CNBC's "Fast Money" Podcast Summary Episode: Tesla’s Stall Continues… And The Long Term Impact From Trump’s Economic Policies
Release Date: February 11, 2025

1. Tesla's Stock Decline and Business Concerns

Overview:
The episode kicks off with an in-depth analysis of Tesla's ongoing stock downturn. Shares have plunged over 6% on the day, reaching their lowest point since mid-November and marking a five-day losing streak. This decline follows a broader trend where Tesla has shed a third of its value since its December peak, undoing more than half of its post-election rally.

Key Points:

• Stock Performance: Tesla's stock has consistently underperformed, losing significant value despite previous highs.
• CEO Distractions: Elon Musk's various ventures, including his involvement with the Oval Office and his $97 billion bid for Twitter (referred to as "open air"), are cited as potential distractions impacting Tesla's core business.
• Sales Decline: Sales in key markets such as France, Germany, and China have started the year on a downward trajectory.
• Competition and Innovation: While Tesla is pushing into self-driving technology and robo-taxis, concerns remain whether these innovations will suffice against increasing competition, especially from companies like BYD.

Notable Quotes:

• Melissa Lee (02:37):
  "Elon really didn't spend a lot of time talking about like the car sales and what's going on in Europe... the fundamentals of the car business are not particularly good and they're only getting worse right now."

• Guy Adami (04:27):
  "It's always been a story of we're betting on the concepts and we don't necessarily have delivery."

• Katie Stockton (06:09):
  "This is a countertrend move and ultimately something that will yield a buying opportunity."

2. Impact of Trump's Economic Policies on the Market

Overview:
Three weeks into President Trump's second term, the podcast explores the immediate and long-term implications of his economic policies. The focus is on policies like increased tariffs, restructuring government departments, and significant investments in energy and AI.

Key Points:

• Policy Optimism vs. Reality: Initial market optimism regarding Trump's policies may mask underlying challenges, such as potential regulatory changes and geopolitical tensions.
• Elon Musk's Political Ties: Elon Musk's close association with the Trump administration raises questions about regulatory support versus backlash from other political stakeholders.
• Economic Uncertainty: Former PIMCO Chief Economist Paul McCully discusses the distinction between risk and uncertainty, emphasizing how undefined economic parameters can lead to market hesitancy.

Notable Quotes:

• Melissa Lee (08:30):
  "If Musk were to leave the administration... then all of a sudden, if you were really excited from 250 up to 500, essentially, and now here you are at 325, where do you think the stock goes?"

• Paul McCully (32:55):
  "Risk is calculating the odds in a game where you know the parameters and you know the rules... uncertainty is when you are playing a game and you don't know the parameters, you don't know the rules."

3. Earnings Reports: Lyft and Supermicro

Lyft:

• Performance: Lyft shares fell sharply after missing both top and bottom-line estimates. The stock has now erased all of its year-to-date gains.
• Guidance Concerns: CEO David Rischer attributed the soft guidance to intensified pricing pressures, indicating a challenging competitive landscape.
• Robotaxis Future: There are mixed feelings about Lyft's plans to roll out mobile-powered robotaxis by 2026, with concerns over credibility and market readiness.

Supermicro:

• Delays and Challenges: Supermicro is racing against deadlines to avoid a NASDAQ delisting amidst accounting concerns raised by an activist investor.
• Financial Outlook: Despite lowering full-year 2025 expectations, Supermicro remains optimistic about its liquid cooling technology for data centers, aiming for $40 billion in revenue by 2026.
• Investor Sentiment: The market reacted positively to Supermicro's updates, with shares rising approximately 10-11%.

Notable Quotes:

• Deidre Bose (Lyft Report, 16:38):
  "The after-hours declines wipe out all of Lyft's year-to-date gains."

• Dan Nathan (Supermicro Analysis, 23:02):
  "If you think they're going to file, the stock can probably... go up to 70 bucks and then we'll have a conversation."

4. Apple's AI Partnership in China

Overview:
Apple is reportedly partnering with Alibaba to integrate AI features into iPhones for the Chinese market. This strategic move aims to bolster Apple's shrinking market share in China amidst fierce competition from local giants like Huawei.

Key Points:

• Market Challenges: Apple's sales in China have declined by 12% year-over-year, indicating significant struggles against domestic competitors.
• Privacy vs. Partnership: Apple's commitment to user privacy in the U.S. contrasts with its need to collaborate with Alibaba in China, raising concerns about data security and governmental access.
• Regulatory Hurdles: The AI features must pass approval from Chinese cyberspace regulators, suggesting a lengthy and uncertain rollout timeline.

Notable Quotes:

• Fred Lambert (Electric Editor-in-Chief, 14:54):
  "In Europe, we're seeing the impact right now. I put that much weight into that."

• Dan Nathan (On Alibaba, 29:07):
  "This stock to me is still about 30% too cheap."

5. Energy Sector Analysis

Overview:
The energy sector is gaining traction, with analysts noting a shift towards more cyclical and defensive market areas. Notable movements include increased stakes by activist investors in BP and Phillips, signaling potential growth opportunities.

Key Points:

• Sector Rotation: There's a notable rotation favoring energy, driven by positive momentum and relative valuation improvements.
• Crude Oil Outlook: Crude oil is in a triangle formation, with a significant breakout above $76 per barrel for WTI expected to sustain sector momentum.
• Individual Stocks: Companies like SLB are showing positive technical signals, indicating potential upward movements.

Notable Quotes:

• Katie Stockton (Energy Analysis, 39:03):
  "Energy has just reversed into favor. This is a six-week trailing history that you're seeing behind the sectors."

• Dan Nathan (44:14):
  "I like the fact that energy is getting its mojo and Schlumberger quickly."

6. Federal Reserve and Economic Insights

Overview:
The podcast features insights from former PIMCO Chief Economist Paul McCully, who discusses the Federal Reserve's position amidst economic uncertainties introduced by the new administration.

Key Points:

• Economic Stability: Despite political shifts, the Federal Reserve remains in a strong position to manage the economy, with policy rates currently favoring stability.
• Inflation and Growth: McCully emphasizes the importance of maintaining a balance between growth and inflation, warning against rates rising to levels that could dampen investor confidence.
• Political Influence: While there are concerns about political meddling, McCully reassures that the Fed's independence remains intact, ensuring prudent economic management.

Notable Quotes:

• Paul McCully (32:55):
  "There’s more downside risk from uncertainty about the rules as opposed to simply risk within the context of definable rules."

• Paul McCully (36:16):
  "I don't worry too much about where the Fed is in the firmament of politics and democracy. I think we're fortunate that we have a statesman as chairman of the Fed."

7. Housing Market and Federal Reserve Commentary

Overview:
The housing market remains under pressure, with Fed Chair Jerome Powell expressing concerns over mortgage rates, housing shortages, and rising costs. This segment delves into how these factors interplay with current economic policies.

Key Points:

• High Costs: Powell highlighted persistent challenges such as high insurance, material costs, and labor shortages that continue to drive housing prices upward.
• Market Correction: Homebuilders face difficulties accessing capital and managing financing costs, leading to reduced market margins and cautious investor sentiment.
• Stock Reactions: Zillow shares dropped following weaker-than-expected guidance, despite revenue beats, reflecting market sensitivity to future outlooks.

Notable Quotes:

• Jerome Powell (Housing Commentary, 42:45):
  "We're clearly having an effect on the housing market and that'll unwind as we normalize policy."

• Guy Adami (Housing Market Analysis, 43:07):
  "The valuations aren't that great. The business is challenged."

8. Closing Trades and Final Insights

Overview:
In the final segments, the hosts share their top trade picks and provide concluding thoughts on the day's market movements.

Key Points:

• Top Trades:

  • Energy: Katie Stockton advocates for natural gas funds like UNG, citing strong momentum and sector rotation.
  • MLPs: Energy transfer Master Limited Partnerships (MLPs) are highlighted for their robust performance.

• Market Sentiment:

  • Lyft's Potential Rebound: Despite recent setbacks, some analysts believe Lyft's strong quarter could lead to a stock rebound.
  • Supermicro's Resilience: Despite delisting threats, Supermicro's focus on innovation keeps investor interest alive.

Notable Quotes:

• Katie Stockton (Final Trades, 44:15):
  "Energy could just be on its own path."

• Dan Nathan (Final Trades, 44:22):
  "I like the fact that energy is getting its mojo and Schlumberger quickly."

Conclusion

This episode of CNBC's "Fast Money" provides a comprehensive overview of key market movements, focusing on Tesla's financial struggles amid CEO distractions, the nuanced impact of President Trump's economic policies, and the evolving dynamics within the tech and energy sectors. With expert analyses and real-time market reactions, listeners gain valuable insights into navigating the complexities of the current financial landscape.