← CNBC's "Fast Money"
CNBC's "Fast Money"
Stocks Surge On Tariff Cuts… And Trump’s Drug Pricing Executive Order 5/12/25
00:43:43
Stocks surging across the board after the U.S. and China agreed to temporarily slash tariffs. The sectors and stocks seeing the biggest moves, and what the news means for the Fed’s rate policy. Plus Drugmakers on the clock, as President Trump signs an executive order aimed at lowering prescription drug cots. How the pharma space is reacting, and why one top health care analyst isn’t too worried about the policy changes. Fast Money Disclaimer
Loading summary
Transcript129 lines
- [00:00]
Melissa Lee
Hey Fidelity, what's it cost to invest with the Fidelity app?
- [00:05]
Tim Seymour
Start with as little as $1 with no account fees or trade commissions on U.S. stocks and ETFs.
- [00:11]
Karen Feinerman
Hmm.
- [00:12]
Melissa Lee
That's music to my ears.
- [00:14]
Tim Seymour
I can only talk.
- [00:17]
Karen Feinerman
Investing involves risk, including risk of loss.
- [00:19]
Melissa Lee
Zero account fees apply to retail brokerage.
- [00:20]
Tim Seymour
Accounts only $0 commission applies to online US equity trades and ETFs and retail fidelity accounts.
- [00:23]
Karen Feinerman
Sell order assessment fee not included.
- [00:24]
Tim Seymour
Some account types and securities excluded. Details@fidelity.com commissions Fidelity Brokerage Services LLC Member NYSE SIPC Are you still quoting 30 year old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99 of places that take credit cards nationwide. And every time you make a purchase with your card, you automatically earn cash back. Welcome to the Now It Pays to Discover. Learn more at discover.com credit card based on the February 2024 Nelson Report.
- [01:02]
Melissa Lee
Live from the NASDAQ markets at the heart of New York City's Times Square. This is fast money. Here's what's on tap tonight. Buy America is back again following the US And China agreeing to a temporary rollback on tariffs. Stocks posting off the charts move higher. But does this relief rally have legs? We'll debate that. Plus drug pricing drama. The president signing an executive order aimed at lowering prices here in America for medicines the sector slumping early in the day before rebounding. Find out why the stocks didn't about face. And later ins Disney's monster 20% move over the last week. What's behind RH and Wayfair's couch surfing surge. Now two of our traders are handling the big move in banks. I'm Melissa Lee, come to you live from studio. Be at the nasdaq. On the desk tonight, Tim Seymour, Karen Feinerman, Dan Nathan and Vanuan Eisen. And we start off with the monster move for stocks. The market surging as the US And China temporarily slash tariffs following a weekend of negotiations. The Dow rallying more than 1100 points while the Nasdaq spike spiked more than 4%. The S&P 500 up 3%. Chip makers among the big winners, the SMH Semiconductor ETF rising 6% today, Nvidia AMD Qualcomm leading the charge. Nvidia now up 13% just this month. Traders also piling into consumer discretionary names. A sector up almost 5%, Lululemon soaring almost 9% and Nike jumping 7%. The transports also having a Big day. The group up more than 1,000 points since April 9th with all of the risk on gains. The benchmark 10 year yield climbing now back near four and a half. CNBC senior Washington correspondent Eamon Jabers is here with the latest details on what happened this weekend. Eamon?
- [02:36]
Tim Seymour
Hey there, Melissa. The statement released by the two countries came in very early this morning with both countries agreeing to temporarily suspend most of the tariffs between their economies. Under the agreement, President Trump's tariffs will be cut from 125% down to 10%. But that 20% tariff relating to fentanyl is going to remain in place. So that leaves a total tariff rate of, of 30% on China. The pause is set to begin on Wednesday setting up a 90 day negotiating period between the two countries. Treasury Secretary Scott Bessen said on CNBC this morning the negotiations are not going to be easy but that both sides are approaching the talks with respect and a recognition that they have mutual interests here and in the Roosevelt Room. Earlier today the President said he may speak to Chinese leader Xi Jinping before the end of this week. So that is maybe an indication that progress might continue to come quickly. Still, a lot of the hard issues remain to be settled, including Chinese non tariff barriers to trade and the open question of how much if any manufacturing is going to move back to the United States as a result of any agreement that the United States and China can come to.
- [03:46]
Melissa Lee
All right, Eamon, thank you. Eamon Javers from Washington. Details shmeetails the rally's back on. Everything is fixed, right Tim? Well, that's the way we were moving today.
- [03:56]
Karen Feinerman
Well look, we on Friday, I don't think anybody here, self included, expected anything substantive. Now we got something substantive, but I'm not still sure what we did. I mean if you think about it, China at this point, outside of that fentanyl carve out that Eamon just talked about, is, is basically now at the same reciprocal tariff, the 10% as our best trade partner. So I'm just wondering, I'm really wondering what, what was this all about? Therefore, I'm not even sure what has happened yet. You know, let's, I'll let those folks figure that out. I'll talk about the markets and if we look at intraday on the 7th to where we closed today, I think the NASDAQ's not only in a new bull market, but it's in a bull market. From that close on the 8th, it was almost a 25% move. And if you think about certain parts of the economy that I think were given a fresh sense of, okay, we don't know where the next six months are going to go. But we know that the dynamic around that, as I think we've said the worst in terms of that rhetoric is out there. In fact, I think the White House now moves on to tax cuts. I mean, I just think that this is part of that playbook. Whether there's real detail or not. Semiconductors are up 40% from that intraday low. That's right, 40 from the intraday low on the 7th. And have outperformed the S&P by 15% since then. You know, there's market leadership if you believe that this wasn't just a snapback rally and again through some important 200 day moving average levels.
- [05:22]
Dan Nathan
So obviously is hugely good news, right. That the rhetoric has cooled down and hopefully that we're in a place where even if they can't get there in 90 days, that if there's constructive discussions going on. Absolutely. Extensions. That seems reasonable and actually seems likely. And so I'm pleasantly surprised that China sort of blinked, actually. And we blinked.
- [05:45]
Karen Feinerman
I was going to say who Blitz.
- [05:46]
Dan Nathan
We both did. We both did. I really do.
- [05:48]
Karen Feinerman
First.
- [05:49]
Dan Nathan
I think we both did. And also, I mean, the pressure on China, look at what, what, you know, what happened to their stocks, right. Baba up huge. I mean, so they've been really feeling the pressure as well. So one of the things we still don't know about where things could be manufactured. If you are importing goods from China, you really need to think more about. It's already happened a lot, but more about diversifying your supply chain because who knows. And so I think that. But for China though, that's been a very scary thing. And so to not have a deal I think was just as bad for them. One thing though, the VIX was in the 50s not that long ago. It's now south of 20. Right. So for me, I am a lot closer to a seller here and net net on the day was a small net seller than I am a buyer. We still got a lot of hurdles, but I do think the rhetoric is very, very positive versus what it could have been.
- [06:47]
Tim Seymour
So I'm looking at you.
- [06:48]
Melissa Lee
Are you going to say as a silver linings guy?
- [06:50]
Tim Seymour
No, no, no.
- [06:51]
Melissa Lee
Because I feel like our illustrious rally. No, no, in that. In that you don't think that it's reflective of. Still, you said something that can be done.
- [06:59]
Tim Seymour
You said something on Thursday and I pushed back pretty hard. You said something like the bottom or the worst case scenarios are in. And I said no. And I kind of was pushing back a little bit because the way I see it, it's really not about the markets right now. It really is about the disruption that we had in our economy, which I don't believe it's going to turn around on a dime because if you're thinking about 30% tariffs, that's a 30% tax on the companies that are importing. They have to make a decision whether they're going to eat some of those or they'll pass it through to consumers. We already have a situation where consumer confidence going forward will was low. I don't think it was all to do with tariffs. Okay, Small business confidence was low. Look at the 10 year U.S. treasury yield. It's at 4.47%. At 4.6% a month ago, that is what caused the White House to blink. And I think that's really important. So if we have a rally like this, we have a dollar going higher, but we don't have the 10 year yield coming down. Go back a month and a half when the White House, they said we don't care about equities, we care about the 10 year yield. Well, we're in a situation right now where the equity market is saying one thing and that's fine. I think all of us are happy that the volatility that we saw in the first week of April is out of the way. In the stock market, at least in actually the treasury market, we're not seeing the volatility. This has been a very orderly climb higher. I'd say the dollar move today was a bit aggressive, like putting those sorts of moves. I know, but you know, I mean it really didn't see a downtick all day long. So I guess the point is, you mentioned the Vix. The Vix is down below 19. It was 50. But the 10 year yield could be the thing that causes this to come back in. If we start seeing that move higher. Which goes back to my view and this is why I think I pushed back. But you were right. And I'm sorry, this is on Thursday. That's what. No, but I mean you were really, you were right. Okay, but what I'm saying right now is like I don't think the economy's out of the woods. I think that there's a scenario here where a 30% tax on imports. Right now we have this huge imbalance. We take in 450 billion from China and we buy, you know what I mean? And they buy 150 billion for us. And I just think there's a scenario here where this might not play out the way the stock market is suggesting today.
- [09:18]
Melissa Lee
In that conversation, though, part of my point was that I think that the worst, or I was positing that the worst of the tariff rhetoric was in, but the damage to the economy has yet to be seen.
- [09:29]
Tim Seymour
Yeah.
- [09:30]
Melissa Lee
Yeah. And I think there are two different things. I don't know. What do you think, Baldwin?
- [09:33]
Vanuan Eisen
Well, today's point, I still think that we don't know long and a variable lags right to kind of quote the Fed. So until we kind of get data 2, 3, 4 months from now, we need to see what the impacts have already had. What I do think is on the positive side is that one, at least two seemingly behemoth adversaries are willing to come to the table and put on pause. We can argue until we're blue in the face about whether it made sense to ratchet to 125 and then 145, whether that was a de facto embargo or not. But at least it seems that cooler heads are prevailing and until there is something in place, we're not essentially putting in a de facto embargo. To your point about, you know, the variable lags on the economy, I'm with you. There is probably some damage that's been done, but clearly the extent of that damage is much lower now than it would have been than it would have been had this been a much more protracted situation. So unfortunately, you know, with earnings out of the way, we have, you know, a little bit of economic data. But I, I really think this was really the thing, and it's an unfortunate situation when stocks are kind of trading on, on headline risk. I think that's concerning. I'm with you. If we're trading like this on headline risk, volatility still volatility. 4% to the upside is still 4% to the upside. Vix at 19 seems like 1819 seems like.
- [10:48]
Karen Feinerman
Well, the pain trade was, was always to the upside. The pain trade was where sentiment was about as, as bad as it got. And part of the other conversation we had on Friday, last Thursday was, you know, soft data surveys, all that mean nothing until we get hard data that tells us the economy is falling out of bed. And I realize you can wake up one day and the hard data could have turned dramatically. Soft data tends to try to smooth it out. But, you know, so back to today's rally. Should it be any surprise that you had a big unwind? I mean, gold's down 2 and A. It doesn't mean the gold trade is over, you know, the dollar rallied a bit, but I mean the dollar fell 10% and this is a major currency, so some of these snapbacks are fine. And I guess, you know, the treasury market is a fascinating place to be looking because I actually still think we'd rather see a 5% 10 year than a 35010 year. And I think that's what was happening when there was a blink of some kind. Whoever wants to acknowledge it, they don't have to. There's no question there was some sense going into a big auction week of Treasuries and in a very important 10 year auction that, you know, some of the people that have been buying our bond market were starting to also possibly blink.
- [11:54]
Tim Seymour
So aside from the 10 year treasury moving higher, I think it's also interesting that the Fed funds tracker, the CME that does that, it didn't really move the Fed funds lower. I mean, so right now, the June 18 meeting, it looks like a slam dunk that the Fed does nothing. The July meeting goes, there was nothing either way. I know, but, but, but my point is what, what is interesting about it from an economic standpoint is that the Chinese are stimulating their economy. They're ready or they were ready to do that. That doesn't mean that it was going to make too much of a difference because they've been stimulating their economy for a couple of years. They have deflation and we have a worry of inflation. Right. And so I don't know if a 30% tariff changes a whole heck of a lot of the way the Fed is seeing the kind of, you know, push and pull from their dual mandate. All right. We already saw companies that were laying off workers. Right. It'll be interesting to see what we hear from the ports in L. A whether they're seeing like all the way an influx. Peter Brookfart said something really interesting to me earlier. Do we go from all of these ships where you couldn't give them away about a week ago or two weeks ago to seeing a massive inflationary demand for that sort of shipping to come back? And what does that mean? There are other taxes that can be put on these goods that we're importing right now and it could be higher logistics costs for all we know. There could be a whole host of other things. So again, that's why I don't believe the economy is out of the wood. If you don't think that the fed funds at 4 1/2% of the upper band is restrictive right now, then you should be buying stocks. If that's the next move that we're going to see the 10 year move lower and then the Fed is going to start cutting because they can sooner than expected, then that makes equities look that much more attractive.
- [13:30]
Melissa Lee
All right, for more on the rally, let's put bringing in Stu Kaiser, Citi's head of equity trading strategy. Sir, great to have you with us.
- [13:36]
Stu Kaiser
Thank you.
- [13:37]
Melissa Lee
What did you make of this rally? Is it a game changer?
- [13:40]
Stu Kaiser
We think the news over the weekend was a game changer. You know, we've basically been slowly trimming tail risks, I would say for the last two to three weeks. And I think on the weekend you, you went from trimming to chopping and I think you cut off a significant amount of the tail risk. To your point, it doesn't mean you're out of the woods at all. I mean our view a month ago was your near term risk was to the upside on positive tariff news and then your medium term risk is kind of to the downside if you get, you know, downward pressure on EPS and on GDP growth. I think the Fed will be happy about this. They wanted to wait and see and I think this opens up some more space for them to wait and see. But look, the bottom line is in 1Q, 2/3 of 2/3 of S&P 500 companies basically punted and just left guidance where it is. How that resolves itself over the next one to two quarters is probably going to largely determine the direction of equity markets.
- [14:26]
Melissa Lee
How do you think of the trajectory of this market rally? Is there still room to the upside in that? Maybe we overshot to the downside when we were at 48, whatever it was. And how much of an upside shot is there from here?
- [14:39]
Stu Kaiser
Yeah, I think, I think there's still room to the upside. I think if you're someone who's less positive and doesn't want to be long, this market prefer to be short. Those folks are going to step out of the way and they're going to let the systematic buying from risk parity, from volume target and from CTAs, you know, play itself out. There's no reason to fight that. Those are emotionless buyers and they're not fundamentally driven. So you let that play out. And how much is that worth? It's hard to know. On Friday I would have told you it's probably worth a couple hundred points of S and P a little bit less now. But again, every investor knows about these flows and they're not going to get run over. By them. They're going to be careful.
- [15:10]
Karen Feinerman
And I think we're going to. I think we're getting some headlines now, even about tax policy. We're getting the first whiff of what's going to look like the White House is on to the next, the next act, and again, leave the detail and the important detail and ultimately the impact of the economy on effective tax rates that I do think are, are going to be somewhat of an issue. But I think there's more goodies. And I'm just getting back to the market that we have here. And I'm getting back to a market that I think also, if we get some sense, even coming out of earnings season, I think people can sort it any way they want about stabilization of earnings outlooks. You just said it. They kind of punted. But, you know, some of these guys weren't as bad as it sounded because why should they have been positive? So where can we go? Throw some levels at us, because I think the market can continue to trade higher here.
- [15:54]
Stu Kaiser
Yeah, could you get the S and p back to 6,000? I mean, you know, no problem. I think you could get there. To your point, though, tax and budget is, is a real and important negotiation. We highlighted that back in late March. Obviously it got washed out in the news flow by tariffs. But, you know, the bottom line is whatever deal they announced, when the CBO scores, it is going to look probably relatively, you know, deficit expanding. And that could be an issue. We could get the long end of the bond yield curve moving higher. I think the risk from race to your point, lower 10 year on weak economic data, unequivocally bad for equity markets, but I would say higher 20 year and out based on inflation and policy risk is, is equally an issue. So look, again, I would not try to step in front of this rally. I think you have to let it play out. I think it can run from here. Because the bottom line is most institutional investors captured very little, if any of the rally we've had to date. You know, it was, we were half joking, but you only had to own the market for 60 trading minutes to capture the entire 17% rally off the low. The flip side of that means, though, if you didn't own it for those 60, you didn't capture much of it. So you're almost in a. It's not a fomo, it's a fear of. I missed out. And the question I think now is do we get engagement, another level of engagement to the upside, or do people hope they get a little pullback and are kind of aggressive dip buyer. So, you know, I think there's more upside, but it's not a clean trade.
- [17:14]
Dan Nathan
Everyone doing Foimo in their head.
- [17:16]
Tim Seymour
Is that a thing?
- [17:17]
Dan Nathan
So how much though of this rally today do you think was on what Tim talked about with the tax package? Because that's sort of been coming and percolating the last few days and you know, that would be a positive.
- [17:28]
Stu Kaiser
Yeah. I mean, I think almost all today was tariff. The market has largely been expecting those 2017 tax cuts to get extended. The question has the House wants to extend them, the Senate wants to make them permanent. But I think the base case for most folks is the vast majority, if not all that is going to get extended. So to me, look, you went into the weekend, if you had polled clients, you know, which we did, you know, people were expecting, oh, maybe we get down to the 50 to 70% range in a best case on China tariffs and we come out of it at 30, 10 of which has already been announced and 20% of which is fentanyl, which in theory could be rolled back pretty easy. So I think most of this was was was tariff driven. And if we get a good outcome on taxes, that's potentially another leg higher.
- [18:05]
Melissa Lee
Right. And by the way, there could be other deals in the in the works at this point point. Stu, good to see you. Thank you. Stuart Kaiser, Meanwhile, the jets airline ETF taking flight today up more than 3%. The move coming even as air traffic breakdowns and mounting delays are hitting one of the nation's busiest airports, Newark. Here in New Jersey, not here in New Jersey, over in New Jersey. Philippa has got the latest. Phil.
- [18:25]
Phil LeBeau
Hey, Melissa. Let's start first off with the daily recap of cancellations and delays. We've had the same story basically for about two weeks now. Today, 84 flights canceled in and out of Newark. That's about 8, 8% of the daily flights with cancellations totaling more than 167. And all of this raises the question what is being done to fix air traffic control, to ensure the safety of air traffic control for the area that is monitoring flights in and out of Newark? Well, we heard today from the secretary of transportation. He and others have said, look, here's the game plan, immediate fix, communications and radar. Some of that has already happened. And but there's a long way to go. They're also going to be adding redundancies and also cutting flights. Yes, there will be a meeting on Wednesday where United Airlines will be there along with the other airlines and the FAA as we take a look at shares of United Airlines, United has already cut 35 daily flights. CEO Scott Kirby has said, look, we should have everybody cutting flights. There should be a cap on flights here. It's not mandated right now by the faa, but they will come out of this meeting probably with some kind of an agreement in terms of who can fly how often in and out of the airport. Take a look at American and Delta. They also have a presence at Newark Liberty, though it is United's third busiest hub. So United really dominates that market. That meeting again, scheduled for Wednesday. And just for a point of reference, Melissa, there are about 470 daily flights. Depends on the day. It fluctuates a little bit. You know, some days are a little busier than others. And that makes Newark the 10th busiest airport in this country. Not a good place to have these issues popping up with air traffic control.
- [20:12]
Melissa Lee
Phil, thanks. Phil LeBeau on Newark. So we knew that United was going to cancel some of its flights out of Newark for this reason, Tim. I would think in some ways it's a positive for the airlines. They're cutting capacity and that's a good thing.
- [20:26]
Karen Feinerman
Not really oft rewarded or oft punished for capacity increases, for sure. You know, I think a lot of the pain in airline stocks was. I mean, Newark has a microcosm for issues that are going on in a number of different airports and a number of things that are going on with air traffic control. I get it. I think airlines were punished. Delta was halved, United was halved in a short amount of time. We're not talking about a small bleed. I mean, these things were cut in half. Meanwhile, Delta is Now up almost 52% off that intraday low. 52%. So I just think we're getting back to the focus on airlines for the fundamentals, but they are very cyclical. Remember, fuel prices are a lot cheaper than they were also six months ago. So I sold upside calls for all that. Having said, and Delta today, just because I think that move is something I'm supposed to be paid for.
- [21:13]
Tim Seymour
Ten minutes ago, I just got an email from Scott Kirby, the CEO of.
- [21:16]
Melissa Lee
United, personally, to you.
- [21:18]
Tim Seymour
No, but to anybody who has a flight coming up in a few weeks. But part of the email I think is really interesting, and it doesn't actually make me that much more comfortable in flying an flight.
- [21:27]
Melissa Lee
In and out is safe.
- [21:28]
Tim Seymour
Every United pilot is trained for a wide range of potential issues, including radar or communications outages. Okay. I mean, like, I hope they are. I mean, you know what I mean? But like some of this stuff is kind of beyond us, you know, or beyond even a pilot or something like that. So I think there's going to continue to be some trepidation about that and we really hope there's no major accident because we've already seen some this year and I think that, you know, cutting capacity, oil, this and that, whatever, that's fine. But you have one major incident in an airport that's as important as Newark and you know, this industry is going.
- [22:00]
Melissa Lee
To have a hard time coming up Apple in focus as the tech giant eyes iPhone price hikes ahead of its fall release and why CEO Tim Cook is keeping up his charm offensive with President Trump despite the reciprocal tariff rollback. That's next. Plus some housing hype in today's rally, the major moves in some home related retailers like RH and Wayfair, and how our traders are navigating those jumps don't go anywhere. Fast money's back in two. Every day, thousands of Comcast engineers and technologists create connectivity solutions that change the.
- [22:34]
Tim Seymour
Way we work, live and play.
- [22:36]
Melissa Lee
Like Kunle, a Comcast engineer who is focused on revolutionizing the in home WI fi experience today and for the next generation. Kunle builds powerful Xfinity WI fi devices that deliver a fast, reliable connection with capacity to connect hundreds of high bandwidth devices at once and next level latency for the applications of the future like augmented and virtual reality and cloud gaming. Learn more@comcastcorporation.com wifi Our state has changed.
- [23:08]
Tim Seymour
A lot in the last 140 years.
- [23:11]
Melissa Lee
We know because Multicare has been here guided by a single purpose, making our communities healthier.
- [23:19]
Tim Seymour
That comes from making courageous decisions, partnering.
- [23:22]
Melissa Lee
With local communities to grow programs and.
- [23:24]
Tim Seymour
Services, and expanding healthcare access to those.
- [23:28]
Melissa Lee
Who need it most.
- [23:30]
Karen Feinerman
Together, we're building a healthier future.
- [23:33]
Melissa Lee
Learn more@mycare.org.
- [23:37]
Tim Seymour
Are you still quoting 30 year old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99 of places that take credit cards nationwide and every time you make a purchase with your card, you automatically earn cash back. Welcome to the now it pays to Discover. Learn more@discover.com credit card Based on the February 2024 Nelson Report.
- [24:08]
Melissa Lee
You'Re watching shares of Coinbase after hours, the Stock Popping over 6% on news it will replace Discover Financial in the S&P 500. Discover shares unchanged at this hour. This move will be effective May 9th. All right. Apple soaring more than 6% in the pause on most Chinese tariffs. CEO Tim Cook seemingly keeping up his charm offensive, though speaking with President Trump this morning about his plans to invest more in US Production. The company also reportedly looking to raise iPhone prices this fall, but not citing tariffs as the reason for the hikes. Of course not. For more on all this, let's bring in Steve Kobach. Steve?
- [24:40]
Steve Kovac
Hey there, Melissa. Yeah, the President said this morning that he thinks Tim Cook is going to up that $500 billion investment in the United States over the course of his term. But however, I would just point back to previous comments that Trump has said about what Apple is doing in the United States and what actually happens in reality. We've seen this many times. Trump, especially in his first term, claiming that Apple was going to build more factories here never really materialized. But look, the story out of this is nothing has really changed for Apple in the last 24 hours. That's because they already got the exemptions to the so called Liberation Day tariffs over about a month ago. And so where we are right now with this fentanyl tariffs on China in place that every, every other company is experiencing, Apple has already been there. They've already been playing this game. They still need to work this out. They're still facing that $900 million charge for the June quarter. And then we got this report from the Wall Street Journal today saying that Apple is considering raising prices. Perhaps that helps mitigate the tariffs. The report says that Apple doesn't want to make it about tariffs. They actually want to talk more about the features and things like that they can find in phones. But there's another thing to point out here because it speaks to the pricing power of Apple. They haven't raised prices on the iPhone in quite some time. You're looking at this right now. 799 was for the base model of the iPhones, the regular iPhones as you might call it. That was last up increase back in 2020. And then the pro models are the equivalent to the pros. At least that hasn't been UP increase since 2017. So you could argue perhaps they're overdue for a price increase. Especially take a look at what iPhone sales have been doing coming out of COVID over the last two or three years. They've been down to stagnant with services really picking up a lot of the revenue growth. Slack, we have not really seen some mega growth in the iPhone. AI or Apple intelligence did not do it. There was that big miss with the Siri updates that never happened. But this could be a Way to at least forget the tariff part about it. Could be a way to return the iPhone to growth. Melissa.
- [26:34]
Melissa Lee
All right, Steve. Thanks, Steve Kovac.
- [26:37]
Tim Seymour
I don't know how it returns iPhone to growth. I mean, iPhone units have been flat, you know, pricing power, we don't know because they haven't raise prices. There is no there there with Apple intelligence. So to me, I actually think that Apple's in a really tough spot. And you know, go back to what the White House said about Amazon showing, you know, the pricing for the tariffs. And I know that was in their whole thing or, you know, that sort of thing, but how is this not a hostile and political act if they're going to raise their iPhone prices really to offset tariffs? You can't, you don't have pricing power if you don't think that you have a better phone, that you have better features. And let's also remember in that quarter they just reported ported services were disappointing, right? So if you don't have the hardware with the capabilities, right, to kind of increase services, which would be, you know, that you put on top of the AI sort of layer, you know, I.
- [27:28]
Melissa Lee
Mean, then there's also the just sort of the existential risk to services revenue in general. I mean, the App Store, search, all these revenue streams are in jeopardy right now. Also.
- [27:39]
Vanuan Eisen
Yeah, I was going to point out that that Take Two ruling is really kind of like the overhang that I feel like really isn't getting a whole lot of headlines. And so if you're looking at paying 28, 29 times, you're really paying for that service or at least that's a significant point. I think that's 21, 22% of revenue. So you're paying for that recurring revenue stream. And if that is at risk, not even to mention the $20 billion related to search and Google, then yeah, there's, there's some real erosion there. With that said, I think it's a little bit early given the capital flows that we're seeing, given the move that we've seen in the, in the US Currency to try to get in front of this right this second.
- [28:20]
Dan Nathan
So of all the Mag 7, it's my least favorite. I think it's not the most expensive, but I do think, you know, I agree with Dan, surprisingly on a lot of the points about, you know, flat revenue growth and services not being up, you know, not growth there. So I think he's handled, Tim Cook has handled this as masterfully as you possibly can, but it's such a treacherous walk. I don't know how he's going to be able to to raise prices. If you saw. Well, you're talking about the Amazon hostile political act. That's interesting to me.
- [28:55]
Karen Feinerman
Yeah, but, but I think the analyst community or the investor community in the buy side community didn't believe even the base case scenario that Apple gave on just 20% tariffs, which, you know, may or may not. I mean, right now it's a very different day than it was even then. You were already exempted from some stuff. We're already talking about 50% India. I mean, it's amazing how focused we were on 50% of manufacturing was going to come out of India that day. I'm not going to argue with anybody here that Apple isn't expensive. But, but again, if we get back to a market that's not starting to think about recessionary multiples, Apple's not going to 25 times. It's just not. And I still think that the sentiment around tariffs for Apple is something that has not alleviated at 210. Remember, Apple went into pre Liberation Day at 228. Anyway, I think there's more to go.
- [29:45]
Melissa Lee
There's a lot more fast money to come. Here's what's coming up next.
- [29:49]
Tim Seymour
The home sweet home trade furniture retailers seeing some major moves as the whole housing space surges into the green. Plus the battle against rising drug prices, the latest executive order from President Trump and the impact it's having on drug makers, biotech and the broader healthcare space. You're watching Fast Money live from the NASDAQ market site in Times Square. We're back right after this.
- [30:18]
Melissa Lee
Imagine what's possible in your business career when learning doesn't get in the way of life. At Capella University, our game changing Flexpath learning format is available in select business programs and lets you learn at a time and pace that works for you. That means you don't have to put your life on hold while earning your business degree. Instead, enjoy learning your way and earn your degree without missing a beat. A different future is closer than you think with Capella University. Learn more at Capella Eduardo introducing cnbc.
- [30:52]
Tim Seymour
The new streaming platform from the number one source in business news. Watch live or on demand. Access any market, anytime, anywhere. Start Streaming. Go to cnbc.com stream now. Calling all Fast Money fans. Join us for our next live event Thursday, June 5.
- [31:12]
Dan Nathan
This show encouraged me to get into trading and I I think I'd become.
- [31:15]
Melissa Lee
A much smarter trader from them.
- [31:17]
Tim Seymour
Watch the show, stay for an exclusive Q and A, meet the traders and leave with A special gift.
- [31:22]
Evan David Segerman
This was an incredible experience.
- [31:24]
Tim Seymour
I loved being here and meeting these.
- [31:26]
Karen Feinerman
Guys and it was just. The experience was awesome.
- [31:29]
Evan David Segerman
Never miss a show ever.
- [31:31]
Tim Seymour
So to find out how to navigate this wild market environment. Get your tickets now, just scan the QR code or go to CNBCEvent.com fastmoney.
- [31:43]
Melissa Lee
Welcome back to Fast Money. The ITB US Homes ETF popping more than 4% today. And like so many other sectors, the good news on tariffs with China a big reason for the surge. Home furnishing company wayfair surging nearly 21%. RH jumping 16% in Williams Sonoma up more than 8%. Tim, I know you're a big fan of a lot of these names.
- [32:03]
Karen Feinerman
Yeah, or in the goods you could buy some in the oven section. But I think rh, which is one of the most extraordinary stocks for trading out there, I mean it's just it was a 4 or $50 stock at the end of January, got down to intraday low for 20 and the day they announced and certainly China exposure for sure. But remember this is one of the first sectors to have recovery after Covid. I'm not saying we went through something similar but and I'm not saying we're done with what we spent the first day block talking about but I will say I think RH has fundamentals also. Some of their selling margins are actually starting to improve. We've seen some inflection in dynamics, some of the housing turnover within their most affluent markets. Unfortunately because of some of the tragedy on the west coast, I mean there are places where they're starting to see a real surge in demand out of that cohort of a demo.
- [32:51]
Vanuan Eisen
Yeah, I like RH as well in terms of, you know, them really kind of appealing to that upper crust for lack of a better word or like higher income kind of cohort there. Getting into the actual bidders themselves. Taking a look at dhi, I think that gives you a pretty broad lens into the housing market overall in terms of their breadth and scope of where they're building, the price point of home that they're building as well. If you still look it's still in a pretty much a multi year downtrend and I think you're going to see some challenge to kind of break to that $250 level. With that said, I think some of the rollback in tariffs does give them a bit of cost abatement in terms of the input around lumber. I mean you still have the steel and things of that nature that are in place. But I think any pricing pressure being that right now they're really competing on rate buy downs and those type of ways to draw on the consumer. I think any relief on that front is good news. But I would wait for it to get to that 250 level before I enter.
- [33:47]
Dan Nathan
Just one thing to know, RH and Wayfair, they bet both are pretty big. Short interest. RH at 20% way for at almost 24%. So you get a positive shock and then you get a really extra push from that short interest.
- [34:00]
Melissa Lee
Coming up, drugmakers on the clock as President Trump's executive order takes aim at prescription drug costs, what it will mean for pharma and why top health care analyst isn't too worried about the policy. More on that when Fast Money returns. Welcome back to FAST money. Stocks surging after the US And China agreed to temporarily cut tariffs after negotiations this weekend. The Dow jumping more than 1100 points. The S&P 500 climbing more than 3% and the tech heavy NASDAQ leading the gains rallying 4.3%. And some after hours action. Simon Properties beating revenue estimates and zoom info topping EPS and revenue expectations as well as raising guidance. McDonald's is planning to hire 375,000 workers this summer. The fast food giant making the announcement at a news conference that included the U.S. labor Secretary. McDonald's up more than 13% this year. And check out Amazon jumping more than 8% in today's rally. The tariff cuts particularly positive for the e commerce giant which is significant exposure to China through the goods that they sold, the third party sellers that sell goods sourced from China and also advertising. Dan?
- [35:11]
Tim Seymour
Yeah, I mean it just seems very performative, all this stuff. And it goes back to Stargate. It goes back, you know what I mean? It's just like I feel for these CEOs that they have enough trouble managing their own business usually then you have all this other stuff going on and then you have, you know, the, the effort to do that. Now one thing I will say is like all these guys like you know, suggesting they're going to build data centers and all this sort of stuff over the next four years. I mean McDonald's is talking about this summer. I mean like so, but it also seems like a whole heck of a lot of people to hire this summer, but.
- [35:39]
Melissa Lee
375,000.
- [35:41]
Tim Seymour
Yeah, yeah.
- [35:42]
Karen Feinerman
Well, I mean you could make an argument especially because some of the headlines that have been negative for McDonald's in the last couple of years have been around hiring and minimum wages and you know, at what terms. So on the Amazon side. You know, I thought Amazon was kind of, it wasn't defensive on the charts, but you could have made an argument that actually Amazon's going to benefit from less out there in the retail space and their ability to channel everybody through their platform.
- [36:05]
Melissa Lee
Meantime, President Trump signing an executive order aimed at cutting US Drug prices to match lower ones abroad. Health care stocks closely, closing broadly higher. After starting the day in the red, they were led by biotech and pharma while managed care lagged the sector. Here's what the President had to say about the long term impact of so called most favored nation pricing policy.
- [36:24]
Stu Kaiser
I think the health care companies should make pretty much the same money. I really don't believe they're going to. They should be affected very much because.
- [36:32]
Karen Feinerman
It'S just a redistribution of wealth. It's a redistribution where it could be the same top line, but it's going.
- [36:38]
Stu Kaiser
To be distributed differently.
- [36:40]
Karen Feinerman
Europe's going to have to pay a.
- [36:41]
Stu Kaiser
Little bit more, the rest of the world's going to have to pay a little bit more and America is going.
- [36:45]
Karen Feinerman
To pay a lot less for more.
- [36:48]
Melissa Lee
Let's bring in BMO's head of health care research, Evan David Segerman. Evan, great to have you with us. I know you're skeptical about whether or not this policy goes through, but let's say that it does. I mean, the implication of what President Trump has said is that basically prices abroad will be raised, that the benchmark overseas will be higher and therefore we will pay lower prices. And that's what he means by it'll just be redistributed. Is that such a bad thing or is that even possible given that so many contracts in developed nations are government contracts?
- [37:16]
Evan David Segerman
So we're generally of the view that the policy as it stands, there's really not much in the EU actually when it comes to substantial policy. You know, I think a lot of people like the idea of paying less here for drugs in America. But to your point, Melissa, you know, the contracts that exist to cover prescription drugs are contracts between private entities. So think you know, PBMs payers and manufacturers. Of course you have Medicare, but that's really governed by law. And to really enact something big, you need to change the law, which is what Biden did with the ira. I was a bit surprised that the EO didn't include a provision to potentially use the IRA price negotiation kind of component and peg it to an MF and most favored nation type pricing, which the ego doesn't have it.
- [38:00]
Melissa Lee
Do you think any of this takes effect or do you think it has to go through Congress eventually?
- [38:08]
Evan David Segerman
I at the standards that much policy in the EOs. So there's not much to take effect. Yes, there's this 30 day clock to like look at what the reference pricing could be. But to your point, I think Congress would really have to act. I also think Congress is somewhat limited in what they can do outside of Medicare. Right. They really don't have a ton of power to regulate contracts between private entities. Not a constitutional lawyer but you know, I believe that that would be heavily challenged by the courts. And of course changing Medicare is also very difficult.
- [38:39]
Melissa Lee
Let's say what you say goes into effect. We have a magic wand and that EO is gone. Drug pricing, mfn, all that is in the past. It is a non starter. There's still tariffs involved here. There is still price negotiations through Medicare. I mean there are other headwinds for this. Patent cliffs. They're the fundamentals for the industry. Does the sentiment improve at all if that EO goes away?
- [39:02]
Evan David Segerman
I think if it goes away, sentiment does improve. Tariffs seem to have come and gone. I haven't heard much of that recently. Of course that could come back. I think the reprieve for the US China relationships help kind of the broader sentiment around tariffs in terms of the fundamentals of the sector, that hasn't really changed. That's why we continue to like a name like Lilly. We can talk, we always talk about GLP ones on here. But you know, as I said last week, I think the sector is still investable even with some near term headwinds and today actually highlighted how those headwinds may not be so bad.
- [39:34]
Melissa Lee
All right, Evan, thanks for joining us. Appreciate it. Thank you Evan. David Siegerman. You think it's investable? You own some?
- [39:40]
Karen Feinerman
I do. You know it's interesting. I listen to Evan David and I think he's fantastic and he's been on our show a lot. He sounds really negative and I think, you know, there's plenty to be negative about. But again if the executive order doesn't really have any bite. We've been talking about the Medicare negotiations for a long time. We know about patent cliffs. You know what out there it's have we stopped being able to invest in pharma companies? I think it's gotten kind of ridiculous. I think there's a huge opportunity.
- [40:08]
Dan Nathan
I do think he has a nine hundred dollar price target in Lilly, which is a good way up from here. 20%.
- [40:15]
Melissa Lee
Yeah, that's so.
- [40:16]
Dan Nathan
And a number of outperformance.
- [40:17]
Karen Feinerman
I don't know.
- [40:17]
Dan Nathan
I didn't think he sounded so negative. I thought he sounded like this is a scare that's not going to end up being a.
- [40:22]
Karen Feinerman
He wasn't negative. Let me. But he wasn't positive. In other words, what? I don't hear any positive. I hear there's no catalyst. It's kind of dead. Yeah. There's some patent cliffs and we know about Lilly and we know about Nova to a lesser extent, but we know about Lilly. If that's the only name people are coming up with in health care, I think there's an opportunity.
- [40:38]
Melissa Lee
Up next, Disney Magic shares jumping more than 20% over the past week as streamers and media giants hone in on advertising upfronts this week. Can Mickey keep up his mighty run in the face of a Hollywood slowdown? And bank stocks not missing out on today's rally. But two of our traders are not sold on the bounce. How they are handling the moves in fast money returns. Welcome back to Fast Money Media stocks. Amazon, Disney and Comcast popping today as they and other media companies present their content and ad offerings this week. CNBC's Julia Borson's got more on all this. JULIA hey, Melissa. Well, the news of a China trade deal giving new optimism to the ad business as upfront presentations kicked off today. Roku shares gaining the Most up nearly 13%. Disney and Fox shares increased by 4% and Warner Brothers Discovery was about 2% higher. Now Comcast shares are up nearly one and a half percent as NBC Universal hosted its upfront presentation this morning. Now, with so much economic uncertainty, E marketer projects that TV upfront ad spending will fall about 20% this year as brands opt for flexibility of more last minute ad buys. But in this quarter's earnings reports, CEOs have been largely sanguine, Fox saying on his call just this morning, quote, while we recognize the commentary around the macro environment, we have seen no impact to our business. Disney in its earnings call last week was also confident in the market. The ad market holding up and its stock is up about 20% in the past week. Disney is coming off its third straight positive week, close to turning positive for the year. Now Disney's upfront presentation is tomorrow afternoon and then in the morning, ESPN is hosting an event expected to announce some details of its flagship streaming ESPN app. MELISSA Julia thanks. Julia Boorstin, are you a buyer of Disney's run? DAN Sure.
- [42:33]
Tim Seymour
I mean, up 20% a week is kind of difficult. I mean the one thing I'd say the first thing I noticed this morning was at Netflix and Spotify gapping down. And I think that a lot of that had to do with the relative strength they had to the market. Not anything to do with really, you know, Disney related sort of stuff, streaming related. I did think, you know, last week Disney when they reported, I was shocked. I know Karen doesn't like guidance, but that they gave this sort of clarity or they had this sort of clarity to offer that sort of guidance. And I would think that the discretionary sort of space, I know it did well today but that's one that's going to continue to have headwinds.
- [43:07]
Vanuan Eisen
Yeah, sub growth streaming seemed to be turning the, turning a real corner really adding like you know, accretively to, to equity and then focusing on the art of the deal. I know this is probably going to fly under the radar, but the Abu Dhabi deal, I mean the way that they structured it I thought was pretty much expertly done. Essentially they get a royalty stream and they don't have the construction costs on their balance sheet. So I mean I just think it's a smart way. I know we're probably three, four, five years out from seeing that. But really at the end of the day this is really a story around brand, around parks and experiences and seeing expansion done in a creatively financed way I think makes a lot of sense.
- [43:44]
Melissa Lee
Coming up, a financial fade. Bank stock surging today's market rally but two of our traders aren't believing the bounce, how they're making similar moves. And JP Morgan and Citi next more fast Money into. Welcome back to Fast Money. Bank stocks also rallying today. The KB up over 4%. Bank of America, Citi, Wells Fargo, JP Morgan, Goldman Sachs among the big winners. But two of our traders are fading the action in Citi and JP Morgan. Tim and Karen both selling calls here. Karen, which stock?
- [44:17]
Dan Nathan
Why JP Morgan? Why just an enormous run. I mean, you know earlier, the end of the, earlier in the year was up at about 280 and that was at a time we thought all right, deregulation, great, M and A is going to be huge. M and A is not going to be huge it seems so sort of take that off the table. It's had a very big run and I don't think it's a particularly tariff, I don't know. Tariff, tariff, leveraged industry. So the bounce off this tariff, you know, I guess, I don't know, call it reprisement, whatever is I think overdone. So had to sell some and there's the tiny bit. One day Jamie Dimon will retire. But I'M still long. I just sold against a portion.
- [44:59]
Karen Feinerman
Yeah, I mean, I call this being tactical in a high volume market for banks. I mean, Citibank went 55 to 75. I just sold it out a couple months at the old highs. My view is that today was the day actually banks should have rallied, the yield curve steepened. There's some dynamics that you took away some of the stag, you took away some of the inflation and so there you go. But Citibank, I don't think it's going to get away from you. It hasn't for the last decade, even though I'm actually still pretty bullish on Citibank. But the trader in me said I could sell volat 2 months and I can always roll these, these calls up and out if I want to.
- [45:29]
Tim Seymour
You know, it's interesting what you just mentioned about M and A. It might come back. I mean, you saw that Google deal for Whiz. That was a $32 billion deal. If people get confidence that that might pass, you might see some other strategic M and A. And the other thing is, if I had an S1 for an IPO like, and I pulled it, or kind of pulled it back, if you will, after this market volatility, I'd be dusting that thing off right now.
- [45:48]
Melissa Lee
Up next, final trades, final trade time. Tim.
- [45:59]
Karen Feinerman
Yeah, I think Alibaba can go higher. It's not just a rally today and it's ready to break out past those lows from two months ago.
- [46:06]
Dan Nathan
Yeah, I'm going to be selling some upside. J.P. morgan calls. Not against Jamie, just coming.
- [46:11]
Melissa Lee
Never again.
- [46:11]
Dan Nathan
No, never.
- [46:12]
Melissa Lee
Dan.
- [46:12]
Tim Seymour
Yeah, XLB. Not that negative.
- [46:14]
Vanuan Eisen
Funnel him also a seller. JetBlue. Listen to what Expedia had to say.
- [46:19]
Melissa Lee
Thanks for watching. Fast 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 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 Earn a business degree on your terms at Capella University. Our Flexpath format is available in select programs and lets you learn on your schedule. A different future is closer than you think with Capella University. Learn more at Capella Eduardo.