maybe ish on EPS and throw a reasonable turn on that. And that gets you in somewhere the 4850-5250 range. So to me it's not like the market is cheap yet either.
- [08:49]
Melissa Lee
Yeah, not cheap yet. And you want to see, you know, we've talked to so many different people, Mandy Hsu, for instance, you want to see correlation right across asset classes and that includes stocks around the world. If the US is in a deep, deep sell off and there are true recession fears, that's going to be, there's going to be a spillover to other parts of the world and that's just the way it is. You're not going to see Europe at highs.
- [09:11]
Mike Koh
I agree with that, no question about it. And you also want to see, you know, what does capitulation mean? To me it means huge volume day to the downside where you flush everybody out. Four or five times normal volume in individual stocks or a huge day in the QS or the S and P. We just haven't seen it yet. And again, I think this was somewhat telegraphed. If you look, I mean semiconductors, again, if you want to look at the smh, which was a leader for so long, they made their all time highs in July of last year. We're coming up almost to a year where these things made their highs. Microsoft, which I think everybody would agree is one of the most important stocks and companies in the world, look at that stock, how poorly it's traded since that same time frame. So there have been signs that are warning signs. Now the broader market is finally rolling.
- [09:54]
Bono
Well, it's funny, we're spending a lot of time talking about the potential for a recession. It reminds me a little bit of 2022, right? And we were so focused on that. And the stock market started to price it in the S and p was down 26% at one point from its 2021 all time highs. The Nasdaq sold off about 37% and we never had the economic recession, we had an earnings recession. And I think that's kind of the Mike's point. So the longer a trade war, whether it happens or not, it goes back and forth. I mean, if you're the C level suite in corporate America, you're just kind of sitting on your hands a little bit right now and you're going to these meetings like with Trump today and you're really kind of pleading with him a little bit, you know what I mean? And saying, listen, this is not going to be good for hiring. It's not going to be Good for Capex. It's not going to be for good for R and D. It's not good for them to kind of strain the relationships that they have with really important trading partners. It's not just the government that worries about these trade imbalances, but a lot of our companies, the Fortune 500, I mean, they rely like a great deal on all of this kind of trade. So to me, I just think if you want to splinter supply chains right now at a very difficult time for the global economy, it just doesn't make a whole heck of a lot of sense.
- [10:59]
Melissa Lee
Okay, all this being said, was there anything that you put on as a trade, anything that looked interesting in your view, Bono and tempting that I have.
- [11:11]
Stuart Kaiser
Put on or that I would look to put on?
- [11:13]
Melissa Lee
Yeah. Or you look to put on have put on? I have.
- [11:15]
Stuart Kaiser
I dabbled a slight bit yesterday from a trading standpoint. I added to some names. I'm also looking at Google around that 165 level, 162 level. But that's been a name just for you to kind of get a high quality type of high quality growth stock that has been at a suppressed valuation also, believe it or not. You know, it pains me to say it, but it's like, do I vote with my brain? Do I vote with my heart? I think Tesla starts to look interesting only because there is just so much momentum in that stock now. I'm not going to focus on forward earnings, I'm not going to focus on deliveries. None of that stuff matters to that core cohort that is going to live and die by Tesla. And I do think when you start seeing 40, 50% retracement, there is going to be somewhat of an urge for people to buy that as a trading vehicle.
- [12:02]
Mike Koh
There is an interesting name in the semi spread. Look at what a Broadcom has done. I mean remember back in December that guide the stock went up 40%, retrace the entire thing. Just traded down to the 200 day moving average actually was up today. Had a decent day. I mean I think Broadcom and we talked about this the other day is giving you something to trade against on the long side.
- [12:20]
Melissa Lee
You have one more.
- [12:21]
Bono
Yeah, I mean I like the idea of going back to the Mag 7 and how do you do that without idiosyncratic risk? You do it through the QQQ, those top 10 names and I just think that's the one that you want. A dollar cost average if we're going to go from down 13% in the NASDAQ 100 possibly to down 20, 25%. If you kind of average into that over the course of what it is, if it's a bear market that lasts a year, two years from now, you're going to be pretty happy with the pricing that you did, dollar cost averaging.
- [12:49]
Melissa Lee
Let's get more on the markets and volatility. What to expect from tomorrow's CPI print from Wells Fargo Securities. Mike Schumacher joins us. He's the firm's head of macro strategy. Mike, always good to see you. You've been meeting, no doubt, with a lot of big clients. What are they doing, if anything, ducking and covering.
- [13:05]
Dan Nathan
At this point, to the point many people have made here, the rules aren't clear. The volatility is extraordinary. So it's hard to make a big business decision, big investment decision. It's just not the right time to be a hero today.
- [13:16]
Melissa Lee
What are they waiting for? Because one can argue this will go on and on for months and months and months.
- [13:21]
Dan Nathan
I think the passage of a little more time and also perhaps a little more of a concrete idea from President Trump, what exactly does he want to see on tariffs? Is it generating revenue? Is it targeting particular objectives like fentanyl? Is it something else? People don't know. Maybe we get some of that in a few minutes today, perhaps, But I think a little more clarity from him would go a long way to boosting.
- [13:43]
Melissa Lee
Confidence in terms of the CPI print. It's going to be an interesting print because not a lot was in effect for the month of February at the same. What do markets want to see out of that number? I mean, I feel like you can make a case for a hotter number or a cooler number.
- [14:02]
Dan Nathan
They want something low. So you think about the last six cpi, Melissa. Five are bad and the last one is just awful. So right now the Fed's in the penalty box that can't do anything. So if the S and P is down 5% tomorrow, is the Fed more likely to come in? Probably not much. So I suspect people will be a lot more comfortable if that number were just a little bit weaker. Doesn't have to be an amazing number, just something benign. Jay Powell would breathe a huge sigh of relief.
- [14:26]
Bono
So, Michael, you just said they're kind of backed into a corner. Ish. You know, going back to September, when they did that 50 basis point cut, they were worried about the employment situation. Right. And now they just don't want to see inflation kind of re accelerate. So Mel's point is like, you know, hot, cold. It's just like, I don't know what the Fed can do right now because are they likely to get more dovish if we start to have weaker data? After what you just said, five kind of hot prints, I think it's going.
- [14:54]
Dan Nathan
To be a while frankly. So from my perspective, the Fed needs to see at least a couple of months of relatively decent inflation data before it can do much of anything. So it puts us probably into July best case for a Fed cut. Markets pricing a cut before then. I think that's incorrect. So the market's probably ahead of itself. Markets pricing about two cuts for the second half of this year. That seems a little bit light to me. So most importantly though, the market seems to think the Fed is just about ready to go and I would disagree needs to have better data.
- [15:22]
Mike Koh
The last couple of years volatility has been a one or maybe a two day event. Now we're into probably the third week of a volume north of 20. I think people got to get used to it. But you know, what's your take on that? This elevated volume for a prolonged period of time.
- [15:35]
Dan Nathan
Yeah, we've been talking about the main idea guy for the last month or so has been that risk premium should go up and we're seeing it day by day. So elevated volatility in equities vix is very high. Fixed income volatility is high, affects volatility struggling but rising a little bit. Corporate spreads are out. Equities, we don't have to talk about those. We know the story is. So I suspect this does continue for a while as people come to grips with the idea that hey, maybe it actually is a sustained trade war. We haven't seen one of those in a long time, usually don't go so well and that's going to drive equities to a pretty dizzying state I think in terms of up and down. And the same thing for bonds, lots of all.
- [16:10]
Stuart Kaiser
You mentioned that we do spend a lot of time on equities, which is really the main focus of the show. But I'm curious about the fixed income market. What do you believe the implications are for there and what might be the better trades that emerge out of this whole situation?
- [16:20]
Dan Nathan
Yeah, for fixed income in the US for us we'd say look, if the Fed is on hold for a while, you probably don't want to be long short securities like 12 year, kind of boring but stay out of trouble typically I think going.
- [16:32]
Melissa Lee
I'm sorry to interrupt. Mike. Thank you. Michael Schumacher, Wells Fargo President Trump is speaking at the Business Roundtable right now. Let's listen in it's very good.
- [16:40]
Dan Nathan
And then this, the people in this room, we're going to tie this back together. The people in this room obviously are very interested in all the conversations going.
- [16:46]
Mike Schumacher
On around trade and tariffs that are important here.
- [16:50]
Dan Nathan
And then you've also had a large scale effort to root out wasteful spending in the federal government. And I believe there's a thread that kind of ties all that together.
- [16:58]
Melissa Lee
And I'm just curious if you could share with us what that is.
- [17:01]
Guy Adami
Well, it's basically make America great again. We have a bloated, very dishonest, in many cases, federal government and bureaucracy. That's been a long time coming. Somebody should have done this many years ago. And we're cutting numbers that nobody's ever seen before. Doge, as we call it, affectionately, you've been all hearing that term a lot. Elon's been doing really a fantastic job. He suffers a little bit because of it. People go after him, but actually if you. I think in the end it'll maybe reverse itself and be just the opposite. That's happened before. There's people that they tend to go after one group or another, but basically it's the other you have. They go after conservatives. And when somebody stands up and fights, it ends up their business ends up doubling. You can see that. Just a little example. Goya Foods. He was just a wonderful man. The owner and the family and largely Hispanic foods. And they went after him because he supported me. And this was the end of the first term and he fought back and it ended up that he ended up tripling his business. And it's today a much bigger business than it was. And there are many examples of that. And maybe it's going to be that way with Elon. When I saw what was happening with this, you know, the concerted effort by Page, I think they're paid agitators. And when I saw what was happening, I said, I want to buy a Tesla. And we just went to the front. He had four beautiful cars there and I bought one in front of the press. It was a very public purchase and they're beautiful and do a great job. Very good competitors with Mary and everybody else, you know, he's done a great job and he shouldn't be sacrificed or have to suffer because he wants to help government. It's not that he's a Republican, which he's, you know, not the strong. I mean, I don't. Sometimes I'm not even sure what he is in terms of his philosophies, but he's a great Guy, he's a patriot. He wants to see the country straightened out. And he's done a fantastic job with Doge. We've found massive fraud, abuse, waste, and we had many, many jobs where there was nobody working but getting a check. We had contracts that expired years ago, but they were continuously being paid. Probably, I'll bet you it's $500 billion, perhaps if you added up so far, and we're trying to get to a trillion dollars. That's a big. That's a big number. And he did have an ability to do something that a lot of people didn't think of. He'd come in with bigger ideas. We'd say, we want you to cut down the size of your agency by 2%. And we thought that was good. He came in, he said, 80%. I said, what the hell's going on? 80%. And largely, I mean, we had to do it carefully. And we had some little hiccups, not big hiccups, but we saved a tremendous amount of money for the future. This is going into the future. And in some cases it would be 80, and in some cases it would be 5% or 2% or 3%, you know, depending on the agency. But. And you can almost. You're all great professionals, the top. And you can almost look at some of the agencies and see which ones had to be cut and which ones didn't, also in terms of their importance and in terms of being current. So we saved a tremendous amount of money. And I think, you know, it's. I don't know if it's going to reach a trillion, but it's going to reach a lot. And it was an honor to have Michael there yesterday. You got to see a little bit of it. We had a conference and a lot of investment coming into our country, much more than I've ever seen. Apple is investing $500 billion. IBM was with us yesterday, and they're investing a lot. Just companies all over. I could name them. You've read most of them, Many of them, but hundreds of billions of dollars is being invested. That wouldn't have happened if I didn't win the election, number one. And I think, number two, the tariffs are having a tremendously positive impact. They will have, and they are having. We have car companies that are not building in Mexico now. They're building in the United States. Some of them. The plants were already started and they stopped construction. And now they're going to build in the United States. It was very unfair. They'd build in Mexico and sell them across the Border with no tax, no nothing. They'd take away our jobs. They'd close up places in Michigan and all over the country and they'd build them in Mexico. In many cases, they were owned by China, built in Mexico, owned by China. And that's all stopped now. They're all coming. They're all coming here. Honda is building a massive plant and different places, Indiana, South Carolina, but also in Michigan. A lot in Michigan. A lot of activity is happening. They're looking all over the place for places. And that's because there is a good spirit. There's a new, a renewed spirit. And also, very importantly, the tariffs are. They don't want to pay 25% or whatever it may be. It may go up higher, maybe go up higher. Look, the higher it goes, the more likely it is they're going to build. And ultimately, the biggest win is not the tariff. That's a big win. That's a lot of money. But the biggest win is if they move into our country and produce jobs. That's a bigger win than the tariffs themselves. But the tariffs are going to be throwing off a lot of money to this country. And we've been ripped off for years by other countries, many, many decades. And they were doing the same thing. But I think we'll do it better. And I think we have a bigger advantage because we really are the piggy bank in. They weren't.
- [22:51]
Dan Nathan
Thank you, Mr. President. You've also mentioned rebuilding the top priority and I guess what's your strategy to lower the overall cost of living, make everyday expenses more.
- [23:08]
Melissa Lee
We're obviously losing the camera shot. That was President Trump speaking at the Business Roundtable. Ask a question by Chuck Robbins there. President Trump spending a lot of time talking about the work that Doge has accomplished, most notably saying that Doge has achieved $500 billion in efficiencies, which is halfway to that $1 trillion goal that they had had. And also the impact of tariffs has been investment more than he's ever seen, he said, into this country from the likes of Honda, a lot of car manufacturers coming in, building plants in various places, Apple building plants here, etc. What we do know, though, is that the impact of all of this has been volatility in the market. So let's continue our conversation with, with Michael Schumacher, Wells Fargo, thanks for sticking around. You have glimpses like of this. Nothing seems to get resolved. You know, the expectation for volatility tomorrow is just as high as when he before he started speaking. So what are you finding in terms of how your clients are positioning. If they don't want to do anything right now, presumably a lot of them have to be in the markets. That that is their mandate. So what do they do on the investor side?
- [24:18]
Dan Nathan
Melissa, what we're telling people to do and what I think a lot of people have done is to buy bonds that are a little bit longer than the Fed can really control. So maybe the three to five year part of the yield curve and that's short enough also that it's probably not too susceptible to supply concerns. If there is some sort of grand tax bargain in Washington. The president didn't talk about that. That could happen. It's certainly a concern of a lot of people. So staying sort of relatively short but at least taking some risk because you're right, people can't just sit there and say, well I can't put money to work otherwise how do you justify your existence? You've got to go out there and do something useful. So that's one thing we've seen people do. I think in foreign exchange markets are plenty of opportunities. So for instance, we still think the Canadian dollar weakens a fair bit versus the US bank of Canada meets tomorrow, probably cuts 25 we talked about the Fed probably doesn't do much. So that by itself should benefit the US dollar. US dollar versus the Chinese R and B. We think there's a lot of upside there and we think the R and B weakening could actually be a nice safety valve for the Chinese economy. That's not a one day or one week trade. It's probably a three to six month type of thing. But we think there's pretty good momentum there and we think that'll happen as well. So I think really when there's a lot of volatility, you've got to lengthen your horizon and say I can't really guesstimate the next day or two. So let me take a somewhat longer view and just protect myself in terms of downside.
- [25:41]
Melissa Lee
Michael, thank you so much. Good to see you. Michael Schumacher, Wells Fargo. Coming up, much more on the market action today, why billionaire investor Ron Barron is standing firm on Tesla, why some airline stocks were heading in different directions and how the turmoil is fueling a surge in 401k trading. But first, Apple's drop continues and one of our traders says it it could be the most interesting chart in big tech where he sees the name heading next and weight loss player Viking Therapeutics also sinking. Why new manufacturing deal had investors fleeing that stock. Do not go anywhere. Fast Money's back in two. This is a message from sponsor Intuit. TurboTax Taxes was getting frustrated by your forms. Now Taxes is uploading your forms with a snap. And a TurboTax expert will do your taxes for you. One who's backed by the latest tech, which cross checks millions of data points for absolute accuracy. All of which makes it easy for you to get the most money back guaranteed. Get an Expert now on TurboTax.com, only available with TurboTax Live full service. See guaranteed details@turbotax.com guarantees. Our state has changed a lot in.
- [26:49]
Megan Casella
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Melissa Lee
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Megan Casella
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Melissa Lee
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Megan Casella
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Melissa Lee
Learn more at multicare.org@capella university. Learning the right skills could make a difference. That's why our business programs teach you relevant skills you can take from the course room to the workplace. A different future is closer than you think with Capella University. Learn more at capella. Edu welcome back to Fast Money. Shares of Apple, the big laggard among the Mag 7 today down nearly 3%. Those losses officially erasing all its gains since election day. The stock now down 15% from its record high, though that's a smaller loss than Smack seven peers. Dan earlier called Apple the most interesting chart in big tech. Dan, why did you do that?
- [27:56]
Bono
Yeah, from a technical perspective, we've been looking at this 220 level for a long time. And when you think about this, Stock is down 12% of the year. You said it was a laggard today. It certainly was. But it's acted on a relative basis a lot better during this sell off than, let's say, the rest of the faithful eight here. So I think about what's going on here. I think about what Verizon said this morning. They're talking about a more competitive environment. Well, there's a couple of things that you can draw from that. A, maybe you have a consumer is less likely to upgrade their phones. Maybe they don't have reasons to upgrade their phones. Apple Intelligence was meant to be one of those reasons. And you think about where the stock's trading right now. You know, it's still at a level that's well above where it was when they announced, you know, Apple Intelligence back in June. And I say to myself, the company just pushed out like their updates to Apple Intelligence. There will not be an upgrade cycle in a meaningful way until Apple intelligence comes out. So that's a 2026 thing. You think about the valuation here, you think about a consumer, you think about where they live in a trade war, they better get some sort of exclusion like they did in the first Trump thing. So this stock to me, I just think is trading at a multiple that it does not deserve to relative to its fundamentals. I think the technical setup is bad and I think for some reason the sentiment is still, you know, a sort of wait and see sort of thing.
- [29:09]
Melissa Lee
So I will play the role of Ms. Silver Lining since you are not playing that role tonight. Tonight.
- [29:14]
Mike Koh
But he typically is.
- [29:16]
Melissa Lee
Everybody knows Dan is sunshine Dan. Of course the upside to Apple may not be there anymore in terms of the bull case for the super cycle, for the upgrades, for the etc. Etc. But the downside risk, Mike, might not be as bad either because it is a utility. People, you know, in hard times, they're not going to get rid of their phone, they're not going to probably reduce their services to a great extent. They're still going, there's an installed base.
- [29:42]
Mike Schumacher
Yeah, I mean that does create a floor in terms of, you know, what their top line and bottom line are going to look like. But I think Dan's point is a slightly different one, which is how much are you willing to pay for that? I mean the thing is trading 30 times forward right now, it's probably going to grow the top line at, you know, four, four and a half percent best case over the course of the next 12 months, you know, that you're probably going to get better than that out of the S and P and the S and p is trading 7, 8 turns cheaper than that is. So to me I don't really see that as a, as a huge bargain. You are right though. I mean I remember very distinctly Warren Buffett commenting that if you looked at the average family that had two cars and iPhones that they would give up their second car before they would give up their iPhones. So I think it is a very sticky product. But you know, also this tariff thing, as you also rightly point out, if they have to onshore any manufacturing, I mean they make about a 99% margin on the, on the stuff that they make in China and you bring it here, you're not going to see those kinds of margins.
- [30:35]
Melissa Lee
So what is Apple's P30 ish, little north of 30. What is wal Mart's?
- [30:40]
Mike Koh
Right around the same, silly.
- [30:42]
Melissa Lee
So, so I'm just raising it because what are you paying for in this you're paying for. You're paying a premium for certain.
- [30:49]
Bono
Why are they throwing video out that's trading at 22 times 4.
- [30:53]
Melissa Lee
It's not defensive really.
- [30:55]
Bono
If AI of generative AI is going to be in every industry but if.
- [31:00]
Melissa Lee
The bull case goes away.
- [31:02]
Bono
Well, the bull case is embedded in this stock right now and it should.
- [31:06]
Melissa Lee
Okay, so you say it's still embedded. Okay.
- [31:08]
Mike Koh
You know, it's I don't want to play your reindeer game, but I'll play this game. You know, We've said this 100 times. Apple wins to passive investing. I think we all agree, you know what they lose to active investing because when it's active it's on the way down. And if things, if there's ever forced selling for whatever reason, what works for Apple on the upside works against them on the downside. And that 195.4ish level from June 10, which is where we took off from on that and whatever the. What they call that WWDC guy.
- [31:34]
Melissa Lee
Yes, June.
- [31:35]
Mike Koh
I'll wait on line for that again this year. They reported April. I mean we could see a round trip very easily in this type of environment.
- [31:42]
Stuart Kaiser
I support the argument against valuation. What I will say is like I can understand from a momentum standpoint why Apple has outperformed its peers because it didn't get the bloat or fluff that a lot of the other air related peers got. And so as you're fleeing that trade, whether it's logical or not, but as you're rotating out of that trade, you probably don't think of Apple first and foremost as you're kind of looking to get out of hyper valued Nvidia aside or names that have had the type of parabolic move that other AI adjacent names have had. So I think that might be, I guess an additional silver line, let's call it a copper lining in terms of what one might be able to do around Apple.
- [32:23]
Bono
Yeah. And I'll just say this. If you think that the numbers are going to inflect this year, if you think that 9% expected earnings growth and 5% expected sales growth and a re emergence of iPhone growth is going to happen, then you're fine right here. But I don't think that's going to happen. I don't know what the catalyst is for that to happen. And the other thing is, if applications built on generative AI are not part of this model, then your gross margin is not going to continue to go up. It flattens or goes down a little bit in my opinion, especially if you don't have an upgrade cycle.
- [32:51]
Mike Koh
You learn a lot here on CNBC's Fast Money. Every once in a while we throw some poetry out. So you know what Bono and just said, they flee from me that sometime did me seek. Melissa, that's Sir Thomas Wyatt and that's apropos to Apple right now. Of course he didn't, but I just picked up.
- [33:08]
Melissa Lee
All right, coming up, shares of Viking dropping hard. Why investors are worried a takeover may be off the table. That is next. Plus, billionaire investor Ron Baron reaffirming his faith in Tesla even with shares cut in half since their all time high, while he is staying plugged in. Ahead, you're watching Fast Money live in the NASDAQ markets at Times Square. Back right after this.
- [33:38]
Megan Casella
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Learn more@mycare.org Is it time to reimagine your future? The right business skills may make a difference in your career. At Capella University, we offer a relevant education that's designed to focus on what you need to know in the business world. We'll teach professional skills to help you pursue your goals like business management, strategic planning and effective communication. And you can apply these skills right away. A different future is closer than you think with Capella University. Learn more@capella.edu welcome back to Fast Money. Stocks in the red again today, though, closing off the lows of the session. Ontario Premier Doug Ford temporarily suspending the 25% surcharge on electricity exported to the U.S. helping fuel a midday comeback. The Dow still down nearly 500 points. The S&P falling 3.10 of a percent. The Nasdaq paring its losses down 2.10 of a percent. Shares of some retailers getting hit hard. Kohl's down more than 24%. It is. That was its worst day on record. Shares touching levels last seen in 1997. Dick's down nearly 6% after its earnings. Both companies forecasting weaker results in the year ahead as recession fears pick up. Crypto meantime, seeing a bounce. Bitcoin now back above $82,000. Ether and Solana also seeing gains. Well, Viking Therapeutics dropping 5% after inking a $150 million manufacturing deal with Cordon Pharma. The partnership signaling that the Biotech could be looking to enter the red hot GLP1 drug market without a strategic partner. Also of note, Novo Nordisk continuing its slide hitting a 52 week low today. Shares the Ozempic maker now trading at July 2023 levels. Guy, what do you make of this Viking?
- [35:49]
Mike Koh
Listen, I got a mea culpa. Last year this was a $50 stock. We thought, you know what, you have to be long Viking here, they're going to get taken over. And for a while that looked brilliant. I think the stock almost doubled. Now look where it's trading. It's pretty remarkable. But you know, I think people are looking at this news and say they wouldn't make that kind of investment, I guess if they were going to be acquired. I don't know if that's the truth or not. But what I'll tell you is I'm hard pressed to believe they can go it alone. And in this environment I think somebody's going to take a flyer on a name like this, one of the big cap pharma names. So as wrong as I've been now for 35, $40, I mean this is worth a shot.
- [36:23]
Melissa Lee
I think both William Blair and Jefferies, by the way, say that this does not take a deal off the table. Just FYI. Coming up, not selling a single share. Billionaire investor Ron Baron is staying plugged into Tesla even with the stock more than 50% off its record high. While he's in it for the long haul with fast money returns. Welcome back to Fast Money. Tesla rising nearly 4% for its first positive day in for the stock still down over 50% from its December highs though on concerns that CEO Elon Musk is distracted by his doge responsibilities and neglecting his portfolio of companies. But the recent weakness isn't deterring longtime Tesla bull Ron Baron. Here's what the billionaire investor said on Swackbox today in Tesla, I think we're.
- [37:13]
Guy Adami
Going to make from where it was a trillion one. I was thinking we would make four times over the next 10 years. I think we're going to make more than that. Now from these prices, I'm the last in, I'll be the last out. So I won't sell a single share personally until I sell all the shares for clients.
- [37:30]
Melissa Lee
Also today, Elon Musk telling reporters outside the White House that he plans to remain CEO of Tesla and that the company will double US Vehicle output in the next two years. Bonwin has said that he is interested in Tesla. Would you?
- [37:43]
Mike Koh
Yeah, I think so. I mean I thought 240 was. It could happen. It did. It actually blew through. But look at how much volume it traded today. Probably two times normal volume traded lower traded closed on the highs. I mean this is the type of thing you want to see. Now I'm not suggesting anything is fixed. The margins we saw last quarter were a train wreck but that happened at $390 or so and we saw the subsequent rally. So at these levels a lot of this is sort of priced in and you could see a 35, $40 bounce in this name very easily. We've seen a before.
- [38:13]
Melissa Lee
Where did you get in or.
- [38:15]
Stuart Kaiser
No, no, this is, this is one that's on the list. So QS I purchased and then some Google here. Again I want to be very clear, I'm not making the argument based on valuation but I don't think if you care to get long Tesla, I don't think you're ever going to find a 25 or 30 times Ford P E as your, as your entry level. So what I'm saying is being that there is such, it is such a moment a name and trade so much on technicals and just aura feeling. I mean I think there's an argument to be made that Musk has been distracted for years now. I just think that you know, in terms of the retail presence and sfd, if that's really what you buy into, I think you start to average costs in here, here, around here.
- [38:55]
Melissa Lee
So Mike, what are the options Pitt saying about Tesla?
- [38:58]
Mike Schumacher
Yeah, I mean unsurprisingly given the price action we've seen, it's been pretty bearish. This was a name that typically saw calls outpacing puts pretty comfortably for, for ages and that situation has reversed. We've also seen that the price of 5% out of the money puts relative to 5% out of the money calls is, is pretty much as bearish as it, as it has been, you know, in the last five years. So I would actually suggest that that probably indicates that we're closer to the bottom. You know one of the things I think that people could take a look at if you actually think there's some further downside. I wouldn't buy premium, I wouldn't spend premium to do that, but you could use something like a one by two put spread. I was, I was looking out to April and looking at the 225 puts and then selling two of the 195s against it. That trade could be put on for pretty much even money. And if it did pull back a little bit further, you could, you could profit from that. In the few instances where we've seen pullbacks of 50% or more in Tesla, the average move down has been about 57%. Now since the stock's already down 50, that means another 14% from here. And, you know, actually to, you know, to Bono in point with respect to where you get to it at 30 times. 30 times is probably about 130 bucks a share. So that's going to be a lot lower than we are right here. But I think something like a one by two if you want to lean into it on the short side. But you are going to get long at 165 if you do that.
- [40:24]
Melissa Lee
We are waiting on the House vote on the funding bill to avert a government shutdown. We're expecting that at any moment. We'll bring it to you when Fast Money returns. We've got breaking news on the House vote for a funding bill to avert a government shutdown. Emily Wilkins got the details. Emily?
- [40:47]
Megan Casella
Hey, Melissa. Well, the House has now passed a bill that will keep the government funded until at least September 30th. Doing that with nearly all Republicans voting for it, plus one Democrat as well. The only Republican to vote no is Thomas Massie. Look, Melissa, this was a very difficult vote for a number of Republicans. They don't like voting for continuing funding. They wanted to find ways to reduce it. But many of them got personal assurances from Trump and Trump's team that if they made this vote now, they would be able to vote for reduced funding and larger cuts further down the road. Now, of course, this is going to the Senate and the game changes there in the House. We were all watching Republicans in the Senate. A handful of Democrats are going to have to join Republicans if they want to, to pass a bill. The question, of course, is if Democrats decide to use this moment and a potential shutdown for leverage for things that they might want or reassurances about Doge and Trump and the cuts in the government or whether they will go along because they don't want to be seen as shutting the government down. We know at least one Democratic senator, John Fetterman, does plan to vote for it. And I'm also hearing right now that Jared golden was the one in the House, the one Democrat who actually voted for, for this continuing funding. And he is from a very moderate district. He has a lot of Republican constituents there, a lot of independent constituents, didn't feel like he could be able to vote against, against keeping the government funded. So very, some very interesting dynamics here in both chambers. But I think, of course, the big question is when are we going to actually see the cuts that Republicans and Trump have promised?
- [42:18]
Melissa Lee
Emily, thank you, Emily Wilkins. Meantime, we got breaking news that could impact merger activity in the Trump administration. Amy Jaffer got those details. Eamon.
- [42:26]
Mike Koh
Hey, Melissa. That's right. New comments coming to light now from Andrew Ferguson. He's the new Trump FTC chair. A lot of questions around the FTC under Andrew Ferguson and how it would be different from Lina Khan and the Biden administration. These comments made earlier today behind closed doors at a Yale CEO event. The comments were off the record. I was in the room. I have since been released from my obligation to keep these particular comments off the record. And I can tell you that what Ferguson told the CEOs in the room was that the FTC under Trump will approve mergers and will move quickly to approve mergers and get the FTC out of the way if those mergers are lawful. But he said if the mergers are not appropriate, the FTC will come after them. He was careful to signal to the CEOs in the room that the Trump FTC is not the Bush FTC of, you know, a decade or so ago. And this is not the ofTC of the 90s where nearly everything went. And he told a long story to the CEOs in the room, Melissa, that indicates his perspective on how the FTC is going to act against large monopoly power, in his view, which has become too socially active. He said that when he was working in Mitch McConnell's office on Capitol Hill, he was getting a lot of calls from companies that were concerned about social issues around policing, Black Lives Matter type era issues. He said that that made him realize that large economic power is large political power and it's being used to support a social agenda that he and much of the country don't agree with. He said that the FTC will take action when it sees monopoly concentrations of power that empower that kind of social activism on behalf of the companies. So this is not an anything goes FTC by any stretch of the imagination. They're very concerned about large concentrations of corporate power using that for social causes that they don't agree with.
- [44:17]
Melissa Lee
Melissa, back over to you, Eamon. Thank you. Eamon Javers. It's interesting to try and dissect what that could mean in terms of the social stances that companies proposing to merge might take if they got bigger. And it seems almost like a threat, like don't go down that road or we won't approve your merger.
- [44:34]
Mike Koh
Well, I think if I'm Listening. That is Wild west, just as was during the Bush administration, but not as draconian in the Biden administration probably I would think closer to Bush and Biden. With that said, look how poorly like Apollo Dan talked about it the other day, look how poorly that stocks traded since election day almost and throw Blackstone in the mix. So maybe you'll get some relief in some of those names. But I still think a lot of good news is still priced in despite the sell off.
- [44:58]
Melissa Lee
You know, we were talking about banks earlier in terms of, you know, feeling the pressure there, Mike. You know, you have this thing being taken. Part of the Trump promise was a wave of M and A. And here we have the FTC head saying, no, it's not going to be anything goes here. And at the same time we have recession fear. So the two things that were supposed to help the bank trade are slowly dissipating.
- [45:21]
Mike Schumacher
Yeah, I mean, the bank trade and frankly the Alphabet trade too. Right. So, you know, I was kind of enthusiastic about Alphabet coming into the year and I thought we might see an FTC that was a little bit more friendly. And it doesn't seem like that's going to be the case. I think. It's obviously a very tricky situation. If you end up having government agencies who are deciding whether or not there should be mergers or any other kinds of corporate actions based on the political views of the people who run them, that seems like a rather dangerous path to go down. I don't think anybody on either side of the aisle wants to see that. But I do think that there is some need to keep an eye on the size of big tech. Of course, I mean, we have an extraordinary amount of power concentrated in a handful of companies. And I think, you know, the government, whoever's running it, is right to scrutinize it.
- [46:11]
Melissa Lee
Meantime, the recent market volatility prompting a surge in 401k trading activity. For a look at what investors are thinking, CNBC Sharon Epperson sat down with the CEO of Empowerment, the nation's second largest retirement services company. Sharon? Well, Melissa, the Employee Benefit Research Institute just wrapped up its retirement symposium here in D.C. and that's where we sat down with Ed Murphy, the CEO of Empower. Empower administers about 88,000 retirement plans to some 19 million individual investors. And Murphy told us that right now no longer are many investors doing a buy and hold strategy, some who have.
- [46:50]
Dan Nathan
Individual mutual funds or ETFs, some of those individuals are moving to more of a stable value type investment. But we're not seeing widespread capitulation.
- [47:02]
Melissa Lee
Despite the downturn, about 60% of 401k.
- [47:06]
Megan Casella
Participants are invested in target date funds.
- [47:08]
Melissa Lee
Murphy says most of those investors are staying the course. But other data shows that trading activity in 401k plans has doubled in the last three weeks, most of it in the last week. More than half of outflows in 401k plans in the first week of March came from large cap US equity funds. Meanwhile, in terms of inflows, about 40% of those inflows went into stable value funds. Now, meanwhile, the 401k industry is also.
- [47:36]
Megan Casella
Bracing for what could happen with the.
- [47:38]
Melissa Lee
Impact of layoffs on investors retirement savings strategies.
- [47:43]
Mike Koh
When you have a downturn like this.
- [47:45]
Dan Nathan
And you have concerns about the viability of one's role and whether they're going to keep their job because it is a relatively weak job market right now, you'll see people adjust their deferral rates and their savings rates.
- [47:59]
Melissa Lee
Murphy says he hasn't seen those changes yet, but he is going to be watching very closely to see the contribution rates that employees have as well as employers in the next couple months. Melissa Are there any clear demographic trends, Sharon, in terms of who is doing the most trading and who is pulling money out of the 401ks? Well, the most challenging of course is for people that are very near retirement or maybe even in retirement. And that says Murphy says that's what they're looking at very closely because being in a challenging market, a down market.
- [48:29]
Megan Casella
And you're in retirement, that makes it.
- [48:31]
Melissa Lee
Very difficult for those investors. Yeah. Sharon, thank you. Sharon Epperson. Up next, final trades, final trade time.
- [48:45]
Mike Schumacher
Mike coe yeah, nearly 8% top line growth and a 4% free cash flow yield over the course of the next 12 months at like Eaton Corp.
- [48:52]
Melissa Lee
Bona win Goldman Sachs.
- [48:54]
Stuart Kaiser
I expect this volatility will present extreme trading trading opportunity.
- [48:58]
Bono
Dan yeah, guys. Broadcom comes out Avgo.
- [49:02]
Guy Adami
Guy.
- [49:02]
Melissa Lee
Guy.
- [49:03]
Mike Koh
So odd.
- [49:04]
Melissa Lee
What Avgo?
- [49:05]
Bono
I mean it's just like it was a volume merger. You know what?
- [49:08]
Mike Koh
You know what the B in and tube is?
- [49:10]
Melissa Lee
We sure do, Baba. Thanks for watching. Fast Money Mad Money starts right now. All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Fast Money participants consider reliable. But neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Fast Money disclaimer, please visit cnbc.com fastmoneydisclaimer@ Capella University, learning the right skills could make a difference. That's why our business programs teach you relevant skills you can take from the courseroom to the workplace. A different future is closer than you think with Capella University. Learn more at Capella. Eduardo.