Melissa Lee (0:00)

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A different future is closer than you think with Capella University. Learn more at capella.edu live in the NASDAQ markets in the heart of New York City's Times Square. This is fast money. Here's what's on tap tonight, a major market reversal, the S and P hitting nearly six month lows before staging a sharp midday turnaround. What sparked the comeback and can markets keep the momentum coming next week? And a meta meltdown, the stock getting precipitously close to erasing all its gains since that historic 20 day winning streak. We make sense of the move and what it says about the state of big tech. Plus a big box bust for Costco after earnings, what came out of the White House's first crypto summit and opportunities overseas. How traders are playing the rallies in markets outside the US I'm Melissa Lee coming to you live from Studio B at the nasdaq. On the desk tonight, Tim Seymour, Bono and Nysen. Welcome back Steve Grasso and Mike Koh. We start off with that midday reversal which capped off a wild week for stocks, the S and P dropping more than a percent at its lows of the session before rebounding to end more than a half a percent higher. Still, it was the index's worst week since September, the initial Friday sell off coming as investors digested a weaker than expected jobs report, the US economy expanding payrolls by 151,000 in February less than the 170,000 expected, the unemployment rate edging higher while wages rose less than expected. But comments from Jerome Powell seem to turn things around. Midday, the Fed chair Saying the central bank can wait to see how President Trump's aggressive policy actions play out before it moves again on interest rates. The president weighing in again earlier today saying reciprocal tariffs on Canada and Mexico could come as soon as today and calling the CHIPS Act a waste of money. What a wild week. Economic data, trade war escalations. Fed commentary was all there. What's your setup going into next week, Tim? Well, your setup is that markets are still, I think, nervous and possibly not buying the bounce. I think you're in a case where sentiment remains very, very low. You've had extraordinary volatility. I mean, this was a week that it's a week to remember, have enjoy yourself this weekend and relax a bit because you've had 2% intraday volume almost every day. In fact, going all the way back to last Thursday. I think whether it's, it's a recovery up or closing on the lows. And if you look at indices that technically I'm sure Steve's got a view a bit Bono's a view. You know, there's a dynamic in terms of where we are relative to the 200 day moving average. So longer term, support, where we've been dancing really at support or below it. So the Nasdaq today finished really kind of back up near the 200 day. But if you think about where it was intraday and it really looked like we were going to close at fresh new lows, you haven't seen the Nasdaq as an index move to the downside through the 200 day really since March of 2023. So it's an, it was an extraordinary week. And you noted Powell, he was really the white knight today because on a payroll number that was somewhat mixed, I would say, at best, but it wasn't a disaster. So therefore it could have been worse. You had Scott Bessant, the Treasury secretary, who was out there talking about a detox for, you know, essentially the economy or the markets or people that are expecting the kind of fiscal full plate that we've gotten over the last 10 years. And I think that's fair. I think there are a lot of people that are ready to listen to that and acknowledge it. But the treasury, excuse me, the Fed chairman was really the big deal today. Yeah. The economy is fine. We can afford to wait. We'll see how policies net out all good things that markets wanted to hear, I think. Yeah. Especially given the context. So leading up to that, you had seen early parts of the day being much more positive and then rolling over into the later hour trading session. So I think, you know, that reversal today was, was relatively positive. To Tim's point though, I still think testing that 200 day moving average across the major indices is a bit concerning and you want to see a floor kind of put in before jumping in with, with both feet to the best in comments. I think there's a lot of logic there. Essentially we have had this fiscal stimulus, you're starting to see some of that now in Germany that has fueled this market. That along with interest rates for the better part of, you know, a decade, a decade and a half. And so kind of moving from fiscal stimulus to corporate spending with the tariff overhang, which makes capital budgeting a bit more difficult in that context, I think is why you're starting to see things roll over. The last thing is that we simply were just kind of priced to perfection in terms of multiples 20 to 23 times. And now, you know, you're starting to see what we thought was going to be strength within some of the smaller caps that really hasn't held up because those are supposed to be somewhat insulated from tariffs. I think that uncertainty still continues to loom as a macro overhang. You know, when Tim talked about the S and P and technical levels, when you go back, he mentioned March of 2023. If you go back to October of 2023, that's where we fell off a cliff and we were down below the 200 day moving average for about six days. Then we rallied pretty much to where we're at, to all time highs. It had the same setup. And what created the rally? Powell, Powell creates this rally now I don't know if it's going to be that type of a rally that we saw from October of 2023. There's a lot of things that have changed. But you do, I don't want to say you have a Powell put, but maybe you do have a softer stance. They're up to three cuts this this year, maybe we do get four. But the fact is they're cutting, they're not raising. Right. So you have a softer stance by the Fed. You have tariffs. The key letters in tariffs are the ifs. We don't know if, if and when they are going to happen. Do that again. That was nice. Are you ready for it now? The key letters in tariffs are the ifs. Nice. Ah, that was more than that. It was a big setup. So you do, you do have the ability for him to back off and put his foot on the gas and if you get some reciprocity, not just Reciprocal. If you get some reciprocity from Canada or Mexico, he's got a reason to back off but he's got to feel like he wins because you still have that U.S. mexico, Canada agreement coming up. So do we have a more positive flow going forward? Yes, I think we have a positive flow. Is all the money going to go back into the tech to the mega cap tech stocks? Probably not to Bono and point. Is it going to go into the Russell? I don't think the Russell can, can outperform. I think you're going to get some sort of rotation but not necessarily into the Russell. I think you'll get a wider tech spread than the mega cap names. I like the ifs and tariffs because what you all said, what you said to me basically equates to more volatility across asset classes, which is what we've seen. It's not just in the, in in equities, Mike. I mean the volatility that we've seen in the market in terms of the dollar and the dollar's fall in terms of the swings in the treasury market in terms of the swings in German bond yields on the back of its stimulus announcement, I mean just extraordinary moves in a single week. Yeah, I mean you can sort of get a sense for the volatility that you're going to see across risk assets even just by looking at a simple barometer like the VIX index for example. Because what's going on of course is that in a risk off atmosphere generally you're going to see correlations and risk assets tend, if not to one, they're going to rise. And looking at the VIX index and putting it into context with a couple other factors, we get some interesting things coming out of it. So going back to when the beginning of the VIX took place, which was January of 1990, the average 30 day return for the S&P is about 80 basis points or so. It's interesting that if you take a look at the environment where we are right now, 8th, 9th decile for the Vix during that time, slightly above average forward earnings multiples and the fact that the VIX is still basically in an uptrend, if you look at the 30 day moving average for the VIX is much lower than this and what happens is that 30 day forward looking returns for the S and P drops from about 80 basis points to the upside to about 20 basis points to the downside. So and that's not a usual circumstance, it's hard to compile a bunch of factors like that and Get a big data set where the forward look for the S and P isn't positive. But until we start to see the VIX meaningfully decline and I think, you know, the late day move we saw today was a positive. But until we see that, I think there's still some significant risks ahead. What do you think happens next week? I mean, it seems like you have all this uncertainty, you have all this volatility sort of baked into equities, whatever asset, you name it. And then there's the fundamental backdrop for a lot of the major drivers that drove the markets last year. It's, it's weakened tremendously. It has weakened, but we've blown off a lot of steam. I mean I really. And if you look at the move in Metta, which we now know is taken out the 20 straight days higher in a short amount of time. And if you look at Google and some of the moves in stocks, people have wanted to own at lower prices. I do think there are people and I believe investors should be really going through their list and their watch list and trying to figure out which names. There's no question policy will continue to drive uncertainty. There's no question that the administration is now not afraid to say, we've heard it from the President, we've heard it from the treasury secretary, be prepared for a little pain. That's something that I think actually markets also though will get comfortable with. And I think that's something that we had not heard or maybe even expected to hear from a president that we thought at times was really so focused. I think what happened in Europe is, is real. In other words, I think fiscal Germany, higher bond yields, lower dollar. These are big deals. I think oil will stay lower. I think at least the headlines today around Russia are that there's maybe a chance for Russian oil to no longer have a cap on it for Russian oil to be flowing. We know that there's a dynamic with the Saudis right now. It does seem like this administration is going to get their lower oil prices which will on some level be also stimulative to the consumer. A lot of crosscurrents next week is, I think, a chance for markets to actually catch their breath. But I don't think that there's necessarily people ready to come in and buy. Yeah. A key inflation report though is on deck. And for next week's February CPI due out on Wednesday, economists expecting a 2.9% rise in prices year on year. According to facts that that would mark a slight deceleration from January. For more on the macro environment. Apollo's chief economist, Torsten Slok joins us here on set. Thorsten, welcome to you. Great to have you here on set. What do you make of the jobs report? How does that set up the CPI report for next week? Well, I do think that the soft data going into today's number has been deteriorating both when it comes to consumer confidence we had on Wednesday last week, and also when it comes to corporate confidence. We're seeing the CapEx plans from the regional Fed districts are beginning to roll lower. So the worry you can have is that the soft data is saying that both consumers and corporates are beginning to worry about the outlook. The issue is in the data today is, of course, that that was measured in the 12th of the month, meaning the 12th of February that week. And that was just before things really started to begin to become more intense on the trade war front and also on the Doge front. So from that perspective, the data today at 151,000, it was relatively strong. But it is, of course, very important is something that now is the rearview mirror compared to some of these risks that we've been talking about in the last few weeks. You are expecting the data will deteriorate just, I mean, just factoring in those things, more layoffs from the federal government, plus the impact, the ding in consumer confidence. Because I think Scott Benson is absolutely right when he's saying that there is some detox period or there is some adjustment costs in going from an economy that looks like what it does today to the economy that the administration is trying to achieve, both with a lower level of federal government, but also with changes very fundamentally in how big is the manufacturing sector, what's going on with imports that also have to be lower. And that adjustment period can potentially take some time and it can potentially be painful. And it could in the very worst case also involve the recession in particular, if all the sentiment data begins to reflect to be reflected in the hot data in the form of weaker economic numbers. Torsten, there's been a lot of focus on government jobs. And to Melissa's point, if there's going to be more layoffs, put it in perspective for us, the total government jobs as a percentage of all the jobs, and what would that unemployment rate get to if they canceled all government jobs, which they know they're not going to do, but you have to have the ancillary ones. For every government job, there's another person that's higher than the private sector because of that government entity. Absolutely. So if you look at total employment in the federal government is about 3 million people. And if you look then at studies from Brookings and others show that for every federal employee, there are two contractors. So that means that if you have 3 million and you add 6 million contractors, you get up to 9 million people. Who basically is the true number for what is total federal employment? Total employment in the US is about 160 million. So now you have in very round numbers, 9 million people out of 160. But if you then also take into account that you live in a household with someone who might be in the private sector, the total number of households is 130 million. And therefore, if you now say that roughly 10% of all households, meaning between 10 and 15 million, are impacted in some way or another, it's not so much the direct effect of layoffs from federal workers is really more the sentiment in effect that you begin to say, maybe I should not be going on vacation, which the conference board indicators have already been suggesting. Maybe I should not be buying that car. Maybe we should not be buying that new iPhone. Maybe we shouldn't be buying that new washer and dryer. So the fear is not so much the direct hit from Doge, even the direct hit from tariffs could also be somewhat limited. It's more the spreading of the sentiment that people begin to pull back and in the worst case say, well, maybe we shouldn't be spend so much in the household sector. And maybe corporates also say, well, maybe we shouldn't hire if there's such an elevated level of uncertainty, that could be the real risk where things could really begin to accelerate. That's not the scenario that we think is the baseline. We still think we will not get a recession. We think will only be a modest negative impact. But we do worry about the sentiment effect, especially if uncertainty persists at this elevated level. It's one thing to have a growth scare, Torsten's another thing to think that stagflation is a possibility which is sort of gaining some steam these days. Is that in your scenario at all or is that unlikely? When I think also I was at the event where Jay Powell spoke today at the U.S. nPF Forum, and exactly the question was also asked to him, well, how would the Fed deal with and how should we generally think about if there is this somewhat unusual scenario of inflation going up a little bit and GDP going down a little bit, because inflation going up says the Fed should be hiking and GDP going down says the Fed should be cutting. So that's why what would the Fed in the dual mandate Put a weight on. I do think that as long as inflation expectations are well anchored, which they absolutely are. This was a very important part of the debate of the conference. If inflation expectations are under control, the Fed will absolutely focus on the slowing economy and therefore begin to cut, especially if the unemployment rate so the Fed put is more in play. I do think the Fed put is in place even in a stagflationary environment and next week we get the CPI number but if we do get also the GDP number slow down and even of course the most important thing for the Fed, the unemployment rate going up, then the Fed will begin to say the unemployment rate going up, that's not good. And we'll put weight on that. As long as inflation expectations are well anchored, which they absolutely are. In your view, is that why the markets turned? So I do think that the turbulence and all the downside we're seeing in markets at the moment because the sentiment indicators that have eroded so much markets is looking at that and saying, well, is this a leading indicator for actual people holding back among consumers and also holding back among hiring and capex spending for companies. And therefore from a risk management perspective it makes sense that the market is saying, well if this uncertainty persists and if that's the reason why the sentiment indicators are deteriorating, well then we should expect to see some more holding back in the hot data eventually coming when it comes to consumers and firms and ultimately the unemployment rate. Thorsten. Thank you. Torsten Flock of Apollo. Michael? Yeah, I mean I think it's pretty clear when we take a look at what happened after that meeting that people are sort of seeing, I think what Torson was just talking about. I mean look, consumer consumer pressures are, you know, we're 70% of the economy. So obviously if you feel like consumer sentiment is deteriorating, then that means that the demand pressure that could cause some inflation is going to be deteriorating. And you know, all of the things that he was just talking about on the employment side, I think we all recognize that it's not just the government jobs being lost necessarily, but you know, it's a combination of other things. And finally, you know, we had, you know, modest $690 billion year on year GDP growth I think between 23 and 24 and we were running a $2 trillion deficit. If you go along with Bessant's argument that we should be looking at 3% of GDP in terms of fiscal debt, then you're going to deal with some economic contraction and that obviously helps keep a lid on inflation. I think what's interesting about this week. First of all, Torsten Rest and just referenced the travel industry, what people are willing to do. I mean, tough, tough week for airlines. Tough, tough week for hotels and travel stocks. But, you know, JP Morgan's Bruce Kasman, who I really respect, our chief economist, sounds like they're kind of reassessing their view on US Exceptionalism. And that may not seem extraordinary now, but that's not something I think the entire market has done. And I think this is something that is going to play out over the next couple of weeks. Weaker US gdp, higher global gdp. How do you trade that? President Trump warning that some reciprocal tariffs could take effect as soon as today, capping a tumultuous week of trade policy. Megan Cassell has been on top of it all. She's got the latest. Hey, Megan. Hey, Melissa. Another day, another tariff threat, and this time it was the president himself really sowing some confusion about that tariff timeline, suggesting it could be as soon as today or early next week for those reciprocal tariffs. Take a listen here to exactly what the president said. They'll be met with the exact same tariff unless they drop it. And that's what reciprocal means. And we may do it as early as today or we'll wait till Monday or Tuesday, but that's what we're going to do. We're going to charge the same thing. Melissa he went on to say in that same set of Oval Office remarks earlier today that he reiterated the April 2 date, saying that was the date for reciprocal tariffs. I've asked White House officials for clarity on this one, told me that the only definitive thing on the schedule next week on the tariff front continues to be the steel and aluminum tariffs set for March 12th. That's Wednesday. So we don't think the reciprocal tariffs are moving up. But it does show you just how fluid things are right now and how top of mind it is for the president. We also heard from the president about the jobs report in that same Oval Office appearance. And while it was a mixed report, as you guys have been talking about, he really celebrated it. He was specifically focused on manufacturing numbers. He called it a manufacturing turnaround that was coming ahead of schedule. And the report itself, it was about 10,000 manufacturing jobs created, not particularly hot. And that's department. But the White House does see this as a way that they're going to really boost job growth. Kevin Hassett acknowledged to me in a separate conversation that they do expect to see some doge cuts showing up in the jobs report later in future months, the next two months. But he also said that they think manufacturing is the way to offset that and that tariffs are the reason that's going to grow. So it shows you a little bit about just where this White House is focused right now. Melissa. All right, Megan, thank you. Megan Casella. It's funny that Megan said that the one next date that is set is next week when we thought April 2nd was also a firm date. And obviously that's not the case either. So. But that goes back to just how crazy things have been and you just, there's no, there's no anything that this administration sticks to in terms of playbook. Well, fluid was the term used and I think that's about as polite as one can fluid or pragmatic. Yeah, it just, again, it just really reflects the uncertainty and that's what you're seeing in the market here. Again, if we are going to be de escalating or taking out the fiscal stimulus, it is going to be on the corporate side and with, with their inability to set budgets because they have, you know, various inputs around their input costs, I think that makes it difficult and that's what essentially the market is bearing out. There will be an opportunity for you to step in, but I think it's tough at best with a murky picture. This is the looming issue. Until you have clarity on that us buying stocks is going to be delayed and then because corporates setting their budgets and capex expenditures are also going to be delayed. Coming up, a markdown on Costco share seeing their worst day in a year after earnings last night. Why investors are running away from one of the biggest names in the defensive sector next. Plus rough waters for the crude stocks this week. What the move lower says about the state of the travel trade. More fast money right after this. This is a message from sponsor Intuit. TurboTax Taxes was getting frustrated by your forms. Now taxes is uploading your forms with a Snap and a TurboTax expert will do your taxes for you. One who's backed by the latest tech which cross checks millions of data points for absolute accuracy. All of which makes it easy for you to get the most money back guaranteed. Get an Expert now on TurboTax.com only available with TurboTax Live full service. See guarantee details@turbotax.com guarantees our state has changed a lot in the last 140 years. We know because Multicare has been here guided by a single making our communities healthier. That comes from making courageous decisions, partnering with local communities to grow programs and services and expanding healthcare access to those who need it most together we're building a healthier future. Learn more at multicare.org @capella university learning the right skills could make a difference. That's why our business programs teach you relevant skills you can take from the course room to the workplace. A different future is closer than you think with Capella University. Learn more at Capella Eduardo Breaking news and some new additions to the S&P 500. K Rooney, he's got the details. Hey Kate. Hey Mel. So we have a list for you. There are some changes to the S&P 100, the 500 and the mid cap group as well. For the S&P 100 we've got Palantir Intuitive Surgical Service. Now those companies are going to replace Dow Inc. Kraft Heinz Co. And the Ford Motor Company. This is in the S&P100. These companies will remain in the S&P500. And then moving down the list here you've got Doordash getting added to the mid cap group as well. You also have Williams Sonoma Expand company Borg Warner in the group that is getting replaced. Teleflex and Celanese Corp. Finally here on this list that was for the S&P 500 meanwhile but the hymns is going to be added to that mid cap group. So all of this is going to be effective March 24th. That is a Monday. It will coincide with some of the quarterly rebalancing. Mel, back over to you. All right, Kate. Thanks. Kate Rooney, we should note that there had been some anticipation that coin strategy formerly known as Microstrategy and or hood would be added to the S&P 500. Those stocks are trading lower in the after hours session. Partly this sort of burst expectation here. But it's a good day for the purveyor of Dutch ovens. Tim, in terms of Williams Sonoma being added. Yeah, I'm almost even choking on the news. Really. It was now and it's interesting here because Williamson was the name. He's not going to I'm not going to make it. I didn't feel your pain. Yeah. Let's just say I don't think the valuation here is that expensive. This is a story that if you've seen actually some of the home improvement also some of the the home furnishing stores, it's been a very rough couple of weeks. Williams Sonoma been has been probably the exception given the fact that I think some people were expecting this move. All right, let's get to Costco now finishing their worst day in a year after missing Wall Street's Earnings expectations. The wholesaler beat on revenue, reported an increase comm store sales number and strong E Commerce numbers. But the CEO warning investors on the conference call that President Trump's tariffs will make grocery margins much tighter. Mike, this is an interesting case where the, well, maybe a not so unusual case where the Apple's community come, come out afterwards, defend the stock and say they are actually much better poised to deal with tariffs than a lot of their competitors simply because they can just pull the trigger on the mix of goods that they sell in their store. Yeah, that's one of the strengths that Costco has obviously that you know, they have sort of negotiated goods and they base, you know, they focus on the things where they can offer the best value and they can, as you point out, they can adjust their product mix. I think one of the big issues though with Costco and this is faced by frankly a lot of companies that have performed very, very well. This is 13 and a half percent CAGR over the last 10 years in terms of EPS growth. But the fact is this thing is trading at such a rich forward multiple, it just creates a huge sort of air gap that can exist underneath on any kind of a disappointment. And you know, to be honest, even a 6% pullback and Costco is, you know, that's on the Holly index. So this is a company I'm very familiar with, but I still find that the turn right now is hard to get behind. I agree in terms of the valuation and north of 50 times, I mean it's tough. I will say I do buy into the, the tariff insulation story. Essentially the CEO came out and said only about 33% of our revenues are from imports and less than half of that are from Canada, Mexico and China. So there is some logic there in terms of their ability to one shift mix, but also just what their overall exposure is. I still think this is a top of class name. To Mike's point, I think 6% seems to be a relatively run of the mill type of move, all things considered. If there was really a tariff scare and real threat to margins over the long term, I would expect to see this fall significantly lower. All right, there's a lot more fast money to come. Here's what's coming up next. Remember when Meta was riding an historic 20 day win streak? Well, it gave up all those gains at its lows of the day. What to make of the pullback and the volatility? Volatility in the tech space? We'll find out with longtime VC Rick Heitzman plus Lovin It McDonald's hitting a new high today as investors bite into the stock. How to trade that move and more of today's big market moves. You're watching Fast MONEY live from the NASDAQ market site in Times Square. We're back right after this. Is it time to reimagine your future? The right business skills may make a difference in your career. At Capella University, we offer a relevant education that's designed to focus on what you need to know in the business world. We'll teach professional skills to help you pursue your goals like business management, strategic planning and effective communication. And you can apply these skills right away. A different future is closer than you think with Capella University. Learn more at capella. Edu Friday night on an all new dateline. You're the most hated mom in America. I heard that. Lori Valo Daybell, also known as Mommy Doomsday. Did you watch your children die? The exclusive jailhouse interview. You've heard a lot of stuff, Keith. What I tell you will be the truth. An all new DATELINE Friday night at 9, 8 Central. All new NBC. Welcome back to Fast Money. Stocks closing near their highs of the day after a rollercoaster trading session. The Dow rising more than half a percent. But despite the gains, the S and P posted its worst week since September and the NASDAQ recorded its third straight down week. Meanwhile, McDonald's hitting a fresh all time high today up 3.5%. The stock outperforming the rest of the discretionary sector which was far more than 5% lower this week. Moderna also gaining the vaccine maker the best performer in the S and P this week up 15%. And check out the travel trade. Cruise lines mounting a comeback late in the day but still down double digits since Monday. Tim mentioned this. Airlines finishing deep in the red as investors weigh staffing cuts at the FAA and continued uncertainty for the consumer. What do you want to trade, Steve? I could go with Moderna or McDonald's. I think Moderna. When you look at that chart, you can easily get a bounce off the lows. The chart is horrendous. They need something to replace the all the vaccines from the pandemic. They're working their best to do that. McDonald's no better operator than McDonald's. And if you look at it, 80% of their revenues come through the drive thru. They've got it down to the most ordered SKUs on that drive thru. They're using AI with seasonality. It's hard to bet against McDonald's. Yeah, I believe in that too. And it's interesting too because they gave some first quarter comps that were sluggish week, they said in weather, etc. So I look at the travel stocks and I got to get back to the airlines, which I've been an active investor in airlines for years. I do think we got to a place where people were presuming that these companies were suddenly bulletproof and going to be able to run through the cyclicality of their core business. So you've seen, excuse me, McDonald's, you've seen Delta Airlines go from roughly 70 down to almost low 50s, hit that 50, you're almost at a 28% retracement. You look at the charts here and it does look like 5152 is not a bad place to possibly rebuild a position. Yeah. And I'm going to take the cruise lines. I think that's pretty interesting. To me, this might be the proverbial canary in the coal mine. Essentially this whole experiential kind of cohort is really what we're saying is this is where the consumer is going to be. This is where they're going to allocate their last dollar. This is going to be the last thing that they take away is a cruise, is a cruise or some type of, some type of vacation type of experience as opposed to goods. And being that we're seeing weakness here, to me that coupled with the consumer, the drop off in consumer confidence, to me, I don't think that should be ignored. Coming up, tech stocks posting their third straight week of losses as momentum comes out of the mega cap tech trade in a big way. We'll talk to investor Rick Heisman about whether these one time darlings get their mojo back. And remember, tickets are on sale right now for the second edition of Fast Money Live. Do not miss your chance to see our show in person with our traders. They even get your burning questions answered live on air. It's all happening June 5th right here the NASDAQ market site. So get your tickets right now. CNBC events.com/fast money back into welcome back to Fast Money. Tech stocks, one of the market's big laggards this week hitting levels not seen since September at their lows of the day. And take a look at shares of Metta, the once red hot stock nearly erasing all its gains since it's it started that historic 20 day winning streak in January. It's now down more than 15% from its record high. Our next guest expects more market choppiness ahead, but he's optimistic A sustainable rebound is coming. Rick Heisman is founder and partner at FirstMark Capital. He was an early investor in Airbnb and Shopify. Rick, great to have you. Great to see you. Great to be back. Thanks for having me. You have been really Busy. You've sold 10 companies in your portfolio over the past hundred days. What does that speak to? I think none of them have been huge. Mega Cap sells nothing over $1 billion. But a couple that are close and we're seeing is the M and A wheels are starting to turn. Okay. So, you know, a lot of things were on hold in a volatile 22 and 23, and then people weren't sure about the regulatory environment, especially with the old FTC in 23 and 24. And now corporate development. And most large companies are back to work. And they're back to work. They're starting small. Like everything starts. And we sold a company to ebay, we sold a company to Cyberark, we sold a company to CCC that are big companies that are starting to add products and do that. And you have to start small before you get big. So hopefully we see with a more normal market that people feel better about this being a precursor for much larger mergers in the second half of the year. So you're still optimistic long term, but right now, is this like an adjustment period? You said that VCs have been overly optimistic over the past six months. And six months happens to be basically since Trump was elected. Yes. Right. And so we're readjusting now. What do we readjust to at this point and what specifically in your view, where VC is overly optimistic about? So, you know, like most things, as you know, someone would say, things happen very slowly, then suddenly. And so I think people thought when the administration changed over the, there'd be a new FTC chair and then everything would be much more laissez faire. And it doesn't work like that. Right. So. And then also the new administration has brought a bunch of different crosswinds on everything from tariffs to everything else going on today. It's catching. Yeah, it's just picking up. I like it. And so, you know, you're seeing those. Those things happen. And you're still seeing people getting used to and comfortable with M and A. And M and A is also a precursor for the IPO market that, you know, it creates a competitive tension effectively. So they're lockstep. So I think people are waiting for a few more wins, seeing how the customer reacts before anything goes to gets too crazy. Well, Rick, first of all, congrats sounds like you've had a bunch of wins. I mean it's been a great, it's been a great couple of months in a time where people had been starving for liquidity. So when you think about the backdrop that's had the markets upset, are there, there are companies in your portfolio, are there some sectors that you think, wow, this is actually good news and I think this might be a decent backdrop and obviously manufacturing and places that really are built towards generating those industries around the United States. And clearly that could be semiconductors. Right. In places that we talk about. Any thoughts on that? So people are still bidding out the infrastructure for AI. One thing we haven't seen slowdown is CapEx and we saw it last week. I think we're going to continue to see it both in reshoring as well. It's just overall the hyperscalers continue to invest. So our infrastructure plays are still seeing phenomenal fundamental traction. Probably the other thing that we've talked about in the past and we're going to continue to see is a transition to digital health care. And a lot of the players there, like Rocco and some of the other folks are seeing that there's just so much demand for health care, the system stressed and you're delivering a better quality care. So some of the things both that are part of the administration's plans and even independent of those, you still see good fundamental demand. Interesting. Specifically on the health care because we've talked about this many times in terms of RO and telehealth. But as these drug companies move to direct to consumer, is there still a place for roe? I mean, I understand that Lilly has a deal with RO to distribute the vials. Yes, but Novo is going at it looks like by itself, I mean easily they could just say, just come to our site LillyDirect or Novo Direct and just get it from us. You can't, because you can't prescribe your own medicine. That would be clear conflicts. They don't have the infrastructure to deliver that medicine and they don't have the software for adherence. Right. So it's, you know, do you, if you go there, you're gonna need someone to still write your prescription. You know, are you qualified for this? Can you write a prescription? Are you qualified for insurance? You can't pre qualify someone for your own insurance. That wouldn't work either. And then how do I get you the thing? They're incredibly good at making a large amount of medication at scale, but getting that to the 100 million households like the last mile problem is never going to work. And then once you get that medication they've historically relied on the physician at work for, you took the medication. Do you have side effects? Do you not feel good? Is it doing what you said? And physicians aren't good at it, but it's better than nothing. And what you're seeing is the digital follow up and the digital way to adhere. You're getting 2 to 3 xe adherence and adherence is super important. Right. Because everybody wins. The medication works the way it's supposed to be working. You're getting it, you're getting it paid for by insurance. Because whether it's heart medication or body medication or whatever it is, everybody wants the medication to work. Would you short hymns? I would not short him as I believe that the GLP1s we're still in the third or fourth inning of a fundamental megatrend. All right. Curious Rick, thank you. Good question. Oh, he's a trader. Yeah. And if you would have asked when it was trading at $72, he might have said he was going to short. Maybe, maybe I was on the right week. I'm on the right week. Thank you, Rick. All right, have a wonderful weekend. Heitzman, a first Mark, what do you think about the adjustments that we've seen and Meta has declined? Listen, I think Metta still is probably one of the predominant Magnificent seven names that still has their magnificence. I think they've gotten essentially the way to kind of realize revenue from I think they've gotten that right. You compare that to say an Apple that's also in that same same cohort. I think they have kind of right size a lot of their capex bidding granted they have come out and and essentially said they're going to be, you know, kind of continuing to increase that capex spend. But they essentially have proven the use case there in terms of converting capex spends to top line growth. So I still think this will present an opportunity. With that said, it's still caught up in that entire MAG7 exchange traded fund type of names, large percentage of the overall index and I just don't think there's a way to escape that. Coming up, a rough week for US Markets but not abroad. Germany's main index is trading at records inside the the biggest moves around the globe next plus bitcoin falling even as President Trump holds the first crypto summit at the White House. What to make of the move and what it means to the rest of the space. That's next. Breaking news here out of the Justice Department or Eamon Javers has the details here. Eamon? Hey, Melissa. That's right. The Department of Justice has just filed its final remedy proposal here in the Google Search case. You remember that the Biden Department of Justice had requested that Google be broken up and sell off the Chrome browser after a judge had found that Google was guilty of anti competitive conduct in an antitrust case going back several years. Now the question here was would the Trump Department of Justice back off of that significantly or even erase it? Google had asked on national security grounds to be given some exemptions here. Well, in this document that was just filed a few moments ago, it's a 200 plus document, 200 plus page document. We see that the Department of Justice under Donald Trump is not backing entirely off of that request by the Biden Department of Justice. They're modifying it slightly, but they're not changing the core requirement that Google be broken up. A couple of points to highlight for you here. One is that AI investments would be allowed under this new proposal by the Department of Justice with advanced notification. That is, if they want to make AI investments, they're going to have to work with the Department of Justice on giving them a heads up about that. That's one way in which this is being loosened up a little bit. There's this question about Android, which is very important here, the Android divestiture provision. My understanding here of looking at this for not very long is that it is still possible that Android will be forced to be divested by Google if things don't go well as they negotiate the future. So watch that space. There are a couple of other items here, including search, text, ad modifications, syndication and data access provisions being clarified. But by and large, Melissa, what you have here is the Trump Department of Justice modifying the terms of the deal with Google here, but not backing off the central claim that Google ultimately be broken up. That's obviously going to be disappointing news for the folks at Alphabet Backward. So they can sell Chrome, they have to sell Chrome, but they get to keep AI. So they keep Gemini. Just those things seem almost inseparable. They can continue to make AI investments is what the text here says. So if they notify the Department of Justice, so, you know, the question is, will those investments be approved by the Department of Justice? Is it just a matter of checking a box and sending an email saying, hey, we're going to make this investment, is that cool with you? Or is there a more detailed process? I don't know the answer to that, Melissa, to be honest with you. But this is obviously not what Google wanted and I think in the broader question of where is the Trump Department of Justice, where is the Trump FTC even going to come down on M and A and antitrust questions, I think this shows they're hewing a little bit more tightly to the Biden model than not. This is a, this is a conservative administration. Yes, but it's a populist conservative administration now. And this is not necessarily sort of the Chamber of Commerce rules of the road here. This is an administration that is largely skeptical of big business, big tech in particular, and these large mergers. And I think what you're seeing here reflects that. All right, Eamon, thank you. Eamon Jabbers, Obviously there are a lot of questions still that need to be answered regarding this. We have the not too many details right now. Eamon just gave us the latest. Mike, I'm just curious what, what your take is on this. Certainly it would be a disappointment for investors. You want Google to keep Chrome, you want all of the search under one roof, including its AI. Yeah, I think this is both disruptive and rather disappointing as somebody who is an Alphabet fan, but I will say this, this is already trading at a pretty material discount. And I kind of hearken back to the breakup of Standard Oil. You know, the, this the sisters ended up in the aggregate trading at a valuation greater than the parent did before it broke up. That might happen here too. Yeah, I would agree with Mike. I mean I'm not even going to speculate on that because I think the market hasn't even priced this in. I think if anything we just out of their numbers. The disappointment was really on the growth multiple. Coming up, the crypto trade. Getting President Trump's backing at the first ever White House Crypto summit today. So why is bitcoin down? Chat with our next guest about the most bullish aspect of the strategic bitcoin reserve that is next, more Fast money into June 5, CNBC's Fast Money Live returns and you can get in on the action. It is a very special night here on Fast Money. Join Melissa Lee and the team of traders live and on air. 18 years this has been on my bucket list. It was awesome. The energy in that room was great. An exclusive in person experience at the iconic NASDAQ market site in New York City. Get your tickets now@cnbc events.com fastmoney welcome back to Fast Money. The White House hosting its first ever Digital Asset Summit today. The attendees included the CEOs of Strategy, Coinbase, Robinhood and Ripple. The meeting comes a day after President Trump signed an executive order establishing a US Strategic Bitcoin reserve. For more on what all this means for crypto, we're joined by Vaneck's head of digital assets research, Matthew Siegel. Matthew, great to have you with us. You're bullish, obviously, and a lot of people in the crypto community are. But. But why now? Knowing that taxpayer dollars will not be used to buy additional Bitcoin, only in a revenue neutral way, and that they're going to start with just the bitcoin that they have, why is this positive for the price? Well, this is a huge deal because President Trump has laid down a path to the US Being a leader in bitcoin and digital assets and ending the regulatory weaponization of the last four years that drove so many entrepreneurs offshore. So he's instructed his cabinet to explore all possible paths to adding to the government's existing 200,000 bitcoin. And Treasury Secretary Bessen also said today that he will work with the IRS to rescind and revamp all of the tax guidance that the IRS has already put forward. So I think basically this does three things. It significantly lowers the risk of the US Government ever banning bitcoin. And judging from my conversations with investors, people still worry about that. It also increases the likelihood that other nations will create bitcoin reserves, and we're starting to see motion on that front. And then it makes it very challenging for institutions and agencies to label Bitcoin as unsafe or unsuitable, which still comes up. So this establishes Bitcoin in a separate category from other digital assets, and it opens room for Congress to start the process of crafting, drafting legislation on additional bitcoin purchases, which could be a standalone bill like Senator Lummis has put forward, or it could be packaged into a reconciliation. So, and I think applying this revenue neutral condition removes the fear that this is going to be used, that taxpayer funds would be used to acquire Bitcoin. I think that's a very savvy. So it's a monumental milestone for the industry and we think there's a good chance that it leads to the government buying bitcoin over the next year. Matthew, unfortunately we are out of time. We had breaking news on Google. Thanks for coming by. Appreciate it. Matthew Siegel, Vaneck up next, final trades. Thank you. Final trade time. Mike Koh, I think it's too bad we have to think about it in terms of breakup values, but I think this might presents an opportunity to buy Google. Tim, not a great day in a couple of days for Lilly, which was back near all time. Highs but for Novo again, I think you've got an opportunity to be buying weakness and a building base and a story that I think is as good. Von Owen I do think eventually this volatility will subside, but in the meantime we're looking for a place to hide out. GDX Steven MP Materials I'm up 60%. I should probably be selling it. I bought more today. Alright, thanks for watching Fast have a great weekend. Mad Money with Jim Cramer starts right now. All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Fast Money participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Fast Money disclaimer, please visit cnbc.com fastmoneydisclaimer Is it time to reimagine your future? The right business skills may make a difference in your career. At Capella University, we offer relevant education that's designed to focus on what you need to know in the business world. 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