← CNBC's "Fast Money"
CNBC's "Fast Money"
The Great Rotation Underway… And A Technician Twofer For Apple 7/1/25
00:43:53
A market rotation is underway, as investors transition from this year’s best performing sectors into some underperformers. The areas seeing some action, and if it will continue through the summer. Plus A technical twofer on Apple, as the Chartmaster Carter Worth and Kaite Stockton of Fairlead Strategies dig into a short-term play on Apple. Fast Money Disclaimer
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- [00:00]
Katie Stockton
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- [00:24]
Melissa Lee
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- [00:26]
Katie Stockton
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- [00:28]
Melissa Lee
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- [01:05]
Tim Seymour
Live from the NASDAQ markets in the heart of New York City's Times Square, this is fast money. Here's what's on tap tonight. The great rotation. This year's outperformers pulling back on the first day of July while recent laggards catch bid. What tone will this set for the market in the second half? We'll debate that in time to buy Apple. The Chartmaster has been bearish on the underperforming tech stock for three years. Is he starting now to change his tune? We'll find out what the charts say. Plus, bank stocks on the move as they lay out their capital plans. Casino stocks cashing on some positive data out of Macao in a build or breakout. Why one trader sees strength coming for the beaten down bunch. I'm Melissa Lee coming to you live from Studio B at the nasdaq. On the desk tonight, Tim Seymour, Karen Feineman, Dan Nathan and Katie Stockton, founder and managing partner of Fair Lead Strategies. Welcome, Katie.
- [01:50]
Katie Stockton
Thank you.
- [01:50]
Tim Seymour
And we start off with a seeming shift out of this year's best performing stocks and sectors to some of the biggest laggards. The NASDAQ climbing to new records to close out the first half. Semis far outperforming the broader market. And names like Netflix, Palantir, Coinb, all soared. But today all those trades were losing steam. Meantime, the long underperforming small caps they jumped today. So the defensive health care names, retailers like Target, insurers and Staples. So what do you make of this broad rotation? What does it say about where to go in the second half of the year? Tim, you said earlier on our call it was like A switch flipped.
- [02:25]
Dan Nathan
It felt like it. And I don't know who flipped the switch and I don't think there was any major strategy report out there. But, but it's, it's very clear. You know, we watched, we've watched interest rates kind of trickle lower since the third week in May and yet homebuilders are up 4% today as a group which are highly sensitive to interest rates even on a day when rates trickled up a little bit higher. In other words, this wasn't a big interest rate day. It was a day when I think you saw lagging sectors and sectors that, that I really wanted to see follow through and sectors that could conceivably have been rallying with banks and some of the broader stuff outside of technology were not. But health care had a really nice day. Oil services had a really nice day. And that's kind of hard to figure too given the fact that now we're in this place with oil where we really don't know where we are. But I think it's a reassessment of where some of those growth trades that were destroyed and just destroyed going into liberation day and haven't really come out. And some of that is very clear. The other thing is, you know, whether we talked about it with Laurie yesterday or whether you're listening to any strategist on the street talk about their forward, you know, their forward P E on the S and P right now is, you know, 258 I think she said yesterday we're talking about 20, almost 24 times forward. So I think this is a place where people are looking at. I don't think you get too far away from the trades that have worked year to date. But I think some of these trades, yes, it's game on.
- [03:41]
Karen Finerman
So we all thought the same thing on the call today was really so notable, so many industries, you know. So I looked at retail also out of nowhere, right. So we saw a target up huge. Abercrombie up huge for no particular reason other than that to me they seem to be attractive because they're very cheap relative to what has been working. Doesn't make me want to abandon my Mag 7 exposure. But it is notable how long it lasts. I don't know. I thought the health care thing was interesting. Something like banks did nicely, but I think still staying with that for sure and we'll get to that later. It was very interesting though that just why all of a sudden did that just giant portfolio reallocation.
- [04:24]
Tim Seymour
It was like, I mean s and P500P is 27 or so. Right. The XRT, for instance, it's sub 20. I mean, it's sort of like people looked at the valuation, thought it's time to go elsewhere or at least diversified beyond mag 7. Kate.
- [04:38]
Katie Stockton
Which I think is highly related to the fact that we just saw the second half begin. Right. So it's the timing of it that I think is, is reflective of what's happening. I think in the last week or so we saw this big run up in the S&P 500. Probably part of that was window dressing on behalf of fund managers trying to make their portfolios look better at quarter end. And then when you remove that phenomenon, perhaps there's still bullishness out there. Obviously there's risk on positioning, but they might be then saying, okay, you know, I got what I'm going to get out of Nvidia perhaps now I'm going to source oversold sectors, oversold groups relative to the broader market for opportunities.
- [05:17]
Guy Adami
Yeah, I don't think it's particularly bullish though, what we saw today. And again, I think to your point, you probably saw a little bit of a mark up into quarter end. S and P was really not able to make a meaningful new high. Closed unchanged on the day you saw the NASDAQ closed down nearly 1%. Obviously that's the heavy lifting of the Mag 7 or Faithful 8 or whatever the heck you want to call them. But then when you look at the regional banks, you know, the relative outperformance to the major banks which have been trading pretty well, and then the Russell 2000 up a percent. So I look at that and I just say the money's got to go somewhere, you know, and. But I just think that the S and P here is getting really overbought. If you look at it when Tim's RSI ise. Right. What do you do? A 14 day RSI.
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Dan Nathan
I'm a nine day guy.
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Guy Adami
Yeah.
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Dan Nathan
I'd ask Katie. I mean, I'm going to listen to.
- [05:59]
Guy Adami
But you're like the RSA guy.
- [06:00]
Dan Nathan
Well, there's time and a place.
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Guy Adami
So it's looking a little. It's looking.
- [06:03]
Dan Nathan
Thank you, by the way. Thank you. Nice.
- [06:05]
Guy Adami
Looking a little overbought to me.
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Karen Finerman
I just want to add one thing that maybe helped this rotation somewhat more is in the big beautiful bill, there was that AI that states would have the opportunity to have some control over, which hadn't been there. That was something new. And I think that sort of added fuel to the fire, to the. All right, let's let's get out of that sector. It's a little too hot right now, especially with this new bill.
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Guy Adami
You could also make the case, I mean like, you know, the cryptos are, the eyes are. That's like what's his name's. But buddy, that's Musk's. You know, you look at what like what just went on between those two guys again, the Trump and Musk, I mean those guys are going to be out. A lot of those Doge guys left. So these tech guys are going to be out. And that was the voice for these industries one way or another. So again, I don't think that the deregulation that a lot of folks thought that they were going to get by all these CEOs lining up behind Trump is going to really happen. If you look at just Apple we were talking about yesterday, that DOJ suit, that's not going away, you know, a lot of these other things. So Google is still on the hot seat here. So I don't think it's a smooth sailing for tech as it relates to, you know, M and A and deregulation.
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Tim Seymour
Like I have a question here. Yeah, that is, you know, Mag 7 for a long time, even critical, that has been a market that's been very narrow and here we see some broadening out and it's still not positive.
- [07:22]
Guy Adami
It doesn't matter because there's so it does 30% of the S&P 500. You know, you're going to have to have so many things go in concert together, you know, to really make a meaningful new high and establish a new range above this like 6150 level. At least that's the way I see it.
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Katie Stockton
It was remarkable. We had breath at nearly two and a half to one positive today and the S&P 500 was still down on the day. And that shows how key the mega caps are to the performance of the S and P, which is overbought by all metrics. But the overbought cond doesn't really matter until you see that loss of momentum. We had some sell signals right at the end of May that got blown out in the past two weeks. And so you want to respect that momentum. What we're seeing today are actually some short term breakouts in those other segments of the market. So if they can hold on to those gains really just for a few days, because these are short term levels that are in play, I think that would be really helpful for a market that needs that breadth, I think in order to extend higher.
- [08:21]
Dan Nathan
Yeah, I like it and I'm not, I'm not here to talk about where I think the market's going to be in November or even October. I'm here to tell you where I think, I think we're going in the next few weeks. And I think there were a couple of tactical calls. Goldman was out there with a two week call. I mean this is the best month of the year for equities, let's not forget that. And, and while you know on July 9th we may have some, some, some not great news out there, I think, you know, I think institutional positioning is still underway. I know sentiment has shifted a lot. I think retail has been very steady. I think CTAs and this gets a little bit like inside baseball. But I think they are trend followers and I think they are, you know what I'm reading is they're going to put you know, anywhere from 40 to 80 billion into the market and some of this is into sectors that I think have underperformed. So I feel great about banks, I mean I felt great about banks before this. I still think banks have a nice way to go. I think the health care sector and we, we know that there are Washington headwinds, We, we know there are loss of exclusivity headwinds. We know there are dynamics that some of these companies aren't that cheap. But boy, such a difficult sector to trade that I think still looks really interesting. Price action here gives me a lot of confidence there.
- [09:27]
Tim Seymour
Even within sectors there were interesting rotations within the semiconductor sector for instance we saw that drawdown in Nvidia and the related chips software to all bids for Texas Instruments and Intel and an xpi. I mean what does that tell you about smh?
- [09:42]
Katie Stockton
I do think it's the great rotation, right? So, so the rotation into the relatively oversold. In fact some of the semis not in video, not Broadcom are oversold already on their monthly indicators. So these are long term oversold conditions and semis do tend to lead us out of more difficult tapes. So we often the catch is that we see after that initial oversold we see a retest oftentimes so and we have not seen seen that yet. So that gives me a little pause in chasing the short to intermediate term up moves. We do feel that we have enough evidence that a pullback will at least present a better buying opportunity for those that have broken out.
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Tim Seymour
All right, meantime, President Trump's budget bill clearing a major hurdle in the Senate are Emily Wilkins is the very latest on next steps. Emily?
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Leslie Picker
Hey Melissa. Well yeah now it goes to the House where Speaker Mike Johnson, he's trying to tee up this mega bill for a vote as soon as tomorrow. But it's not clear that he has the support to actually pass it at this point. Remember, he can only lose three Republican votes if everyone's in attendance. And some members estimate that there are at least a dozen nos right now. And some of those there are your more centrist members who are worried they could lose their re election over Medicaid and snap cuts. And then on the other side of the equation, you have your fiscal hawks who are upset that the Senate violated their agreement that would balance spending and cuts in the $3.3 trillion package. Congressman Ralph Norman told me that he is a no. And then he added that the spending provisions on this thing are massive and we will blow up the deficit. We can't keep mortgaging our future. Another congressman, Congressman Marlon Stutzman, tweeted, saying that we cannot in good faith pass a bill through our chamber that hinges on cut corners and earmarks. The American people won't stand for it. Now, the House does plan to start tomorrow morning with a procedural vote before getting to the bill. And really the key here, as you think about these negotiations, is that no additional changes can be made to the bill at this point. Unless it's going to have to go back to the Senate. Senate's going to have to vote on it, potentially have it ping pong back and forth. That will clearly miss that Sense self set July 4th deadline and push potential passage of this later into July. So lots of moving parts here, guys. Obviously a big, a big win for Trump and for Republicans that this cleared the Senate today, but it's not to the finish line yet. Melissa.
- [12:07]
Tim Seymour
All right, Emily, thank you. Emily Wilkins in Washington. Our next guest says the budget bill could push the dollar even lower after its worst start to the year since 1973. Let's bring in former Bridgewater chief strategist Rebecca Patterson. Rebecca, great to see you. Great to have you on the show. In addition to the spending bill, there are other fact factors. Why you see a weaker dollar going forward.
- [12:27]
Rebecca Patterson
Yeah. Well, let's start with the spending bill. You know, the, we're not at the finish line as we just heard, but if we get a bill something like what we're seeing today, we're looking at a debt GDP ratio in the US that's going from a current 100%, which is already incredibly high, to something closer to 125% of GDP or beyond that in the next decade. What that means is that we're going to have to issue more and more Treasuries to cover these budget deficits. The way. And so if we have more bond supply without the same increase in demand, we're going to have higher borrowing costs. And higher borrowing costs are going to slow the economy. A slower economy, all else equal, is not going to make the US a very attractive place for capital. And that's going to mean less foreign money coming to the United States and less demand for dollars. So you can tie what's happening on the Hill right now in part to what could happen going forward with the.
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Tim Seymour
Dollar as it relates to the markets. I guess there's a near term way of looking at a weakened dollar and that is good for multinationals, good for the stock market, but longer term, obviously slower growth is negative. So how do you sort of parse this out in the context of we are at record highs in the s and P500 and we are looking a little bit oversold at this point. Overbought. Excuse me.
- [13:46]
Rebecca Patterson
That's okay. So, yeah, the dollar on a trade weight basis, so it's against a basket of counterparts, is down about 10, 11% year to date, more so against specific currencies. So it's, it's weakened a lot already. I think it started from an overvalued place. So there's more. It could fall before the dollar becomes absolutely cheap. You're right to say that historically a weaker dollar has been good for multinationals. I would caveat that a little bit though, because the big companies have very sophisticated hedging programs. They try to remove as much as possible of currency swings so they don't affect their earnings one way or another. And there's also a causality issue. You know, historically, yes, earnings per share growth speeds up with a weaker dollar. However, you have to think about what's causing that. If the Fed is cutting interest rates and that weakens the dollar and lifts growth sentiment, that could also lift earnings per share growth sentiment. This time that's not what's happening. The dollar is weakening a little bit on Fed expectations, but mainly because of a reallocation out of U.S. assets by investors. And we see that in the flow data that's getting reported for the last couple of quarters. So it's not the same cause of dollar weakness that historically has been good for growth sentiment and good for US Stocks.
- [15:05]
Dan Nathan
Rebecca, it's Tim. How much of this dollar weakness is also just concern about Fed independence and broader kind of systemic US Stuff? And I guess, you know, we've just kind of talked about this. So lead us though, into who benefits. And you've been investing globally forever. I mean, is it game on for em, which has underperformed for 15 years?
- [15:24]
Rebecca Patterson
You know, if, if we have a weaker dollar and we have worries to your point, Tim, about putting as much capital as, as as investors have for the last 15 years in the United States, you are seeing some green shoots in places like Germany and Europe more broadly. Not surprisingly, their stock markets are doing much better than the US Market year to date. And we did hear from the European Central bank today that if the euro keeps strengthening to say, 1.20, that would start to create some concern for them. So I think there are winners in this to a degree. Too much currency strength can be a bad thing. But right now for emerging markets, Tim, I think we have been in a pretty good place. There are some challenges though, like countries like Taiwan. The Taiwan dollar strength has created headwinds for the country. They're intervening the other way to try to limit it. In Switzerland, Swiss franc strength has led the central bank there to cut interest rates to zero. Hong Kong is intervening to try to protect its currency peg with the dollar. So yes, there are some winners, relatively speaking, but we have to be careful. If the dollar weakness continues, and especially if it's quick, you can lead to some stresses in currency markets that could spill over to other asset classes. I don't think we're looking at a currency crisis tomorrow, but I would keep it on your radar screen that these stresses could build and become less of a winning combination and more of a global instability situation.
- [16:52]
Karen Finerman
Hey, Rebecca, it's Karen. Thanks for being on. So what do you think? With all the whole picture, including the data we got today, and we have the President, you know, telling Jerome Powell he's a moron or whatever it is, what do you think the Fed is going to do and how does that fit into your picture?
- [17:06]
Rebecca Patterson
Yeah, I think that Jerome Powell has done an excellent job of just sticking to his mandate and ignoring the noise around around him. And I think that's what the Fed should be doing. And right now, you know, we have payroll data out this Thursday. The labor market is moderating, but we still have a relatively robust job picture with an unemployment rate around 4.2%. So from that standpoint, the Fed feels no urgency to cut rates. And inflation, while it is moderating, is still quite a bit above the Fed's target. So I think they're right personally, just to wait and see. And I think that's what's going to happen in July unless suddenly the data picture changes markedly. Could we get a rate cut or 2 by year end which is what's priced in the market? Perhaps. But I do think going to your point, Karen and Tim's earlier, that if we do get a quote unquote nomination for the next Fed chair earlier than the normal process so sometime early this fall for example, or even late summer, it just, it's another small nail in the coffin of perceived institutional strength in the U.S. i think that only adds to the risk that less capital comes the US and that adds to the probability that we have a continuation of this weaker dollar trend.
- [18:21]
Tim Seymour
Rebecca, great to see you. Hope to see you here at the NASDAQ soon.
- [18:24]
Rebecca Patterson
Absolutely. You all take care.
- [18:26]
Tim Seymour
Rebecca Patterson, Katie Stockton, what do you see in the charts for the dollar?
- [18:30]
Katie Stockton
You know it's actually very interesting the dollar index. You can draw an uptrend channel all the way back to 2008 and it's being tested that lower boundary right now. You we do have signs of short term downside exhaustion to suggest that we'll see a bounce. But I wouldn't get excited about a bounce unless it takes the dollar index above the 50 day moving average which has been resistance for months now. So we're watching the support level very closely. The momentum is obviously to the downside longer term. So it does increase the likelihood of a breakdown which would then put the next support around 95.2 for the dollar index.
- [19:05]
Tim Seymour
Wow. Yeah.
- [19:06]
Guy Adami
I mean this could also be much ado about nothing. If you go back and look at the last five, six years or so, we've had 15% drawdowns in the dollar go back to 2018, 17 into 18, 20, 20, you know, during COVID And so here we are down about 15% over the last or a little less over the last few months or so. I mean maybe there are some very technical sort of things. You saw that unwound look at where Japanese yields are. I mean like that's not something we were able to say for a very long time. You're at 3% and here we are with fed funds at 4 and a half percent with the idea that they're going to go down to 4% by the end of the year. So again I think we spent a lot of time talking about the dollar. But you know, during COVID is 89 the Dixie.
- [19:45]
Dan Nathan
You know we're near those like pre Covid levels. I'll just say this, I mean Germany's debt to GDP ratio is half of the U.S. they're the best, the largest creditor nation, they have the largest current account and they've just done budget spending that actually is GDP positive. So I think that outperformance is going to continue.
- [20:00]
Tim Seymour
All right, coming up, bank stocks on the move. How the names are deploying capital after the recent stress test and what it means for investing in the space that's next. Plus a jackpot in the casin the new data out of Macao sending these stocks surging. Do not go anywhere. Fast Money's back in two.
- [20:17]
Melissa Lee
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- [21:47]
Tim Seymour
What do you want to be remembered for?
- [21:49]
Melissa Lee
Is this really all there is? Asking big questions about your life can feel overwhelming, but the Hidden Brain podcast hosted by me, Shankar Vedantam is here to help you get started. All through the month of July, Hidden Brain will bring you our you 2.0 series with a special focus on purpose, passion and meaning.
- [22:11]
Tim Seymour
If you're feeling adrift, alone or burned.
- [22:13]
Melissa Lee
Out, this series is for you. Join us.
- [22:21]
Tim Seymour
Welcome back to Fast Money. Several big banks releasing their capital return plans in the last hour. Leslie Picker's got more. Hey les, Amelia.
- [22:28]
Rebecca Patterson
The five biggest banks we track increase their dividends by at least 7%. This is a pretty significant hike after last week's stress tests, which were perceived as being much easier than in recent memory. For these tests, more recently we got the news from Goldman Sachs about its dividend. That firm plans to increase its common stock dividend by 33% from $3 per share to $4 per share beginning July 1. Wells Fargo is increasing its dividend by 12.5% to 45 cents per share. Morgan Stanley increasing its dividend by 8% and also reauthorizing a multi year repurchase program of up to $20 billion. JP Morgan increasing its common stock dividend by 7% and also authorizing a new repurchase program of $50 billion. And bank of America increasing its quarterly common stock dividend by 8% to 28 cents per share. We're still waiting on news from Citigroup, but those are at least five of the biggest US Banks on their capital return programs following those stress tests last week.
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Tim Seymour
MEL all right, Leslie, thanks. Keep us posted on Citi. LESLIE picker, the stocks you saw there really not much movement in the after recession. Maybe not entirely a surprise given where the banks have run, how they've run. I mean JP Morgan at basically this.
- [23:51]
Karen Finerman
Isn'T a surprise that you know, things have improved and they're going to have more capital. We all knew that. But I think, I think, you know, the market's been good so that's great for the asset management business. We're seeing some deals, you know, IPOs. We're also seeing a couple of little deals. So things seem pretty good for the banks in general. So this is nice but it's not like a part of the thesis.
- [24:12]
Tim Seymour
I mean Jefferies just last week when they reported, you know, they have that sort of off calendar year situation so you get to read into and they're, they're very bullish in terms of the second half of the year and the cadence of business coming in.
- [24:25]
Dan Nathan
I leaving without drilling into the core areas of business. I'll just point to the fact that I thought banks, when we go back to where we were kind of in May of 23 when we had the blow ups and Silicon Valley bank, etc. Banks were well on their way to rerating. They were well on their way to starting to pay more back. The fact that the supplemental leverage ratio or SLR is, is allowing a of lot lot more perspective on how much more they can give. And I'll say again, I think European banks have a even better regulatory tailwind and they pay significantly higher dividends. I think their balance sheets are better.
- [25:02]
Guy Adami
Yeah, it's interesting though, the S and P is up what, 27% off the April lows and you see Some of these, Morgan Stanley's doubled that performance off the lows up 60% yet Goldman up 50%. You got JP Morgan up 43%. I mean, it seems a little, you know, like a lot. I mean a little too much, you know, I don't know. I mean, that sort of outperformance. So if you believe those moves are like commensurate with what's going on in the economy, then great. But I just can't imagine that they're off to the races from these levels. I think the valuations, aren't they getting a little, little hefty on some of these?
- [25:32]
Karen Finerman
Well, I mean some of the promise here has been deregulation, so we're starting to see that a little bit. But I still think there's more to go on that. And the overall market's higher, so they have a much lower P E higher than they used to.
- [25:43]
Dan Nathan
Steep yield curve. I mean, yeah, the yield, I mean, look, the interest margins, I mean, where do banks really make money? Blocking and tackling. I mean, yield curve steepening and I think it probably steepens more.
- [25:52]
Tim Seymour
Yeah. Katie, what do you see for the banks?
- [25:53]
Katie Stockton
You know, the big ones that you mentioned do look a little overstretched short term, but they're like new all time highs and there's nothing wrong with that. So I think those are good holds in any portfolio if you can live through a pullback. What's interesting to me is as part of today's rotation we did see kb, the ETF representing the bank sector and KRE for regional banks, both up nearly the highest of the day among the group groups. So with that we have short term breakouts in sort of the broader sector that might be worth a look. So if you look down into these ETFs or more of like an equal weight type of position that they're taking in these banks. So it might be worth looking under the surface for opportunities.
- [26:35]
Tim Seymour
There's a lot more fast money to come. Here's what's coming up next.
- [26:39]
Melissa Lee
Time to double down on casino stocks, the headline that got these names surging today and whether you should continue to roll the dice on gaming. Plus an Apple opportunity. The stock down sharply in the first half of the year, but could the charts be pointing to a short term pop? A technician twofer is coming up next. You're watching Fast Money live from the NASDAQ market site in Times Square. We're back right after.
- [27:14]
Tim Seymour
Are you on the right track? What do you want to be remembered for?
- [27:18]
Melissa Lee
Is this really all there is asking big Questions about your life can feel overwhelming, but the Hidden Brain podcast, hosted by me, Shankar Vedantam, is here to help you get started. All through the month of July, Hidden Brain will bring you our you 2.0 series with a special focus on purpose, passion and meaning.
- [27:39]
Tim Seymour
If you're feeling adrift, alone or burned.
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Melissa Lee
Out, this series is for you. Join us at 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.
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Tim Seymour
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Melissa Lee
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Tim Seymour
Think with Capella University.
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Melissa Lee
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- [28:04]
Tim Seymour
Welcome back to Fast Money. Casino stocks hitting the jackpot today. New data out of Macau showing gaming revenue jumped 19%. 19% year over year in June to more than two and a half billion dollars. Melco, Las Vegas Sands, Wayne and others all up sharply. Tim, you also flagged this JP Morgan upgrade of Melco, specifically saying maybe JP Morgan is watching fast because just yesterday you were talking about how much you love Melco.
- [28:26]
Dan Nathan
Well, we listen to them, maybe they listen to us, who knows. But I think it's a case where the story for both Macao gaming is such that I just think this is a reopening play that's launched long been waiting to reopen. And I think some of this is just a case of this is the most levered play of those names, which makes it riskier, but it means that they have the most gearing towards better numbers. And in fact what JP Morgan was saying is that even one turn on EBITDA, of which it trades at about seven and a half times now versus historic or pre Covid 11 times is actually equal to a 40% move in the valuation. So the gearing is there. I think there's something to do. I love Vegas Sands here too, but I think Melco's got a ways to go.
- [29:04]
Tim Seymour
Yeah, it's not just this month, it's three straight months of beats in terms of ggr. So it is a trend for sure going on in Macao.
- [29:11]
Guy Adami
Yeah, just curious. I mean we've been talking about a Chinese consumer that the government is trying to prop up and it just seems like probably most of that Macao traffic are the Chinese. So again, maybe it's a green shoot. I know you know that's a term the guy likes to use and we'll just kind of use that for him right now.
- [29:25]
Tim Seymour
Silver lining, Stan, is.
- [29:27]
Guy Adami
I mean, listen, you know, to me it seems very curious and we're just talking about it. I mean it's off Probably a pretty low base. They were probably declining for a couple of years from COVID and now they're moving up higher.
- [29:36]
Tim Seymour
Katie, how does the chart look?
- [29:38]
Katie Stockton
I'm interested in their long term setup. The momentum shift is pretty meaningful. When you look at things like the monthly MACD indicator. The Melco looks like a giant double bottom formation. So it just a little more follow through and convincing price action. I think we have some opportunity.
- [29:53]
Dan Nathan
Sweet.
- [29:53]
Tim Seymour
Does this tell us something about the Chinese consumer? That they are better or at least they have some money? I mean we know that you know Chinese people like to gamble. I mean that's well why there's a huge gaming of in Macao.
- [30:07]
Dan Nathan
The, the masses in China don't. But there's an enormous amount of wealthy people that are also and David Riedel said this yesterday, are now traveling more domestically and that's part of the story here. So I just, I just think China has been so painful around just Covid and reopening. I think that's part of the this.
- [30:25]
Karen Finerman
So if you like this, I mean and you do and you've been right on this, the idea of the gearing as you call it is so good that bang for the buck is really. Yeah.
- [30:33]
Dan Nathan
And it can go the other way. Just be clear. I mean part of the reason this stock has gone from, you know, look at the chart, you can see where it moved from. It's because it's, it's trading at five times kind of debt to market cap. So be careful.
- [30:45]
Tim Seymour
Coming up slicing into Apple for the second half. Shares down more than 15% this year. But could there be any, any kind of pop coming for the stock? We're getting not one but two technical takes on the charts when fast money returns back into.
- [30:59]
Melissa Lee
Missed a moment of fast. Catch us anytime on the go Follow the Fast Money podcast. We're back right after this.
- [31:13]
Tim Seymour
Welcome back to Fast Money Stocks Mixed today. The Dow jumping 400 points, now less than 1% away from its all time high. The S and P and NASDAQ retreating from their own record forwards. The S and P down slightly in the Nasdaq falling 8. 10 of a percent. Auto stocks higher. Ford saying sales jumped 14% in the second quarter, well above industry forecasts. And GM saw a more than 7% rise. And speaking of autos, Tesla dropping 5% after President Trump said doge should look into cutting subsidies for Elon Musk's companies. That after the CEO upped his criticisms of the president's budget bill. Tesla Closing below the $1 trillion market cap. Cap mark for the first time since June 9th. Constellation Brands on the move after missing top and bottom line estimates. The alcohol company saying tariffs on aluminum weighed on profits. And shares of software company variants surging after hours on a Bloomberg report that private equity firm Thoma Brava is in talks to acquire the company. That's up about 11% at this hour. Meantime, Apple outperforming all other Mag 7 stocks today holding on to gains after Bloomberg reported yesterday that the company is considering a partnership with OpenAI for anthropic or to power Siri. Despite those reports, Moffitt Nathanson sticking by its call to sell shares. Analyst Craig Moffitt writing that the company still faces a host of challenges including its quote rudderless AI strategy. Well, the chartmaster put out his own sell call on Apple. That was back in August of 2022. The stock's relative performance to the tech sector peaked just five weeks later. Now Carter, you see an opportunity for a short term trade. What do you see?
- [32:47]
Melissa Lee
Yeah, that's, that's just it. Right. And so it's always about what one's time frame is and what one's objective is. Obviously it's been a terrible performer on almost a three year basis. In fact, if you look at its relative performance peak and you have a first chart that might depict this, this again was in September of 2022. We're about to lap that three years later in the period. Apple since Then is up 36%, the S&P is double up 70 and the tech sector is up 105. So it's the definition of no alpha. But here and now I think you can catch a trade. We've got four identical charts. They're short term in nature and let's go through them. The first, no lines, no drawings, no annotations. We know that Apple has that same plunge low in April as the market. But let's put some lines in and we have this set of converging trend lines and just over the past three, four, six sessions we've moved out of that formation to the upside, albeit barely. If we were to draw the lines another way, the question is can we make it further into the apex of this second set of converging trend lines, this formation. And that's my thinking. And and then if you were to include the 150 day moving average that comes into play around the 220 level which would be the midpoint of the prior charts apex. So we are thinking you can catch 6, 7, 8% from here and the setup to my eye looks Right.
- [34:12]
Tim Seymour
Wow. So this many years later, Carter, you're willing to say short term trade now, Carter, you always say you can draw the lines any way you want. And that's why we're going to ask Katie for her take as well because she may draw lines completely differently. Katie, how do you draw your lines?
- [34:26]
Katie Stockton
What do you see now? Well, I actually thought about featuring Apple today. So Carter and I have sort of like minded views here. You know, it's the first real action from Apple that is bullish in a long time. We've seen that long term underperformance but also lower highs, lower lows up until kind of right now. And we have right now a breakout from what looks like a short term triangle formation. Triangles, I think are the highest probability setup that we can see. And so with the price objective that you can derive from the triangle, you could get Apple to about 238, which is even better, 14, 15%. It would still be technically a counter trend move by our measures looking at things like our cloud model, even looking at the longer term indicators which still do point lower for Apple and of course it'd be a lower high even relative to earlier this year. So it wouldn't be a major breakout but certainly an impressive countertrend relief rally and relief from the underperformance.
- [35:25]
Tim Seymour
Carter, to your eye, what would it take to get Apple to be a trade on the long side, not short term, but to actually break that counter trend to be a real rally as opposed to a countertrend rally?
- [35:37]
Melissa Lee
Sure, sure. But first the 238. Katie, I'm all for it. The path to 238 passes through to 20, so obviously that would say a minimum and why not higher there it's time and price as always. It's like anything, if you are in a bad spot, sickness, it's healing, it's, it's convalescing, it's getting better than a setback and getting better. But this action day to day is developmental and the implications are there is some follow through coming. Now can that ultimately to your question turn into something that's more enduring? It's anybody's guess. But for now you have to make a decision, I think buy, sell or do nothing. I'm a buyer.
- [36:16]
Tim Seymour
Carter. Thank you. Carter Braxton. Worth of worth charting. It is amazing to have two stellar technical analysts on at the Pantheon about the same stock.
- [36:25]
Karen Finerman
Yes, you said your cloud model. What is the cloud model?
- [36:29]
Katie Stockton
The cloud model, oh gosh. Well, it's a Japanese model and it was developed in the 1800s. Around the rice trade. It's actually really fascinating, but it provides one look of the primary trend and support and resistance. Resistance. So right now we just saw Apple get through the cloud model on the daily chart, which is a nice catalyst, but it's still below it on the weekly chart. So the weekly is sort of the primary trend that we feel like is more dominant. So we are seeing it as countertrend.
- [36:56]
Guy Adami
Yeah, I mean, it caught a bid yesterday, 200 bucks.
- [36:58]
Tim Seymour
Right.
- [36:58]
Guy Adami
And so it's been massively underperforming the group. And the idea was that open air anthropic, they were in a license app. Well, that was the announcement on June 10, 2024. I mean, let's just be really clear. The stock was at $193. That was WWDC when they announced Apple Intelligence. It was meant to be powered by open air and they never shipped anything. So again, I think the announcement is nothing. If you think the technicals line up, there's that gap from early April to that, you know, 150, 200 day. It's like 220 have a ball.
- [37:26]
Tim Seymour
But going back to what we were talking about earlier about rotation, does it fit rotation or is it still too expensive to. To be considered one of the stocks that you rotate into?
- [37:34]
Dan Nathan
Well, I think there were expenses, expensive stocks that rallied today. So it's, you know, I think some of these are out of favor. Apple, you know, Katie Carter, even Dan have pointed out just how favor. Great call by Carter because Apple was dead money for three and a half years, really. And relative underperforming the S and P for the NASDAQ for two and a half. But I think holding that 200 level, which it could break at any, you know, one bad headline, but was really important. And Carter's first chart was that right shoulder that it's completed of a head and shoulders. So. So I don't think any good news is priced in here. That's why it doesn't matter that this is old news, because this isn't news that necessarily was rallying the stock. So I kind of like it.
- [38:10]
Tim Seymour
All right, we've got a news alert here on Citi. Let's get back to Leslie Picker with the details. Leslie. Hey, Mel.
- [38:15]
Katie Stockton
Yeah.
- [38:15]
Rebecca Patterson
We told you we would come back with Citi's capital return plans when they cross. And they have indeed crossed. Citi also planning to increase its quarterly dividend by about 7% from $0.56 per share to $0.60 per share, subject to quarterly approval by Citi's board starting in the third quarter of 2025. Citi does note that it previously announced a $20 billion multi year share repurchase program that took place in January 2025 and so far 3.75 billion have been repurchased from that program year to date. You can see Citi shares pretty little changed in the after hours trading on this news. Mel.
- [38:55]
Tim Seymour
All right, last thank you Leslie Picker. Coming up, technicals that can really raise the roof. What Katie Stockton is seeing in the homebuilder space and whether these stocks can lay a strong foundation for your portfolio. Do not go anywhere. Fast Money is back into welcome back to fast money. The ITB Home Construction ETF surging over 4% today, notching its best day since May. The fund continuing its momentum from June when It was up 4.1%, snapping a four month losing streak. Katie says ITV has got more room to run. What do you see?
- [39:30]
Katie Stockton
It is a turnaround so they're in its higher risk. But we're starting to see this rotation benefit homebuilders and more as of today really at the ITB ETF got above the cloud based resistance that we watch and it has a good deal of upside still to the 200 day moving average. And if you look at the constituents there too, we have a lot of names that have long term oversold readings and this is pretty remarkable. I mean they've been in a cyclical downtrend, they've been very out of favor. And finally we're seeing the momentum shift to a pretty notable degree. It's on the weekly MACD's for one buy signals have been intact for a few weeks. So it still feels pretty early stage. And we also have a lack of overbought conditions in the space after that phase of underperformance. If you look at the ratio of ITB to the S&P 500, there are now some signs of exhaustion. We follow the demark indicators to that end. So as much as it still looks just like a downtrend, that oversold reading that we have is enhanced by the demarc indicators to suggest that we'll have a relief rally that's more substantial in relative terms as well for homebuilders.
- [40:40]
Tim Seymour
How are you feeling about homebuilders? How do the fundamentals match up to this positive technical outlook?
- [40:46]
Karen Finerman
Well, they are cheap, right? And this is a, they've. I still think though that we've got this, this long standing situation of rates are too high and invariably too low. That is starting to change. I do like Home Depot and Lowe's and I do like qxo. I do like this supplier, supplier roll up strategy with a great jockey at the helm.
- [41:09]
Dan Nathan
Copper today finished within 10 cents of a closing high. So I think copper prices are going higher and I think as you get into a lot of the folks that are actually, actually making homes and you look at the difference between the two Homebuilder ETFs, the XHP has a lot more components inside of it than it does builders. And I think some of these names are going to do well. Some of them have higher input prices because of higher copper. But I think that trade is still also working.
- [41:32]
Tim Seymour
How does XHP look or the home improvement retailers?
- [41:35]
Katie Stockton
You know it's across the board, the improved momentum there. So it's not limited to the likes of Home Depot perhaps. Right. So I know there's some variance between those, those two representative groups. But XHP is also coming off a long term oversold reading and it's within a secular uptrend. We have, you know, sort of forgotten that secular uptrend was there because of the underperformance. But it is coming back in a pretty meaningful way. There's still challenges, there's still resistance, but compelling from especially an overbought oversold perspective.
- [42:06]
Tim Seymour
Coming up, whether it's burritos, burgers or brew, these stocks. Have you covered details sales on the jumps in Chipotle, McDonald's and Starbucks and the next move for those names next. And here's a sneak peek at the Kramer cam. Jim is chatting exclusively with the CEO of Generac. Catch the full interview. Top of the hour on Mad Money. More Fast Money into welcome back to Fast Money. Investors chomping into restaurant stocks today. Food chains like Chipotle, why not chomping, sure. Starbucks, McDonald's all higher in the session. Sweet, sweet Green meanwhile was lower today. Kate Rogers is more on all these moves. Hey Kate.
- [42:45]
Leslie Picker
Hey Melissa. Yeah, we'll start with Starbucks. So that stock closing up over 3% today. BTIG putting the stock on its top picks list for the second half of the year on optimism over Brian Nichols turnaround plans. BTIG's Peter Soleil writing quote, while progress has taken longer to materialize, frustrating some investors with shares only slightly positive in the first half. We still believe it's happening and we'll set the stage for outside same store sales and earnings growth in 2026 and beyond. The recovery trajectory now looks like it will emerge towards year end 2025 and into the first half of next year. McDonald's also getting some love from investors closing up nearly 2% after remember a rough few weeks due to a slew of downgrades tied to its exposure to the low end consumer. It also an end the winding down of its partnership with Krispy Kreme last week as the market waits for its earnings update later this summer.
- [43:33]
Tim Seymour
Summer.
- [43:34]
Leslie Picker
And then Sweetgreen falling today after a major rally yesterday when is up nearly 9%. TD Cowan today downgrading it to hold with a $15 price target. On concerns over continued same store sales misses not returning to normal levels till 2026 it says weighing on shares. And I know you mentioned Chipotle as well. That stock closing up over 3% after kind of a rough rough start to the year. And same store sales misses concerns over the consumer, you name it. Melissa. So investors kind of turning positive on that. That one as well.
- [44:02]
Tim Seymour
All right, Kate, thank you. Kate Rogers on the restaurant beat. The McDonald's is interesting, I thought because of what Kate had mentioned in terms of the concerns over the low end consumer. I don't think those concerns have dissipated, Tim. So I don't know. I mean have the clouds cleared all of a sudden?
- [44:17]
Dan Nathan
I don't think they have. Although the low end consumer was almost the first to kind of get hit. And so it seems if anything, if we're in a place where, you know, maybe we haven't gone to the other side, but I think they would be the first to rally out of it. I just think McDonald's trade is like a champ given all the it was getting rattled with these downgrades right and left. It's not cheap. You don't need to own it here. But I think it's a long term hold for anybody.
- [44:39]
Guy Adami
Yeah. So I'm obviously a big salad guy. You can probably tell that Sweetgreen is really interesting. Is down like 65% or so from the November highs. They've never made money. Right. And so you've seen like a decel as far as the revenue growth. That one, I mean it's really hard to get behind these cabinets. Has got the same thing. They make money but it turns out 150 times earnings, you know, that sort of thing. And these were like the darlings of the space. So again I think that says something about the group.
- [45:05]
Karen Finerman
Well, Kava is sort of interesting. Me still too expensive. I think I'll make the same mistake I made with Chipotle. Oh great. Interesting concept. Huge growth forever. Cabo might be headed the same way. Huge growth ahead of them.
- [45:17]
Tim Seymour
Yeah. Katie, what do you see in these?
- [45:19]
Katie Stockton
You know, I'M interested in Chipotle. It has a breakout above its 200 day moving average and I think it is significant. McDonald's less so. It feels kind of toppy if I have to say longer term. But it's nice to see some short term momentum there at least.
- [45:32]
Tim Seymour
Yeah. What do you have on your salad, Dan? I was going to say a lot of. A lot of no carbs.
- [45:37]
Guy Adami
I have a little protein. You know, I actually don't eat tomatoes so that's a big problem for me. But I'm like a cucumber.
- [45:43]
Karen Finerman
That's not your biggest problem.
- [45:47]
Guy Adami
Yeah, I got one.
- [45:47]
Tim Seymour
All right, up next, final trades, final trade time. Katie Stockton, a fair lead.
- [46:07]
Katie Stockton
I'm looking at Target. So TGT it has finally filled that gap down from April, which I see as a gap.
- [46:13]
Tim Seymour
Way great to have you on the show, Katie. Thank you, Tim.
- [46:16]
Dan Nathan
Wonder if Sweet green sales go down now that we know Dan's a just kidding freeport. I think copper is going up, not down and I think there's more there.
- [46:26]
Tim Seymour
Karen.
- [46:26]
Karen Finerman
Yeah. So I really like that retail rally today and had a very nice day, but I still think it's very cheap.
- [46:33]
Tim Seymour
So long then, Nathan and your salad.
- [46:35]
Dan Nathan
Salad.
- [46:36]
Guy Adami
So if I didn't know Apple was the chart that Carter and Katie were looking at, I'd probably like it. I'd say it's going to that. That moving average. But the news that it's rallying on I don't like. So I'm going to fade it again and fit it.
- [46:48]
Dan Nathan
So it's a bearish bull call.
- [46:50]
Tim Seymour
Thanks for watching. Fast forward on Squawk. Mad Money starts now.
- [46:55]
Melissa Lee
All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of cnbc, NBC Universal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet or another medium.
- [47:09]
Tim Seymour
You should not treat any opinion expressed.
- [47:11]
Melissa Lee
On this podcast as a specific inducement to make a particular investment or follow.
- [47:15]
Tim Seymour
A particular strategy, but only as an expression of an opinion.
- [47:18]
Melissa Lee
Such opinions are based upon information the Fast Money participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries.
- [47:25]
Tim Seymour
Warrant its completeness or accuracy and it should not be relied upon as such.
- [47:29]
Melissa Lee
To view the full Fast Money disclaimer, please visit cnbc.com.
- [47:35]
Tim Seymour
Are you on the right track? What do you want to be remembered for?
- [47:39]
Melissa Lee
Is this really all there is? Asking big questions about your life can feel overwhelming, but the Hidden Brain podcast hosted by me, Shankar Vedantam, is here to help you get started. All through the month of July Hidden Brain will bring you our U 2.0 series with a special focus on purpose, passion and meaning.
- [48:00]
Tim Seymour
If you're feeling adrift, alone or burned.
- [48:03]
Melissa Lee
Out, this series is for you. Join us.