← CNBC's "Fast Money"
CNBC's "Fast Money"
Stocks Sell Off On President Trump’s China Threat… And A New Drug Price Deal 10/10/25
00:43:45
Stocks dropping across the board, as President Trump threatens a tariff increase on China. The sectors getting hit the hardest, and where government layoffs are beginning as the shutdown continues. Plus Another drug pricing deal in the pharma space. The company striking a deal with the President, and the reaction from the health care sector. Fast Money Disclaimer
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C
Well, it speaks to leverage and I know Tim kind of mentioned that too. You know, this rare earth has been at the center of the focus as it relates to what we need and what they have. And the flip side of that is like our high end GPUs that are 90% of them come from Nvidia, they're made in Taiwan, that sort of thing. And I think when China a couple of weeks ago, you know, kind of said to their buyers of these chips, we don't want you buying them. They feel confident with the chips that are being made by Huawei right now. Now maybe that's a negotiating tactic, but the White House had just negotiated this export deal with Nvidia. So you put that together. Their lack of demand for these Chips and then them, the leverage that they have over rare earths. It's a real problem. This today right now reminds me of April 2nd. We were sitting on the desk. There was this, I think it was in the Rose Garden, this big presentation of these tariffs. And I think we were all expecting something that didn't look like what happened on April 2nd. And you know, the stock market was already down about 8% into that from their February highs. So you think about that swoon that we had over the next week or so. We did have the president and administration pull back from the worst of those tariffs. I'm not sure that happens anytime soon. That being said, you know, is this market going to basically be able to take this in stride a little bit? Today was a little bit of a panic, right? You know, next week we don't have the bond market open on Monday. There's going to be lots of time to digest the stock market, if you will. And I'm not sure we have what we had in early April over the next couple of weeks because I think the administration knows they don't want the stock market to fall apart. That's a loss of confidence in the administration.
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D
But they have a stock market at all time highs and they've got some room. So if I'm the White House, I'm in a much better position to be as aggressive as possible. And I think it's, it's easy to flex muscle with all risk assets, all time highs. But those are good points. And you know, we don't usually, you know, we don't, we don't always get it right on this desk. But that conversation yesterday was, was, was the conversation to have because we're having the conversation about dollarization. And you know, we brought up, I think this is as much about China. And then we brought up that rare earth is really not something that's been settled and that it, you know, they're 92% of the world's refined rare earth. Now over the summer and at different times in the last year, as we've been having tariff conversations, for sure, we've discussed the US desire to begin to build away from that, to reinvest MP materials is a great example. But we're still talking about three to five years. So when markets have had the kind of move they've had, there's no question you get this kind of pullback. Katie's going to have some, it's great to have her here always. But on days when suddenly you immediately check some charts and say, wow, are we about to violate some really key levels to on the downside, just when we were where we were on the upside. And I'll also say, you know, it's been easy to be very blase about a government shutdown when in fact there are headlines coming out every day about AI and trade dynamics that very much include Asian companies to Trump and sorry, I guess pun intended, I don't know. But to override concerns about a government shutdown, it's amazing how suddenly people are saying, hey, maybe with the government shutdown, I mean, banks sold off today because maybe, you know, they're more concerned about growth than ever. Suddenly the market doesn't just digest tariffs, it digests the second derivative of that, which is growth.
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Well, firings out of the government shutdown brings the shutdown to a new level in terms of an economic impact as well. I mean, not just the hit from shutting down, but the hit to there are people out there who are not getting paychecks for sure. But all of this begs the question, Katie, as to whether or not the markets were primed for a pullback period and this was just the excuse.
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Well, it does feel like there is some pent up selling pressure. Our sentiment metrics were not overly bullish, however, so it's a little unusual that this is happening all at once. Coming into this week we had our first sell signals from something called the weekly demark indicators since the April low was established, in fact since late last year. So we were paying attention, very close attention now of course, to momentum gauges, short term momentum gauges like the 20 day moving average that is now likely to roll over next week and that would be our first impetus to get hedged or to recommend hedging strategies. We also feel that the VIX was a great risk metric and it's been just kind of rangebound for many, many weeks and now has poked its head up against the 200 day moving average, looks poised also for some kind of volatility spike. So I do think it's interesting, I think it's meaningful. The sell signals that we had teed up are now confirming.
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A
Mike, do you think that the buy the dip mentality that has been reigning in the markets, has that come to an. Is this the end of the road for that?
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E
Well, I think that investors are going to require a little bit more clarity before they rush in and buy this one because we have a confluence of things going on. And you, you know, any one of these would probably be, you know, absorbable, I would say at any point in time. But the Combination of the government shutdown, the fact that we just had a, this is an important technical move we saw today. A downside revers the fact that we had gold trading at all time highs, which spelled some unhappiness with the dollar, I would say. And the fact that we were already at pretty heady valuations for the S and P, I think those things serve as a pretty good counterbalance for what we normally would have to buy the dip, which is that this is seasonally typically a good time and that there's a decent amount of cash on the sidelines. But again, two standard deviations above the long term forward average of price to earnings for the S and P, I think all of those things are a little bit testy. And you can see that there was very much a rush for the typical safety trade. So utilities, ex, the energy generation and staples.
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Yep. I'm glad you mentioned gold. It is ironic that all of these things going on with trade and the, I don't want to say erratic, unexpected moves by Trump, all of that sends gold higher and that all strengthens China's hand at the same time. And the dollar goes down.
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D
Isn't this a buy the dollar day? Usually the dollar goes lower and gold goes higher. I'm not saying changing of the guard, but boy, that is fascinating. That's part of this conversation. It's not an overnight development, but it's also not going to end. I just point out too, you know, there's some other geopolitics around here that include China, which is that over the last couple of days, China has been sailing naval vessels around Japan and actually was sailing them right through next to Okinawa today. I mean, there's, there's, there's provocation, there is, there is definitely bluster, there is definitely some sense that China is ready to, and listening to President Trump, listening to the White House point out the letters that were sent around the world, this isn't just against necessarily the US but also other trading partners. So there's no question China is flexing some muscle and they're doing it both in the markets and they're doing it geopolitically.
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C
Yeah. When you think about the stock market and we hear this all the time, Tim, you just mentioned that they have a little room to play with. Right. So we have the S and P that was up nearly 30% off those April lows. I just feel like, you know, when you have this level of uncertainty, you have this level of just the administration digging in, you know, this idea that the Chinese and the US they really want to save face in these sorts of situations. And it's kind of right out there in the opening. So when I think about a stock market that gets hit the way it did today and we have this memory of what happened back in really, it wasn't just April, it was February, it was into March as we were expecting tariffs. But think of these tariffs rates right now, we were coming into this year maybe 3% or something across the board, we're looking at high teens. And if these go into place, you know, in, in November, well, we're going to have global growth scares. And it brings me back to 2018 when we had a very similar global growth scare and we had weak demand here in the US we had weak demand, you know, weak economy in China. And so if you think about 750,000 government workers furloughed, if you think about what they want to fire right now, that is one of the threats here. You think about a consumer on the lower end that is having a difficult time right now. You think about inflation. This is the thing the Fed minutes were telling us last week that the Fed is divided on whether they want to continue to cut rates at the rate that is expected in the Fed fund futures right now. So what do you think is going to happen to inflation if any of these tariffs go into place, given the consumer sense? You know. So to me, I just think it's a really tough point just to kind of put a bow on this as it relates to the stock market because sometimes this stuff can get out of your control. And the last time that we had a proper sell off, you got to go back to 2022.
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Proper meaning 10%.
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No. Well, I mean, forget April. Go back to the bear market we had in 2022. A lot of the elements were in place that are similar now. We had SPACs, we had unprofitable tech, we had crypto, we had a whole host of just euphoria going on meme stocks. We have all that right now. And then add on all of this geopolitics and central bank stuff and tariffs.
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A
Well, our next guest is more worried about China U.S. relations now than six months ago. CNBC contributor to Wardrick McNeil is Longview Global Senior Policy Analyst. He served in the Obama administration. Duodrick, always a pleasure to see you. Where are we now? I mean, where are we in the grand scheme of things? I mean, I would posit then maybe it's even more concerning now because back in April we saw when we were staring into the worst case situation for Tariffs. We knew at least the upside would be talks between the two men and now we've gotten to that point and then it was taken away. We saw that China is willing to provoke the US with its leverage. It seems like it's much worse.
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F
Thanks for having me, Melissa. Great to be with you and the traders. Listen, for the first time in a very long time, the market sentiment has matched my energy. There's been a real concern on my part that we are just not prepared for what China has been planning for quite some time. The stuff that they announced on enhanced export controls, the legal architecture has been in place to do this for about five years or so. And China is finding a correct time to do this for maximum leverage. But let's take a step back quickly, Melissa, and talk about what they've done. They have, they have announced a policy that could either completely halt or severely slow down one of the sectors in our economy that the market has been trading well on. You cannot produce chips at the downstream if you cannot control a guarantee the supply chain in the upstream. And so I think it's time for us to really focus on the main thing and let the main thing be the main thing in these discussions. And that is how do we break this chokehold that China has in the critical mineral space.
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D
So, duodric, why now then? Always great to have you. And so, you know, we're talking about this some in a couple of weeks. That was going to happen anyway. You've got leaders that, you know, we're going to be there anyway. Wasn't necessarily about getting together. But China does seem to be going on the offensive. And I before I reference to the naval vessels and you know, what are clearly provocative, two days of cruising around Japan. Why are they doing that? Why is this, you know, where is the. I don't want to call it bravado because I think China's, you know, had felt this way for a long time. I think China's got a lot of muscle, they can flex. But it does appear that there's a confluence here. And there does appear to be timing. And I don't believe China does anything happenstance. And here we are. In the last few days, the movement in gold has highlighted just how much China has already diversified away from the US and with gold, it does give some backing to their own currency if they're the biggest gold holder and producer in the world. So sorry, but why now? Why all this now?
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F
Yeah, look, I think there's two ways to look at this, Tim, and both of them are likely Correct. In the short term, I do buy a lot of what we're hearing other analysts talk about in terms of trying to maximize leverage for what was potential. It may not happen now. A meeting on the margins of APEC and China. Look, let's be clear. They still want some things for us, at least in the near term. I think they're pretty annoyed that I EPA fentanyl tariffs are still in place at 20%. When they've made a deal with Biden to do something about fentanyl, they came back and offered a deal to Trump. None of that has moved the dow on the IEPA 20% tariffs. I think China, despite what we know over the long term, still has a desire to get access to advanced chips in the short term. So they want to see those export controls go away. But those are near term things over the long term. Look, I do think they believe that now is their time to really assert China role in the world. And they don't look to be subservient to the US and they're showing the world that they can stand in the ring and match us blow for blow and that has diplomatic value over the long term. Tim.
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C
You know, Dwight, we talk about rare earths and obviously China has a chokehold on them and our defense industry obviously relies on that. But it's not just rare earths. A lot of our supply chain that goes into defense manufacturing really is involved with China. A lot of things that go into a lot of our weapons systems and stuff like talk a little bit about that. That's something that, I mean to me should be very frightening. I know Trump, when he was speaking to all the generals last week, he talked about the ships. He loves the ships. Well, we don't make enough ships and they make a lot of ships. Isn't this a really important part of this whole discussion?
- [18:11]
F
You hit it on the head. Listen, I've been extremely frustrated with both the Biden and the Trump administration of Trump. 1 Biden and Trump 2 because we have spoken very clearly about the chokehold in our defense industrial sector, but not much is being done to really bolster that sector. And so we're in some real tough straits as we look at critical minerals and all the other things that you talk about then that we're dependent on from China in our defense sector. So, you know, I would like to see Congress and administration really get serious, stop talking about it and do something about building the US Defense industrial base. We are going to always be at the beck and call and the chokehold of China if we cannot figure out how to build here at home, or here's a novel thought with allies, let's reengage allies. They're still out there, they would still love to work with us, but we have to focus on the main thing. I keep coming back to that.
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Dewar, great to get your take. Thank you, Deworldrick.
- [19:13]
F
Thank you, Melissa.
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So, Micah, what would you do, what would you be inclined to do ahead of Monday?
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Well, there's not much we can do ahead of Monday, is there?
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In your mind, what is your plan as to what you do on Monday now?
- [19:26]
E
Yeah. Okay. So yeah, I mean there's a. Look, there's a critical level here, about 30 and the S and P is going to be the 50 day moving average. I think if we manage to hold that, that would be a decent show of confidence. You know, our principal business is selling volatility. So from my perspective, if we do get some dips, we are going to get a big bid to implied volatility. We saw that in the vix, that's certainly part of it. But you know, we're seeing it sort of across the spectrum. A lot of single names and certainly the high beta names, which are the ones that fell the most. So, you know, from my perspective, I think it's an opportunity to start scaling in to short volume because if the VIX gets up to about 30 plus, generally speaking, the next 30 days for the S and P is actually pretty good in terms of its performance on a relative basis.
- [20:14]
B
Yeah, I mean the way I look at the VIX is obviously as a counter trend indication, a transactional gauge of market sentiment. I feel that this is probably the beginning of the volatility event, not the end. And I say that largely because we have these sell signals that have relevance for about nine weeks from now. So as much as we didn't get the volatility event in September or early October as is normal, perhaps this is a bit more of a rough Q4 for the broader market.
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A
All right, meantime, as we had mentioned, Safe Havens performed decently today. Utilities, Staples, shares of Pepsi in particular, bucking today's sell off the stock up nearly 4% adding to yesterday's 4% gain. And that came after the soda and snack company topped EPS and revenue estimates with international growth offsetting lower volumes in North America. The stock, though, still down on the year. Is it time to start switching into safer areas?
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D
For sure, because I think either way there was positioning that should have been in two places and Utilities are this strange. Hey, they're not your, your father's utilities, your mother's utilities, somebody's utilities anymore. But staples are what they are throughout multiple cycles and some of them are better positioned on multiple here. Pepsi, as you noted, had fantastic numbers a couple of days ago. Stocks really taken a couple of days even of a run, not just the immediate reaction on Wednesday. So you have a dynamic here where people are assessing the best of breed companies in there. I do think both snack foods and places that were overly hurt by GOP trends and whatnot. But also I think there are places in some of the very traditional staples and that includes tobacco and some of the unilevers and the procter and gambles of the world that look interesting to me.
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C
Unilever, you know, safe haven. We also talk about treasuries, right? And so we see a 10 year that's kind of in and around that 4% again, which is I think kind of interesting. We talked about gold before. Look at bitcoin today. It got killed.
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D
Not so, you know, and that is.
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C
Really interesting to me. And it goes back to what we were talking about 2020 and 2021. You know, Bitcoin was one of the worst performing risk assets in 2022 and it was supposed to be the one that acts well in an environment right like that. So, you know, bitcoin has become very correlated to the nasdaq. And I just think that's an interesting one because that pillar of the bull case seems to be gone right now.
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A
Coming up, big bank earnings kick off next week with JP Morgan, Citi, Goldman and Wells Fargo all out on Tuesday. We're taking a first look at what to expect out of these results next. Plus, the White House preparing a new deal to lower drug prices. The details right after this.
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This is Fast MONEY with Melissa Lee right here on cnbc.
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And now a next level moment from AT&T business.
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Coverage not available everywhere.
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Learn more@att.com 5G Network what made you.
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Confident that you could do something that hadn't been done before?
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Trailblazing women, Changing the game One of.
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What your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta think big to accomplish big things. Julia Boorstin hosts CNBC Changemakers and Power Players New episodes every Tuesday, wherever you get your podcasts. Welcome back to Fast Money. Earnings season gets in full swing next week when big banks kick off results. Citi, Goldman Sachs, Wells Fargo, JPMorgan Chase all report on Tuesday. Leslie Ficker has more on what to expect from the group. Hey Les. Hey Mel. Yeah, interesting timing this quarter with concerns about credit quality rippling through the financial system. Take a look at shares of Jefferies right now down more than 8% in after hours trading. And that comes after Bloomberg reported that several large firms are looking to at least partially redeem from its Point Bonita subsidiary. This is the one that had about $715 million invested in First Brands receivable. The auto parts conglomerate went bankrupt a few weeks ago, roiling certain pockets of the financial industry. So far though, the six big US Banks have held up okay, with JP Morgan, Goldman Sachs, Morgan Stanley and Wells Fargo trading right around their all time highs before today's sell off. As for next week's earnings, they should provide fresh clues about the state of the economy and how the loan books are holding up. Guidance particularly on net interest income. The profitability metric for loan making will be a key indicator indicator of demand Investment banking pipelines are a barometer of corporate confidence and the amount banks are setting aside for those bad loans would show how they feel about the credit quality right now. Melissa all right, Leslie, thank you. Leslie Picker, how does what happened today change the picture in terms of confidence for deals, confidence for IPOs, all of these things?
- [26:16]
D
I don't think it does it. Okay, look, we're having this conversation one or two days into this and I would extend this to the markets dynamic. I think there's a lot of people watching that can't wait to buy the market now. That will change very quickly, if we're 10 days into this and we have a lot more ratcheting higher back to the large cap banks, you're going to hear about great markets, you're going to hear about fantastic wealth management, you're going to continue to hear about a robust environment for M and A. So if I'm a big money center bank, on a look back, the numbers were fantastic. I think it was a great quarter and it was a great quarter for the price movements of some of the biggest money center banks in the world. Now they started to give that up. And I know we always talk about this. Karen, if she was sitting here, she would have said something like, I actually feel better going into these Numbers because banks, MoneyCenter banks have pulled back 10, Citibank's down 10% before today going into next week's numbers, which I think are going to be positive. So I'm not ready to also go 180 degrees away from a trade that I think has been a great trade and will continue to be a great trade given the environment that at least is sideways, I mean sideways in news flow. It's not going to be spectacular. But if we fall out of bed, obviously it's a different story. But the fundamentals right now for MoneyCenter banks are excellent.
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A
How are the charts?
- [27:28]
B
You know, we did see a breakdown in relative terms for the bank index versus the broader market and that was a reflection of exactly that. The pullback that proceeded. Now coming into earnings, Earnings, I would say that because they're now relatively oversold coming into earnings, they're actually probably better positioned. You look at Citigroup for one, it's right into some short term support after its pullback. But that doesn't necessarily resolve the issues on the intermediate term set up where we have seen those overbought downturns develop.
- [27:56]
C
Yeah, a protracted shutdown actually pushes out deals. Right. So we've seen this before. Right. So if you're filing S1 to go public, if you are, you know, trying to do to a SPAC or something like that, I've heard that from some people this week that they got to wait, they got to see what's going on. So that's one. I think Tim is 100% right on all the trading and the MA and all those fees. Great. Now go back to Q2 though. We had Jamie Dimon, his kind of normal cautious stance as it relates to a consumer. We also had Wells Fargo, but then we had Brian Moynihan and Bank of bank of America. His usual, you know, stance about the consumer. They're doing just fine. I think Citi was in the same boat. But you think about this going back to the shutdown, going back to a weak labor market, going back to some delinquencies, going higher. If we were to see all of these CEOs kind of strike a cautious tone about a US consumer, that will be difficult for this group right here. So to me, you know, then throw in the inflation stuff as it relates to higher tariffs.
- [28:51]
A
There's a lot more fast money to come. Here's what's coming up next.
- [28:55]
F
Biotech blasting off the sector at multi.
- [28:57]
C
Year highs and seeing a bump in merger activity.
- [29:01]
F
Who could be the next target?
- [29:03]
C
We'll talk to Mizuho's Jared Holtz to find out. Plus an AI breakout and a breakdown. We're going off the charts for a.
- [29:11]
F
Technical tale of two stocks that could be heading in opposite directions. You're watching Fast Money live from the.
- [29:19]
C
NASDAQ market site in Times Square. We're back right after this. And now a next level moment from ATT Business.
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Say you've sent out a gigantic shipment.
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Of pillows and they need to be there in time for International Sleep day. You've got AT and T5G so you're fully confident, but the vendor isn't responding. And International Sleep Day is tomorrow.
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Luckily, AT&T 5G lets you deal with.
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Any issues with ease.
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So the pillows will get delivered and.
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- [30:10]
A
What your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta think big to accomplish big things. Julia Boorstin hosts CNBC Changemakers Empowerment Players New episodes every Tuesday, wherever you get your podcasts. Welcome back to Fast Money Stocks adding to their losses after hours after the president announced 100% tariffs on China on top of what already exists. The Dow had tumbled nearly 900 points during the regular session for its worst day since May, while The S&P 500 and NASDAQ both had their worst day since April, falling more than 2 and a half percent and 3 and a half percent respectively. The Vix meantime spiking higher, briefly crossing the 22 level. That's its highest level since June. Tech and consumer Discretionary hit the hardest today. The so called MAG7 losing a combined $768 billion in market cap just today. Take a look at bitcoin trading. Around 110,000 losses accelerating though in the after hours session here. But the consumer staples managed to eke out a gain thanks to another big day for Pepsi. Friday's action stealing the second losing week in the last three for the major indices. What do you make of consumer staples or utilities or any of these sectors supposedly more defensive?
- [31:26]
B
It depends if we're talking in absolute or relative terms.
- [31:30]
A
Good question.
- [31:30]
B
Because in relative terms of course they're very oversold. Well, maybe not some utilities, but Staples certainly are oversold and there are a lot of great setups like we mentioned Pepsi earlier. And yet when we see a pullback, this pullback does continue. The correlations tend to be very, very high on the downside and most stocks tend to bottom right around that same day. Even consumer staples, even utilities, even if they are outperforming. So it really depends on the broader market.
- [31:58]
D
I think you can be very comfortable in staples and utilities here. I really do. And that's truly during a downdraft. But once again, know what you own. If you're trying to hedge with a, say a Staples etf, know that all staples are not really staples and certainly in the utility space you've got some highfalutin stuff in there. But I think based upon where the investors want to go, I think health care, we've talked about it for three weeks. I think health care has had some type of a turn, some news float. We're going to talk about some more White House driven news flow. I think that's where you want to be.
- [32:26]
A
My co. Quick, would you rather for you staples or utilities?
- [32:32]
E
I'm going to have to go with staples. That's because part of the utility sector has been tied to the AI trade.
- [32:38]
A
Yes, good point there. Coming up, the Trump administration set to soon announce a deal on drug pricing with another big pharma name. We'll get the details and the latest on the health care space. That's next. Welcome back to Fast Money. President Trump in the Oval Office just now announcing a deal with AstraZeneca to lower drug prices. This hour, shares of the pharma giant moving higher in the after hour session. CNBC's Bertha Coombs has more on all this. Bertha? Melissa AstraZeneca is now the second drugmaker to sign on to President Trump's most favored nation drug price program. According to our colleagues at MSNBC who reported it earlier, it comes after breaking ground on a four and a half billion dollar plant in Virginia yesterday where Dr. Oz was present. CMS Administrator Dr. Oz very much at the center of a lot of these negotiations. And it also comes 10 days after the first Pfizer agreement to provide drugs at lower prices for Medicaid as well as making a $70 billion investment in the U.S. including manufacturing. In exchange, Pfizer won't face tariffs for three years. We'll listen in and see what the details are. But CMS Administrator Dr. Oz, as I mentioned, very much at the center of this. And he told me in Washington on Monday that, you know, his goal is to get 95% of drugs in the US priced in line with what Europe pays. So who's next? The administration has reached out to a lot of firms. When I asked Dr. Oz about GLP1s for weight loss and Medicare, he declined to answer, but said, quote, we're in the middle of a lot of action. You'll be hearing more about it very soon. So, Melissa, this is not likely to be the last one we hear. Yeah, you know, in the Pfizer deal, if we can call it a deal, Bertha, you know, is regarded as a lot less than what had been feared. They were drugs that were not huge moneymaker drugs anyway. I mean, is it, do we have a sense of what this is for AstraZeneca? We don't have a sense for AstraZeneca. But, you know, Dr. Oz sort of says this isn't obviously the only tool that they're looking at. They're also looking at, you know, Medicare. He says that his team is negotiating quite aggressively. We're going to get the next round of the prices for IRA price negotiation next month. And they're also looking at using the Medicare innovation Pilots to try to do something when it comes to prices as well. This is one of his top priorities. Yeah. Bertha, thanks. Bertha Coombs. And we see Asian. They're up a percent in the after hours session. For more on all this, let's bring in Mizzou host Jared Holz. He's the health care strategist at the firm. Jared, always good to see you. What jumped out at me is that Dr. Oz told Bertha that he wanted 95% of the drugs in the United States to be priced in line with what other countries are paying. That's a lot. I don't know what the Pfizer deal represents. If it's like 0.5% of the drugs in The United States or even less. Is that even possible in your view?
- [35:45]
G
Yeah, I mean, it seems very optimistic. You know, it's an administration that's obviously, you know, pretty hyperbolic with a lot of the commentary around this industry. And so directionally, I think, you know, obviously we're going, you know, we're at a point where we're headed lower with drug prices really across the board. 90 or 95% seems like a huge number.
- [36:09]
A
Okay, so pair this with what is going on in M and A all of a sudden. Big Cat pharma seeing the light at the end of the tunnel in terms of the political winds, you know, hampering growth there. And now it's, you know, looks like M and A is actually starting to happen. You had a spreadsheet that you sent earlier this year, and actually a few candidates have already been knocked off that spreadsheet. Jared, give us a preview in terms of what you're expecting next.
- [36:36]
G
Yeah, it's been a super active year. I mean, I think 14 or 15 deals already north of 500 million, just in terms of publicly traded companies. So we're kind of, we're headed towards what could be a record in terms of the number. I still have about, call it 40 targets on my list that I think are near term candidates. Some of them are a little bit bigger, like insomet. I know you're super familiar with them. And then it kind of goes down by market cap and also revenue on there, as well as Abu Vax and cytokinetics and vaccine to name a few. I think it's impossible to call which one is going to be next. But I think as you alluded to, if some of this political. If some of the political headwinds are abating, I think that will certainly help.
- [37:27]
A
There's also, though, the political headwinds of this rift now with China, Jared, and I'm wondering in terms of, you know, part some of the deals that were made were deals with Chinese biotech companies, deals from molecules, partnerships, licensing agreements, et cetera, etc. If for some reason the political winds stop that or halt that significantly, is that even better for US Biotech? Is there sort of a, you know, stop the Chinese deals from happening? More deals will happen. The US Mentality?
- [37:56]
G
Yeah, it could be. I think the whole point of China has been that the drug development there is a little bit more accelerated, maybe a little bit less red tape around, you know, timelines and things of that nature and clinical trial design. I think it'll still be both. I'm not sure. We can, you know, call for some sort of decline in China just because we're. We're seeing an uptick in U.S. i think it'll be a fair mix of both, but I think sizes could be higher if pharma feels better as an industry. And that's why I think, you know, looking at some of these names on the sheet that you mentioned earlier is probably smart.
- [38:33]
A
Jared.
- [38:33]
D
Tim, I guess I'm just interested in the strategy sessions you've had with customers and investors over the last couple of weeks. I mean, the news flow, not only the deal flow that we're all talking about here, that was probably always expected. And so on some level, even investors, they didn't care three weeks ago or a month ago before the White House came in. So how has the tone changed? What do you expect it's going to change now, given the current trade rancor and in some level, some part of this industry being very insulated. If you think that it's really all about the geopolitics, which are better.
- [39:05]
G
Yeah, I agree. It was already a pretty good year. If we're looking just at M and A, it was a pretty good year through August. And I think some of the things that have kind of unfolded over the past couple of weeks with Pfizer first and now AstraZeneca, it kind of opens up the deal channel a little bit wider. If, you know, if the companies, if this industry actually feel like the political headwinds are decreasing, it makes them feel better. I think there are two things. I think, one, investors kind of felt like the first half of the year was a little bit slow, but are certainly noticing now. I mean, it comes up in every discussion. Everyone's trying to kind of figure out what the next thing is going to be. And I think the pacing has been the fastest that we've seen in a really long time. I mean, the past couple of weeks, Mats Sarah was, was bought out by, by Pfizer. Maris was taken out. There's speculation that JJ is going to buy protagonist Bristol Myers did a $1.5 billion deal, a private deal, this morning. So the pacing is really, really fast. And I think you're right. If the geopolitical kind of framework that kind of envelopes this industry is a little bit clearer, it's really going to accelerate things even more.
- [40:15]
A
Jared, great to speak to you. Thanks.
- [40:18]
G
You too. Have a great weekend.
- [40:19]
A
You too. Coming up, a breakout and a breakdown in the space. We're going off the charts with Katie for a look at two key players in this trade that's next.
- [40:31]
D
December 11th.
- [40:32]
F
Join Melissa Lee and the team of.
- [40:34]
C
Traders in New York City for an.
- [40:36]
D
All access celebration live and on air.
- [40:39]
C
Fast Money Live trading the holidays.
- [40:42]
F
Get your tickets now@cnbc events.com fastmoney.
- [40:52]
A
Welcome back to Fast Money. The AI trade taking a big breather today, but not all names in the space are created equally. Katie Stockton taking a look at two names, one looking to break out and the other about to maybe break down. So which charts you're looking at.
- [41:05]
B
That's right. So UiPath has a breakout. The ticker there is path and you'll see a big basing phase that's been completed with a breakout above previous highs, above some moving averages and even a Fibonacci retracement level. So that does bode well for intermediate term upside follow through. Maybe welcome some consolidation there. And to contrast that we have Appian which is a PPN and you'll see there a downtrend. It's near its lows or headed towards its lows. It seems in terms of momentum to the downside, not a good day for it today alongside the broader space. But I do think it begs the question as to winners and losers in the air space in general. It feels like if we do see a pullback that is broad based that might then sort of differentiate between the ones that have better fundamental prospects. So I would pay a lot of attention to how these trade in relative terms during a pullback.
- [41:59]
A
When we are discussing this segment in the makeup room as we do every night.
- [42:04]
C
What are you talking about?
- [42:06]
A
We were getting makeup.
- [42:07]
C
Oh yeah.
- [42:09]
A
You're saying that there, you know that you threw out a couple of names.
- [42:13]
C
Yeah.
- [42:13]
A
There's so many to choose from in your view?
- [42:15]
C
Well, there's a lot of quality names that got really overdone to the upside and people didn't care about valuations. They were discounting like, like Nvidia missed their data center number last quarter and the stock was down 1% the next day. A lot of euphoria. But let me ask you this Katie, because I see a lot of paths. Right. Zoom, PayPal, these are things that were down 80 some percent from their 21 highs. They all look kind of similar. Would you put these stocks in that.
- [42:38]
A
Sort of bucket, you know, for everyone.
- [42:39]
B
That'S a high flyer like a Micron or amd. There is one that looks quite the opposite. Maybe a HubSpot, maybe their periphery plays a servicenow. Doesn't look great. CRM has good support but maybe doesn't look great from a Momentum perspective. So I do feel like you have a lot of diversity in the space and maybe it's because there's a lot of speculation in the space.
- [43:01]
A
Yeah. Mike, where would you go amongst the names that Katie mentioned or others?
- [43:08]
E
Yeah, I mean, look, I was just taking a look at the stuff that we traded today of about 48 of the 114 stocks we were active in today were sort of tangentially related to the information technology space and they were all down huge. I think if we get further weakness on Monday, you can almost throw a dart at a board at that point because the average that I saw for our book was down about 6.3% on the day for that pad. So you get down 10% and that sort of correction territory, you might look to start making some entries.
- [43:41]
A
Yeah. Tim, what do you think?
- [43:43]
D
Well, I believe this is a market especially in the sectors that we're talking about, despite those that have not been winners or have had a lot more volatility, people are looking to buy the sector. There is zero about what's going on that is going to change that in the short term. The mentality coming out of April for a lot of people has been if you strip that April, this is a three year bull market that I've wanted to own and I've been disappointed when I haven't owned it. That that's how it goes right now.
- [44:11]
A
Coming up, a baba bummer. The Chinese tech giant tumbling on the latest trade threat. What will it take for a turnaround? That is next? More fast money into. Welcome back to Fast Money. Chinese tech stocks sinking today with one recent standout getting hit particularly hard. Alibaba, down 8 and a half percent during the regular session, another after the close, it's now lost 17% since hitting four year highs early this month. Can the stock get itself righted if the tariff threats keep looming over it? And this is the perfect example of stock that you may like the fundamentals in, but you have these exogenous factors going and it sort of derails it. So what do you think?
- [44:54]
D
I think this is one you're buying and this is one that I've been buying and one that I'd like to have bigger for some clients as well. It's the biggest position and ideal my etf. So I think this is a case where, yes, the news flow could continue to be challenging. But when you do know the fundamentals of a name and on valuation and on balance sheet and on core positioning and if we just had a conversation about the core trends in AI being things that people want to buy. This is an AI trend as it pertains to Ali Cloud and everything they're doing in Asia. And if you believe that China is competing, then they're going to be doing it with Alibaba. And this is with Alibaba as, as, as the homegrown product. So you're buying weakness.
- [45:34]
A
Mike, would you.
- [45:36]
E
You won't get a chance to do it after there's a resolution with China. So if you like the fundamentals, then yes, you have to buy it now, unfortunately.
- [45:43]
A
And the charts say yes or no.
- [45:45]
B
I give it a chance to pull back further. It takes more than just price, but also time to work off an overbought condition.
- [45:52]
A
All right, up next, final trades, final trade time.
- [46:02]
E
Mike co. Yeah, I'm looking at the only thing that's green today. Staples, xlp.
- [46:06]
D
Tim, make an argument that Alibaba is the Porsche of the Chinese tech market.
- [46:12]
A
The Boxer.
- [46:13]
B
I'll go with psq. It's an inverse triple Q etf, but only with a time frame of a couple, maybe three weeks as a hedge.
- [46:21]
A
Okay, that's a good clarification, Dan.
- [46:24]
C
I'm with Mike on the Staples, but I want to go with Walmart.
- [46:28]
A
Thank you for watching Fast Money. Have a wonderful weekend. Mad Money with Jim Cramer 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 andor 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 if you're looking for new ways to get ahead, then you're our kind of person. We're Udemy and we help learners like you upskill in AI productivity, leadership and management and more. Learn at your own pace from real world experts. You can also prep for certifications that show employers what, you know upskill for the career you want@udemy.com now back to your regularly scheduled listening.