← CNBC's "Fast Money"
CNBC's "Fast Money"
Stocks Tumble To Wrap Up Week… And Tim Cook’s Last Developer’s Conference 6/5/26
00:43:09
A bleak day for markets as the Dow, S&P 500 and NASDAQ all tumble to wrap up the week. The semi stocks leading the sell-off, and if this is the start of a broader pullback. Head of Macro Strategy at Wells Fargo Mike Schumacher lays out where he sees stocks heading next, and gives his take on what this means for Fed rates. Plus, details behind SpaceX’s blockbuster IPO next week, Boeing production reaching new heights, Apple’s Siri makeover, and how retailers could benefit from an AI buildout. Fast Money Disclaimer
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- [00:00]
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- [01:00]
Brian Sullivan
Live from the NASDAQ market site, this is Fabric Money, a big show. Here's what's on tap. Stops tanking. The NASDAQ posting its biggest point loss ever. The S&P 500 breaking a nine week win streak in a big way with its worst day of the year. And is this the end of the AI driven rally? We'll discuss, we will debate, we'll talk about it. And while it certainly was a rough day for the AI trade, one top analyst says some retailers could actually get a boost from the data center build out. And he will bring some stock picks. Plus Lulu shares. They go downward dog. Will Apple score a win at its developers conference? And Chipotle bucking the sell off. Hi everybody and welcome. I am Brian in for Melissa tonight. Coming to you live from Studio B at the nasdaq. Big show on your desk, Tim Seymour, Steve Grasso, Mike Coe and Mike Schumacher, head of macro strategy at Wells Fargo Securities. All right, we're going to start with a pretty loud message that stocks can and will go down. I know it's hard to believe, but if you need proof, here you go. The NASDAQ losing 1100 points, worst point loss ever. The S&P 500 seeing its worst day since October. And the widely owned and widely traded NASDAQ 100 crumbling 4.3%, its worst day in more than a year. What has been hot today was not semiconductor stocks being sold in a big way. The SMH, ETF, SM, its own head sagging 9%. Broadcom down another 8% after a 12% loss yesterday. AMD, Intel, Micron, A Marvell, all plunging more than 10%. Software cybersecurity stocks also caught up in the Cellophan, Microsoft, Palo Alto, Palantir, Cruz, Crowdstrike, Oracle and more, all with big losses. Now this happened after borrowing costs went up because this morning we actually got some decent economic news with the May jobs number coming in way better than expected. That sent the ten year yield jumping back above four and a half percent, a move that spooked some stock investors. So welcome everybody. Let's kick it off. Tim, listen, every drop this year, every drop recently has been a buying opportunity.
- [03:25]
Tim Seymour
Is this one great to have you, Brian? I don't know but I'd rather focus on the things that drove the sell off which are some of the world's biggest companies. Some of the biggest parts of this rally were either you know, a Broadcom, which gave you some negative guidance a couple of days ago. There's rumors matters going to bring a stock deal. We talked about the Google deal all week and you had a payroll number which at least puts the Fed solidly in the no hike camp. It's great having Mike Shoemaker here tonight because I really do think we're in a case where there stood could be a dynamic that the Fed's more in play than they were. However, if the Fed's hiking because of a payroll number, it's probably a good thing. I think you've got a place where we were parabolic on the way up. I would say that technically there are some things that have happened that aren't great for the next few days of trading either. I think we've had some selling climaxes, some outside reversals as Guy likes to call them. I mean we've had some cases. By the way, this didn't start here, it started in Asia overnight. Cosby with a big sell off. So I think you've got a case where it's time for a big breath. But some of the most exciting parts of what people have been investing in gave you reason to say, hmm. And again, if the biggest companies in the world are issuing equity, that's something that I think also has people concerned.
- [04:35]
Brian Sullivan
You know Steve, when a sports team is so hot like the Knicks are right now, by the way, they are and they lose a game not saying they will, but when they lose a game, coaches always say, well it's good that we lost because it's we got to work hard reminds us that we can lose and we got to reset our strategy. That's kind of how today felt at my Point. I know I'm going to lose all of your audience right now. I'm not unhappy the market sold off today. I think sell offs can be very, very healthy.
- [05:01]
Steve Grasso
Well, we did have leading into this, we had nine weeks of upmarket.
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Michael Coe
Right.
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Steve Grasso
So we were going for the 10th. That would have been statistically really unprecedented since 1985.
- [05:11]
Jay Sole
Right.
- [05:12]
Steve Grasso
So not unfortunately, but, but before I was born or the. Right around the year I was bor. And then when you let into it with the SMH, the SMH down 10% or 9%, it's up 58% year to date. Stocks up 80% year to date. So I think we have to take just a deep breath. I think Tim just said that. Settle your nerves and say, okay, you rode this up and hopefully you've been in the names. But do appreciate that you can get some rotation out of the names that got us here. Right there, about 35, 40% of the market is technology in some way, shape or form. Are you happy with what you own? Ask yourself that. Does it make you sleep better at night? And if you want to slice off some of your wrist, then slice off some of your wrists. But this is not a sell. This is a reassessment of where you're at.
- [06:02]
Brian Sullivan
Okay. Michael Coe, let me ask it a different way. I know we had the jobs number this morning. Bit better than expected. Ten year yields, they rose back over four and a half percent. Was that the trigger? Because if it wasn't, I don't know what today's trigger was, do you?
- [06:19]
Michael Coe
Well, I mean, certainly one of the things and it already got mentioned is the fact that there was some weakness in international markets even before we got that number right. So I think it's safe to say that that was not the only thing we're looking at. You know, at the top of the show, you referenced the drawdown that the S and P saw in early October. And that was also, as it happens, the largest options trading day that we had yet at that time. Today has now surpassed that. We traded almost 109 million contracts. So we beat out that October number. But there's something else about that October number that proved to be a pretty good buying opportunity. It was about a 3% drawdown from the prior peak to that early early October drawdown. And that's approximately what we just saw today. And you know, as Steve was just pointing out, and as you mentioned already, the market does need to see some pullbacks. It doesn't go straight from the lower left to the upper right.
- [07:08]
Brian Sullivan
So let me Ask Mike. I'm going to go back to you. Did we expect this kind of options volume day? Was that the setup coming into today or this kind of come out of
- [07:18]
Michael Coe
the field, expect an all time record? No, I don't, I don't. You never go into a trading day saying today's going to be the biggest day that the US options market has ever seen in its history. That's what we got today.
- [07:29]
Brian Sullivan
So today, today, today was it. We made history today.
- [07:32]
Michael Coe
We made history today.
- [07:34]
Tim Seymour
Yes, but, but again, if you think about where we've come from and if you think about the data that we've had for the last two weeks, I mean it's all generally encouraging and what I would just point out is that a move, I mean look, you know, look at the dollar move in a micron. I mean, you know the, these are moves in stocks that we didn't believe should have been where they were a month ago. So I think you have to, you have to understand that there's been breadth overall in the market for the most part. There are other sectors that also have continued to work. You've had a number of days this week where the Dow really been the outperformer and it's showing that there's also just some rotation involved. So yeah, I mean I think the message is kind of that of being collective. I'm sure Michael's got a view.
- [08:16]
Michael Schumacher
Absolutely. The macro backdrop is pretty good. I agree. The numbers today were good, not bad. The thing is the policy backdrop has gotten worse. That's the challenge. So people look at the Fed, look at your, whatever your other favorite central bank might be and say is that central bank going to cut and help me out answer from the Fed no. The Fed wants to sit. The Fed wants to watch and wait. And now at least the rate odds
- [08:38]
Brian Sullivan
of a rate hike up definitely gone up.
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Michael Schumacher
And you look at what, not at
- [08:42]
Brian Sullivan
the meeting in two weeks, but in July they've gone up, in September they've gone up.
- [08:45]
Michael Schumacher
Yep. Forget July, we'll do nothing in July. Watch the World cup of traffic out here like we all do. It's just not going to happen. But think about September or more likely December if the data run hot. Could the Fed hike? Sure, it could hike. And the market saying 25, 26 basis points priced in. I'd looked at it basically as a 50% chance of a 50 basis point hike, but really again, the big takeaway is the rate cut. That's toast. Rate hike possible, but down the road quite a bit. So the Fed wants To watch rate cut.
- [09:16]
Brian Sullivan
Rate cut. You said toast.
- [09:19]
Michael Schumacher
Toast. That's a term in the book.
- [09:20]
Brian Sullivan
That is a technical. I think it's squat is another one because the President Trump would like, would like a rate cut and this idea is that he's putting in, you know, warsh as his pick because wash by born be amenable. Big word grass Amenable.
- [09:36]
Steve Grasso
To look it up while you're talking. I pronounce it amenable by the way.
- [09:39]
Brian Sullivan
It is. It is.
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Tim Seymour
I think so.
- [09:40]
Brian Sullivan
It's just two way rate cut. Doesn't sound like you believe that right now.
- [09:43]
Michael Schumacher
Michael Schumacher, we don't even know what Warshire's views are really. And is he going to fly solo on June 17th? He might. Is he going to do something nasty to Trump? No, I can't imagine that. But he will he fully endorse a rate cut. I don't see how he could. You've got too many hawks on the Fed right now. He loses that battle and the data don't support it. So probably he'll try to keep the ball in play, not deviate too much. But can't really believe he's going to
- [10:07]
Steve Grasso
argue for I can get on board with the no action. I can't get on board with this. And I don't think you're saying this, but I don't think the market can change on a dime. Meaning that the market threw away the rate cut odds and they put in a rate hike odds. If the Iran war ends that will reverse almost immediately. And to your point on President Trump, if we're at all time highs, I don't think he cares about rates, truly. I think he's going to pick one or the other. I think he's looking for rates to be low to foster an all time high.
- [10:43]
Brian Sullivan
Michael Schumacher, who's sitting right there by the way, just said 50% chance of a 50 basis point hike.
- [10:50]
Michael Schumacher
Now that's what the market told us.
- [10:51]
Steve Grasso
That's what the market say.
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Brian Sullivan
You're quoting the market, you're not quoting yourself.
- [10:54]
Michael Schumacher
That's right.
- [10:55]
Michael Coe
Fair enough.
- [10:55]
Steve Grasso
But what would, and I've said this before, what would a rate hike do for a supply shock induced inflation environment? All that does is actually affect the lower income brackets because they're already getting hit. Demand destruction has already happened at the pump. So if they're ready getting hit at the pump and they're going to get hit with their credit cards and their rent, you've only hurt the people who need it most.
- [11:22]
Tim Seymour
Look again, I think for the broader economy today was A great day and this was a great week. And the job market's been almost superhuman if you think about the numbers we've had for the first quarter of the year. To me, the last quarter, the last three months, especially in a war economy and in an economy where we've been most worried about AI. So again, 265,000 jobs added. The payroll growth is average 180, 88,000 over the last three months. I mean these are numbers we did not expect. These are numbers that you weren't getting out of, you know, some of the dialogue, the analog that's coming out of the job hiring or job firing, what. So added to ISM, but add to PMI's manufacturing. This is an economy that actually is significantly stronger than people thought it was. And ultimately if the Fed, I get back to that. If this puts the Fed in play, that's actually for good reasons for the equity market. I'm not, you know, I also say I actually think we've been in an uptrend in the treasury market since almost last October. If you take out the war noise, in other words, yields have wanted to move higher. I think they're going to go higher. You know, I don't know Michael, I mean you've been pretty measured on this and if anything have been leaning the other way.
- [12:28]
Michael Schumacher
I think I'd say probably higher in the short term, Tim, but by the end of the year, perhaps a little bit lower, let's say intense. Next big test for the bond market frankly is CPI on Wednesday. If that come in hot, comes in hot, it's going to be a challenge for the market and the Fed will look at that and say, oh my goodness, we've had hot CPI for a while. Probably going to raise the chance of a hike market response. Stocks, bonds, take your pick. All of them do badly. So to me that's the next big hurdle to get over.
- [12:53]
Brian Sullivan
All right, so let's kind of add to the conversation because folks, as all of you out there know tech stocks, many of them coming off all time record highs and the incredible runs of the last couple of weeks, I mean The S&P 500 was up nine weeks in a row coming into today. It's not been hot. Bitcoin and other crypto Bitcoin just keeps going down, dropping below $60,000 today. It's now at its lowest level since October of 2024. And one stock that's in the middle of that is strategy. Strategy formerly known as MicroStrategy, losing 1/4 of its value this week. Steve Grasso worst week for strategy since November of 2022. Earlier on Power Lunch, 2pm Eastern Time, by the way, I reference that like those nature shows where there's like a wounded hyena and the other hyenas kind of come at it because they're like, we're going to chase you. Terrible to watch. But it's a circle of life, Tim.
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Steve Grasso
And it feels like I would say the gazelle.
- [13:50]
Brian Sullivan
That's.
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Steve Grasso
I would use the gazelle. So strategy is the gazelle. So no hyenas are killing the gazelle. You get my strategy is the gazelle not saying.
- [13:58]
Brian Sullivan
I didn't give any names, but it feels like the market is coming after something when it comes to crypto. I agree with that.
- [14:06]
Steve Grasso
And you know what's funny is that Mike was pointing out the the last options record was in October. The last time we saw crypto at the highs was in October. And everything else has rebounded, but crypto has not rebounded. So there's stablecoins, there's tokenization, there's the clarity act. There's probably a dozen reasons to sell crypto and there's only one reason to hold crypto is if you're a believer or a huddler. Strategy.
- [14:35]
Brian Sullivan
Give a reason to buy.
- [14:36]
Steve Grasso
Strategy. Strategy has sat there and said that they were never going to sell.
- [14:41]
Brian Sullivan
And maybe he sold a little bit this week. Yes.
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Steve Grasso
And that's the reason why. So the market has heard him say, I'm never going to sell. I'm going to be a bitcoin maxinista and that's all I'm going to do. And then when you see him sell, it takes the legs out of the crypto market because for all purposes, bitcoin is the crypto market.
- [15:03]
Brian Sullivan
Saylor is not the CEO anymore, but it's executive chair.
- [15:06]
Tim Seymour
Look, this is a levered situation that with the kind of price moves you've had, I mean you're going to have exaggerated moves lower. Thank you, Brian.
- [15:12]
Brian Sullivan
No. And that I think went to my gazelle slash hyena point. Mike Co. You're out there in California, Pacific Ocean. Does it feel to you like with bitcoin there's a little blood in the water?
- [15:25]
Michael Coe
I think there's a lot of blood in the water. I mean one of the things I look at when I look at bitcoin is the long term weekly average. And there's sort of a trend line that goes back since in all of its history it violated that a couple months ago and it just hasn't looked very good since as Far as the sales are concerned. That was kind of curious. I think my theory on that is it was a bit of a trial balloon. What happens if we sell a couple because they sold such a small amount? It wasn't meaningful. It didn't do anything for their preferred dividends. It was hard to understand why they would do that. And then, of course, he came out very shortly thereafter with a statement where he said, okay, well, it's going to be back to business as usual. Which I think implies that we're going to go back to acquiring bitcoin now. So it did seem like a very curious move. But the minute that, you know, the biggest hodler out there decides to sell a little bit and does so publicly, it's obviously going to give some real concerns to everybody else.
- [16:19]
Brian Sullivan
And what you're saying is so critical. Mike. Co. And I want to be clear to the audience. We said they sold two and a half million. They sold million with an M. We didn't. That wasn't like a typo or a misspeak. It was million, not billion. I mean, it was a. To your point, it was almost like a couple of people needed a car or something. Mike, I don't know. Do you have a reason why they would have done? You just. You said trial bull. You think it was like a test sell?
- [16:41]
Michael Coe
Yeah, I mean, it was very, very curious. I mean, so they also retired some debt, but that was a much more meaningful spend off of their cash than what they raised off of the.
- [16:50]
Jay Sole
That.
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Michael Coe
What odd lot of 32 bitcoin that they sold. So I really believe that it was kind of a test. You know, what happens if we ever do sell some? What's going to happen to our preferreds? What is going to happen to our stock? What is going to happen to bitcoin? Because actually, I think it's as much a driver of that. It is of their own shit because they're just a Treasury holding company, basically. So I think that this was a test and I don't think it went very well.
- [17:15]
Brian Sullivan
Well, I think you guys on this program, I'm told I'm a pretty avid listener and viewer. Like acronyms, you know, COIN one right now we love Sappho.
- [17:23]
Tim Seymour
Sappho.
- [17:24]
Brian Sullivan
Sell around and find out. Oh, because I think that's what happened with strategy. All right, one big market story that is developing right now. You can use that. Tim, involves Meta, the Facebook and Instagram parent also being sold today. It's in part while the whole market went down. But there's also a report in the Financial Times saying that Meta's considering that's critical considering raising billions of dollars in a stock offering. Julia Boorstin has more. Julie, what do we know?
- [17:51]
Julia Boorstin
Well Brian, Medicares did plummet on a Reuters report that it's considering selling billions of dollars in new stock to finance its AI infrastructure. Take a look. Shares ending the day down 5 and a half percent. This as Metta plans to spend as much as $145 billion in AI related capital expenditures this year. Now today's report follows the launch of Google's record $85 billion share deal this week. Better did throw cold water report telling us quote this is pure speculation saying we've been clear that huge opportunities lie ahead in AI and we'll continue focusing on raising capital in the most flexible ways to support that. But Barton Crockett from Rosenblatt telling us quote the idea that Meta is considering an issuance is not surprising. Everyone comparable I'm sure is considering this market will be asked to think deeply about the AI dream. If a revenue ramp follows the spend there's probably a rinse repeat cycle until eventually the cycle hit some kind of equilibrium or wall. Crocker noting that Google has the advantage of its stock being at a high while Meta stock is down about 10% year to date guys.
- [19:03]
Brian Sullivan
All right, big story there. Julia Borstin.
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Steve Grasso
Julia, thank you.
- [19:05]
Brian Sullivan
Are two things. Number one, I need to issue an apology to my good friend Tim Seymour. Apparently you already use Sappho. I didn't know. So now I'm stealing your stuff and I've been crediting you. I would never do that my friend. You're not only handsome but intelligent. So I, you know I want to do that. Secondly, what do you make of this story? I mean metal was a stock. They announced the buyback two years ago. Now we're talking about a possible sale.
- [19:27]
Tim Seymour
Again I feel that this is a big part of the week that was Google sale was not insignificant. The mega cap tech world have gone around to Japan, to Switzerland, to the UK and issued $160 billion of debt. By the way credit investors love this. Equity investors hate this. These are some of the best issuers in the world and there's now a lot more debt by the way, long term debt competing with sovereign debt. And it's not great for the treasury market, it's not great for the gilt market and against some of these local markets. So I think this is significant and I think we started to see this with Metta and part of the reason Metta has been in the Malaise that it's been in for as long as it has is the market realized? This is no longer a net cash company, this is a net debt company. They're not uber levered but it changes what the multiple is. And if the biggest, most free cash flow generating companies in the world have to spend $900 billion in capex and we don't really know what the payoff is going to be or what the timeline is for that, that changes. And think about the weighting of the markets and it changes how significant these companies were trading at a premium.
- [20:28]
Brian Sullivan
Is it Steve Grasser quickly any kind of a tell that maybe parts of the credit market are wobbling if they're issuing, I don't know going back?
- [20:35]
Steve Grasso
No, I don't think that's the case. The demand is out there. I think that that's ok. The idea that they're not spending their own money and this is another layer or a change in dynamics of how they're spending spending money to or how they're raising money to fund the AI dream, I think that is, is really interesting and I think when you watch that, when you saw Alphabet do it, Google do it and then you see Meta do it, there's a definite change in philosophy here and I don't think it's positive for the market and the stocks have reflected that.
- [21:07]
Brian Sullivan
All right, good stuff guys. Thank you very much. All right, coming up, Boeing and what CEO Kelly Ortberg had to say about raising 737 production. But first we are counting down to the massive SpaceX IPO. What it means or maybe doesn't mean for the market. Big market day. Nasdaq down over 4% we're back right up.
- [21:35]
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- [22:04]
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- [22:30]
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- [22:54]
Tim Seymour
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- [23:00]
Brian Sullivan
I got a news alert on some S&P 500 changes. Pippa Stevens, what's going on?
- [23:05]
Pippa Stevens
Well, Brian, take a look at shares of Marvell Technology and Flex. Because they are higher, they will be added to the S&P 500 prior to the opening bell on Monday, June 22. They are replacing Pool Corp. And the Campbell's Company, which are being booted down to the S and P small cap 600 index. So really here, Brian, a sign of the times with Marvell set to join the S and P and now up some 5% here after hours. Back to you.
- [23:33]
Brian Sullivan
All right, Pippa Stevens, thank you very much. Let's move now from soup to space. We are a week away from Space X's market debut here at the nasdaq. Space X. We don't need to tell you, but we will. It's expected to be the biggest IPO ever. And none other than Elon Musk making a surprise appearance at a JP Morgan event for potential investors last night. Raising a lot of eyebrows and some hackles. Leslie Picker has more. Leslie.
- [24:00]
Leslie Picker
It was a rare appearance, Brian. He hasn't really, you know, he wasn't in the Retail Roadshow video. So seeing him at this event that JP Morgan was hosting, it was livestreamed over X as well. And that conversation opened with a question about why Space SpaceX is going public. Now, Musk, who joined, virtually summed it all up in this exchange.
- [24:23]
Michael Coe
We're embarking on a massive new growth phase and we need capital for that.
- [24:30]
Steve Grasso
Okay. Okay.
- [24:35]
Michael Coe
Number two, another thing is the revenue.
- [24:39]
Steve Grasso
Like, I also feel pretty good about,
- [24:41]
Brian Sullivan
like, the revenue projection.
- [24:43]
Michael Coe
Meaning like, like before, like, revenue was a little unstable,
- [24:48]
Brian Sullivan
but now I feel
- [24:49]
Michael Coe
like the revenue's, like, much more predictable.
- [24:54]
Leslie Picker
We were able to get an exclusive sneak peek at how JP Morgan really decked out, went all out with its new headquarters. They had moon rocks, literal moon rocks. Forty foot rockets in the elevator banks. They had space themed sculptures and other types of art. However, there was another surprise that dropped last night. S and P Global said it would not change the rules for entry into the S&P 500, which was seen as a blow to SpaceX. By preventing it from the fast entry into the benchmark. And that decision stands in contrast to what the Nasdaq did for quicker inclusion into the NASDAQ 100, which is seen as a tailwind, creating a cohort of forced buyers who track the index index. However, the S and p has about 20 times as many assets tracking its benchmark than the NASDAQ 100. Brian.
- [25:42]
Brian Sullivan
All right, Leslie Picker on that. Leslie, we know you got a big week next week as well. It's going to be a big deal. And Steve Grasso, first off, people are, you know, some people are up in arms saying, well, why is Musk talking to the CEO of a bank either way? And by the way, is leading, I think, or one of the lead guys on the COVID of the book.
- [25:56]
Steve Grasso
Why would people have a problem with that?
- [25:58]
Brian Sullivan
Well, the CEO of a bank talking about a stock that they're helping represent at the ipo. Go ahead. It rubs some.
- [26:04]
Steve Grasso
Who's the gazelle on this one? I'm just kidding.
- [26:07]
Brian Sullivan
Nobody gets but I will say this is Space X his own thing, or does it represent in any sense the macro market?
- [26:14]
Steve Grasso
It's always its own thing when Elon Musk is involved. Right. So this is a personality. I want to get an allocation. Most people want to get an allocation. Some people in the institutional world have an allocation already. But what's interesting about this one is the retail investor is going to get 30% of the allocations. That is historic. That's never happened before.
- [26:35]
Brian Sullivan
High. Really high.
- [26:36]
Steve Grasso
That's really high. And if you think about it, he's a cult, like. So if they're going to follow him, they're going to follow him into this as well. And you've always been taught never bet against Elon Musk. This is a thing where you never put it on valuation. You're not going to buy his stocks on valuation. You buy it on an idea.
- [26:56]
Brian Sullivan
And if you buy it on an
- [26:57]
Steve Grasso
idea, then if you look at these IPOs, historically a year out, terrible, terrible performance. But if you got an allocation, you look great.
- [27:08]
Brian Sullivan
And I think that's this stock will
- [27:09]
Steve Grasso
look great regardless of what happens a year out.
- [27:13]
Brian Sullivan
Okay, Michael Coe, I don't think you're the Gazelle, but Michael, you've seen all that stuff going on the Internet about how bad IPOs have done a year out where people are saying, don't buy these IPOs.
- [27:26]
Michael Coe
Well, I would agree with Steve that betting against Elon Musk has been a big mistake. I will also say that saying you should ignore valuations, right at the time that we're having the biggest IPO in history and we've had a tremendous run like we have. It does feel a little bubble trouble. Ish. I have to say that all of that language and price action being combined together, but yeah, racing out to buy it on the very first day hasn't generally proven to be a great investment strategy.
- [27:55]
Brian Sullivan
Generally, a lot of people are going to want to do it.
- [27:57]
Steve Grasso
Just, just a preface.
- [27:58]
Tim Seymour
I'm sorry.
- [27:59]
Steve Grasso
If you get an allocation, that's my point. If you're getting it at the true IPO price, that's where you make money on these deals. And for the first time ever, 30% is given to the retail audience, where they're usually left out in the cold because they're paying that spike first print.
- [28:15]
Tim Seymour
I don't know how they're going to do that. I don't know how retail, like, you know, people are trying to get on their Fidelity account and buy it now and it's, it's not happening. I mean, I hear you. I know that's the headline. This is a, you know, again, it's a great headline, but I'm not sure how people on a retail platform are accessing this deal.
- [28:34]
Brian Sullivan
Well, you know what else hyenas do? THEY LAUGH There's a lot more fast money to come. Here's what's ahead.
- [28:41]
Phil LeBeau
Max production, getting unlocked. What Boeing CEO had to say about the new 737 assembly line and the impact it could have on the stock. Plus, the Cook is hanging up his apron. Apple CEO Tim Cook getting ready for his last developer conference. The legacy he's leaving, and whether the tech giant can transform Siri into a real AI contender. You're watching Fast Money live from the NASDAQ market site in Times Square. We're back right after this.
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Get my men onto the beaches somehow.
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Brian Sullivan
All right, welcome back to Fast Money, everybody. And just a word of warning, if you do not like the color red, you might want to look away. A lot of red on the screen today. Stocks sinking in a big way to close out the week. The dow dropping about 700 points. That really wasn't the story. The S&P 500 posting its worst day of the year. It broke a nine week win streak. So we're coming in off a red, red, red hot market. The NASDAQ had its biggest point drop ever percentage wise down 4%. All right, a big headline happening right now. A group of states reportedly preparing to sue to block Paramount Skydance's purchase of Warner Brothers Discovery, both stocks with the market taking a leg lower on that report. Shares of lululemon dropping nearly 9% after cutting its annual outlook in its latest earnings report. The interim CEO blaming negative media commentary over its recent proxy fight with Lululemon founder Chip Wilson as well as recent failed product launches. That would probably bigger deal than a media fight. Lulu now is down more than 6.65percent in the past year and hit its lowest level today since 2018. Stock looking a little Under Armour. Ish. Meantime, Boeing CEO Kelly Ortberg speaking to Phil LeBeau this morning about ramping up production of its 737 Max jets. Company plans to begin to assemble a new line of planes in July, helping increase output from 47 planes to 52amonth. Tim, Boeing stock, listen, fell today. The entire market fell today. But I think a positive sign for Boeing.
- [32:19]
Tim Seymour
Yeah, I mean the, the improvement in May over April. The Max planes, you know, they make more of their money in the 787s and the bigger planes. But this has been a one steps forward, two steps back, three steps forward, two steps back. I mean that, that's been the move in Boeing. It is a free cash flow story. Here we are talking about companies that are issuing debt. This is a company I think that's seen the worst of at least the negative free cash flow and that's why I'm a long term believer in the story. I think there's never an easy path forward. You speak about the regulatory environment. I mean, it's, it's, it's choppy. But I'm long Boeing and I expect to stay long.
- [32:55]
Brian Sullivan
Long Boeing and staying long. All right, Tim, thank you very much. Coming up, forget Mary Jane's last dance. Tim Cook's last dance. What we care about on the show, what to expect expect from Apple's big Developers conference next week or fast money back into our welcome back. Apple's annual Developers conference kicking off on Monday. This will be Tim Cook's last WWDC as CEO. Investors closely watching for that. But also more importantly, any updates on a revamped Siri and their AI strategy. Mackenzie Seagal is joining us now. Mackenzie, what can we expect from the worldwide Developers conference on Monday?
- [33:39]
Mackenzie Segalos
So on Monday in Cupertino, Apple investors will decide whether Tim Cook's contrary bet is starting to pay off. While Apple's Mag 7 peers have collectively committed to spending $1 trillion on AI infrastructure, Apple stayed out of that capex race, betting that it doesn't need to own the best model if it owns a device where consumers actually use AI. But that only works as Siri can become useful when paired with ChatGPT or Google's Gemini. Investors I've been speaking with say that Monday has to show tangible personalized AI products that people actually want to use, including some sort of agentic experience where it takes action across apps. And even if that bull case comes true, Wall Street's already given Cook a lot of credit. The stock's up 15% this year. A strong memory chip supply chain has flipped China into a growth story. And Apple's trading at more than 32 times forward estimates on 10% growth. So heading into WWDC, we'll be looking at whether this will be a buy the rumors, sell the news event for Apple or if Tim Cook can deliver on Apple's lofty AI promises as he hands the reins over to John Tertis.
- [34:47]
Brian Sullivan
Brian, great stuff. I know. Busy week for you as well. Mackenzie Segalos, we appreciate it. Thank you very much. Mike Coe, what are you looking for from Apple next week? And you have a take on the stock?
- [34:58]
Michael Coe
Yeah, I mean the valuation is obviously getting at the upper end of its own historical range and that, that part is a little bit troubling. But what doesn't seem to be so troubling is the sentiment in the stock obviously was down today, but not nearly as much as a lot of the rest of the names in it. And as we look at the options market, actually we saw slightly more bullish bets than bearish ones, about 4% more. And that may not sound like much, except that it generally saw 20% more bearish bets than bullish ones today in the options market. So it was a standout on relative basis. I think people are reasonably optimistic. And if you are looking to press a bullish bet here, the fact that options premiums are not that high make that the way to play it, I think.
- [35:36]
Brian Sullivan
All right, good stuff. Mike, Coat. Thank you very much. Apple, meanwhile, one of the relative ports in the proverbial storm today. But there were a few others. Consumer staples, the top performing S&P 500 sector today, up about one and a half percent. Not a big move. But in a market like today, any up move is good. Utilities, real estate, health care. Also ending higher question. Michael Schumacher and I feel kind of silly asking this one day. Well, that's not helpful. No, but I mean, you plan to
- [36:05]
Tim Seymour
hold silly about anything around here.
- [36:06]
Michael Schumacher
We're all friends, hyenas or gazelles or something like that.
- [36:09]
Brian Sullivan
Is there a reason to make any kind of major rotational decisions? How about that? I'd like that. Thank you.
- [36:15]
Tim Seymour
Nothing.
- [36:16]
Michael Schumacher
So US Economy still looks good. Global economy looks good. That was the news, not just from here, but from Canada. You know, the policy backdrops a little bit worse, but so what? I mean, it's a down day, it's a painful day, a lot of red. You're down a couple of percent. I don't see why people would change their overall view based on what?
- [36:31]
Brian Sullivan
I'm not saying they should, which is why they didn't want to ask the question because I didn't answer that way.
- [36:37]
Michael Schumacher
But now we got that you're not helping.
- [36:39]
Brian Sullivan
Are you here to help? Always. You know, but the idea is that, and I think on a serious note, Tim Seymour, the market day like today, there's been, you know, this people see, I see they stop you out here, global celebrity and they say, Tim Seymour, I love this market. I own this market. I'm waiting for it to fall. People have been jumpy for months as the market has kept going up. And they're. Some people will use a day like today. Like, see, I told you.
- [37:02]
Tim Seymour
I look at the industrial sector, I look at the transports, I look at the financials. I mean, this is not a market that's been lacking for breadth outside of the tech space. And I think the economy we have is going to embolden people or just encourage more rotation There have been a couple of really obvious rotation days this week. How about that, you know, is two days ago when the Dow was up, you know, one and a half percent while everything else was down. Maybe that was even yesterday. It's been a long week. But I, I guess.
- [37:31]
Brian Sullivan
Are you saying you mentioned the Dow earlier in the show? Do you think the market's almost been kind of quietly rotating, rotating this week anyway ahead of today?
- [37:39]
Tim Seymour
Yes. And I also would argue that we've had days this week where the indices were up 40 bips, but because they were pulled up by a handful of memory and AI and CPU stocks and the rest of the market was really pretty ugly. So I think we've started to see, we had seen this earlier in the
- [37:58]
Steve Grasso
week and they came out of software. They went into, they went in, they came out of software, went into semis, we came out of semis, went back into software. So they're rotating within the tech complex. But every stock is using technology. So the broader it gets, you could have a Caterpillar or a John Deere be an AI stock. Everything will filter through to the names that haven't been affected so dramatically as the semis.
- [38:22]
Brian Sullivan
Not only a great point but a great segue. You're welcome to our tease. All right, so you're here to help.
- [38:27]
Steve Grasso
That's right.
- [38:28]
Brian Sullivan
I'm doing this.
- [38:29]
Steve Grasso
Help me, Safo.
- [38:30]
Brian Sullivan
Safo. Because coming up after the break I got to switch the decaf. We are going to have a guest who will say there are retailers who will benefit from the AI data center build out. We're going to connect data centers to retailers.
- [38:47]
Tim Seymour
Fantastic.
- [38:47]
Brian Sullivan
We hope. Next. All right, so you know this folks. Data center build out right at the forefront of the AI investment boom. And UBS says retail could be an underappreciated beneficiary. Analysts writing that the gains in local economies could ripple through the retailers with brick and mortar stores that are near, near data centers. Jsole is behind that call, behind the research, joins us now. I love what you did, Jay. Welcome. By the way, you looked at retailers that I think were within a 10 mile radius of data centers. Right. Why?
- [39:32]
Jay Sole
Right. Data centers under construction. Because when data centers are being constructed, you take a mid sized county, it can raise the GDP in that county by 1 to 3%. When that happens, typically that creates economic growth broadly which ultimately helps retailers. Now the key is the data centers aren't being built, you know, evenly across the US Some localities are in favor of it and some are not. Right. It's a NIMBY World. Some people don't like it. So there. Some, some. Go ahead.
- [39:55]
Brian Sullivan
No, no, I know. I was thinking, I agree with what you're saying. Having been to data center sites, the amount of money, truck drivers, concrete electricians, the built to, you know, there's no doubt there's a ton of money, but it feels like the money is temporary. So how long does this effect, Jay, last? Right.
- [40:14]
Jay Sole
Well, it's a topic that we'll revisit because if you take the data centers that are under construction now, we're basically saying, look for the next year, here are the retailers that have outsized exposure to where data centers are being built. Now, probably data centers continue to get built. I think, you know, data center construction is up, you know, 20, 30% last two years and up that again this year. You go beyond 2027, it's going to continue to get built out. Then we'll look at who has the exposure at that point as well.
- [40:38]
Tim Seymour
So when, when, when a couple percent change in comps really comes in, that can really change the fortunes of a stock.
- [40:43]
Brian Sullivan
Stock.
- [40:43]
Tim Seymour
But, but ultimately you can't buy a nice house in a bad neighborhood. So I'm just curious where you're marrying your thesis on data centers with a Macy's or someone who actually may have had pretty good comps in Q1. And actually there's an overall benefit, maybe even for their business from AI. I'd love to hear about that too.
- [41:00]
Jay Sole
Sure. Well, I'd love to address both those. So take department stores, because you mentioned Macy's. Macy's and Bloomingdale's, remember, have actually really nice exposure to the places that, where the dentist has been constructed. On the other hand, do they do. Kohl's does not.
- [41:14]
Brian Sullivan
So I would have, if you would have asked me, I would have inverted that in my mind.
- [41:17]
Jay Sole
Right. That's the thing about the analysis.
- [41:19]
Tim Seymour
Sorry.
- [41:21]
Jay Sole
It's a beautiful tie now. And Cole sells beautiful ties, by the way. I just want to say that. But I think, you know, the other point about retailers are benefiting from AI. You know, the retailers are using it. One thing I found very interesting, we looked at proxy statements of how management teams are being compensated. What we found out is Ralph Lauren is actually the only name in softlines that's basing their management compensation on how well their companies are integrating AI across the organization. Now they're an AI leader. That's one reason we have a buy rate on that buy rating on that stock, because they're really ahead of the game and they're getting great benefits from it already.
- [41:51]
Brian Sullivan
Well we showed a chart earlier graphic we had pretty high end names. Arc Terex. That's not cheap on running right on cloud now is it? There it is again. Okay, Canada Goose. I mean those thousand dollar jackets, are those the names we should be buying?
- [42:08]
Jay Sole
Well I think that if you look at a name like Aritzia there. So if you take an Aritzia and you pair it up with like say a retailer that doesn't have a lot of exposure say like a Bath and Body Works, you know that's a nice trade to be able to put together like the off price space Ross store is very popular right now. They actually have a lot of exposure to data center construction. TGX on the other hand. On the other hand does not. Now both are great stocks but if you want to just play the data center thing and like who has most exposure versus who has less that's the
- [42:33]
Michael Schumacher
way to do it.
- [42:34]
Brian Sullivan
Fascinating research. Really appreciate the work Jay, you and your team are doing on that because I would have never thought that. So that's of course that's why you're on the show. So Jay, thank you very much.
- [42:42]
Jay Sole
Brian, thank you.
- [42:42]
Brian Sullivan
Mike Koh Pretty interesting take there. Right. But the storm mix was a little bit different than I might have sort of initially asked if someone just asked me about it. Your take on that note and research.
- [42:54]
Michael Coe
Well I mean I think your instincts on that were probably related to, you know, which NIMBYs are actually able to influence what gets built in their neighborhood. Look, you're talking about skilled trade people here that's going to have above average incomes and salaries. And I do like Ralph Lauren actually just to give myself a little pat on the back. That is one of my acronym names over the last couple of years, Ralph Lauren and this is a name also that it's seen double digit adjusted EPS growth. So it has been a stable and solid performer now for several years through to a pretty tough time for retail.
- [43:29]
Michael Schumacher
Yeah, I still struggle with this idea that you're going to have construction workers buying fancy clothes like you Brian, or fancy shoes. I appreciate the analysis. I think it's interesting. And also how durable is this? We talked about capex concerns, a lot of debt, funding issues, equity raises. So I'm having a little bit of difficulty. But it's a very interesting analysis, very provocative.
- [43:48]
Brian Sullivan
Yeah it is because it's, it's a different mix. That was the only point that not that construction workers aren't going to buy nice clothes to Seymour, it's just more
- [43:56]
Tim Seymour
that look, I mean I Was you want this time? Yeah.
- [43:59]
Brian Sullivan
All right. Coming up, Wall street buying one food name today. In a terrible tape, Chipotle Rose. Talk about why coming up. All right. Inarguably, what was a very tough tape today. Chipotle a bright spot rising 4% in a down market. Chipotle was upgraded to overweight by JP Morgan, the analyst. They're calling it a quality gross stock with an attractive valuation. Following a more than 40% though drop over the past year, they got a $35 target. That implies about 20% upside. Tim, to Chipotle today.
- [44:38]
Tim Seymour
Well, it is. It's 45 to 50% cheap to its five year P E. It is at a place that somewhere around 26 times forward that I find it interesting. By the way, I wish the one at 73rd and Amsterdam actually stand kept their food still. It's 930 at night when I go in there and they say they're open to 11. Yes, you heard that. I think the story is one. This is a growth story that really hasn't been growing. And I think it's a margin story that they need to reassert themselves on. But yeah, I think you can start to nibble here.
- [45:07]
Brian Sullivan
Nibble. I mean, if you look at the personal vendettas against specific locations now,
- [45:13]
Tim Seymour
it's disappointing.
- [45:14]
Brian Sullivan
If you look at the chart, I
- [45:15]
Steve Grasso
always compare the two Starbucks and this one, right.
- [45:18]
Brian Sullivan
CEOs CEO Brian Nicholson, graduation and he's.
- [45:21]
Steve Grasso
And he's an operator. And when you look at the chart on Chipotle, this is one of those. It's so bad. It's good. I don't know if I'm at the. It's good yet, but I think it's just a counterintuitive play. It's been down so much. But if you look at the relative performance between the two, Starbucks is definitely outperformed. If you want to give it a shot, I could see what they're saying with Chipotle.
- [45:40]
Brian Sullivan
All right, up next, it is your final trade time. Mike Co. Kick off the final trades.
- [45:53]
Michael Coe
Almost everything ships in a box. A very old company that works in a modern economy. Packaging Corporation of America. Ticker Michael Schumacher.
- [46:00]
Michael Schumacher
Long US Dollar, long dxy. Take your pick. Dollars going up.
- [46:03]
Brian Sullivan
Steve Grasso IJR Small Cap etf If
- [46:07]
Steve Grasso
you want to sleep at night, put
- [46:08]
Brian Sullivan
a little money there. And before we go, Tim Seymour. I surrender my tie to you. It's yours. My gift to you.
- [46:14]
Michael Coe
Final trade.
- [46:15]
Brian Sullivan
Oh, final trade.
- [46:16]
Tim Seymour
Oh. AEM Agnico Eagle. Nice to have you.
- [46:19]
Brian Sullivan
Michael and Brian, thank you all very much. Have a great weekend. Go Nick SMD Money starts right now.
- [46:25]
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