← CNBC's "Fast Money"
CNBC's "Fast Money"
Stocks Wrap Up A Volatile Week… And Playing Defense Amid The Market Swings 4/2/26
00:43:29
Stocks paring early losses to round out a volatile shortened week. How President Trump’s Iran War address impacted the markets, and the latest oil surge pushing WTI Crude prices back to triple digits. Plus Tesla’s disappointing deliveries, Bitcoin’s latest leg lower, and how one private wealth manager is playing defense to weather the market storm. Fast Money Disclaimer
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Narrator/Commercial Voiceover
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Frank Holland
Live for the NASDAQ market site in the heart of New York City's Times Square. This is fast money and here's what's on tap tonight. A massive market turnaround. The Nasdaq more than a racing a 2% decline at the open and closing out for its best week since November. Is this the final sign that the bottom is in for stocks? We will debate that. Plus oil spiking back above the $111 mark on worries the war in the Middle east could go on much longer and prices could go much higher. We're also wondering what's the real impact on the US Economy And Tesla shares, they're in reverse. Bitcoin breaks to the downside. And what is the deal with Microsoft? Shares are higher today but still the worst performing mag7 name this year by a lot. Can the stock turn things around? Well, that's another thing we are going to debate. I am Frank Holland in for Melissa Lee coming to you live from Studio B at the nasdaq. On the desk tonight we have Tim Seymour, Karen Feinerman, Dan Nathan and Guy Adami. But as we mentioned, we want to go right to the market. Stocks staging a rally into the close with the S and P and the Nasdaq just kind of eking out some gains after a rough start to this day. The early sell off coming after President Trump suggested there could be an escalation in the Iran war before an eventual end to this conflict. At the lows, the Dow fell more than 600 points. The S&P dropped more than a percent and a half. The Nasdaq tumbled over 2%. But a midday moderation of the losses meant all three posted gains for this week, each ending five week long losing streaks. Oil meanwhile, surging more than 11%, settling at its highest level since June of 2022. As investors, they are bracing for supply disruptions in the Strait of Hormuz. Our Eamon Javers, he's in Washington right now with the very latest. Amen.
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Eamon Javers
Hey there, Frank. New statements from the Iranian Navy out this afternoon claiming that they targeted data centers of two American companies, Oracle in Dubai and Amazon in Bahrain. The Iranian Revolutionary Guard Corps writing we had previously warned that our response to the killing of Iranians would be to disable the machine of assassination. We've reached out to both companies and we'll share their responses if we get them. And an Iranian military spokesman has also said the Strait of Hormuz will be closed long term to the United States and Israel. Not clear, Frank, whether that means it'll be closed to US Flagged tankers or the US Navy or what exactly, but it's. But it does seem to indicate that the Iranians envision allowing some shipping through that global oil choke point. And all of that coming after. We saw an earlier report from Iranian state media today saying that the country was working on a prospect with Oman. Excuse me, was working with Oman on a possible safe passage arrangement. That news generated a significant market spike earlier today, Frank, on hopes that some kind of a deal could. Could be struck soon. Of course, it was unconfirmed coming from Iranian state media, so make of that what you will. But it did seem to get the market's attention today.
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Frank Holland
Yeah, absolutely. Amy jabbers live in D.C. with the very latest. Amen. Thank you very much, Guy. I want to come over to you. A lot of things uncertain, a lot of things unclear, a lot of things unconfirmed. I think the question everybody's trying to figure out today going into a long weekend was today, the bottom. Do we see a bounce off the bottom in the middle of the day?
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Dan Nathan
You know, it is certain, Frank.
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Frank Holland
We are all happy to hear, Frank.
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Phil LeBeau
Oh, thank you.
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Frank Holland
That is great to be back.
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Dan Nathan
You know, we play this game on the show. If you had told me last night that crude oil be up 10% on the back of the comments that the President made last night. Where's the s and P500 down 100 handles. Given the hunt, 250 or so handles. It's rallied over the last preceding few days and obviously that was not the case, so label me a bit of a skeptic. You saw the Vix north of 23 and a half 24. And the crude oil markets telling an entirely different story in my opinion, in the broader market right now.
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Frank Holland
I mean, I think we're definitely seeing kind of a bifurcation. Everybody loves that word, the moves in the oil market and the stock market, at least today. Karen. So oil spiked 11% and still we saw gains. Is that something that's sustainable to you? If we continue to see oil well above 100 bucks a barrel and the stock market actually moving to the upside,
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Karen Feinerman
I mean, not unless it's for a really great growth reason and everything is really humming and. But that's not why it's here for sure. We all know that. I agree with you. If you had told me that. And we did see the market down 100 handles early this morning and crude oil is off its highs, but it's, it's still very, very elevated. And you know, I, I guess the Strait of Hormuz obviously is what everyone's focused on. I think Israel and the US don't even really use oil from the Strait of Hormuz very much. But nevertheless, it's still super important. I'd love to see some sort of deal there. I think we would have to sort of be a part of it. But it's, I don't know, it's a sort of diplomacy. I don't really completely understand, to be honest. And yet maybe that maybe the bottoms in the VIX wasn't that high even on, even when the market did open. So I don't know if people feel like it's, you know, all clear is in, that's fine. I'm always long. So I was long when it was down a lot, along when it rallied. I'm still down, I'm staying long, but it is a confusing time. But I think I want to stay long. Normally though, I love to see when earnings come around and we can see, all right, what are companies really doing? What are they really seeing? What's happening in their business. But to hear what they did in the first quarter is not going to be so relevant when you think of what's happened in the last five weeks.
- [06:17]
Frank Holland
You know, to your point, the VIX did move to the downside yields, at least on the 10 year, they stayed pretty steady. So Tim, is that the market saying, hey, we know what the President's plan is. We believe in his two to three week timeline and we really do think that this conflict is going to come to some type of resolution. Maybe not a complete end, but some type of resolution that's somewhat friendly to everybody here. In the US and our interests.
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Tim Seymour
I'm not sure the market knows what the President's plan is. I think the market is looking past conflict and saying, okay, oil is telling us that, that prices are going to stay higher. Oils and term structure in the futures contracts tell us that. And you know, WTI surging past Brent in terms of prices tells us that. It tells us that, you know, global oil is in a new framework. And I think this. Karen's right. We really just don't know how companies are going to react to. It is fascinating because I think the street continues to be actually upgrading EPS going into earnings season. And that's interesting given what we have. I think the VIX making lower lows though is the equity market. Yes, you can make an argument that's the equity market looking, looking past us. The fact that we seem to be failing at some really important levels, you know, the 200 does seem to be hurdle. I think you want to get into the micro of the market itself. I think we were oversold. I think we needed this bounce. I think we should have expected this bounce. But the fact that if you get back to the geopolitics of this, the fact that Oman and other global powers there, you know, the idea of working through to get oil through there, no matter what continues to go on, which I think will continue to go on, that's where markets are. But oil tells you we're not settling lower inflationary impact for sure.
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Guy Adami
You know, it's interesting that we think that the Iranians would just kind of, I don't know, negotiate away their only point of leverage if you think about it. Right. So I think that's kind of what WTI is saying at $111, right. So we may not be reliant on it, but I think the supply chains and a lot of the products that we rely on are right to some degree. And so, you know, you could wind things down, at least us bombing them in two to three weeks. But if they have a chokehold on Hormuz, then, you know, it really does create bottlenecks for the global economy. And it's really not our economy I think you have to be so worried about. It's the global. And if you think about how much of earnings of S&P 500 companies come from outside the U.S. i mean, that's a bit of an issue. And to Karen's point about earnings, okay, Q1, fine, whatever. You know what I mean? Q2 and visibility going forward, that's going to be an issue. Now, you know, if Investors are looking past all this. I get that. But you know who's not looking past it right now? I don't think the US consumer is. And if you think about, just use those, those auto sales that we saw, they were bad. We didn't even talk about it Yesterday. I mean, GM was down 10% year over year. You know, Tesla, you think that people would be interested in EVs, maybe you know this, when oil is like this, down 14% year over year. So there's some stuff going on as it relates to the consumer at a time where I know we're going to get that all important jobs report tomorrow morning and the market's not going to be open for it. But man, let's see how those numbers look. Because if they start to have, you know, I guess month over month declines, you know, two in a row, you're going to start pricing in some stuff that I don't think the market has actually priced in just yet.
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Frank Holland
All right, don't want to be a stickler, but everybody's saying, you know, the US doesn't necessarily need that oil. On the east coast we don't. But in California, they are importers of oil and also a lot of industries. I think you're about diesel.
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Guy Adami
I mean, we were talking about this, we said it the other night and Canada is a. California is the fourth largest economy in the world.
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Frank Holland
And they, they are importers, right?
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Guy Adami
They're importers. And I think diesel in the last month and a half has gone from like five bucks to like seven and a half bucks. And at some point those increased input costs have to be passed through to consumers. And it's not just what they're paying from three to four or whatever that is at the pump for their own cars.
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Tim Seymour
Guy, wasn't your nickname in high school, Diesel.
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Dan Nathan
You remember that? Well, Croton, we had nicknames like that. You had, you had nicknames like Biff and.
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Tim Seymour
Yeah, no question. Todd. Yeah, sorry.
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Frank Holland
While we're educating very quickly just to your, to your point, Tim, when it comes to Brent, we're on the June contract for wti. We're still in the May contract. So a little bit of a difference there.
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Tim Seymour
Yeah.
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Frank Holland
And why May? Seeing some of the price differential. But I want to go to the consumer and Karen, talk to you about this. $4 a gallon gas does impact a lot of people and their sentiment, even though it's not quite what it meant a couple of years ago. People's earnings have gone up, the economy's bigger, but the sentiment is still there. When it comes to retail names and also discretionary names like cruises, airlines. I mean, where's the bottom when it comes to those?
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Karen Feinerman
Well, I feel like if you have a job, you usually feel pretty good. I agree with you. So the pump, the sort of sticker price shock at the pump isn't great. But I think we also use less energy than we used to, perhaps per person. So I feel like the consumer could get through that. You know, they do have the tax refunds coming. I know this, the oil is going to eat some of that. But I feel like if you're employed that I think we'll still see decent enough earnings for the first quarter to, to, to Dan's point, which was sort of to my point originally about, you know, you could have had a great first quarter. It doesn't really matter, but it's really about what's it going to, what does it look like now? And why wouldn't you put out guidance that was very conservative. No reason whatsoever to be a hero. One thing though, I want to point out, the backwardation is substantial in the oil market. So if I were to tell you guy, in October, November, we had, they have $76 oil, let's say with the market, where would the market be?
- [11:34]
Dan Nathan
Well, it might not be, but it might not be at 76 in October. I mean, for sure, for sure. If you were just looking at it through that lens, just be like, okay, the problems will be solved by the fall. Unfortunately, I think that's not how it necessarily, it could work that way. It doesn't necessarily work that way. So we could be in an environment where the front month continues to be elevated each continued month. I mean, that is a scenario that nobody wants to see. But in terms, I think we can sort of talk about the economic impact of higher oil. You can do the math problem. The psychological impact I think is more of a big deal. And people drive by these gas stations every day and they see the prices go up every day and they start to question should I be driving, should I be going on a trip, should I be going to Starbucks? And consumer behavior on the back of gasoline prices cannot be underestimated.
- [12:17]
Frank Holland
Yeah, I saw a number of stations, at least where I live, well above 4, about 10, 15 cents above 4. I kept driving. I was looking for $3.99.
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Karen Feinerman
How long did you drive for?
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Frank Holland
Another month, keep going down the road. Also, we haven't seen the impact on food prices. That's a totally different story because of higher fertilizer prices. But we do have to move on from this one. So even if the US Action in Iran ends with President Trump's two to three week timeline, our next guest says oil will be above pre war levels through the end of the year. Denton Sinkhorn Grotta is the chief oil analyst at Opus. Denton, thank you for joining the show.
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Denton Sinkhorn Grotta
Yeah, thanks for having me.
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Frank Holland
All right, so Denton, spell this out for us. So I looked at the charts. Before the Sovran conflict started, oil was at about 67 bucks a barrel. How much higher do you see it getting? If we really do see this two to three week timeline and how much of it is risk premium compared to actual demand, whether it's filling back up the SPR or whatever else needs to
- [13:05]
Denton Sinkhorn Grotta
happen, I think it's a little bit of all of the above. I think there's still going to be a risk premium out there. We're just having gotten through missiles being fired back at one another. So there's always that risk. But you're going to have a backlog of ships that need to clear through the Strait of Hormuz and it's not just going to magically open like the President said last night. So you have that, but then you also have it's going to take time and effort and money to bring production back online. And you're going to have to motivate producers. I heard you guys talking about the forward curve and yes, some of these prices are lower as we get towards later in the year. I think those prices are going to have to come up to motivate producers to bring on new new rigs, new wells, etc. And after the dust is cleared, we don't know what kind of damage was done to oil wells in the Middle East.
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Frank Holland
All right, so in your notes to us, you say we need to prepare for oil to be above 80 bucks a barrel through Q1 of 2027. That doesn't sound that bad. From where we're at right now. If it's above 80 bucks a barrel, what do you think that means in general for demand and also for consumption here in the US and around the world?
- [14:07]
Denton Sinkhorn Grotta
Yeah, so the demand, from the demand side, you're going to have to see inventories rebuild. Like you mentioned, the spr, but not just here in the United States, but strategic reserves elsewhere throughout the world. So it's going to take some time to fill those storage tanks. So from a demand standpoint, you're going to see probably a pop in 27. We're seeing some demand destruction now, there's no question about it. Countries in Asia are really doing their part to try and really conserve every drop. Meanwhile, in Europe, you're starting to see jet fuel issues where airlines are starting to reduce capacity. And that's the plan for this summer as well, to reduce jet fuel demand.
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Frank Holland
All right, so, Denton, settle the discussion that we were having earlier. Here in the US Are we as insulated as many people think we are, either on the east coast or the West Coast? Let's start with the East Coast. Does the east coast have the insulation to keep prices lower than many of us believe it has? And what happens to California if this lasts more than two to three weeks?
- [15:04]
Denton Sinkhorn Grotta
Yeah, well, I thought we were going to start with the nick thing and all that, and then diesel and bif and all that stuff. But anyway, I want to start in California. California has always been described as a fuel island without being a physical island. They've closed two refineries within the past six, seven months. And they've always been dependent on imports of refined products, particularly jet fuel. The Los Angeles market has always been short jet fuel, but now with refineries closing down, your short gasoline. Where's a lot of their gasoline components come from? South Korea. Who's one of the countries most impacted by the Strait of Hormuz being closed? South Korea. So that's going to be a real issue. The waiver of the Jones act last week or two weeks ago, that should help. But shipping costs are insane as well. So you could ship gasoline components from the Gulf coast to the West Coast. It's just going to cost a lot more. Meanwhile, the east coast probably a little bit more insulated because you have the Colonial pipeline that runs all the way from Houston all the way up to Lyndon, New Jersey. However, one of the interesting data points in the EIA last week was that gasoline imports and components into The East Coast Pad 1 was 99,000 barrels a day. Now, the EIA history goes back to 2004, so you're looking at a little over 20 years. That's the lowest I could find in that data series. Even at the depths of COVID the lowest it got was 161,000 barrels a day. So the east coast is a little bit more insulated than the west coast is. But from a crude oil standpoint, you know, we're largely insulated and refined products from the Middle East. But here's the problem. Those products that might go to California, that might go to the east coast, are going other places. So, for example, we've seen recently two cargoes of jet fuel loaded out of the New York harbor to go to Europe. Just in the last couple of days there's been three cargoes that have left of diesel going to Europe from the New York harbor as well. These, the east coast might be a normal kind of attraction. Now we're sending them elsewhere.
- [17:06]
Tim Seymour
Denton Biff here. So as we're looking at bringing it back to the market and thinking about trades that, that at least as an oil analyst, you know, looking at, I'm not asking you to play necessary oil security analysts, but of the big integrated, say Exxon, Conoco, Chevron looking abroad to Total or Shell, who is really best positioned to extract this higher margin out of the product side of the business and the market maybe isn't giving credit to at least in terms of your understanding of their core business and where they may be better positioned for wave two of this trade?
- [17:39]
Denton Sinkhorn Grotta
Well, one of the things we've actually been seeing is some of the physical markets here in the United States really shooting up. So WTI at the Houston terminals is trading for around 7, 750 over, over the WTI futures contract. I would suspect that those who operate in the Permian and I'm thinking Chevron and Exxon there are pretty well positioned to take advantage. And don't forget refining margins are really strong right now. Who has the large exposure? Who has the two largest refineries in California? Chevron does. So I think for me, Chevron kind of stands out. And yes, I am not a securities analyst, but I think that's one that does stand out just because of their refining as well.
- [18:18]
Frank Holland
Denton, before we go, I want to ask you about a note that came out from JP Morgan earlier today. We wanted to focus on your research and your thoughts first. But J.P. morgan out with a note saying that oil in the near term could go up to 120 to 130 a barrel and that this continues longer than the two to three week timeline. Maybe up to 150. How realistic do you see that?
- [18:36]
Denton Sinkhorn Grotta
Yeah, I think that 120 to 130 level is certainly well within reason if we continue along this path with the strait being closed, obviously the longer it goes, you're going to have to see countries start to shut in production in the Persian Gulf because their storage levels are filling all the way up. 150. I think you probably need a little bit more bad stuff to go wrong to get up there. But again, stranger things have happened in the past before.
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Frank Holland
All right, Denton, before we let you go, you got to give us your nickname. I mean Denton Cincuana, you got to have a nickname.
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Denton Sinkhorn Grotta
Cinco.
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Frank Holland
Cinco, that's it. Where does that rank when it comes to Biff and Diesel? Is that better or worse?
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Dan Nathan
It's kind of better.
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Frank Holland
It's worse.
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Kathy Entwistle
It's.
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Denton Sinkhorn Grotta
It's way too simple.
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Frank Holland
So Dan, have a great holiday weekend. Thank you very much for having me. Guy. We got a lot of information from Denton just now. A lot of thought about price and the price action when it comes to oil demand. East coast, west coast. What are your thoughts?
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Dan Nathan
The refiners and Chevron and look at the stock. I mean just pull up a chart of Chevron over the last three or four months. The proof is in the pudding and it's manifesting itself in the way these stocks are trading. I mean Chevron historically doesn't trade this way and now it's finally getting. It's just do. Valero still works with these crack spreads. I mean it's off the all time high but it's hanging around. You got to stay long integrated in my opinion. You got to stay long. The refiners like Valero.
- [19:53]
Frank Holland
All right, last word from Diesel. Coming up, disappointing deliveries will dig into the last miss by the EV maker and how much will it matter for the stock as Elon Musk focuses his sights elsewhere. Also playing defense. How our next guest is positioning amid market volatility and our top safety plays to hedge against risk. Do not go anywhere fast money back in two.
- [20:18]
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- [21:17]
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- [22:04]
Frank Holland
And welcome back to Fast Money. Tesla is taking over 5% for its worst day since November. That after the EV maker reported some disappointing deliveries for Q1. Our Phil LeBeau has the numbers. Phil?
- [22:16]
Phil LeBeau
Frank. The number for the deliveries for all of Q1 came in at 358,023 vehicles. That was shy of what the analysts were expecting. They were expecting 370,000. And by the way, it was also down more than 14% compared to deliveries in the fourth quarter of last year. Now, the estimate for full year deliveries is still at 1.7 million. We'll see if the analysts adjusted it all. A lot of that will depend on what comes out. When the company reports its Q1 financials. Those are coming up in what, three weeks? Less than three weeks. So what are the catalysts that are out there? Q1 Financials on the 22nd Cybercap production, they have said that they will start ramping up production in April. We haven't gotten any official word about what's happening there. And then the robo taxi network, will it expand? They gave us some incremental news in the first quarter about things improving, especially with the Austin service. But generally speaking, it's been quiet, which raises the question, when do we get a catalyst? One other note, when you take a look at shares of Tesla, they also report their energy storage deployed on a quarterly basis. The street was expecting 14 GWh. That's not what they got in the first quarter. Energy storage deployed was 8.8 GWh. That's not a huge factor for traders to look at, but it has been a growing part of the Tesla business. One other note, when it comes to electric vehicles, Rivian also reported its Q1 deliveries today. And one reason that it's up 3%, a little bit better than expected, coming in at 10,365. Though of course, the story with Rivian is R2 production and deliveries, and that's expected here in the second quarter. Guys, I'll send it back to you
- [23:56]
Frank Holland
all right, our fellow boat with the very latest on the EV space. Phil, thank you very much. Dan coming over to you. All right. Tesla Missile and deliveries. Does it actually matter for the long term narrative for this company? Elon Musk has basically ceded the EV market to the Chinese and kind of given up. He's focused on robots and robo taxis. Does this number today really, really matter?
- [24:14]
Guy Adami
No, I don't think so. But I'm surprised. Was down 5 and a half percent on it especially you know, given the way some of these other mega cap tech stocks rallied off of their lows. This did not participate in any means. And I think, you know, we were talking about a little bit last night on the desk. I mean, you know, with Space X filing confidentially, I mean if you're an investor and you love Moonshot sort of stories, you know, you're probably going to have to pick and I think the Tesla story is pretty well picked over and I think a lot of folks are maybe going to raise cash in Tesla and kind of move it into Space X, but that's a couple of months away.
- [24:45]
Frank Holland
All right, Karen, first your thoughts about deliveries and then obviously the longer term trajectory of the Elon Musk economy, if you will.
- [24:51]
Karen Feinerman
It's sort of amazing that this, it doesn't matter anymore, right? Jen has talked about this for a while. It's not a car company. It doesn't matter. It's a future earnings company. And I agree that rather Space X is. Seems far more interesting than Tesla to be right here. I'm somewhat skeptical of the time frame and the ramp for autonomous vehicles. The whole, the whole part of that story, the Space X part of the story seems a lot more tangible. So that's very interesting to me. I agree that I think it's likely to siphon money away. I don't know. They'll do $75 billion raise. I don't know. So now they're talking about $2 trillion potential IPO. $75 billion I guess is enough to trade for people to trade out of this into that. That's what I would do.
- [25:39]
Frank Holland
We do have to move on. But I want to ask you about competition for Space X. There was some news today that Amazon bought a competitor I guess buy them
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Karen Feinerman
or they were in talk.
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Frank Holland
Global star. Yeah, Global star.
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Karen Feinerman
Right.
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Frank Holland
So are you worried about competition in the space and maybe there'll be some other entrants in there that want to try to get some of this market share and while Elon Musk and Space X are the leaders there can always be new entrants. I mean I think it was about a year ago we thought that Chatbots was a leader. Now we think it's Claude Space X
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Karen Feinerman
is really, really far ahead. I mean when you look at the scale of Global star, I mean they've got a tiny number of things that they've put into orbit relative to. I mean Space X is really far ahead. It's early. There are kind of where Nvidia was on chips three years ago.
- [26:21]
Frank Holland
All right, there's a lot more fast money to come. Here is what's coming up next. A good defense is the best offense. Why our next guest is prioritizing protection in these market swings and her top safety plays to weather the storm.
- [26:36]
Guy Adami
Plus a mess in shares of Microsoft, the tech giant leading the Mag 7's losses this year.
- [26:43]
Frank Holland
The underlying issues and what the company needs to do to turn things around. You're watching Fast Money live from the NASDAQ market site in Times Square. We're back right after this.
- [27:00]
Narrator/Commercial Voiceover
She loves it hot, he loves it cool. The Pod by eight Sleep is a smart mattress cover that fits on your bed and keeps each side at the perfect temperature all night long. By staying comfortably warm or cool, the Pod helps you sleep deeper and wake up feeling more rested every morning. You get daily health insights and a sleep fitness score. However you sleep, the Polyp by Eight Sleep adapts to you. Try it@8sleep.com what made you confident that
- [27:32]
Kathy Entwistle
you could do something that hadn't been done before? I have no fear of failure.
- [27:36]
Narrator/Commercial Voiceover
Trailblazing women, changing the game One of
- [27:39]
Frank Holland
my favorite pieces of advice, Think about
- [27:41]
Karen Feinerman
what your boss's boss needs.
- [27:44]
Frank Holland
Leadership can look in many, many different forms.
- [27:46]
Narrator/Commercial Voiceover
It really does come down to just trusting yourself. Life is short and you just got
- [27:50]
Karen Feinerman
to think big to accomplish big things.
- [27:52]
Narrator/Commercial Voiceover
Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday, wherever you get your podcasts.
- [28:02]
Frank Holland
And welcome back to Fast Money. Stocks closing out a volatile holiday shortened week with a major reversal. The Dow ending the day down just 60 points after dropping more than 600 at the Open. The S and P and the Nasdaq they both eked out some gains all three indices snapping five week losing streaks and posting their best week since all the way back in November. WTI accrued meanwhile selling more than 11% higher closing at $111 per barrel. That is the highest since June of 2022. And with that set up, Morgan Stanley directing its high net worth investors towards cash and other defensive assets as it waits for the Iran War to end. Kathy Entwistle is managing director at Morgan Stanley Private Wealth Management, and she joins us now right here at Studio B. So cash, you want to get out of the market or is it just a short term situation? Are you advising people to wait for an opportunity?
- [28:49]
Kathy Entwistle
Yeah, it's more like waiting for an opportunity. With, with the war and the uncertainty of it, we have clients who have already established themselves and they're in the markets. But with new money or cash that's coming in, we're just taking our time. And again, you've got to get in before the war ends. But it's a little bit tricky right now because the volatility is. Is up and down and it's about trying to find that sort of magic spot to start reentering.
- [29:14]
Frank Holland
All right, we were bouncing this around earlier. I'm sure all these guys have a few questions for you. But do you believe today was a sign that we are at the bottom or near the bottom with the bounce that we saw midday?
- [29:23]
Kathy Entwistle
You know, I would like to say yes, but it's unclear still because I do think there's still a lot of uncertainty in Iran and with the war. And even though there's things that are starting to come together, there might still be a little bit longer that we have to wait and be patient. And when you have clients with patient capital, you don't want to take undue risk. You want to think a little bit more thoughtfully about how you deploy their cash.
- [29:45]
Dan Nathan
At this point, the energy is one of the sectors you like. It's had a year's worth of move in the last couple of weeks. Is it still. It's still a place to be. Is there still more room?
- [29:53]
Kathy Entwistle
I think there's just a little bit more room there. I don't think there's too much more room, but especially when you're seeing oil, you know, barrels going up to 111 and so forth, we're really at a high peak right now, a little bit longer, but I would be a little bit more cautious about entering into that right now.
- [30:07]
Tim Seymour
Kathy, by the way, great color scheming and excellent. Nice to have you next to me in pink. And my name's Biff, apparently today too. So you said something that I think is fascinating though, especially from the advisory communities. You have to get in before the war ends. That sounds to me more tactical than I might expect to hear the advisor community say. I mean, you know, people want to know if there's opportunity here. At the same time, there's many different cliches that are used, but no one gives you the dinner bell to come in and out. So just talk about that feeling some need to get in before the war ends.
- [30:41]
Kathy Entwistle
Well, once the war ends, the markets will have already moved and then you have missed that movement. Right. And so Frank and I were talking earlier, even about software, we're still taking our time a little bit with that, but it is down like 33%, I think, since October. There's other areas of the market that are ripe for the pickings. The PS look good, the opportunities look good, but it's still being a little bit more cautious and taking your time getting in. Because if you. We do have some more disruptions in the war and in politics that can really hurt a client's portfolio if we do it too soon, for sure.
- [31:18]
Karen Feinerman
So the market's not a monolith. Right. We've had some things that have responded this week. Really. You know, the Mag 7 have had a huge bounce back. Are there other areas that are still pretty down and out where you would get started?
- [31:30]
Kathy Entwistle
I would say we still like financials, we like health care. There's definitely long term opportunities there. And of course, if you are a long term investor and you've got some time to wait, investing back into tech and things like this is still a great opportunity. The issue is people were worried that I was going to take over certain roles and maybe now we're starting to think maybe it's not going to take roles over or positions over or areas over. Maybe it's going to do more of a compliment and be more of a efficiency rather than replacement.
- [32:03]
Frank Holland
All right, Kathy, we're wrapping up the interview, but before you go, we know we have to ask you one more question. Nickname. Today's the day.
- [32:09]
Kathy Entwistle
Nickname.
- [32:10]
Frank Holland
Nickname.
- [32:10]
Kathy Entwistle
What's my nickname?
- [32:11]
Frank Holland
Yes.
- [32:12]
Kathy Entwistle
Oh, gosh. Well, my maiden name is McNicholas. I shouldn't even say this, but when I was little, all my friends in middle school called me Pickles because one of the dads called me. I know.
- [32:24]
Tim Seymour
You know what?
- [32:25]
Frank Holland
That's. That's real trust, Kathy. So anybody's watching. I don't know if I would have done that. Trust. I would have just stayed up. Yeah, I don't know. We're going to leave it there.
- [32:36]
Denton Sinkhorn Grotta
It was a pleasure.
- [32:37]
Frank Holland
Great holiday.
- [32:37]
Kathy Entwistle
Thank you.
- [32:39]
Frank Holland
Tim, coming over to you. One thing she mentioned was AI over software. And we were talking about this earlier. She mentioned software is outperforming since the Iran conflict over the Max 7, over the market, cybersecurity is outperforming. It was kind of interesting that she saw AI over software. What was your take on that part?
- [32:53]
Tim Seymour
Well, to me, I'm not ready to jump into software. I still think as a group there's still a lot of questions. But as we look at, I don't think we're questioning demand. I just think the picks and shovels parts of the trade are actually clear. It doesn't mean you have to be chasing the higher beta part of the semiconductor space. But I mean whether it's a even with an ARM or an XPI or other parts of what I think are more really AI demand, there's no question Taiwan semi doesn't scare me here. So I get that.
- [33:21]
Frank Holland
All right, I'm seeing on peripheral. Dan, you were nodding a lot. So you agree with that thesis?
- [33:25]
Guy Adami
I agree with everything Tim says. Usually the one thing I'll say is if you have disruption of supply chains, if you have disruption of this helium and billion this and that, whatever, you know, semicap equipment names like continue to work and I think that's something. They caught a bid in the last six to seven months or so. And I think you think about Taiwan semi, you think about global foundries, you think about intel, you know, building fabs. I think it continues to be good for the semicap equipment names.
- [33:46]
Frank Holland
All right, coming up, the problem with Microsoft. What's behind the drop in the worst performing Mag7 name this year? Gene Munster. He joins us next. The lay it all out Fast Money back into. And welcome back to Fast Money. Microsoft managing a gain today, but still the worst performing mag7 name this year. Down almost 23% since January. The tech giant's been pulled down with just the rest of the software sector. The stock coming off six straight months of losses, its longest monthly losing streak since the financial crisis all the way back in 2009. Let's bring in Fast Money friend Gene Munster to break down Microsoft. He's the managing partner of Deepwater Asset Management. Gene, good to see you.
- [34:28]
Gene Munster
Hi, Frank.
- [34:29]
Frank Holland
All right, so what's going on here? Why is Microsoft taking it just so badly out of all the Mag 7? And why are so many doubts about Microsoft kind of developing around the software business when it does have so many other businesses?
- [34:41]
Gene Munster
I mean, it's most basic level. Microsoft is an iconic software company. It even predates, of course, Salesforce and the whole SaaS business. And so it is that software piece that really strikes a note. There is a little bit of a narrative just around what's happening with cloud. Obviously, Azure's doing exceptionally well, but it has been losing share Slightly to Google Cloud, but the real substance of this is around the software business. And just to kind of zero in on that. Your previous, Kathy, in the previous segment was kind of talking about the impact of the software world, but the market is really struggling with what does this mean for seat growth? And ultimately, if knowledge workers do decline, I'm in the view that ultimately that knowledge work will decline. I think it could be substantial declines. If we just look at over the last six weeks what we've seen from Oracle to Block to Morgan Stanley, Atlassian, those companies on average have cut their workforce by 15% 1 5. And so, Frank, to answer your question, is that what's going on with Microsoft? It's this looming risk that I think that there's that piece of it that's out there. But I also want to inject one other view about why Microsoft has been struggling. And I think that beyond the conversation about software and knowledge work and what happens with seats, and I think there's a more fundamental question about can they make compelling AI products? And if we go back and look at Google last year, when it had as a year ago, it basically bottomed out. The change was that they came out with a new Gemini model that was beneficial to search and they really showed that they had the chops in AI. And right now, Microsoft's products are weak when it comes to AI. Copilot is marginally useful at best. And I think they really need not only to show that the seat growth is there, but also stand up and say they can create great AI products. They just simply haven't done that and the market's reflecting that in their valuation.
- [36:41]
Frank Holland
All right. We talk a lot about AI. A lot of smart people I talk to, they say everybody's got it wrong. They got it totally wrong. I actually expands the software sector. It doesn't make it contract. And then also I was talking to Robert Smith from Vista Equity Partners last week. He told me the exact same thing. In fact, he said, not only does AI expand the software sector, when we're talking about this vibe coding and the use of AI there, that's great when it comes to code, but what about maintaining workflows, testing them, defining them? There's no way that that vibe coding can replace that. Do you agree with that thesis? That software certainly still does have a place and it could expand in the world of AI, but maybe it's just the, the operators that people go to that shifts.
- [37:18]
Gene Munster
Well, I think if you look at just the software world, we're going to see something where the Kind of the top 20% of producers. It used to be this concept that like a great software developer in Silicon valley was a 10x. They could do 10x what a typical person could do now with these tools, those great need to be a thousand X. I think that that potential is there, but just to kind of put some more substance around this is that I think what you're going to see is this kind of thinning out of the need for knowledge work. That is just the kind of the, essentially the people that are average, I mean for, for lack of a better way of saying it. So I think that those number of seats are going to go down. I think the people that really embrace these tools, that 20% is going to find superpowers around their productivity around some of the vibe coding and other tools that are coming out every week. And so I do believe that when we have the conversation about software relative to the number of seats, seats are going to decline. I mean, I find it hard to imagine a world where two years from now there's more knowledge workers than there is today. 10 years. That probably changes the education kind of relines with what the technology is at. But there is going to be a disruption. And I think that does create this narrative around software, not just Microsoft. And that's not going to go away.
- [38:39]
Frank Holland
All right, got to ask you One other question. SpaceX, a possible IPO. Your view of it, not only the company and the idea of SpaceX being a public company, but about it being an investment. You would imagine it would be in a lot of index funds. I think a lot of people would race out there to buy it. How do you view this, this potential IPO coming up?
- [38:56]
Gene Munster
Just really exciting. We are investors in it. That's not the reason why it's exciting. The reason why it's exciting is that this company has some of the most unique assets. Google has some similar views around its unique assets. Everything from the silicon to the cloud to distribution. But no one really has these unique assets that ultimately SpaceX has. This is going to be a wild ride. It's going to be a roller coaster right out of the gate because of some of that indexing. But don't let all that noise kind of change the fundamentals here. The opportunity. This is a generational company. If you have the luxury. This is a company to own it. Own it for the next decade.
- [39:35]
Frank Holland
All right, Gene Munster, we're going to leave the conversation there. Gene, thank you very much. Have a great weekend.
- [39:38]
Gene Munster
Thank you.
- [39:39]
Frank Holland
Coming up here on Fast Money Defense on and off the court fans locked into the March Madness Final Four this weekend, but there's also a surge in team betting that's causing a lot of concern. The troubling trend on the rise as the sports betting space continues to grow more fast. Coming up in two. Also, don't miss our next CNBC Pro Live event, Wealth for women. It's May 28th right here at the Nasdaq market site in New York City. Speakers include our own Karen Feinerman, right here to my right. Limited tickets are still available, so scan the QR code on your screen or visit cnbc events.com wealthforwomen fast money back in tune. And welcome back to Fast Money, an action packed weekend of college basketball with the March for Madness Final Four games on deck. However, there's also a troubling trend on the rise as the more teens they get involved in online gambling and sports betting. Our Sharon Epperson has that story.
- [40:40]
Sharon Epperson
In this personal finance class, the teacher is playing offense.
- [40:43]
Gene Munster
So would it be a good idea
- [40:45]
Frank Holland
to bet if you have only a 4% chance of winning?
- [40:48]
Sharon Epperson
Making sure his students understand what's at risk with gambling and sports betting when
- [40:54]
Karen Feinerman
it comes to stocks, you can accumulate
- [40:58]
Frank Holland
your money over the years.
- [40:59]
Karen Feinerman
It's not as risky.
- [41:01]
Sharon Epperson
A survey of high school teachers from around the country found 83% reported observing or hearing of students participating in sports betting or online gambling.
- [41:11]
Tim Seymour
FanDuel and MGM sportsbook Wow.
- [41:14]
Sharon Epperson
Sports betting has grown rapidly since 2018 and is now legal in a majority of states. Yet less than a handful of states have adopted academic standards for how to teach the risks of and consequences of gambling.
- [41:28]
Denton Sinkhorn Grotta
Red how you feeling right now?
- [41:30]
Guy Adami
I just lost everything.
- [41:31]
Frank Holland
You just lost everything. And if we're not teaching about this
- [41:34]
Denton Sinkhorn Grotta
to our students, to our most vulnerable
- [41:36]
Frank Holland
students, when are you going to teach it to them? Even though they're losing, they're like, this is fun. And to try to get across that gamification of gambling is a very difficult thing to do because they're just looking at it as entertainment. They're not looking at the long term effects of it.
- [41:52]
Karen Feinerman
RED oh, you see?
- [41:54]
Frank Holland
So now you won your points.
- [41:55]
Kathy Entwistle
Yup.
- [41:57]
Sharon Epperson
High school teacher Brian Sukhovsky says if his students understand the financial consequences of gambling, it'll increase the odds of their future success. Sports Betting alliance president Joe Maloney says the legal industry has zero tolerance for underage illegal betting and supports efforts to raise awareness around responsible gaming. Now, April is Financial Literacy Month. It's a great time to subscribe to My Money 101 Newsletter series and share it widely Use the QR code on the screen or go to cnbc.com money101.
- [42:30]
Denton Sinkhorn Grotta
All right.
- [42:30]
Dan Nathan
Well, first of all, Sharon Epperson, CNBC. May I ask you a question? Is there a silver lining here? Understanding that people can get just learning math skills and learning different things, potentially learning about risk.
- [42:47]
Sharon Epperson
I mean, on every financial literacy standards survey that's out there, risk is where people, adults, teens, everyone fall short. They don't understand the risk. So I think learning that is really important. And what was interesting in this class was to watch them talk about gambler's remorse. Say, you know, what's the problem here? Only a 4% chance and you didn't win. Well, how do you feel? And they're saying, I'm disappointed, but really they're understanding that this remorse has repercussions.
- [43:15]
Frank Holland
All right, guys, looking for the silver lining? It is financial literacy month. Are they also learning about just investing? I mean, they're learning about gambling. What about investing?
- [43:22]
Sharon Epperson
They're learning about budgeting, they're learning about credit cards. They're learning about investing. And as one of them said, you know, they know the long term impact of investing is going to be a lifelong impact. They know that there's a quick fix to make money. That's what some of them said. They think it's free money. They know it's easy money or they think it's easy money. But what they really need to focus on is stocks. That is the next lesson.
- [43:44]
Frank Holland
By the way, every gambler thinks it's easy money. Sharon efforts, great story.
- [43:48]
Denton Sinkhorn Grotta
Thank you so much.
- [43:48]
Tim Seymour
Great job.
- [43:50]
Frank Holland
Coming up here on fast, another leg lower in bitcoin. The token hovering right around 67,000. What our traders are watching in the crypto space when fast money returns. Stay with us. And welcome back to fast money. Bitcoin under pressure once again trading with about a 65 handle at its lows of the day now at about 67,000. Crypto connected stocks like Mara holdings and Riot Platforms, those were higher today. While Coinshares was just de spacked yesterday, it sank another 24%. Guy, you're watching a lot of these moves. You're actually worried about not only the moves but the sentiment, what it means.
- [44:27]
Dan Nathan
I am, but the worries have been unfounded. But you know, we thought for a while that bitcoin the price would reach where strategy's holdings were. That happened at 76,000. We're obviously through it now. I thought once that happened you'd see a follow on a knock on effect in a lot of these semiconductor stocks. So I Thought the crossover between enthusiasts and people that own those stocks are significant. That has not happened. But I think further weakness in bitcoin at some point is market negative.
- [44:54]
Tim Seymour
These. I feel like if this was. Louise Yamato is looking at this chart geese that. That she. I mean, we're building a base in bitcoin for a volatile security or whatever we're calling it. I could almost make an argument that this is exactly the kind of base that bitcoin wants to put it.
- [45:10]
Frank Holland
Yeah. By the way, I just want to be clear. D, short for Diesel.
- [45:13]
Tim Seymour
Yeah.
- [45:13]
Denton Sinkhorn Grotta
Yeah.
- [45:14]
Frank Holland
You're going to some easy coding.
- [45:15]
Tim Seymour
Well, they should add subtitles.
- [45:16]
Frank Holland
People got to make sure. Karen, any thoughts about this. These moves in crypto? So Guy was also worried about the sentiment, the risk off sentiment. The fact that we're seeing this pressure on crypto. Do you believe that's a bigger concern for the market? The fact that everybody's risk off. For obvious reasons though, but still risk off.
- [45:31]
Karen Feinerman
Well, the one thing. One of the things that was driving bitcoin, which I'm long and I've been long for a very long time, it's been a rough go this year, but or less for more than just this year. But the Clarity act was really the driver of that huge run. And then at the last minute, you know, it got pulled and I thought there was going to be a resurgence there, but I don't. I think that seems to be off the table at the. Maybe not fully off the table table, but not in. Not front and center at the moment.
- [46:00]
Frank Holland
Yeah. At least at this moment. All right, coming up, final trade. Stay with us. We'll be right back. All right, final trade time. Tim, you're. Oh, boy.
- [46:15]
Tim Seymour
Diesel. Nickels and Biff and jj.
- [46:19]
Frank Holland
Karen.
- [46:20]
Karen Feinerman
Yes. A firm which has gotten annihilated this year. I think. I think it's way overdone. And thank you for being here, Frank.
- [46:26]
Frank Holland
Yeah, it's great to be here, guy.
- [46:28]
Dan Nathan
Thanks for being here, Frank. I like Walmart, wmt.
- [46:31]
Frank Holland
Dan, you got the last word. Yeah.
- [46:32]
Guy Adami
Volatility is CME Group's friend. Alex, you need.
- [46:35]
Frank Holland
All right, thanks for all of you. Thanks for the warm welcome. Thank you for watching Mad Money. Excuse me. Fast Money. Mad Money. That starts right now.
- [46:44]
Narrator/Commercial Voiceover
All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Fast Money participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Fast Money disclaimer, please visit cnbc.com fastmoneydisclaimer what made you
- [47:17]
Gene Munster
confident that you could do something that
- [47:19]
Kathy Entwistle
hadn't been done before? I have no fear of failure.
- [47:23]
Narrator/Commercial Voiceover
Trailblazing women Changing the game One of
- [47:25]
Frank Holland
my favorite pieces of advice? Think about what your boss's boss needs. Leadership can look in many, many different forms.
- [47:33]
Narrator/Commercial Voiceover
It really does come down to just trusting yourself. Life is short and you just gotta
- [47:36]
Frank Holland
think big to accomplish big things.
- [47:38]
Narrator/Commercial Voiceover
Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday. Wherever you get your podcasts.