Tyler Matheson (0:00)

What does it mean to be rich? Maybe it's less about reaching a magic number and more about discovering the magic in life. At Edward Jones, our dedicated financial advisors are the people you can count on for financial strategies that help support a life you love. Because the key to being rich is knowing what counts. Learn more about our comprehensive approach to planning@edwardjones.com FindYourRich Edward Jones Member, SIPC Weekdays at 5am Be first on world markets, first to the global business conversation. Get a jump on the investing day every day with Frank Holland. Success starts early. Worldwide exchange, 5:00am Eastern, CNBC. Thank you, John. And indeed it does. Live from the NASDAQ market site in the heart of New York City's Times Square. This is fast money. And here's what's on tap tonight. Back in the win column. After five straight days of losses, the S and P closes the week with a solid rebound. Could this kick off a jubilant January? We'll debate that. Plus, big boo's warning. The surgeon general wants additional labels on alcoholic beverages alerting users to potential cancer risks. The hangover for this sector is real. And later, the ripple effects of President Biden's decision to block the US steel deal. Bitcoin strong start to 2025 and Tapestry keeps rocking. How long will the run last? I'm Tyler Matheson in for Melissa Lee coming to you live from Studio B at the nasdaq. On the desk tonight, table for three in the studio here, Karen Feinerman, Steve Grasso and coming in remotely, Tim Seymour and Julie Beal. Tim, welcome back from a nice holiday. Good to have you back with us. And we start with the markets on the rebound. The Nasdaq and S and P both rising more than a percentage, breaking five day losing streaks, longest since April. The Dow is up 340 points on the day, breaking a four day downdraft, itself higher by almost 2% there. Meanwhile, US treasury rates on the rise, continuing the yield on the 10 year, touching 4.6% again just in the last hour. The Fed Governor Adriana Kugler sat down with our Steve Liesman to discuss what's coming from the central bank in 2025. For all the headlines from that interview, let's join Steve now. Hi, Steve. Hey, Tyler. Yeah. Fed Governor Adriana Coogler here in San Francisco seeing a stable employment picture on one side and what she called a bump in the inflation data on the other, telling CNBC in that exclusive interview that the Fed can take its time this year reducing interest rates. There is a view that we can take our time to slow down, maybe the pace to be more gradual, that bump that we saw at the end of the year, until we see that that gets resolved. If, on the other hand, unemployment for some reason doesn't continue to be as resilient, we would be ready to act in a different direction. Cougar noted the average Fed official at the last meeting marked down their outlook for Fed rate cuts this year from 100 to 50 basis points. She seemed to endorse that, though not specifically. She would not comment directly on the futures market pricing that has a single 25 basis point rate cut built in, but only puts a 48 probability on that second rate cut this year. She was not especially concerned with the rise of the unemployment rate to 4.2 from a low of3.4, noting that it's risen only gradually, unlike recessions, when it can rise quickly. She also said she was optimistic about productivity gains, suggesting they could have some staying power, but was uncertain about the fiscal policy outlook on that score. She wouldn't comment directly on the possibility of slowing immigration under the new administration. She'd only say it's helped rebalance the labor market and has been slowing of late. The Fed's response to tariffs depend on how permanent they are and whether there is retaliation. Tyler. Well, that's, I was just going to ask you actually whether she addressed tariffs and that possibility because there are in those two areas that you concluded with on immigration, on tariffs, a fair degree of uncertainty as we turn the page to a new Trump administration. Yeah, that's right. And Fed Chair Powell told us there's three kinds of Fed officials, one who incorporated something of what they think is going to happen next year, another kind, another group of officials who didn't incorporate anything, and a third who wouldn't say unclear exactly where Coogler is on that. But you know, Tyler, it's a bit like saying, draw me a picture of the room but leave out the big elephant in the room. It's almost impossible, I would think, to think about a monetary policy this year, to think about the economy this year without incorporating some form of your belief of what's going to happen to those two particular areas of critical importance to the economy. How unusual is it, Steve, for interest rates as set by the Fed? And they really have, they have one or two rates that they, that they influence very directly. How unusual is it that their interest rates are coming down and longer term interest rates are going up? And what does that signal? It's pretty unusual, Tyler. It's worth noting though, I think People kind of forget this, that in the anticipation of those rate cuts, yields did come down and now we've given back the largest part of that decline. There was a need for the yield curve to rebalance in a way that is to get positive again. I mean, to look at where it is right now, it was north of 30 basis points. I guess it's 32 basis points or so now a positive 210 yield spread. That's good, but it's not good necessarily that the Fed wants to bring rates down, but they're not necessarily coming out there it is 0.319. Oh, who's better in the back than Those guys bringing that 210 yield spread up immediately? It's an interesting question, Tyler. I'm not sure we've heard the last word on this. The key here, though, I think is the extent to which the fiscal policy outlook and the economic outlook have both played a role in those higher rates. All right, Steve, thank you very much reporting from beautiful San Francisco. Karen, how much is the interest rate backdrop figuring into your investment hypothesis for this year? It's important because I do think there's sort of this tail risk of what if we have an auction that really goes very, very poorly and we have an interest rate spike that I think will have a very direct and harsh. Hurt the markets. Yes. So I think about that to the extent that rates rise because the economy is doing well and there is some inflation, but not a worrisome amount, that's sort of okay. I'm more worried about that, that tail issue though, Steve. Yeah, I think that we've all been concerned with a market sell off and there's a lot that's been pulled forward as far as pro growth policies. But when you look at the long end of the curve, it's probably more economic data versus inflation and maybe they go hand in hand. Right. So maybe more growth is equal to equal to more inflation. I'm not really worried about tariffs. Tariffs are more of a tax. Right. So if they're attacked, they could be tactical. They may be very tactical and they could be deflationary. Right. Because it crimps the demand side more than it does the supply side. So, and they're shorter term duration. So it's not something that's, you know, maybe what was tariffs are shorter term in duration, a shorter term effect on the overall economy versus what was Powell's, what was Powell's famous transitory. So it has the ability to be more transitory than anything else. But I think people are so focused on Pro growth. That's why interest rates have moved up. It's a reflection of a growth hypothesis. Julie, thoughts on the interest rate trajectory this year and how important it's going to be for equities? It looks like there's a consensus obviously that. That the Fed and the person that Steve was just. Adriana, who Steve was talking to, sort of said the same thing. We're going to move slower than maybe you would have thought six months ago. Yeah. And I actually don't think they ever really changed their narrative. If you go back to December of last year, they were saying that they were going to cut rates three times next year, and guess what? They were right. But most of the market had them at 6 or 7. Yeah. And so I'm inclined to believe them this time around because they were right and they kind of know what they're going to do and they can kind of control what they're going to do. But I think what's really important is the interest rate backdrop is critical. When I think about small caps in particular, who are more sensitive to that, and the housing market, you know, we continue to be in a place where housing has been really constrained by interest rates, and those have really kind of gone back to the highs they were at before. And I think considering how much wealth, how much consumer wealth is tied up in housing houses, it's important to view, like, understand that in terms of their ability to continue to spend the way that they have been. You know, Julie, I'm going to turn to Tim here in just a minute. Stay with me, Mr. Cameron. Because something just happened that was really quite providential. A piece of confetti from the other night just fell from the ceiling here, Tim. And I want you to think about whether that is a talisman of the market in 2025. First of all, providential. Great pull on that. I tell you what I think, Tyler, maybe it's just that you're in the studio with us one more time here. I mean, this is an exciting day. It's great to see you. Happy New Year. I don't know if confetti. I do cleanup too, man. I'm available. I'll clean and sweep and scrub the tabletop and so forth. So the question is whether there's going to be confetti going off for the market as a function of interest rates. Rates or whether interest rates actually keep the market focused on the same eight or nine stocks. And I actually think that higher rates are going to be very good for the concentration of markets, which isn't necessarily Good for markets. But I actually think that 25 could look similar to 24. I know that's not what people want to hear. I know over the last couple days we've seen broadening of the market. Certainly over the last five days or so, you've actually seen equal weighted outperform the S and P by 50 basis points. You've seen small caps actually outperform by 120, but higher rates, I think. And again, we're all, I think, talking about, you know, higher rates, 30, 50 basis points, maybe 75 basis points. If we get significantly higher, I think that, you know, obviously all bets are off. In terms of what we can say that the market's reaction is going to be right now. I think there's no question the dollar strength is a function of central bank differentials. These comments that we're hearing from the Fed also, if anything, we'll take our time, really mean that our Fed is in a position to be more patient and to watch the economy, which is certainly more resilient than Europe's economy. In fact, this dollar move is as much against the euro as it is against anything. So I think we put it in the context of us versus at least what's going on across the board. To sum it up. Go ahead. Sorry, go ahead. No, I was just going to say, as you so often do. No, I'm sorry. Please finish. Go ahead. You go. All right, we'll transition. Because I was going to say, as you so often do, you gave us a perfect segue to our next topic, which is the dollar and the dollar index seeing its fifth positive week in a row. The greenback trading around November 2022, highs even with today's sluggishness. And the head of Exante Data expects the dollar will remain strong in the first half of the new year. Let's bring in currency strategist Jens Nordvig. He is also co founder and CEO of Market Reader, a Wall street analysis platform. So your prediction, Jens, welcome and happy New Year. Your prediction for the dollar for the first half of the year and will the second half be different and why? It's very hard to fight the momentum we have right now because as was just mentioned, right, US growth is better than growth momentum other places. And the Fed might get on hold in the next several meetings. We might have a Fed that is just looking to be on hold while almost all of the central banks around the world are looking to cut. Right. So that rate differential will go up certainly against Europe, certainly against China. It's got to go in the dollar's favor. And we still have between 2 and 3% growth, which is, which is pretty decent this far into the cycle. And we have also tariffs, right? Tariffs that will potentially impact especially the dollar against China. And that's a factor as well. And finally, we have a lot of kind of political risk around the world. We've seen in South Korea, we've seen it in France. All around the world political risk is popping up. Right. And relative to that, the dollar looks like a safe bet. Yeah. So if you look at what's going on in Germany, in France, it is not just the former weaklings of Europe. It is now the strong countries in Europe, Germany and France among them, that seem to be suffering. So what does a stronger dollar, just so we slow down here, what does a stronger dollar portend for American multinationals that do a lot of business, all other things being equal, that do a lot of business in for example, Europe or in Asia? Yes. Well, I think there's two things. The first is just a translation impact, right? The earnings that these companies have in Europe and Europe tends to be the most important market for all the tech companies and so forth. They're going to get translated back into a weaker impact on the dollar earnings. Right. So that translate translation impact is there. The second factor I think has to do with the tariffs. Right. There's a lot of uncertainty about what tariffs will be. Will they be just on China, could we get global and so forth? And I do think companies that rely on capex are potentially going to see a hit in the sense that a lot of multinationals are just reluctant to make big investments before they know what's happening with terrorists. Right. So the tariff fear is actually having an impact on certain types of capex related to exports even before we know what's happening with those tariffs. It's Tim. So let's talk levels on the dollar index, which has already moved. The Dixie's had an 8, 9% move really in a short amount of time. We're kind of through at least the levels that we hit towards the earlier part of last year. You know, once we got through that 112 level, do you think we can even really retest the highs of where we were a couple of years ago? So let's talk about in the context of the euro. Right. So the euro is at 103 now and it came back from above 110 and we've had a sizable move for sure. If we continue along the path we've been on for the last couple of Months, Right. Where growth is weak in the eurozone and so forth. I think it'll be logical that we test parity in and maybe by the end of the first quarter. But I think the real issue is whether this political risk that's brewing at the core of the eurozone in Germany, in France, whether that's going to start to feed into bond market instability and create a kind of non linearity where it's not just a couple of percent but it's actually a kind of a real tension situation that gives us another 5% on top of those few percent. I think that's a scenario that I worry about a lot and I think investors should take very seriously. We could be heading into a situation where there's extension right at the core of the eurozone which is something we haven't seen before. Jens, thank you so much for being with us tonight. If I mispronounced exante, pronounce that word, your company exante. It means before the fact. So we try to be right. I'll be very well, thank you. Be right once a year on day number two yens. Thank you so much. Have a good new year. Let's trade this. Karen, we were talking before the program about, you know, let's say you're, you're Procter and Gamble. What does this mean for you? If the dollar is strong and you're selling in markets all across the world. So I mean he laid out Europe is a really important market for them. So you sell in euros there but you need more euros to buy dollars now. So the US earnings numbers are weaker. So you always hear about. All right, well adjusting for constant currency. We usually don't have constant currency. It's moved. I kind of tend to ignore it actually because I feel like, I don't know, over time maybe it sort of, it sort of washes out. Yeah, maybe it doesn't but I sort of assume that it will. So. And then on the flip side, you know, you have, you know, our goods are more expensive to other countries, to Europeans and theirs are cheaper. Julie, does it make. Does a strong dollar, all other things being equal, strengthen the argument that American investors should take a look at, for example, international stocks, European stocks, maybe Asian. Yeah, I think if you think about it in terms of valuation, that's certainly the opportunity for a lot of investors to broaden out. But I kind of agree that if I look at all of the opportunities and all of the economies, the US still is the most dynamic, the best capital funded, the most stable with the strongest kind of GAAP accounting rules. And so I think there are opportunities internationally. I think they're wonderful companies internationally, but you really have to be selective and that the backdrop in the US Is probably still the strongest going forward. But that said, I'd rather have more exposure to companies that do not have to manage through their own dollar exposure and fx. And so again, that's another opportunity for small cap to shine. Very interesting point. Okay, Julie, thanks very much. And we're going to take a quick break. And coming up, no deal. President Biden nixing Nippon Steel's bid to acquire U.S. steel. But the saga isn't over yet. The latest twists and turns next. But first we'll talk about Ford shares revving up as new car sales hit a five year high. We'll give you the numbers and how to trade them next. You're watching Fast Money here on CNBC. We'll be right back. Weekdays at 5am Be first on world markets. First to the global business conversation. Get a jump on the investing day every day with Frank Holland. Success starts early. Worldwide exchange, 5:00am Eastern, CNBC. Welcome back to FAST Money, everybody. Consumers feel in the need for speed, or so it would seem, helping to boost December new car sales to a five year high. And one section of the business seems to be doing a lot of the driving. Phil LeBeau has the details. Tell us, Phil Tyler, we haven't seen these numbers really since 2019. 16 million. We eclipsed that in terms of total sales of new vehicles here in the United states, best since 2019. Take a look at the major automakers. They reported their Q4 results today. General Motors, an increase of 20.8%, 8.8% gain for both Ford and Honda, respectively. And take a look at shares of GM and Ford over the last year. Why are we showing you this? Because both of them reported their best US sales since 2019. And then there's Rivian. This was really the auto stock of the day, if you will, the EV play of the day as well, up more than 24% as the company reported Q4 deliveries of more than 14,000 vehicles. That eclipsed the street estimate which was at 12,700 vehicles. Production of basically 12,727 vehicles for Rivian. And as you take a look at their annual deliveries, they now, you know, it was basically flat year over year. But it gives people confidence that perhaps they can make it through this period where they are trying to get through to production of their next generation of vehicles. And that's why you saw shares move substantially higher. Take a look at the auto dealers. And the reason we're showing you this is because the sales rate was expected to be about $16.5 million. But I've talked to a few people who now say their calculations have it coming in at 16.7, even 16.8 million. And as I mentioned earlier, we are looking at the best sales since 2019, eclipsing 16 million vehicles. We haven't been there in a while, Tyler, and a lot of people thought we would be here at the end of 2024. And they finally got there with a very strong December and fourth quarter. Of course, obviously it's post Covid recovery, I suppose. How do you square the numbers that came out today for gm, Ford, Honda with the numbers that came out at Rivian with the numbers that came out yesterday for Tesla? That's question one and question two, because I'm famous for compound questions. Question two is, what was it that did so well for gm? What were they selling most of? Well, a couple of things. One, GMs got the pricing as well as it's got a really solid mix right now. They've done a fabulous job in terms of managing their inventory. Their average transaction price back over $51,000 per vehicle. Obviously trucks and SUVs are going to be a big part of that. But their EV sales, they're expanding very quickly. So they've got the right ingredients, if you will, in terms of their lineup. In terms of Tesla versus what we saw today, Keep in mind that Tesla reported Q4 deliveries globally and they've got a number of issues, whether it's in China, whether it's in Europe. And this is a company that it's fighting the headwind of electric vehicle demand perhaps plateauing a bit in North America, certainly a much more competitive environment in China and in Europe. So a bit of an apples to oranges comparison when you look at the automakers and their US sales today versus Tesla yesterday. And those are global deliveries for Tesla. Interesting, interesting distinction there. Phil, thank you so much. Have a great weekend. Steve, let's trade these companies. What do you think? So GM is by their numbers, they're obviously run more efficiently. Their gross margins, did you ever think you'd say that? No, no. But when you. But it's all relative, right? So when you compare it to Ford, they look, they look great. So Ford definitely tried to turn their, their mix around. But GM, you have Ford, the F150, you have the Silverado, which GM, GM, as Phil said, has done a masterful job with throttling their EVs selling more gasoline, giving the public what they want versus what they think they should want, as the government has tried to cram down lately. So they're trying to spin that around. But when you look at Rivian, Rivian's always running out of money. Their burn rate is about a billion dollars per quarter. Right. And first of all, I don't know what, you show a short interest. I show about 15%. Like almost 19. Yeah, yeah. So between 15 and 20%, that gives you the 25% spike every time you get a sniff of less bad news. But you're always going to have to be borrowing money from someone every quarter or two to pay you. If you have between 6 and 8 billion and you're burning a billion a quarter, that does that. Simple. I will say you start, I'm starting to see more Rivian's around. You do see them. It's a nice looking car. Yeah, it's a, it's a good looking car. Tim, jump in here on the, on the car stocks. Well, I think GM and profitability, everyone said it, it trades almost sub five times earnings. I think you stay long the stock, you know, back to Rivian. Let's not forget who their partners are and let's not forget that Volkswagen upped their, their, you know, their investment of 5.8 billion back in November. They also said they're going to cover the cost of the technology platform in terms of profitability. The guide today is part of also, you know, this is a company that's going to stop burning cash. I like ribbing here. I don't like the valuation, I don't like the cash burn in the rearview mirror. I love the partners, I love the space they're in and I think it's probably going higher. But you know, to me, GM's the story. GM is the story. That's still not trading at a multiple that's anything close to what the company's doing. And I think you stay there. All right, Tim, thank you very much. There's a lot more fast money to come and here is what's coming up next. A big red X for US Steel. President Biden officially nixing Nippon Steel's takeover of the industrial stalwart. What's next in this saga as the hot roll drama gets hotter and a trade war Tit for tat. China hitting US Defense names with fresh sanctions as the US Fires back with hacking accusations. How rising tensions could impact the market in 20. You're watching fast Money live from the NASDAQ market site in Times Square. We're back right after this. Global markets up to the minute, front page news. Wake up to Frank island and Worldwide exchange weekdays 5am Eastern. CNBC Live. Ambitiously. Welcome back to Fast Money, everybody. President Biden officially blocking the nearly $15 billion takeover of U.S. steel by Japan's Nippon Biden, warning that putting one of the nation's largest steel producers under foreign control would create a risk to critical supply chains. U.S. steel down 6.5% today on the news. And the CEO just responding to the news calling the president's action today shameful and corrupt. Karen, what do you think here? Well, that's some fights. That's pretty powerful. Now he's going to change his mind. So they are, I mean they are taking him to court. I don't know if, you know, they talk about it being an unlawful blocking of the deal. I don't know how this is going to end up and I don't know exactly. You know, this will not be resolved it would seem, during the Biden administration. And Trump, although seems to be also against this deal. This has been a crazy one from beginning to end. But I don't know, I sort of, I understand the idea of it being a important company to us, the national security issues and infrastructure. Yes. But they are one of our closest partners that are now that doesn't mean forever. But are we then shutting the door on any, any other M and A cross country, you know, cross border M and A. I don't know. Julie, want to jump in here on US Steel, Nippon and any ripple effects that could move through this sector broadly defined. I agree. I think the only winners here are going to be the lawyers because I think it's going to take a very long time to unwind this. There were so many agreements and side agreements that were related to whether or not the transaction went through. I think, you know, it does put some kind of a chill on the ability of foreign companies to do any of their buying and shopping here in the US for our companies. And so I think that that probably has a longer term effect that we'll see over time. But I'm really curious what Tim thinks. He's like our resident expert on all things Japan and what the implications could be for that relationship. Resident expert, the floor is yours. And then I'll wrap up with Steve. That is quite an accolade, Julie. Thank you. And look, I think the discussion around cfius and really this decision is one that is way political and we'll see what happens under a Trump administration who's also though been critical of this deal, I would just get back to US Steel, the company and I would say this sell off is an opportunity on a standalone basis. If you look at there's a couple different analysts on the street that say the free cash flow of this company is growing and that by 26 you're talking about north of a 10% free cash flow yield. So this is a company with steel prices which can be volatile and let's see where things go. But in the current environment, this is a stock that's probably a $40 stock. There's also another bid out there and it's cliffs and let's see what happens. They say they're substantially below that. But would they be? I mean, they sound interested. I think you're buying weakness in US Steel. What do you think, Steve? This is a stock that, this is a company that both presidents wanted to be pro worker for. And Trump has said that he is not going to let them fail. He believes in a strong steel industry for the US he's not going to let this one fail. So whether it's tax incentives or tariffs, and technically on a chart, this is where the stock should bounce. I'm long it, I think it goes substantially higher. All righty. Coming up, trade tensions intensifying as China slams more US Companies with sanctions. How the US Is firing back and what that standoff could mean for the markets in 2025. That and more is next. Missed a moment of fast Catch us anytime on the go follow the Fast Money podcast. We're back right after this. Welcome back to Fast Money. US China tensions heating up as Beijing proposes a limit on exports of EV technologies. This comes just a day after the country added 28 companies companies to its export control list. CNBC's Eunice Yoon has the details. Eunice Tyler it looks as though China aims to keep its EV technology in house. The Commerce Ministry said that it's revising its export controls to include technologies that are important for the production of EV batteries. This includes lithium and gallium extraction and refining and battery chemicals and processes pricing which impact battery performance. It's unclear when the curbs will go into effect, but the public commentary period ends February 1. China is the world's largest producer of EV batteries. Its suppliers partner with both Chinese and US EV makers like Tesla and Ford. The move comes after China imposed export controls on dual use items to 28 US defense contractors. It's also seen as a larger effort by China to retain a tighter grip on global industry and supply chains. As President Elect Trump heads into his second Term. Tyler, Eunice, Yoon, thanks very much. For more, let's bring in Dennis Uncavic. He is a partner at Meijer Unkovic and Scott Dennis, and does a lot of business in China and that part of the world. Dennis, welcome and happy New Year. Good to see you. Happy New Year, Tyler. Thank you. If President Trump puts either new tariffs on Chinese goods or raises the tariffs that are already there, you say that Xi Jinping will retaliate. How will he do that? And I got to think that one of the ways he might is to put more and more restrictions on critical minerals that are very, very important to, for example, the making of batteries for U s made EVs. You're right, they're called REEs. And those REEs are extremely, they are really not unusual. You can find them in many parts of the world, Tyler. But the key thing is in Jiangxi Province, which is about 500 mil miles north of Hong Kong. That's where they refine all these minerals. And that's where the Chinese in the last couple of days have said, we're going to put a halt on these products that have a dual use, a military and a commercial use. And the Chinese will not back down. I think Xi Jinping is getting ready for fight with incoming President Trump. And let's, let's keep on this theme here. If the new president of the United States comes in and puts more tariffs on, is he likely to increase tariffs on US Imports into China or what will his first line of defense be? I think it's prosecute the fight. I think he wants to limit the key elements going into the US for the companies. I think if Trump comes up with a 30% tariff tomorrow, then the next day the Chinese will have their own 30%. Xi Jinping is in total control of the Chinese economy and he will not back down to Donald Trump. So I do not foresee a very clear road going forward. Steve. So, Dennis, he might not want to back down to Donald Trump, but it reminds me of the Cuban missile crisis. You don't think that he will blink first, but there's been some analogies made to Japan and China being in a deflationary spiral where Japan lost 25 years. Do you see those similarities to China being in a deflationary spiral? Spiral as well? Yes and no. Basically no, because Japan has about 185 million people. China has 10 times as many people. There are multiple levels in China where Xi Jinping can put pressure on, particularly on foreign companies that are doing business there. And I think that is really why Xi Jinping is much more of a challenge than it was with the Japanese. Do I see a deflationary economy in China? I think this year will be worse in growth than it was in 2024, but I don't see any significant value added because of that. Dennis, it's Karen, thanks for being on. When you see this sort of tit for tat ratchet up, where does, where does the US Threaten to withhold grain sales to China? How do you think this escalates? I don't know what President Trump's going to do. My guess is is that on a broad spectrum he will immediately raise tariffs as soon as he gets in. That will essentially target those industries that have technologies that the US Considers to be of a national security thing as a result. That's what, that's why China yesterday took Boeing, Lockheed and Raytheon and said we're not going to sell any parts coming out of China on a dual use basis. And so I don't see a reason for either side to back off immediately. A lot of it depends on President Trump before we get on to trading this, I want quickly, I don't want to leave this topic without talking Taiwan very briefly. What do you expect to happen there? And is it a 2025 issue, is it a 2027 issue, which I increasingly am hearing that that is where the real confrontation may come? If Taiwan was invaded by China, Tyler, I believe that would set off a global catastrophe. I don't think that Xi Jinping is strong enough now with an economy that's growing between 4 and 5% to essentially shut down the economy to take Taiwan. I do think that he is determined that China will eventually take Taiwan. Now, whether it's 27 or 28, I don't know. But it's not 2046, which is the 100th anniversary of the CCP. So I see it probably in the next several years. All right, Dennis Oncovic, thanks very much. Let's move on to trading this topic and China stocks in particular. Tim, your thoughts? Well, first of all, just talking about the Chinese currency, the local currency overnight breached 7.3 on the exchange rate, which is a level that they've been trying to defend. And, and I'm not saying that they won't continue to try to defend it, but I think you have to watch the currency here and I think you have to watch currency flight. That's something that has China very, very nervous in the past. China is a market that most investors that watch our show do not need to own. It's A market though that selectively there are names I think you can own. Now, 24 shaped up to be the year that China sentiment was as low as I've ever seen it in all my years trading international and em, that was probably appropriate if you think about it. We had a number of trades within that year. I continue to think names like Alibaba and Tencent, as long as the government lays off, are not really China macro stories at this point. Right. They're two of the most important tech companies in the world. And I think you look at the balance sheet and you look at the technology story there. But again, I do think that the China macro story is now moved into a currency watch as it has across em, by the way, which is trading at three month lows. We talked about the dollar at the start of the show. It's a very big deal for emerging markets. All right, Steve, quick thought, rare earth MP materials. You started the conversation with Dennis. What, what rings? I think it's mood rings. So MP is the symbol was up 11% today. I bought it recently. I bought it this week. I think you're going to see President Trump really start to ramp up and start to support these companies because he is so concerned with a lot of these rare earth materials for just the issue with China. All righty. Coming up, you booze, you lose. That's the message from the US Surgeon general today. The stock's getting hit from the latest health warning. More fast in two, we'll talk alcohol. All right, welcome back to Fast Money, everybody. A dry January so far for the alcohol stocks. The group lower after the surgeon general Vivek Murthy called for alcohol labels to carry cancer risk warnings. Boston beer Diageo, Molson, Coors seeing some of the biggest losses today, each down more than 3%. Our Brandon Gomez joins us on set with all the details. There has been for many years the idea that a little bit of booze doesn't hurt you and actually can help you. This would argue that that is not the case. Yes. And obviously this is information we knew since the 80s. Now, it's a continuation of that research, a new advisory specifically calling alcohol the third leading preventable cause of cancer in the US behind obesity and tobacco. Now the Department of Health and Human Services saying alcohol increases risk of at least seven types of cancer regardless of alcohol type, contributing to nearly 100,000 cancer cases and 20,000 cancer deaths each year in the U.S. the Surgeon General calling for reassessed consumption limits, advising public health professionals to educate the general public and most notably he wants new labels on alcoholic beverages warning of those cancer risks. Picture those tobacco labels. Alcohol makers offering no comment. Pointing me instead to D.C. and trade groups, the Distilled Spirits Council saying it is, quote, federal government's role to determine any proposed changes to warning statements. Passing the buck to DC did make me wonder, Tyler, how much lobbying power alcohol has there? Well, roughly $22 million spent in 2024, led by AB InBev, Pernod Ricard, Molson, Coors and other trade groups like the Distilled Spirits Council and Beer Institute. So for investors, expect this to hit Washington before it does Wall Street. Where is the cancer incidence or the relationship between booze and cancers highest? Yeah. So with breast cancer for women, they found that actually it impacts about 16% of breast cancer cases in the US and so that was the highest concentration of impact for alcohol within the cancer category. But again, seven different types, lung cancer, throat cancer, mouth cancer. And obviously there's going to be a new surgeon general in three weeks time, or maybe not three weeks time, but roughly. And isn't it the fact of the matter that any kind of label like this would require congressional approval? That is right. And that's why I sort of draw attention to the lobbying power that alcohol does have down in D.C. because that is going to have to be something that's approved by Congress. You mentioned that there's going to be a new surgeon General if Trump's nomination is confirmed. And I, you know, I was looking up Jeanette, Dr. Jeanette Nishawat's past interview. She's a Fox News contributor. She herself has said, right, drinking less is equal to better health. And so the idea, maybe she will continue this as the new surgeon general. But again, we'll just have to sort of wait and see if she's confirmed. But this is, this would be an explicit cancer warning, not just a general health warning or alcohol. It's explicit cancer language. And you saw it pass through the Trump administration back in 2020 in terms of labeling on tobacco products. Brandon, thank you very much. Let's go to Julie. Your thoughts here on the, on the alcohol stocks and how they might react. There's, there's obviously a lot between this recommendation from the surgeon general and action from Congress. And I think it's actually aligned with the way generally alcohol consumption has been on the decline, spirits overtaking beer and wine most recently, the last two years running. There is just an overall trend with younger people moving away from alcohol. I think I've been amazed at how many mocktails I'm seeing In restaurants. How many different kinds of, you know, seed lip and alternative alcohols people are coming out with is fascinating to me because I think it actually is a cultural change that's really meaningful. And I'm not 100% sure it's really reflected in the stocks here. The good news is that they'll be able to talk about dry January, their next earnings calls, and so I think we'll actually get a pretty good read on the impact going forward. I agree with you, Julie, that the incidence of alcohol consumption is declining and younger people are drinking, I think a little less. And I think middle aged and older people are actually watching their consumption closely as well. Julie, thank you. Coming up, a luxury stock making money moves. Tapestry hitting 13 year highs. What's behind Find it the action, how to trade it more fast money into. Welcome back to Fast Money. Tapestry soaring almost 2% to hit its highest level since May of 2012. The parent company have coached Kate Spade on a tear since abandoning plans to merge with Capri holdings back in November. Up 30% since then. So was calling off the deal actually the best thing to happen to Tapestry stock? Karen, your thoughts? Yes, yes, yes, it was quite, quite obviously the stock was 41 I think when they announced the deal and traded down significantly that day. And then I think the day before the deal was squashed, the stock was 51 and traded up to 56 the next day. I had some Tapestry long against the cap recalls which went to zero or will soon go to zero for the January's and sold it in the mid-50s. Now it's, you know, well, higher than that. I did have this thought though, after that verdict was announced that is it possible that Tapestry purposely sort of threw the case to get away from it? Yes, to get away from the deal. To get away from the deal. I mean, Michael Kors was really disintegrating and I don't know, based on nothing. Just the idea of just the idea. Here's a nice way to. Yeah, this worked out nice. Maybe we ought to get out of this. Steve, your thoughts on Tapestry? Yeah, so I've owned both sides of this. So I owned a Capri and I got a lifeline with the Tapestry original buyout. So I sold it on that pop and then Tapestry. I just figured the same way that Karen and I were on the same page. If the deal went through, it gave them a strong foothold and if it didn't go through, it rallies. I didn't see it rallying to 13 year highs. So I've been in and out of it. I'm currently not in either one of them. I wonder if Capri gets another lifeline from someplace else. I'm more apt to buy Capri than I am to buy Tapestry. Especially where Karen left off on her analysis. If there's anything nefarious with Tapestry, you probably don't want to own it here. And there it is, up 30% since that deal broke up. Up next, we got final trades. We'll be right back. All right, folks, time for the final trade. Let's go around the horn, beginning with Julie. I'm a little worried about existing home sales, but I think new home sales are fine and Simpson should benefit. All right, Tim, you're next. Tyler, great to see you. Happy New Year, Diageo. I think a lot of bad China priced in their new cfo Focus on profitably because I actually think you're buying this weakness. Diageo. All right, there's. There you go, Karen. Yes. First of all, thank you for being here. Thank you for having me filling in Meta. I'm going home with the girl that brought me to the dance last year. Yeah, you like the Meta. You do. All right. And Steve, keep the M theme. MP materials. It's up, but it's going a lot higher. All right, thank you, everybody, for watching Fast Money. Have a great weekend. Mad Money starts right about now. 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