← CNBC's "Fast Money"
CNBC's "Fast Money"
The Global Rate Rise and the Battle for Warner Bros. Discovery. 12/8/25
00:42:27
Yields around the world are on the rise as global central banks weigh whether to cut rates before year-end. What this means for the markets, and whether there are more cuts to come. Plus a hostile bid from Paramount Skydance. But will Warner Bros. shareholders side with David Ellison’s company or Netflix. The future of the streaming landscape and the stocks. Fast Money Disclaimer
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D
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. Another twist in the battle for Warner Brothers Paramount Skydance making a hostile bid for the media company. Can it beat out Netflix? And what will it mean for the streaming space and the great rate rally? Yields from the US To Germany to Japan are on the rise. What that signals about the Fed's next move and our markets too optimistic about a rate cut. Plus a big win for Nvidia. The news that had structured therapeutic shares nearly doubling in size and cleanup on aisle 10. Can Staples, Procter and Gale Gamble rebound for more than two year lows? We'll debate that. I'm Melissa Lee coming to you live from studio Be at the nasdaq. On the desk tonight, Tim Seymour, Karen Feiderman, Courtney Garcia and Guy Adami. We'll get to the global rise in rates in just a few minutes. We start off with that new twist in the battle for Warner Brothers Paramount Skydance coming in with a new $30 a share bid to acquire the entirety of Warner Brothers Discovery CEO David Ellison telling our own David Faber this morning that the deal is better than the offer Netflix made on Friday.
- [02:02]
A
Our deal is pro consumer. It's pro creative talent. It's, it's, it's pro competition. And we believe that when you actually, to further contextualize the our $30 in cash or sorry, $30 a share is basically $17.6 billion in cash, more than the $20 $23 in share they signed up.
- [02:23]
D
Netflix Co CEO Ted Sarando speaking at a conference this afternoon saying he is, quote, super confident his company will end up the winner. But shareholders don't. The deal. Netflix stock has lost nearly 12% just last week. So how do we trade this year? On Friday, we had the dynamic where we had the two bids. We didn't have a higher offer from Paramount's guidance yet. And we were. You guys were wondering, since you're both in wbd, why isn't WBD higher?
- [02:50]
A
Well, why weren't my options moving? And so I'm. Long calls and the stock. And I added the calls, you know, sometime early last week when I sensed that this was going to be a bidding war. And obviously there is an element in terms of the shares where there's some part of this that's still going to probably hang open until. We don't know where this is going to go. We don't know where the Warner Brothers board will decide. We don't know where the regulators will be. So there's, there's that period where my January 16th expiry might actually run out of some steam. And ultimately there's so much value that you can try to break down in the company. I, I actually think this deal, I think the Paramount offer is clearly the peace guy offer is clearly superior. I do think it's fascinating to hear like we've got, you know, Warner Brothers, you know, basically saying we've got support of the board, Paramount saying we've got support of the president. And you have a lot of different dynamics here in terms of also just what are they really valuing the core business for? Or the streaming business, I should say, and that of the entire company, because it seems like there's a 20, almost $6 billion valuation for something that the Ellison, David Ellison is saying is we're putting a dollar of value on that in terms of a share price.
- [04:06]
D
What do you call, Karen?
- [04:07]
C
Risk arbitrage, or it's a French word, not risk arbitrage, or.
- [04:12]
D
So it's 27. And, you know, it's not trading up to 30.
- [04:15]
E
It's not trading up to 30.
- [04:16]
D
It speaks volumes, I think, of how this deal is being perceived.
- [04:21]
E
Yes, but it's, I think what it is, the nuance is, the time to close is so long. Right. So nobody knows how long it'll be. And we got a bunch of, you know, potential antitrust for either side. I understand the Paramount argument. The Paramount thinks they have the upper hand in that regard, but. So you have a long time to go that generally doesn't trade well. Arms are very Short term focused. And so I think that I don't think it's over. I think the background to the offer, which was a super interesting Paramount's view of what happened and how they were sort of shunted to the side, I thought it was really interesting. The one thing I would argue is they said they didn't even let us come with our best and final. I don't know why they didn't come up with their best and final at the time where all the bids were due. I mean, in the uk, if you say best and final, like, no, you have one shot, that's it. And so that was sort of interesting to me. I think Netflix, I think they come back with something and I think what they can do, we now see their stock is trading below the bottom of the collar means that deal is not worth quite as much as they said. So that's a weakness in their deal. But they, I mean they're Netflix, they can put a wider collar on, they could put up more shares, they could do a lot of different things. I think we'll see them come back. And then obviously if Paramount had said, well, we do, we didn't even come with our best and final, we know they have more there. So I think it's going to play out kind of slowly though.
- [05:53]
C
Yeah.
- [05:53]
A
I don't know if $30, January, I.
- [05:55]
C
Don'T know is the ceiling here, but it's a short term ceiling. So then you say what's the risk reward? So two and a half dollars to the upside. So it's at 10% ish. Downside. I mean, this started about 18 bucks. I don't think it's going back to 18. But could you see it in the low 20s again? Yeah, I mean if some of the rhetoric around this heats up in terms of people backing away. Yeah, it could happen. I think Netflix is the play though. And you look at Netflix now traded two times normal volume, you're getting it at a valuation you probably haven't seen in a while. I think a lot of the concern about growth is sort of dismissed or now in the stock. And I think that whole concern about them buying WBD and maybe having to pay up, I think that's more than in the stock now. So I think Netflix, given the fact that we traded down to the prior all time high in February and seemingly are holding, is interesting to me.
- [06:39]
D
You agree, Court?
- [06:40]
F
Yeah, well, I think what is it going to come down to is what is the cape, what are the cable channels really worth? And I think that's what people are trying to figure out here because if they are worth more than 225A share, then it makes more sense for Netflix. But Paramount is arguing is it's not worth that, which their, their deal is actually better and they have better regulatory approval process, so they say. But I think it's also pretty interesting here because when you take a look at it, HBO subscribers have a really large overlap with Netflix. So there actually could be some cost dis synergies there that is it actually worth Netflix to get this deal. And I think that's what people are questioning right now. So I think a lot of people are actually favoring Paramount, though. I think we have to see how.
- [07:19]
D
It plays out as a Netflix watcher.
- [07:22]
A
Yeah, I'm a watcher. I'm a watcher on Netflix and I think this is, I agree with Guy. I mean, I think the opportunity here is ultimately for Netflix, but this will drag on. And I think Netflix is kind of committed here. But unfortunately what this has entire process has opened up this concept of Netflix as an asset light business, as a business that seemingly was not necessarily tethered to some of the same dynamics as the rest of the media space, but was a pure streaming play that seemed to also have this content machine that was kind of working. Although as we pulled back kind of the layers here, all we seem to hear over the last week or two weeks is that their licensing of even Warner Brothers type stuff has been a big part of the success at Netflix. So I think that Netflix will probably trade around here or could trade a little bit lower and I think it will overhang the stock. I don't think you're going to miss your opportunity. But if this deal, which it won't and can't we explain why, but this deal suddenly went to Paramount tomorrow, Netflix is a buy tomorrow.
- [08:16]
D
Yeah, absolutely. In terms of Netflix though, the more it acquires legacy assets, it doesn't that bring down the valuation automatically.
- [08:26]
E
So that. It's a very good question. You have to wonder though, might the valuation go down? Not automatically, but over time anyway because of slower growth. Slower growth and maybe more competition. I, I think we talked about this on Friday. Is this a defensive, is it offensive? I think it's somewhat of both. I don't think they're done, but let's, let's just say Netflix says, you know what, we're not getting into a bidding war. This was it, that was our best shot. We're done. That's not what Saranda said though. Right, Right. But let's say they did. The stock, I do think would pop from here and then I think there would be some concern. Well, now they got this other competitor who's, you know, pretty big. Not like they are, but could be a real competitive threat. I don't know. This is classic. This is like great risk. Our just, you know, if you're for your.
- [09:15]
A
What's fascinating about all of this is that, you know, seemingly you could have bought Warner Brothers for one third this amount or two, excuse me, two thirds less this amount, based upon at least the stock market price six months ago. So. So where was everybody when we were looking around kind of at these assets and I mean, the rest of the media space. And at times we've had these conversations here that there's no question that there is a sum of the parts and that when private equity gets involved in the media space, they're going to find the intrinsic value in these assets. And guess what? They were cheap. That's why Disney is cheap here.
- [09:52]
E
One thing about studio assets, though, I feel like there is an element of ego there, unlike, you know, product, a pipeline or something like that. I feel like studio just to own a studio. Right. Is there something there? It's like somewhat like a sports team, just, you know, people pay up for more.
- [10:10]
D
In Paramount hostile bid for WBD Moffitt Nathan says. Robert Fishman joins us now. Robert, great to have you with us. Which bid is superior in your view, if you're a WBD shareholder?
- [10:22]
B
You guys just went through a lot of the different dynamics that investors are now having to weigh after the hostile bid today. I would say, clearly, if you subscribe to the view that global networks have less value than the Paramount bid, on the face of it today, is superior. The question that Netflix and investors really need to address right now is what is the true upside potential of owning this asset in terms of all of the better monetization that Netflix is talking about that they can get out of these assets versus where Paramount Skydance is ultimately looking to take these assets. So to some degree, from the Netflix standpoint and Netflix investors, you have to understand where the companies want to go with this and how much they're willing to dive in to that bidding war that you guys just went through.
- [11:17]
D
So to get at Tim's question, in terms of the valuation of wbd, is it that WBD should have never traded as low as it did and that what we're talking about now in terms of the offers being made, that is really a reflection, a better reflection of the true value of WBD assets? I mean, where are we on the valuation of this, of this property and why Netflix needs to chase after this?
- [11:41]
B
Yeah, so we fortunately upgraded Warner Brothers Discovery at the beginning of the year because of this underlying thesis that we had that the assets and the. The content and the quality of the content and assets and the premium nature of both really were undervalued. And all it does take to what we've just kind of lived through is that one first bid to really unlock the value. So clearly, investors before this were not giving the company full credit or really much credit for the strategy that they were going on. But as soon as you saw there was, you know, this interest in terms of this bid that Peace Guy brought to the table unsolicited, that's how the value completely got unlocked here. So we're now at the point where there is this essentially bidding war that. That's about to take place. And how that plays out, you know, remains to be seen. But as you mentioned before, Peace Guy, David Ellison has announced that this is not his last and final offer. So we have to see if Netflix and how the different shareholders respond to today's events.
- [12:52]
C
So, Robert, Tim brought it up. Can Netflix be a winner here if they lose the bidding war? If. Forget about bidding war, if they just take themselves out of the bidding war, does the stock become a winner?
- [13:04]
B
We think the stock would definitely rebound, as you mentioned. And so, again, we've been positive on Netflix since this year as well because of the clear path that they have in terms of monetizing their existing engagement and the potential of growing that engagement through different ways. But ultimately, I think what this raises is concern for the Netflix investor base. Is this a signal of more defensive nature given, given the bid and whether or not how aggressive they want to be here? But ultimately, we think that the path as a standalone company is a meaningful growth opportunity ahead and at these levels, you know, not properly reflected.
- [13:49]
A
So, Robert, then, then it brings it back to again, this intrinsic value dynamic that I'm talking about. Does it seems like one plus one equals three in this environment where these two assets, strategically, this makes more sense by adding them in. But I want to get back to the rest of the sector that may or may not be trading on this news. And again, assets that may or may not be fully appreciated either by the market or by other players who now have to move after this deal gets done to one of these two people. Are the assets in the industry that much more valuable? And there are other assets out there that at least could be combined and bolted on.
- [14:26]
B
So it comes down to who ultimately perseveres here. If Peace Guy does not end up with these assets, clearly we believe that they do need additional scale in terms of accelerating their own streaming strategy and getting to the global reach that they're looking for. So you know, we've talked about before would they be interested in looking at the NBC Universal assets? That, that's an open question. But I do think, you know, we've heard today from, from Comcast and from others, everyone wants to go at it on their own if they don't persevere. But ultimately we think that consolidation will continue within the industry in order to, to help fight that DTC's overall streaming fight against some of the larger digital players.
- [15:17]
D
Robert, great to get your thoughts. Thank you. Robert Fishman, Moffatt Nathanson in terms of managing the trade, Karen, you mentioned that it's not going to make that it's going to not, not going to go higher by that difference between 30 and where it is now for a long.
- [15:30]
E
Time unless they come up with a bid like before.
- [15:32]
D
So the managing the trade, you're in it because you believe that there will be a higher bid.
- [15:38]
E
I think there will be excitement around it for a little while. But it's not the most compelling rescar. It's not the most compelling side. Doesn't seem, no, it doesn't seem that great. So, you know, I'm lukewarm on this.
- [15:53]
A
Well, I, I'm hanging in and I thought about trading out of the options today and I still could do that because I think there's a little bit more of a volume push to the upside here. But as we get back to it, I think ultimately the trades, Netflix meantime.
- [16:07]
D
Shares of Nvidia and AMD jumping after hours, the president confirming that he has told China's President Xi Jinping that Nvidia will be allowed to sell its H200 chips to China. The approach will apply to other companies as well. Let's bring in Aiman Jabbers for the very latest on this story. Amen.
- [16:22]
C
Melissa. The news here is we now have a statement from Nvidia reacting to the president's announcement on social media a short time ago. Here's what Nvidia has to say about it. They say we applaud President Trump's decision to allow America's chip industry to compete to support high paying jobs and manufacturing in America. Offering H200 to approved commercial customers vetted by the Department of Commerce strikes a thoughtful balance that is great for America. Now Nvidia not mentioning in that statement, Melissa, the news out of the President's statement, which was that the United States government is going to take 25% of this transaction. Take a look at the President's social media post from a short time ago and what you see is he says, I've informed President Xi of China that the United States will allow Nvidia to ship its H200 products to approved customers in China and other countries. The President goes on to say that that's going to happen under conditions that allow for continued strong national security. President xi responded positively. 25% will be paid to the United States of America. The President also goes on to say in that lengthy post that this approach will apply to other people, companies as well. So I've just sent a text to a White House official to try to understand the White House's legal basis for asserting what is effectively a tax on Nvidia, that they're going to have to pay 25% of the revenue from this transaction to the US government and try to understand a little bit about how that will work and how it will be applied to some of these other companies. But this is a striking deal for, and a striking change, I guess you could say, in the way the United States approaches U.S. companies that are doing business overseas if they need any kind of approval or license. We've seen the US take equity stakes and now we're seeing the US take a revenue piece.
- [18:11]
D
So selling the A200 before was a national security problem, but now it's not. And the U.S. government gets 25% of sales.
- [18:19]
C
Exactly. And now the President said here in the statement that it's to certain customers in China that there are going to be national security protections vetted by the Department of Commerce and that other higher level chips will not be part of this deal, notably the Blackwell. But yeah, that's the deal. You pay 25%, you get your transaction.
- [18:39]
D
Eamon. Thank you. Amy Jabers from the White House. Of course, it is worth noting that the H200 chip is about 18 months or so behind the most advanced chip. So they are. There is a question as to whether or not Chinese customers will actually want this chip in a robust fashion because some of the competitors domestically may offer a chip that is more advanced. But still, this is a very interesting dynamic given there is no China in any of Nvidia's forecast.
- [19:02]
C
It opens the door for, I mean, this is a door opening for future sales of other chips, I think, which is, yeah, I think why you're seeing the pop. I don't know how you get a 25% chop on it, I don't know how that structures out but you know, I mean the world we live in, I guess anything is possible. We'll see if this rally in Nvidia lasts. Obviously. I think a lot of people have been hoping for this for a while.
- [19:24]
E
A great question, how they have this 25%. I don't know if I'm joking or not, but I think they should just continue to sell through Saudi Arabia and then transition ultimately. Some of which end up in China anyway or Singapore, whatever the route is. I don't know exactly.
- [19:39]
D
25%.
- [19:39]
E
Yeah, it does save them 25%. I mean they did have originally that 15% agreement which ended up never going anywhere because they didn't. Because they stopped selling. Right, right. This is unusual, but okay. It's an unusual time.
- [19:56]
F
Yeah. And I think, I mean this is really going to open up an entire market for them which we just haven't been pricing in at this point. And there's starting to be a lot of questions of other companies here domestically who are using TPU's or using in house chips. So will this offset that? Probably. I mean the demand in China and the outlook there, we'll see how much they can sell. They know it's only to certain companies so I don't know like how big that market is, but I think it's opening the door to that and that's what people are optimistic about.
- [20:20]
A
I think this news is, I think this is better news for amd. I think this is better news. And I'm long amd, but I'm long in video too. I just think, you know, the My400 now suddenly can compete with a chip that's 18 months old on this call this, this reverse tariff. I think it's interesting. It's one day, it's a couple of hours, it's an announcement. We, we've kind of gotten the sense that this was happening. I mean I feel like we've heard both parts of this. If the two parts are yes, you go to China on this chip and yes, there will be some kind of, of a slice revenue sharing, a chop.
- [20:54]
C
Chop.
- [20:57]
E
Happen to AMD also, why would AMD get to do it?
- [21:00]
A
But AMD has more to gain. AMD just has more to gain to be in this game. But, but what's interesting again we're, we're only minutes into this and even though we've heard, but wouldn't you have thought you'd had a much bigger move in Nvidia on this if suddenly access to China was was wide open. I do and I think we've struggled at these levels.
- [21:18]
D
Coming up, the read through on interest rates. What is global yields moving higher and what is signaling ahead of the next Fed decision on Wednesday. That's next. Plus Toll Brothers on the move after its latest results. What this quarter's numbers say about the state of the housing market right after this.
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- [23:30]
D
Welcome back to Fast Money. Rates rising across the globe. Ten year treasury yields have risen more than 20 basis points just since Thanksgiving. The German bond and JGB is also rising as investors await not only the Fed decision on Wednesday, but news from the ECB as well as bank of Japan next week. But given the move in yields, have market expectations for rate cuts gotten ahead of themselves? We are seeing this levitation. Even though everybody knows, everybody believes that there is Fed dovish ness to be had in 2026. There is the assumption that, that we are going to get probably two, maybe more cuts.
- [24:01]
A
Right. And anything north of two cuts combined with 15 to 25% EPS growth, depending on the strategist you talk to, is a tremendous backdrop for equities in 2026. With the exception of the fact that if JGB yields are part of a handful of ingredients, but definitely an important one that pull up global interest rates. And I don't know that I can tell you one thing is someone that invests in Japan, I've started to change my view on how negative this might be. Or in other words, not as negative as I would have thought. I do think for Japanese equity investors, inflation in Japan is good news. Remember, it's taken you 30 to 40 years to get out of the deflation caused from a credit cancer that eviscerated that market for a long time. I like it for Japanese equities if the yen stays weak because we're concerned about that and yields go higher because they have to pay more to finance their debt.
- [24:52]
C
So we have a 10 year Japanese yield. 2% seemingly is a magic number that people have been talking about for a while now and each day we get a lot closer. I don't know what it means for Japanese equities. Probably right, inflation is a good thing for their market, but I don't think it's great for our bond market. I think it's starting to manifest itself in the TLT and the upper chart. I mean we are four and a quarter is the 200 day moving average in 10 year yields. I think we're to get down to about 82 or so in the TLT which gets us north of four and a quarter. And I don't think the equity market's going to like it. So the Fed can knock themselves out this week. They can cut 50 basis points. I think 10 year yields are still going higher.
- [25:27]
E
Yeah, I think it doesn't do anything. It's a different market. So I think that, yeah, you're going to have two sort of different messages coming from the markets.
- [25:37]
D
But in terms of the Fed, let's, let's just say the Fed's dovish and they cut 25. And so there are still cuts play. Next year, we know that there's going to be a dovish Fed chair installed, whoever it may be, will probably advocate for cutting rates. I mean at that point do you think ok, well there is that sort of push or do you think, oh, 10 year yields can do anything they want anyway.
- [25:57]
E
So I feel dovish makes 10 year yields higher.
- [26:01]
Yes. Okay.
- [26:03]
D
Right.
- [26:03]
E
Okay.
- [26:04]
D
No. So if.
- [26:07]
A
Yes.
- [26:08]
D
Ok, they want to cut rates but yields can still go higher.
- [26:12]
E
Absolutely.
- [26:13]
D
Yeah.
- [26:13]
E
Right.
- [26:14]
D
Yeah. So.
- [26:15]
E
So but it does allow them to still, to the extent that they're funding the deficit at the front end of the curve, that does save. So that's, that's helpful.
- [26:22]
D
But for the equity markets, if we get higher 10 year yields, even if. No bueno, even if the Fed is cutting rates, the short end, it's no bueno.
- [26:30]
A
Bueno.
- [26:30]
B
That's, that was my.
- [26:31]
A
Sorry. I know this sorry to get around. This is a program shown around the world. So sometimes we try to. Yeah, well you, I mean, I'll 17.
- [26:42]
D
You know, we can throw that in.
- [26:43]
E
There too for me.
- [26:45]
A
Darby.
- [26:47]
D
Coming up, Toll Brothers falling in its latest earnings results. The numbers behind the move, what they mean for the housing trade next. Plus our next guest says to expect the unexpected in the last few weeks of the year. What could bring volatility roaring back? That's right after this.
- [27:01]
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Before the trophy and.
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- [28:02]
B
Executive Decisions is the new podcast from CNBC where I ask powerful leaders about their decisions that changed everything. Steve I'm Steve Sedgwick and here's the CEO of Siemens Energy, Christian Brugg. Business leaders should not stay quiet. In a world which is super complex, we sit in a privileged position and we have to use that to ensure that society remains prosperous, stable, successful. That's Executive decisions with me. Steve Sedgwick.
- [28:29]
A
Get it wherever you're listening to this.
- [28:32]
D
Welcome back to Fast Money. An earnings alert on Toll Brother shares dropping after the homebuilder reported mixed fourth quarter results. CNBC's Diana got the details on this. Diana.
- [28:41]
A
Well, Melissa, the luxury builder came in.
- [28:43]
D
With an EPS miss and a revenue beat. The miss was partially blamed on the delayed closing of some of Toll's apartment living business announced in September.
- [28:52]
F
Home deliveries were stronger than expected and.
- [28:54]
D
Home sales gross margin was also slightly bigger than expected at 27.1% versus estimates of 26.9. Guidance on margins was 26.25% for Q1 and 26% for full year. So that may be hitting the stock now. CEO Doug yearly noted soft demand across.
- [29:11]
F
Many markets, but said our fourth quarter and full year results demonstrate that our.
- [29:15]
D
Luxury business is differentiated as we serve a more affluent customer who's less impacted by affordability pressures.
- [29:21]
F
He also added that they continue to.
- [29:23]
D
Balance price and pace and are actively.
- [29:25]
E
Managing spec starts and inventory on a.
- [29:27]
D
Community by community basis to best match local demand conditions. Toll's average sale price came in a little higher than expected in Q4 at $992,000. Guidance on Q1 deliveries are lower than Q1 of this year. Melissa, I was listening to your conversation before the break about the 10 year and I'll just say the last two times the Fed cut mortgage rates, which loosely follow the 10 year went straight.
- [29:49]
E
Up and in any language you want. That ain't good.
- [29:51]
D
Yep. No bueno. That's right, Diana. Thank you.
- [29:55]
C
She was paying attention.
- [29:56]
A
She was.
- [29:57]
D
She was paying attention. Absolutely nothing less of Diana Olek.
- [30:01]
A
Yes, of course.
- [30:02]
C
I'll tell you what else sort of stuck out to me. Quarterly cancellations as a percentage of signed contracts. 8, 8.3% in the quarter last year at same quarter was 5.9%. So things are starting to go the wrong way. And the average selling price the full year or the next quarter. Guidance again, tweaking it lower. They missed on eps. It's not about valuation. They're always cheap. It's about where you think things are headed in the economy, whether or not people are going to have jobs. I think the labor market is deteriorating. I think the home builders are a sell here.
- [30:30]
D
Mm. When you think about the demographic that Toll services, I mean, do you think about. I mean I sort of think about The Walmart commentary, that higher end, you know, higher income households are downgrading, they're coming to Walmart more. And you got to think, well, if they're sort of watching where they spend, they have concerns about where the market overall for themselves the job market is going.
- [30:52]
E
Although some, I think some of those shoppers just like the Walmart experience, like the price, like the experience no matter what convenience, no matter what economy. But I do think that that toll purchaser is also likely long equities, right. Has likely had a very good year. They're still employed.
- [31:13]
That, that I think is the safest part to be right now.
- [31:16]
F
And the problem in the housing market is the supply demand constraint. It's specifically with existing homes. Like nobody is putting their house on the market right now when rates are still high. So Diane actually hit this on the head. But if the rate, if the Fed keeps cutting rates, that can make the longer term go up, which means rates are not coming down here soon, which means those existing houses are not going on the market. So if that trend happens, that actually should be a good thing for the homebuyers. I do think if you're going to be in the space, they are a good one to be in because they are in that higher like the affluent customer who isn't as affected by interest rates, they have a lot more cash purchases. Their average home is about $1 million. So you know that's, that's the consumer has been holding up at it.
- [31:52]
A
Right now my housing trades, Home Depot, I mean I just think we got enough from these folks in their last earnings round. And by the way, the bar has been set very low. 350 at Home Depot is an interesting level to own the stock if you look at the chart. But I think they're going to, they have an investor day coming up. I think they're going to reset the bar in terms of where growth is going to be and I think it's going to be closer to mid single digits.
- [32:11]
D
Coming up, a season of surprises and not just under the tree where our next guest says it is time to buckle up for a volatile ride into urine and how you can play it.
- [32:21]
Welcome back to Fast Money. Stocks pulling back to kick off the week. The Dow dropping 215 points. The S and P falling a third of a percent and the NASDAQ just slightly lower. Shares of confluent soaring after IBM announced it will acquire the data streaming platform in an $11 billion all cash deal. Tesla tumbling after Morgan Stanley's new auto analysts downgraded the stock to equal weight saying valuation concerns outweigh optimism around Tesla's EV and outlook and Ares Management jumping after hours. The alternative asset manager will be added, excuse me, to the S&P 500 on December 11 that Thursday replacing Kellanova which is being acquired by Mars. Well Evercore ISI warning investors December will be a season of surprises. Julian, the firm's senior managing director is behind that call. He joins us now. Julian Emanuel, by the way. He's it's not like share.
- [33:11]
A
He'S got a one name thing.
- [33:13]
D
Julian, we should be Julian about season of surprises sounds wonderful actually, except when it comes to the equity market. So what do you what what's happening here?
- [33:23]
A
So, so today is actually a perfect day to describe what we're talking about, right? The the tape traded poorly all day, broadly soggy and surprisingly the semis were good. You know, and lo and behold we get this news after hours. That is a surprise and we see the semis trading better after hours. But the point is, is that if this were not December and you hadn't had September and October and in November that squeaked out the gain to keep the record intact, the Vix would probably be 30% higher given the fact that we have all this event risk in front of us. I mean the Fed and you know, the, the, the central stock reporting on Wednesday, that's the crucible of the debt concerns around AI all of this and then followed by six days later by employment data that for goodness sake, shouldn't we have had the Fed meeting after the employment data? All of that really says that the market is not prepared for surprises. They could be good but in general this kind of volatility is likely associated to a little bit of downside this.
- [34:37]
C
Week and next week, the last four weeks of the year. Can you be long volatility knowing that the back half of this month they're going to be a couple holiday shortened weeks?
- [34:46]
A
I think you can because look again there are other events out there in front of us. The dialogue around Russia has been going very poorly. Venezuela is a hotspot. And then lo and behold we get.
- [35:01]
B
To January and we're going to start.
- [35:02]
A
Talking about a potential government shutdown at the end of the month of January, which again is normally a very positive one for stocks. But all of these suggest that particularly given the run that we've had and of course, you know, we think next year is positive but things don't move in a straight line forever.
- [35:21]
E
So Julian, is the Fed going to be a surprise at all? Where would the surprise come from.
- [35:26]
A
So we're a little bit sort of out of consensus on our view here. And simply, if you think about it, right, the labor market is just an enigma wrapped around riddle. You know, sounds like Russia. It totally is. You know, you had continuing claims, the weekly claims, very low. At the same time you had ADP negative. And so in our mind, what could actually be an unexpected surprise is if Powell actually sounds a little less hawkish than the market's expecting and you could get one of those, you know, sort of what do they know that we don't type of reactions. I just think that at this time of year, if you get news that's outside of the realm of expectations and consensus is very strong around the Fed, that, you know, you could have some volatility.
- [36:20]
D
But is this volatility confined? Will it be, in your view, confined to December and then January? It's sort of, we're looking ahead. You're still bullish air centric names. And so therefore there's a certain amount of bullishness still baked into 2026.
- [36:31]
A
No, absolutely no question. But again, the other thing we have to remember is that at these valuations, the slightest little upsets, as we saw essentially at the end of October and the beginning of November, caused the market to pull back. But in the larger scheme of things, in our view, earnings is still very strong. The monetary and the fiscal tailwinds are very much there, and we think the.
- [36:56]
B
Capital markets have further to go and.
- [36:58]
A
All that drives upside into 26.
- [37:01]
D
All right, Julian, thank you. Thank you, Julian.
- [37:03]
B
Yeah.
- [37:06]
A
Julian.
- [37:07]
D
Julian Mercy.
- [37:11]
What do you think about stocks in December?
- [37:13]
F
You know, it is historically a good month. I think you bring up a lot of good points here. Like there's a lot of positive setup as we go to the end of the year. We've had a really good earnings season. The consumers holding in there. If the Fed cuts rates, that is a positive for the markets. I think the question is a lot of that priced in. I would definitely be on the optimistic side here. I mean, I don't see anything that's impending. But if there is, it could be a good opportunity for people to look at tax, tax loss harvesting. There's ways of taking advantage of that. So I don't think it's anything to be nervous about. I think if that happens is probably short term. But I think overall all there's more positives than negatives right now.
- [37:45]
A
When Julianne talked about capital markets too, I mean, I think this is a great environment for banks. I think, you know, Goldman Sachs we joked today on the call, I joked, you know the stock, that's Goldman Sachs. I mean all time highs. The capital markets business is humming. What we know from the investment banking side, especially the deal we talked about in the A block, I mean we're at record numbers and banks throw in some fed cuts, throwing some cyclicality, throwing a steeple, steeper yield curve, throw in regulation deregulation, tailwinds, excuse me, and capital give back. I mean banks are as interesting as anybody here in this environment.
- [38:19]
D
Coming up, Structure Therapeutics doubling in value today. Some potentially game changing GLP1 data. The skinny on the numbers that have investors salivating that into.
- [38:33]
Welcome back to Fast Money. Structure Therapeutic shares doubling today. The stock's best day on record. The biotech out with new data on its once daily GLP1 pill showing patients lost on average 11.3% of their body weight after 36 weeks of treatment. For more, let's bring in Mizuho health care strategist Jared Holz. Jared, great to have you with us. Should Lilly be concerned, should investors in Lilly be concerned about this?
- [38:56]
B
Hey Melissa, I really appreciate it maybe a little bit. I mean structure is still pretty far behind. Lilly's going to be launching or for glib run imminently. That's going to be a.
- [39:09]
It should be an excellent launch. We've discussed it at length. So maybe a little bit. I think in general as we move into 2026, we're going to be talking about the competitive landscape a lot more, not just with these assets but China also and large cap Pharma which seems to be still very much engaged. So I would say on the margin, but I think this is still Lilly's game for a while.
- [39:35]
D
Does this prove that there can be a competitor that can just sort of emerge? I don't want to say phase 2B data is out of the woodwork, but can just sort of emerge and threaten Lilly's dominance. I think that, you know, the notion that investors have about Eli Lilly is that they are far and away ahead that Novo Nordisk in terms of, you know, trying to bid for Medcera. They prove that there is a desperation level on their part in terms of getting the next generation drug. But there are these assets out there that could dramatically change the landscape in 2026.
- [40:08]
B
Yeah, I mean I think the gating factor here for anyone who's trying to come into the market, whether it's structure or anyone else, is just the prowess that Lilly has become around this market and Novo too to some extent. I mean they still have 35 40% of the GLP1 market, they may not have the best oral. That might still be Lilly. But so to dethrone these type of players, I think is going to prove to be very difficult. Now in the Oro market, it could be easier because just logistically and via distribution, not as onerous as the injectables. But Structure hasn't really come out of nowhere. It's been a public company for a couple of years. This asset has been around. But I think you do make a good point. There are assets that are kind of floating around that if they can accelerate the development timelines a little bit, could be more realistic players as we head into the end of the decade here.
- [41:02]
C
So we talk about this all the time. You've brought it up to us. Obviously you're too busy to come here on set, which is fine, by the way. We totally get it. But does this make it more likely for them to be acquired at a much higher price than it's currently trading? Because, you know, forget about today for a second. I would submit that there's a, there's a 75% chance, given today's numbers news, that this gets acquired over the next six months.
- [41:27]
B
Agree.
- [41:29]
The way that I've been looking at a lot of these publicly traded stocks and biotech, and it's very simplistic and probably overly so, but Structure is just a $4 billion company even after today. So if the street, if investors believe that this is a 2 billion, $3 billion opportunity, and that's pretty modest with the data that we saw today, especially for an oral small molecule, then this could easily be bought out for a double. It wouldn't shock me at all. I mean, I actually thought the stock might be higher at certain points today because if you just take a fairly low estimate for what revenue could be and multiply it by 2, 3, 4, something like that, you get to a much higher stock price.
- [42:13]
D
I want to ask you about WAVE. WAVE 007 had its data out. Granted, it's early stage, it's phase one, but this is a therapy that targets the gene associated with obesity. This seems like a real. It could be a real game changer if you can actually. I mean, that would mean that you fix the gene and then you're done. There's not injections or pills on an ongoing basis. How do you view this in terms of viability?
- [42:40]
B
Yes, it's a very interesting asset. It is early. I think what this asset is trying to prove is that they can decrease weight gain, but only the bad fat. The Good fat remains and lean muscle mass remains. So the weight loss here is more modest in the trial that they presented today. And now they say they can increase the dosage. So that's the good thing. But even if you were just to assume that patients that have taken a GLP use it, this could be a monster drug. I mean if you've lost 30 to 40 pounds and you're not really interested in doing the weekly injectable because you kind of feel like you don't need to lose any more weight, this could be a twice a year subcutaneous injection just to keep you at baseline. That's a pretty big drug because obviously we all think that the underlying GLP1 market's gonna be huge. So that's why I think this is a very interesting product. May not be first line, but even if it's a maintenance drug, it could be very, very significant.
- [43:46]
D
Jared, appreciate your time. Thank you.
- [43:48]
B
Thanks a lot. I appreciate it.
- [43:49]
D
Jared Holds of Mizuho. Coming up, a stumbling staple stock. Procter and Gamble hitting more than two year lows today. Should you gamble on the consumer giant in your portfolio? That's next.
- [44:02]
Welcome back to Fast Money. Procter and Gamble trading at lows not seen since March 2023. The company last week warned that sales were down significant October and we're weak in November as well. PNG has dropped over 17% this year. Other consumer staple names like Church and Dwight, Kimberly Clark and Colgate Palmolive also down double digits. You guys are commenting on how lousily. That's not a real.
- [44:26]
C
Good word. Last time I maybe Harvard they didn't learn that we obviously Georgetown.
- [44:31]
A
We did, yeah.
- [44:32]
C
It is trading poorly. And the reason why because the consumer is a little bit strapped and they're no longer able to pass on the cost to said consumer. So they're getting a double whammy. Now people say valuation is compelling. I'm not sure that's the case and I still think there's more room to the downside on the names you just mentioned specifically Procter and Gamble.
- [44:49]
A
I'm not a buyer Procter and Gamble on this weakness. I think the valuation is not that interesting. I think the margin profile is getting a lot harder. I think everything we're hearing about trading down is consumers are not accepting price increases. The heyday of COVID was you could crank it higher, they would buy it. Not happening anymore.
- [45:06]
F
Yeah. I think when you look at the valuation is cheap to its own historical average, but it's really not cheap compared to the overall market. And if they are seeing that their consumer is strapped, not holding in there, which I do think you have to question when a lot of other companies are seeing the consumers holding in strong. So clearly it's their products they aren't going out to buy. You do have to question that. So I wouldn't, I wouldn't be jumping in here.
- [45:23]
A
Can I ask so, so we started the show with that much time.
- [45:27]
D
Go ahead.
- [45:27]
A
All right, so clean up. And three, have you ever knocked over a can of tomato sauce?
- [45:31]
C
Well, it's funny you say that actually. There's a good story that we don't have time for, but I don't have time.
- [45:36]
A
Sorry.
- [45:36]
D
Start at the tease up next, Final trades.
- [45:41]
A
Final trade Tim, the conversation here almost had me forget my final trade, but I didn't what glitters is gold gltr precious metals.
- [45:48]
E
Carrie yes, talk about Japan market being cheap but take away the currency risk. DXJ neutral and currency.
- [45:55]
F
Courtney, if you're going to be in the housing trade, I do think toll is one to look at. So I'd take a look at that.
- [45:59]
C
Here, Ty, because I know you won't do it six years ago today.
- [46:04]
D
That's right. Wish so wish your kids happy birthday kids.
- [46:07]
C
William and Maddie. It's their six year birthday today.
- [46:10]
D
Trade time Lionsgate. All right, thanks for watching. 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, rad 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 fast money disclaimer businesses.
- [46:56]
C
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