Melissa Lee (0:00)

This episode is brought to you by aarp. Ten years from today, Lisa Schneider will trade in her office job to become the leader of a pack of dogs as the owner of her own dog rescue. That is a second act made possible by the reskilling courses Lisa's taking now with AARP to help make sure her income lives as long as she does. And she can finally run with the big dogs and the small dogs who just think they're big dogs. That's why the younger you are, the more you need AARP. Learn more at aarp.org skills@pgm our global perspective today unlocks investment opportunities tomorrow. Our 1400 investment professionals provide global expertise and local insights to help you navigate the complexities of a changing world. We offer a diverse range of active strategies across public and private markets to help you identify opportunities and achieve your long term goals. PJUM our investments shape tomorrow. Today live from the NASDAQ market site right here in the heart of New York City's Times Square. This is, this is fast money. And here's what's on tap tonight. Limping to the finish after a record breaking first 11 months of the year. Stocks ending the year with a whimper. Is a sluggish December a good or maybe a bad omen for the new year? We're going to discuss and debate. Plus, do we need to bear down with the bird flu? Why the CDC is concerned about mutations in the H5N1 virus and how a bad regular old flu season could impact the spread. Bird flu. It's a real deal. And later on Inside MicroStrategy's no good, very bad, terrible, miserable month hitting the nail ahead of the struggling housing ETF as well. And Chartmaster looking at where the energy trade after a pretty good run the last few days is going from here. I'm not Melissa Lee. I'm Brian Sullivan. Good to see you. Coming to you live from Studio B right here at the Nasdaq and on your desk physically tonight it's just Guy Adami and myself. But we have Carter Worth, Mike Koh and Julie Beal all standing by ready to go on this big hour show. And we're going to start with a lot more red than green in your market today. All the major averages did close off their worst levels of the session. There's your good news. But just three stocks in the S&P530 rather were able to eke out gains today. Well, today's winners, look at that. Look at that. Look at that green sliver. I like that. Just a winkle A tiny yeah, winkle, winkle. A little bit of green on your screen. Today's bigger winners today. So be company formerly known as Schlumberger, Royal Caribbean, the cruise line and Valero, the refining and oil drilling company. Those gains totaled $0.06. Energy Today your only sector higher. The weakness keeping most of the major averages in the red. That is down for the month of December. The NASDAQ is barely higher this month. A small cap, the Russell 2000 on pace for its worst month in more than two years. For the year though, remain firmly in the green with the S and P up 20% for the second straight year. And that Guy Dami, the first time that has happened since, what is it, 1988. But does this 11th hour fade signal that all the momentum is gone? Or is this just an opportunity to buy in? Guy. Adam, good to see you. Good to see you. I'm going to effort to answer that in a second if you indulge me for a second. Okay. You know, I think the world of you are as unique a talent that I have met over the years. I've been doing this and I am so excited that you and Kelly are going to be doing power lunch together. And I believe that starts this Thursday. So congratulations on that. You and Kelly are going to be dynamite together. Thank you. Once you say that, you're going to make me blush. Thank you. Well, it happens to be true. Appreciate it. Because you bring an energy that, you know, a lot of people don't understand how talented you are. I happen to understand it having been sitting next to you for many years. So let's get into the market. I'll say this. You know, you sort of set it up with is this a harbinger of what's going to happen early into 2026? And I this is just my opinion. I think what the market is starting to realize is that, wait a second, interest rates matter, despite the fact that 10 year yields actually went lower today and valuations clearly matter. You know, the couple stocks you mentioned in the energy pay space are names that you could actually make a compelling case around on valuation. I think the market has come to the realization that there are a lot of sort of headwinds out there that have been in that for out there for quite some time. And now for whatever reason, the market's starting to take issue with it. So the Vix at 17 and a half, I think that's going to be a story earlier in 2026. We've said that for a while and I think you got to buckle in for higher interest rates, by the way. Super. Kind of couldn't do without great people like Guy Adami and everybody else around me. So thank you very much for that. Carter Braxton Worth. Let's go to the charts. You heard me at the top. It is back to back 20% gains for the first time since 1998. So 26 years. Hard to believe, but true. But, but what are the charts? Take strip the emotion out of it. What are the charts say about this market? Right, so there's so many things going on at the surface. Of course, under the surface, what we know is we have a very bifurcated market. The actual S and p is up 24% plus minus. But the equal weight is up half that 12. And we're seeing that in sector after sector. Consider that the semiconductor index up some 20% but the equal weight semi is down on the year. We know this is happening in the sector level as well. The telecommunications sector basically a robust year. Whereas the equal weight almost hunch. And so the question is, is there an analog? It's tempting to find analogs and compare this period to another period. But you know, there's that expression. Analogy is a weak form of argument. And that is true. It's a comfort blanket to find something similar to say we saw this before. This is what precedent is. There's not a lot data. You're, when you do statistics, you're talking about hundreds of thousands of inputs. There's 100 years of data. So it's 100 inputs in this year versus that year. Every time it's different. But what we do know is the market is full valuation is a terrible timing tool. So I don't want to say expensive or cheap and no one knows what that really means. But the market is full. A lot of money has been put into the market. A lot of people believe in the general way being higher. And markets in January have a way of sometimes following through momentum or faltering. And I would suspect it's the latter that we falter. You know, Julie, it's like CNBC hosts and guests have an impossible job recently because let's. There's no denying it's been an amazing two years. We can talk about 7 trillion in new debt added. Can we make our debt obligation? Okay, fine, we'll get to that. But for an equity perspective, it's been a nice run until the last couple of weeks, maybe the last two months for semiconductors. So how do we read it? Do we read it like, wow, we've really done well the Last two years or. Yeah, that was then, this is now. And the setup, to Carter's point, doesn't look perfect. It doesn't. Right. But I think this has been. The last two years have been a really great example of the fallacy that you can really be able to predict with any accuracy. A lot of these outputs, they're just too complicated. Right. Think of two years back, we were positive there was going to be a recession in 2023, and it didn't show up. I always get a little bit nervous when the consensus starts to really coalesce because typically that means the market's going the other direction. It really likes to, you know, screw the most people that possibly can. And when we're really sure, you know, that's when. That's when you need to be really nervous. But what I will say to kind of curse point is I think there is an understanding that there are a lot of really challenging headwinds still in front of us right now and that the valuations being full, you know, a full valuation is not problematic all by itself. What it does create, though, is a high level of expectation. And when those expectations aren't met, there's a lot of crying as the stocks go down. And, you know, I hate. I shouldn't say hate. No, you just said it. I did. You know what? I'm doubling down. I don't like. I hate the word, Mike. Perfect. Because it's too overused. It's every. The perfect casserole. It's used everywhere. Wait, whoa, whoa, what? The perfect casserole on cooking magazines. The word perfect is used for everything. You get my point, Mike, is that the market has been perfect. There's a lot of people. I walk right out here in Times Square after the show is over, and people tell me they made the 20%. I brought it up earlier on the network today because guess what? All you had to do was throw a dart and the stock probably went up the last two years. That's kind of my point. I don't know if it's going to be like that anymore. But for people that literally just close their eyes and press the button and bought in video, they've doubled their money. It makes it seem like this is a pretty easy job. And it's not like, I mean, or they bought bitcoin or they bought Bitcoin and they more than doubled their money. Yes. Everyone's a genius. Yeah, it makes. It makes it really easy. I mean, I don't know that. You know, to Julie's point, if everybody's sort of coalescing around an idea and that sentiment is bearish. Then I kind of agree with the idea that, you know, you always want to sort of if everyone's on one side of the boat, you probably want to start thinking about moving to the other side. But I'm not sure that everybody is on the bearish side. I mean it sounds like a lot of people on the desk tonight are, but I think there's also a lot of optimism. Certainly we've seen and heard a lot of optimism from corporate management after the election. I mean some have come out and said, you know, this is as bullish, at least on their own businesses as they have been. The caveat I would offer is that we have seen sort of continuing claims on the employment side extend out a little bit. And if we start to see some weakness, you know, one of the things we don't talk about too much is sort of those incremental passive dollars that just flow into the market automatically every single time people are contributing to their 401k and so on. If we begin to see the employment picture worsen a little bit and then you also have everybody kind of in this tide of unbridled optimism up until about a week or so ago, then I think that we do have room for a little bit of downside in January, it's tail end of December that happening, that's not the end of the world. We had a very bullish end to 21. Look how 22 started out. That's not basically an indicator of anything. But I keep an eye on employment. That I think is something we ought to worry about a little bit. I'll let you take the casserole thing back, Brian, but I'll say this. I mean since you mentioned well look at Williams Sonoma chart over the last year or so, I mean that's been remarkable. So somebody is actually not only making casseroles but buying the. What you were so nice to me, Dutch oven. You get my point though. Everybody just made money in this market. And so Mike Co just sort of touched on it. Passive investing. A trillion dollars of funds came, their flows came into ETFs last year, which was a record. Passive investing trumps all else. And if you think about it, names like Apple, I think There are over 400 ETFs now of which Apple is one of the top 1515 holdings. They win in this environment, that money flows in those stocks sort of they reap the rewards of passive investing and the levitation that the market's done is on the back of that, my concern has been and it's been unfounded, but it doesn't mean it won't happen. At some point, passive will start to become active and it's never active on the way up. Okay, let's bring in another voice as conversation. I want to try to clarify what I was talking about. Ben Emmons, chief investment officer at FedWatch Advisors, must read Daily Notes. Here's the point I was trying to make. Casseroles aside, Ben, which is this. Let's say somebody's gambling on football and they bet five games, five bucks, right? They don't care and they win all five. They get a little more bold, they start betting ten bucks, they win five more in a row. Pretty soon they might say, you know what, we're going to mortgage the house. I'm going to bet money I don't have because I can't go wrong. I can't miss betting on football. And I, and I do worry there's a part of this market where, that's where we are with stocks that people have, the risk is not, has not gone out of the market, Ben. But I don't want people to get too confident, too cocky, too complacent because that's when you get hurt. I think that's right, Brian, because I described recently it's like a casino market. At least it has some feel to it. You get speculators coming in with a blind eye. Just bet on something because it's going to go up either way. That casino elements I think is playing out a little bit here at the end of the year because those also probably the people want to take off the chips at the table really quick. It adds a little bit of this downward momentum. So with the panel that we're probably going into the new year with some pressure on the markets. But keep an eye on what's happening with bonds too. Like we're having a pretty good rally today. I myself kind of bearish on bonds, but I do think that too there was not a blind eye on bonds. No. Because you know, they're really about fundamentals. I think you get a little bit of a rally in bonds to start a year. Okay, rally in bonds. But let me ask you the other side. Do you think if we, it doesn't sound like you think we're in a 5%, 10 year, but if we got close to that, Ben, because stranger things have happened. Can the equity markets, quote unquote, I'm doing air quotes, survive a 5%, 10 year treasury. I think markets will be under pressure because at 5%, Brian, we may not even be at 5 to high enough because I think there's where the psychology comes in on those who are, I think really overweight bonds. They start changing their minds because I think that 5% represents what everybody has been pricing into the equity market. A stronger economy with more inflation in the fact that only has to stay on hold. They may have to reassess where they are. So I think that's going to be a pressure point there. Not to mention we deal with this debt ceiling coming up in January. You can kind of tell during the budget resolution and even today there's some tension about this speaker and about what's going on with that the bond market could react to that debt that's negatively going higher with yields after the short term pullback that we're seeing here on yield. So I think it's a pressure point, Brian. It's something that we, we have to watch because we're going to go to 5%, we're likely going to go a little higher from there. Yeah. And Ben, your work has been extraordinary and you've been one of the few people that thought that yields could go higher correctly. So. But what you're talking about in the very short term I think is tactical. In the TLT rallying into January, yields may be going down to 4.4%. But do you think that could be on the back of potentially a flight to quality as the stock market sort of sells off? I think we've caught a glimpse of that a little today. I think that's right, Guy. I think that's the relationship that, that probably plays out with, you know, people making note of, of economic data and surprisingly sees that those are curl down and yields have deviated from that. So there may be some reason here for people to say, hey, there's a, this is short and tactical opportunity. But if you think about bonds and you think about the risk of bonds, you think about the economy, we have too much duration risk still in these bonds. Each time yields go lower, that duration risk actually goes up. What does that mean? Can you say duration risk in Ben in plain English for the, for the folks at home on the radio that may be new listeners and viewers because the stock market has done so well. That's a good question, Brian. So think of the idea that if the, if the yield of a bond goes up, the price goes down by X percent. That's kind of a duration measure. So duration, five years yield goes up a 1%, the price goes down by 5%, you know, and actually currently today that duration in Treasuries is higher for like 6, 7 years. So top 6, 7% loss that you could have on the treasury bond if you go up by 1%. That's actually what happened this, this past fall. I think that risk has not abated at all. If anything, any kind of short term pullback in the yields makes that interest rate risk even more elevated, therefore future losses. So it's something really to keep in mind for people watching. Listen, I think it's an important lesson and education. Ben Emmons, FedWatch Advisors. Have a happy new year. Ben, thank you very much. You know Mike, I think, I think he brings up a very interesting point which is it was so easy and then bond yields reverse September, they hit what, 365 of the 10 year. Now they spike back up and guess what happens. All these high beta, high valuation names, not all of them, but a lot of them get hurt. The market, Mike, can turn very quickly on people. Yeah, I mean there's really two markets I probably think of first when I think about the interest rate exposure. One is sort of the high duration equity and when we're talking about high duration equity we're talking about stocks, not ones that are paying big fat dividends and have sort of stable growth, but all of those companies that are pricing in a lot of future growth, those are going to tend to be more interest rate sensitive. Area that's going to tend to be more interest rate sensitive is the Trump trade stocks which is probably in Julie's wheelhouse actually. But you know, companies that are more capital dependent on the debt side which is typically going to be the smaller cap stocks, Russell 2000 type names, those are going to be very sensitive to interest rates in ways that sort of, you know, the high large cap stocks might not be, you know, I don't really see Alphabet as being materially impacted by something like this. Those companies that carry a lot of cash on the balance sheet actually could see, you know, interest income if you will on the 50 billion bucks that they've got. And they don't really have much interest rate sensitivity elsewhere. But those are the two sort of barbell ends that you have to worry about if you're thinking about the 10 year rate spiking yet been a pretty remarkable turn in especially the longer end of the bond market. Guys, thank you. We're going to get back to stocks in just a second. But folks, obviously former president Jimmy Carter died yesterday. He was the age of 100. He had a two year fight very brave fight with cancer. As the 39th President Carter faced sky high inflation, an oil embargo, the Iranian hostage crisis and a general sense of malaise in America. But Carter also oversaw the beginning of things like deregulation in things in industries like the airlines, railroads and energy. And he appointed the man who would ultimately cross crush inflation. That is Federal Reserve Chairman Paul Volcker. It's not a political show guy Darby, but I think Jimmy Carter's economic impact 100%. I mean you mentioned deregulation. I saw Mike this morning talking about similar and a lot of people on Twitter reporting it out. You can say what you want about his presidency. It was obviously a very difficult time in this country. With that said, I mean the dig regulation that we sort of enjoy today is at the foot of that Carter administration some 40 something years ago. And I'll add this, I mean you can make an argument that Paul Volcker is the most important Fed chair that we've had over the last 50 or 60 years. And he was appointed by Jimmy Carter. He obviously did. His work under the Reagan administration was put in place under Jimmy Carter. So a remarkable man. I don't think there's any denying that an incredibly well lived life and quite frankly his presidency set up a lot of things that we're enjoying right now. Well said. You know what's amazing is that Jimmy Carter when he Left office in 1980, was only 56. Passed away at 100 years old. More fast money right after this. This episode is brought to you by aarp. Ten years from today, Lisa Schneider will trade in her office job to become the leader of a pack of dogs as the owner of her own dog rescue. That is a second act made possible by the reskilling courses Lisa's taking now with AARP to help make sure her income lives as long as she does. And she can finally run with the big dogs and the small dogs who just think they're big dogs. That's why the younger you are, the more you need AARP. Learn more at aarp.org skills if bonds are back today, why wait for tomorrow? At pgm, our fixed income strategies help investors uncover hidden value and unlock opportunities. Whether you're looking to enhance your income or diversify your portfolio, our broad range of strategies bring together local expertise and deep credit research to help you achieve your long term goals. PGM our investments shape tomorrow. Today CNBC exclusive Avenue Capital CEO Mark Lasry his 2025 market outlook. Where is he putting his money now? And investing in sports? Stay ahead of the market Squawkbox tomorrow, 6:00am Eastern, CNBC. All right, welcome back to Fast Money everybody. Like the rest of the market, the semiconductors got hit hard today. Now most of that damage coming earlier in the session. But then the group, as the day went on tried to recoup some of their losses. Now overall, overall, Christina, the group still ended the day down. What we say is in the red. But of course there's a company called Nvidia. Now I don't know if you've heard of Nvidia, but they make chips for things that people are going to use in video stock. That was deep thoughts incredible with Brian Sullivan. Nvidia ended up 310 of 1% although it was up 2% at its high. Christina, parts of Nebulous joining us now with a, shall we call it a deeper semi sweep up? Call whatever you want. Yeah, you call whatever you want. To your point, chips did fall in 10 with greater tech. That's been the scenario for a little while, but there were specific narratives at play. And you mentioned the big dog in video, only one in the green after closing. Reason for that? There's two things. The acquisition of its startup run AI that went through developers. It helps developers optimize their AI infrastructure. And then another report actually coming from the information that says the parent of TikTok, ByteDance plans to spend up to $7 billion on Nvidia's AI chips outside of China. And this is in 2025, so another customer. So Nvidia shares though if you look at it just over a two month basis, pretty flat, maybe 1% down, barely above their 20 day moving average. And that's because of the, the, the rumors about chip delays Blackwell and then chatter about the AI trade unwinding because large language models may be hitting limits and smaller models are getting really better. So you don't maybe need as many AI GPUs. But if you lump all of these players together, these AI winners, you know, Broadcom ARM Marvell, TSMC may have been lower today. And then Nvidia, their average return on the air is still about a 107% FAR outpacing the broader chip ETFs as seen by the SMH is up over 40%, the stocks up 14%. And then of course you got those with less AI exposure that are really feeling the pain on semi, one of the worst chip performers today, slowdown in EV sales hurting them. And then the list goes on too with the slowdown in PCs and smartphones as well, impacting names like Micron, AMD as well as intel, because of that recovery. That's taking a lot longer than expected. We are fortunate she is back covering this space. Number one back from maternity leave. Six months gone and it's great. And she does an extraordinary job. And she mentioned these names. Nice. You're so nice today. As opposed to what? I don't know. When you say that speaking the truth. I'm speaking the truth. Well, you are. Now you got me off my train of thought. What I was going to say was, though, you know we mentioned in video arm Marvell. Absolutely. But for every one of those stocks, I mean, look at what Qualcomm has done over the last five or six months since their earnings release. Look at what AMD has done. AMD was everybody's darling. That stock has been under considerable pressure. And then if you want to throw sort of a micron in the mix. So there's a lot of cross currents in this space right now. And you know what's coming down the pike? Competition. And at 18 times sales, ish, which is where Nvidia is trading, it's not about price to earnings. That's reasonable. About price to sales. And their ability to grow into it, I think is going to be challenged. And Carter Braxton, Wirth. Here's the challenging part. I think to Guy's point, we love to lump these companies all together. We just say the semis. Right. We say the banks. These are all different, different companies. To Christina's point, on semi does something very different than Marvell, which does something different than Broadcom. So when you look at the charts for the group and some of these individual names, what do you see? This is as bifurcated, again, an area of the market as there is. So as a simple statement, if one had to check a box, semis were good or semis were bad in 2024, the answer is, of course they were bad. The Philadelphia semiconductor index itself is up 20%. That's less than the market, and it's a whole lot less than the tech sector, up 37. Sixteen of the stocks in the index are up, 14 are down for the year. It's been a treacherous area, required perfect stock picking and not aggregation. Not just being long a theme. And what's so ironic is it was such a good theme for most of the market, which is to say if the tech sector is the most important part of the market at 32% and semis are the leading edge of that most important sector and we're the most owned and most believed in with, of course, Nvidia and Vago becoming such darlings. How is it possible that after all of this, the Equal Weight semiconductor is down on the year 1.2%? Bad year for semis. He said a lot. He typically. What is what did you say? No, but I mean he was like the most important group and the most important group and they're down. We're going to get more on that later. Christina, great to have you back. She has M and Ms. On her fingers. You see what she's got going on. Christina, parts and elves. Thank you very much, folks. There is a lot more fast money and we are back to clauses after this. Here's what's coming up next. Adding to the pile, Microstrategy scooping up even more bitcoin as the crypto hovers below 100k. But as their average buying price creeps higher, will there be a reckoning in the crypto trade? Plus another potential risk for markets as bird flu cases come into focus. The latest on the virus, its mutations and the impact an outbreak could have on the country. You're watching Fast MONEY live from the NASDAQ market site in Times Square. We're back right after this. This episode is brought to you by aarp. Ten years from today, Lisa Schneider will trade in her office job to become the leader of a pack of dogs as the owner of her own dog rescue. That is a second act made possible by the reskilling courses Lisa's taking now with AARP to help make sure her income lives as long as she does. And she can finally run with the big dogs and the small dogs who just think they're big dogs. That's why the younger you are, the More you need AARP. Learn more at aarp.org skills as a global leader in alternatives today, PGM is capturing the potential of tomorrow. So as you look to diversify your portfolio, PGM offers expertise in seeding, developing and managing a broad range of liquid and illiquid strategies. With over $320 billion in alts across public and private markets, we are helping clients achieve their long term goals. Pjum our investments shape tomorrow today. All right. Welcome back to Fast Money. The year's hottest Bitcoin stock down 8%. In fact, not only that, it closed near session lows. We're talking about MicroStrategy now. MicroStrategy through its polarizing CEO Michael Saylor said it bought 2 to 9 million dollars worth of Bitcoin in the week ending Sunday at an average price of just under $98,000. Now that is a sharp decrease from the prior week and down more than 2 billion from the start of the month. That's total Bitcoin value. Shares of MicroStrategy now down nearly 22% over the past month. So do we play any weakness here? Let's talk about MicroStrategy. Okay, so Michael, first off, talk to us about what we do about the stock MSTR. And secondly, what are your thoughts on MicroStrategy? Because I get the feeling that MicroStrategy has more than the ability to move the price of bitcoin. What say you? So, you know, I am a bitcoin believer and I continue to be, but this is probably not the place that I would do it. And that is, there's a couple of reasons for that. One is that it's not like Bitcoin itself isn't a particularly volatile asset. It is quite volatile, probably about 55, 60% annualized standard deviation. MicroStrategy is a very levered way to play that. Now, of course, MicroStrategy has a strategy which is accretive to shareholders by issuing debt, issuing equity, essentially being able to purchase the underlying Bitcoin at effectively a difference and creating some additional book value per share for MicroStrategy shareholders. That's the good news. The bad news is that of course this introduces a great deal of leverage. I'm not sure that they are wholly unique in their ability to do this. So I do worry that there could be others that would say, you know what, I'm looking to take advantage of capital market capital access to do levered plays on Bitcoin as well. I would probably stick with IBIT instead. All right, Julie Beal, what's your take on Bitcoin MicroStrategy? Both, I think. If I were a shareholder of MicroStrategy and I were getting diluted so that the company would be able to be buying more bitcoin rather than, I don't know, running its own business. It's akin to your neighbor's kid who lives in his basement asking you for money to buy more bitcoin. Like just buy the bitcoin yourself. You don't need to lend them the money. It doesn't make any sense to me in this kind of positioning. And I think it's, it's, it's akin to what we're seeing in GameStop. It's really run up on, you know, the hopes and dreams of a lot of guys, frankly. Well, they're bank. There are people that are allowing Michael to do what he's doing. He's Michael. So he's not doing anything wrong. I mean, people come at him say, hey, you know, we have these great opportunities for you. We can do these convertible bonds. And as long as the market allows him to continue to convert his stock into Bitcoin, he will do that. He has said as much and he's a person, has said countless times that he will buy the highs in bitcoin on a consecutive basis year after year, because by definition they will continue to buy it. The problem will arise though, with an average price now, I think of $62,000 or such on their balance sheet. You know, if Bitcoin were to go back down to that prior resistance level of 70,000 or so as they continue to buy, that average price is going to equal potentially where Bitcoin is trading. And that could trigger some really interesting things. So I think we all agree that MicroStrategy, the stock is just a levered ETF for Bitcoin, but you're getting into some dicey areas of Bitcoin would continue to sort of go lower from here. Well said. I missed the days and MicroStrategy was just, to Julie's point, a plain old simple software. Well, he doesn't miss those days. No, he does not, because it's worked. What he's done has worked. And it works until maybe it'll work forever. All right, coming up, we're going to switch gears. We're going to talk about bird confirmed cases hitting double digits in America. Former FDA Commissioner Dr. Scott Gottlieb is here to separate fact from fiction. Talk about the risk of a real outbreak and what it might mean for you and your money. We're back right up. All right, welcome back to fast money. The U.S. treasury Department saving saying Chinese hackers. Get this. Yeah, Chinese hackers stole documents is one of being in what had been called a major incident earlier this month. Emily Wilkins in D.C. and Emily, when I hear Chinese hackers invading treasury stealing documents, the term major, you know, incident kind of, kind of comes up. It does, Brian. No, I think this is something where there's a reason that we're talking about this now that a state sponsored actor in China did hack into the U.S. treasury Department. It is of course, according to a letter that has been obtained by cnbc. Here's what we know so far. We know that the hacker was able to access a third party software provider called Beyond Trust. And from there they were able to access unclassified documents that some treasury officials had in their workstations. According to the letter, the Treasury Department was made aware of the hack on December 8. Now, the Treasury Department spokesperson said in a statement that treasury takes very seriously all threats against our systems and the data it holds. Over the last four years, treasury has significantly bolstered its cyber defense and we will continue to work with both private and public sector partners to protect our financial system from threat actors. Now the compromise software has been taken offline, and at this point, there is no evidence that the hacker can still access treasury information. Brian, I think it's a question at this point, could something like this happen again? What is being done prevent something like this from happening again? And what if any, information did those hackers get that could be used in the future? And I think to a certain extent, a lot of those are future questions that we're only going to learn the answers to to in time. It feels like a big story. Emily Wilkins, we appreciate it. Thank you very much. In more good news, bird flu impacting everything from egg prices to cattle supply. 66 cases now confirmed in humans so far this year. And there's actually a new worrisome development. Genetic samples from a patient hospitalized in Louisiana showed that mutations could make bird flu, which is called H5N1, spread more easily among humans. While your next guest says the likelihood of bird flu becoming a pandemic is very low, want to make that very clear, he does believe the US has done everything wrong when it comes to containing the virus. Dr. Scott Gottlieb joining us on the fast line. He is a former commissioner of the FDA and a CNBC contributor. Dr. Gottlieb, I'd like to say it's good to have you on, but I wish you didn't because it means this is going on. What do you mean we've done everything wrong? Well, this is still viewed by most experts as a low probability risk, as you noted, but there's a range of opinions on this and most agree that it could be a potentially high impact event should we should this break out and we should be taking more steps to mitigate it? A lot of the things that we've done, we've done late. The USDA only recently implemented a program to start testing bulk milk shipments to try to detect outbreaks on dairy farms where a lot of this infection is localized. It's only in the past summer that we started compensating farmers for the losses they sustained by turning over cases on their farms. And the compensation is still too low. We haven't distributed tests to dairy farms so they can start testing their workers. There was one recent study done, albeit a Small study that showed upwards of 7% of all dairy farm workers have likely been infected already with the bird flu. And we haven't done anything to compensate dairy farms for losses they sustain by turning over those cases among their workers, lost days of work absences, things like that. And I think we need to do more to be compensating these dairy farms if we want them to do the right thing. They're on the front lines of this risk right now for the American public, and we can't expect them to bear the full burden of that. We also haven't taken steps to stockpile the full range of antiviral drugs that could be effective against this virus. We have a lot of Tamiflu in the national stockpile, upwards of 60 million doses, but a lot of that's old. And it could be the case that if this virus does break out, it may be susceptible to one antiviral drug but not another. So you want to have the full range of antiviral drugs available. And we've started late updating the vaccines that could be effective against this virus. The vaccines we have stockpiled right now, about 10 million doses, may not be effective against this particular strain. So we need to update those vaccines and have them prepared as a potential hedge against this breaking out. 71% of the herds, dairy herds in California, have been exposed to H5N1. And I bring up California because we don't realize that it actually is the biggest dairy production state. California is a monster when it comes to agricultural products. Do we need to worry about the nation's milk supply, or is that just taking it maybe to the nth degree a little bit too far? Well, look, this is probably wider than just California. California is doing a lot to test their dairy farms, so they're turning over the cases. This may be more widespread among other states as well. There are real economic risks to the spread of this virus. When cattle are infected, they often are put to slaughter. This could become an issue with the milk and the meat supply in this country if it continues. As you said, 875 herds across 16 states have already been infected, and it kills upwards of 2 to 5% of the infected cows, and milk production goes down about 20%. So as this becomes more widespread and it's likely to continue to spread among dairy cows, at this point, it seems to be endemic in the dairy herd in this country. You could see an impact on milk and dairy supplies. Dr. Scott Gottlieb, I guess Happy New Year, Dr. Gottlieb. Thank you very much. Guy. Something else we gotta worry about here? Well, hopefully not. But if you remember pre Covid, I mean, this was something that was on people's radar screen that people were very concerned about. And my concern would be again, politics notwithstanding. I think people are sort of COVID fatigued and they're gonna dismiss this as another whatever it is they call it government hoax and those types of things. And, you know, the fear is that people don't take it as seriously as I think they probably should. That's it. Something to watch. 66 confirmed human cases. All right, coming up, a flop in the flipping market, why profits in housing are down and whether the trend will continue in the new year. Dan Olich, up with the housing story. You don't hear very much anywhere else. We're back right after this. All right. Welcome back to FAST money. There's been a lot of tough news today. This is not one of those times. There's good news. Pending home sales up for a fourth straight month. The National association of Realtors putting a 2.2% month over month gain in November. Total pending home sales at a two month high. But if buyers hope to buy and then flip their homes quickly, beware, there are some cracks forming in the flipping business. Diane Olek has the flipping details. Diana, you didn't do that. I just did it, Brian. Both home flips and flipping profits took a dive in the third quarter of this year, according to a new report from Adam Data. A flip, of course, is defined as a home bought and sold in the same 12 month period. So in Q3, 7.2% of home sales were flipped. That's down from 7.6% in Q2. But the returns, they showed a bigger drop. Flips had an average 28.7% return on investment before the additional expenses, down from 31.2% in Q2. It also ended six straight quarters of increases in that profit metric. So a real turn in the market. And that profit margin was roughly half half of the peak profits hit in 2016. And this is where higher mortgage rates, of course, come in. That profit margin is within the range that could easily be wiped out by carrying costs like higher mortgage rates as well as higher renovation expenses and of course, property taxes. So in real cash, gross profits fell to about $70,000. That's before renovation and carrying costs down $5,000 from the second quarter and down $10,000 from the highs reached just two years ago. We did see in the November closed sales report from the Realtors that the investor share of sales fell from to just 13% from 18% in November of last year. That's both flips and investors who think that they can buy it, hold it and rent it and make a profit, which is not doing as well either. Brian? 70,000. That was gross profit. So we got to strip out what the carrying costs, we got to strip out taxes. Do you have any how much people might actually be making or losing flipping homes? So it's hard. Yeah, it's interesting. I always ask in this report, so what is the net profit? And it's really hard to say because it depends on where you're operating, where you're flipping the home, what the costs are there, what the mortgage rate is, what you decide to renovate it. Some do gut renovations, some do very little. So it's really hard to say what that net profit is. But the gross profits are definitely coming down. You've got higher home prices, higher mortgage rates and just a very tight supply to choose from. Gross profit 70,000 and that's down. And there's a lot. There's a lot in there, as you said. What is the net profit? People aren't going to tell you. Diane Olich, thank you very much. We're going to take a short break here. Coming up on FAST money, All right, high or low energy? What higher? Low energy heading into next year, we're going to give you the energy setup up the technicals and whether or not we are. We are. You didn't tell me about that. I should probably prepare in the commercial. We're going to talk more about energy and oil and gas coming up right after the break, assuming I'm still here. We're back right after this. All right. Welcome back to fast money. Not everything was down today. Guy Adami, oil was higher today. Oil is now up about 4% for the month. But really in energy, oil is not the story. Natural gas blowing up hitting its highest level in nearly two years. But what do the charts on all of energy say? Well, we don't know, but the chartmaster, Carter Worth does. So Carter, what do some of the energy charts show? Well, let's get right to it. Let's look at crude oil first. We have two charts. This is going back to the early 1980s and of course we have the all time high, essentially 150. That was in 2008 and we got close to that after the Ukraine invasion, about 135. And here we are sitting here sort of, I would say, in the middle of the tennis court, which is to say it's a pair of tools It's a non trade. The here and now chart. If you want to zero in a little bit tighter. The question is as annotated there, is that something of a bottom, the green arrow. That's my judgment. Others might put a red arrow. My thinking is you can trade this higher for about $3 to $4 a barrel. But in terms of the shares market, let's look at the sector. What I wanted to try to depict here is we have These are a 10 year weekly charts. We're the same level we were essentially 10 years ago. The peak was in 2014. We got close to that earlier this year and we're sitting right here now. Just go through the next couple charts fairly quickly. This is the same chart and what we know is the earnings are identical for the sector. Earnings per share for the sector as they were in 2014. Also look at sales, you'll see it's the exact same thing. You can do this also for ebitda we are essentially at the exact same level as well in terms of profitability. So the question is though the yields are better, right? And the question is, is this a defensive area of the market? If and as the high flyers microstrategies give way, my hunch is to be overweight. Energy in 2025 makes sense. I mean if you think we talked, we started the show about valuations and I think as people realize how expensive some of the sectors of the market are and they look for places where they can find value, they're going to find it in the form of these energy stocks and people just sort of do the overlay of the WTI chart and you know, because you're brilliant in this space, I mean it's not that simple. WTI could trade sideways in perpetuity and these still would be very profitable, well run companies that are not being rewarded in the form of valuation. So I'm with Carter on this one. Okay, thank you for the comp. Another compliment, Mike. Co do you think that these, that these companies are worth anybody's money? Because they haven't done a whole lot I don't know in the last couple years really. No, they really haven't. But I think that's really the point that everybody's making. I don't think anyone's really looking for crude to go back to Australia. 100 bucks a barrel. The world is very well supplied at this point and we probably are going to see a little bit more supply coming from opec and OPEC as some of their sort of production curtailments run off into the middle of 2025. But the thing is that a lot of the companies that we're talking about are trading at relatively cheap multiples, have decent yields, and are profitable at oil in these areas. So if you're worried about all of the multiple expansion you've seen in other areas, you might start looking at stocks that haven't seen any. It's amazing because at least in my little mind, the AI and Nvidia trade is all energy related. Speaking of trades, up next, your final trades. Time for your Fast Money final trades. Julie Beal Kick it off. I think housing inventory is going to continue to be constrained and so dream finders, homes and entry level buyers will benefit here. I like Mike Koh. Alphabet deserves a market multiple more than the market does. At 25 times. That would be 20% upside from here. I like Alphabet. He likes it. Hey Mikey Carter, what's the last name of those brothers? Save it after Carter. Jamal Kap Biotech Unicure Simple Q U A R E Huge move. More to come. So the Life Serial brothers were the Gilchrist brothers. Believe they lived in Yonkers, New York, in Westchester. The three of them were actual brothers. You're a star. I'm looking forward to Thursday. Devin Energy is your final choice. I love it. Thank you all very much, folks. Thank you for watching or listening to Fast Money. Matt with Jim 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. 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