Melissa Lee (0:00)

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Learn more@discover.com creditcard based on the February 2024 NEL live from the NASDAQ marketsite in the heart of New York City's Times Square, this is fast money. Here's what's on tap tonight. Stocks riding a roller coaster today as President Trump's first round of tariffs go into effect. What was behind the late day fade and is there more pain to come? And off target, shares of the retail giant hitting their lowest levels in over a year. What the company had to say about tariffs and what its results say about the strength of the consumer. Plus a couple recent tech laggards not to win today. How to protect your portfolio amid all this volat volatility and BlackRock strikes a deal to buy ports on the Panama Canal. The implications of that move and more. I'm Melissa Lee, coming to you live from studio Be at the nasdaq. On the desk tonight, Karen Feineman, Dan Nathan, Guy Adami and Danny Moses, founder of Moses Ventures and a host of the on the Tape podcast. We start off with a wild day of action on Wall street after the Trump administration's tariffs on Canada, Mexico and China went into effect at midnight. A sell off in the last hour sent the S and P to its lowest close since Election Day, though finished off its worst levels of the day. The Nasdaq closed just shy of correction territory, down 9 and a half percent from its record highs. And the Dow saw the biggest losses, shedding more than 600 points for the second day in a row. Meantime, the yield on the 10 year treasury briefly fell as low as 4.1% before climbing higher. But another twist after hours stocks like Palantir, Tesla, Broadcom, all moving higher. After hours is Commerce Secretary Howard Lutnick made new comments on tariff negotiations for the latest state of play. Let's get to our Megan Casella. Megan Melissa, truly remarkable day here for trade policy and for geopolitics writ large. It started with all of those tariffs kicking in just after midnight on Canada, Mexico and China. Canada and China both then immediately retaliating, both with tariffs, mostly targeting agriculture and food products, but also some non tariff measures. China blacklisted 25 U.S. companies. Canada is also taxing its electricity exports to some U.S. states, banning U.S. firms from federal Canadian government contracts. We also saw Prime Minister Justin Trudeau come out quite angry towards President Trump, calling him by his first name, calling this a very dumb move, vowing not to let it go unanswered by Canada. President Trump was never likely to let that one slide. He replied quite quickly on social media, saying that any retaliation from Canada would be met with equal escalation from the US So tit for tat was starting to take shape here and we seem to be at an impasse for a moment there, expecting further tit for tat, waiting for some calls to be scheduled. That was just until the last hour when Howard Lutnick gave a potentially consequential but somewhat vague interview saying that he thought President Trump would be able to work out a deal with Canada and Mexico that would involve meeting somewhere in the middle on tariffs. That's how he described it, Lutnick said That would probably be announced tomorrow. So a lot of cushy language there, lots of questions about what exactly that might look like and if it comes to fruition. But it is the first sign, Melissa, of any movement here, any potential compromise coming in the coming days. Melissa, I mean, Ludnick on the Sunday show has made it seem like there was a room for a last minute sort of deal and that didn't happen either. So, I mean, we'll see where that goes. But in terms of the retaliatory tariffs from Canada as well as Mexico, we know that President Sheinbaum of Mexico said Sunday at a rally that's when she's going to unveil the retaliatory tariffs. Do we know specifically beyond the Ontario electrical tax, what the retaliation will be or when that will be announced from Canada? Some of it took effect already. About $30 billion, Canadian dollars, 20 billion took effect at midnight, another 100 billion or so taking effect within three weeks. But they're talking about other things, tearing up some contracts potentially with Starlink trying to get at Elon Musk talking about restricting their exports of nickel. That's a critical material used in a lot of manufacturing. The Defense Department here buys a lot of that. So Canada really coming out swinging. Mexico, we have to wait. But it's likely to be a lot of agriculture, potentially some cars and car parts that they hit if we get to that point. So as you know, the retaliation often hurts more than the initial impact. All right, Megan, thank you. Megan Casella Tariffs impact already being felt across industries. Nearly half of the S&P 500 mentioning tariffs in Q1 earnings calls so far even higher than the jump around the 2018 tariffs. Materials Staples, health care energy among the most heavily affected groups. The topic coming up, more than 30% of materials companies calls already. So does all this combined warrant the growth scare that we've seen roil the markets this week? Guy, what do you say? I believe it does. You know, I think the growth scare is in place. This is sort of the icing, I think, or the cherry on top. But I'll say this as well. I mean this is something we've talked about. As a matter of fact, it's great having Danny here because over the summer, June and July, Danny, Vinnie and Porter talked about make volatility great again and they basically asserted that in Florida a couple of months ago. And I'm of the belief that volume is going to be a story, not a one day story but a prolonged story. And quickly, in terms of the price action today, Karen probably was spot on. She thought, you know, open on the lows, close on the highs and that would have been a very encouraging day. Over the last half hour the S and p gave back 80 handles. Now we've seen rallies of that magnitude over the last 45 minutes a day. We have not seen really a sell off like that. So something new is sort of in the cards right now. We're having fun. Yet there's nothing that investors hate more than uncertainty. And between the new world and economic order that we're seeing in real time happen, it just makes it very difficult. Of course tariffs are going to have an impact. It's going to take a while to play out. I'm sure some companies will use it as an excuse at various times, weather tariffs and things like that, but it's going to be difficult. I would just say that at the height of the market this year we were trading at 23 and a half times forward earnings. So we've only adjusted one and a half times basically I think down to 22 times forward earnings. Historically that's still a very expensive number. And with the uncertainty in the markets, it's probably validated. Yeah. TD is already saying that all the tariffs that they remain in place to the beginning of August will add point four percentage points to US headline cpi. So in terms of price, the price stability that Peter Navarro promised on squawk box yesterday morning, even through the tariffs, economists broadly are not buying that line. It was really interesting to see what happened to the 10 year you talked about. The top of the show. It opened, it would or so closed. I think at 424. That's a pretty big move for a day that maybe you would have thought it might do, the yields might go lower. Yeah. Right. So that's sort of interesting. But I think this, you know, we talked about a little bit yesterday. Part of what, what I think had the economy, people excited about the economy was the animal spirits being released with no regulation or fewer regulations and a very pro business environment. So this is throwing a whole bunch of wrenches into the mechanics of that. And so I think it does weigh on CEOs, particularly ones who are involved in, you know, we talk about GM as an example of a complicated supply chain that's going to really, that's going to be difficult to manage with tariffs from Mexico and Canada and back and forth. So I also think that any company that reports now it's free, say you have, you know, you don't know what, how, what it's going to be for the rest of the year. Give somewhat moderated guidance, be conservative. Why not? It's free. Yeah, I would just say go back to 2018. We have the playbook here. You know, the trade war that started back then, it never ended. Right. It was predominantly focused on China. They put those 10% tariffs in place. They've been ratcheted up throughout the Biden administration. Now we have an extra 10% on that. And you just think about how weak China's economy is right now and you'd say, well, that could push them into some sort of trade deal. It's not particularly clear what the concessions were looking for. Right. We want to actually export less it, import more. I mean, you know, we talk about this trade deficit goes back and forth or whatever. And I just think about the whole idea of reshoring. You know, we thought about this throughout the pandemic and the post pandemic. We haven't made a lot of progress. There's a lot of announcements about folks who are saying we're going to spend 100 billion there, 500 billion here. You know what? Let's see it all happen. Like that's the other thing, you know. So if I think about 2018, there were two very big bouts of volatility. Go back to Q1. What were we afraid of? We were afraid of, you know, the uncertainty in and around trade. We had interest rates that were going higher and then we had some growth fears. And then we got to Q4 of 2018 and all that stuff was still in place. Right. So I think about this, like they could kind of ratchet back Canada and Mexico. They're not likely to ratchet back China right now. And again, I think you're going to have a lot of uncertainty that just sticks with it. And we have an economy here and globally that really does seem to be hanging on right now. I'm not sure what the kind of upside is or where the inflection point would be for the economy right now. I just don't see it. I'm GLAD you mentioned 2018 because by the end of 2018, according to a NBER paper working group paper US real income was reduced by $1.4 billion a month. So consumers really felt it. Companies just got their supply chains back in order post Covid literally, things were just happening. Now. If you're a business, okay, what am I going to order? Do I order it now? Is going to cost more in the future. And now you're disrupting that again. We just got that streamlined so we talk about the markets and how it affects companies, it affects individuals, consumers, investors, the whole gamut. So it's a readjustment period. It's just happening in real time. All right, our next guest thinks the tariff story is massively overplayed in importance. CNBC contributor David Zervos is Jefferies chief market strategist. David, great to have you on a day like today. Why are we all overstating the impact of tariffs here? What are we getting wrong? I just think we're missing the bigger picture, Melissa. The bigger picture is the deregulation story and the smaller federal government story and the movement of resources out of an inefficient federal government into a more efficient private sector. The re privatization of the US Economy as Secretary Besant has talked about last week. I think that's the biggest story. I know that it can be disruptive. I know that it can take a little bit of shine off the market as we move those resources out of the public sector and in the private sector, both labor and capital resources. But the longer term picture is just so optimistic for me. And I think we're getting bogged down in a tariff discussion. That's just minutiae in the grand scheme of things, to be honest with you. I think it is negotiating tactics. It's moved up, it's moved down, it's getting more geopolitical traction than it is actual economic traction. And the real storyline people are kind of forgetting about a little bit or maybe not. I mean, the S and P is only down a couple of percent for the year. So maybe the S and P is seeing through it as well. We're just making a bigger deal out of it than it is. It's a very sort of intangible or unquantifiable thing. Deregulation and the privatization of the economy. David, what makes you so certain that those, and it seems like those are longer term, you know, positive impacts on the economy, that in the meantime we don't fall into a recession or see economic damage before those good things may take over later on? Almost. I think, look, there is a risk that as we do that movement back to the private sector, it's disruptive and I think the administration would probably like to have disruption early. Then they can blame it on the past administration and kind of start fresh six months to nine months down the road at a, at a slightly better place. So there is an argument that they kind of get aggressive early, make a few massive cuts, bring the chainsaws out, etcetera, etcetera. And. And we get a little bit of a wobble and maybe that's what we're seeing. But I think the rate market cushions that. We've already seen a significant fall in rates. I mean people were talking about 5%, 10 year notes and north of that, as well as rate hikes just a few months ago. That doesn't seem to be working out too well. So I think you've got a cushion with the rates. I think you've got an administration that wants to go kind of quickly and early with an aggressive Doge style program as well as a drag program. And I think you could have some disruptions as you make that movement. But the longer term story, which is what equities should really be keying off of permanent capital, is just a really positive story. So we're sticking with that. And I like the idea of having rate hedges to your equity positions. I love my risk parity trades and they've held up great through all of this because we've had the rate rally to go with a little bit of equity weakness. So again the bond market's cushioning the stock market. That's a healthy position to be. And we didn't have that in 22 and we just barely got back to it in the end of 23 and 24. So I think there's a lot more, a lot more positiveness out there than people are giving, giving this credit for. And they're really focused overly on both, I think immigration policies and tariff policies as something that's really going to drag this economy down when they're, they're really sideshows to the big picture. Yeah, but David, it really feels like the administration is playing chicken with the potential for a recession. You know, recession was not something we spent a lot of time talking about. You know, really going back to 2022, we had this kind of, you know, I guess it was a consensus view that it was going to happen in 2023. So it never happened. It kind of just kind of left the lexicon. And when you think about what's going on right now, the amount of uncertainty in such a short period of time, you know, I think there's a lot of emphasis. I think there's too much enthusiasm about Doge. For instance, this whole austerity plan is not likely to kind of, you know, do a whole heck of a lot. So I guess my question is, you know, playing chicken with the potential for a recession that could turn into a global recession, is that worth it to try to set up some long term things right now that we just know are not going to be accomplished anytime soon? Well, I think one day we don't know, you know, how successful this is going to be. It's, it's work in progress. It looks like the attempt is going to be to do something as radical as what we saw in the 80s with the Reagan deregulation and the Reagan re privatization, if you will. So if that's what we're in for and that's the decade we're talking about, that's pretty exciting. It all remains to be seen and things could obviously derail. The good news really is that we have so much cushion on the rate side if things get messy, if we get two or three payroll reports that are negative or the unemployment rate scoots up to 4 1/4 percent, we're going to have not just three rate cuts priced in, we'll have six or seven rate cuts priced in and we'll have a significant cushion that comes into the private equity markets, the real estate markets, all from that long end of the bond market. Really pricing in A significant change in monetary policy which we've all been waiting for and hoping for as rates normalize because they've been restricted for some time as we fought back on this inflation. And I do think the Fed will look through some temporary inflation hiccups if they're high, if they're coming from tariffs because they're going to be one offs. We've already seen a number of the presidents and a few of the governors say the same thing, that these are not changes in the outlook for anchored inflation expectations. They don't change the anchoring, they just sort of do one off price level. So again I don't want to. It's a day where you know, people have definitely gotten spun around and we've had a few days now people getting spun around trying to spin a pretty positive long term story. But I do recognize that we could have a fair amount of volatility making volatility great. Again as you said earlier, here is a theme I I embrace and I think we're going to see it. I think this re privatization story is actually quite volatile and it could create a quarter of negative growth, it could create a pop in the unemployment rate before we get to a much more productive and efficient economy. David, great to speak with you. Thank you. Always a pleasure, Melissa. David Servos of Jefferies Dubai. This narrative guy, in some ways I do, you know, getting to the other side I think is what he's saying is going to be painful, might be volatile and I agree with that. The is where is the other side? I mean is it in October of this year? Is it sooner or is it in 2026? I mean that's what you got to struggle with. But I'll say this in terms of volatility, the market hasn't seen what I think we're about to be embark upon in quite some time. And people are not used to days like today. And I think you're going to get, you're going to have to get used to it very quickly because it's not just sort of the buy and hold environment we've gotten used to. So I look at the VIX always I think, you know, clearly it's elevated the last few weeks. To me it's not quite panicky yet. It's approaching but it's not there yet. However, all that having been said, I think to me what happened in the banks today was panicky and I like to buy when it's panicky. So I did buy some Citibank and I think the banks are out there buying their own stock. And nobody has a bigger buyback relative to their overall market cap than Citibank. So while yields are coming in, credit spreads are widening. They're not pulling in as much as bond yields are. And that's why I think some of the reason the banks have been down. We've had this growth in private credits. It's been fueling the economy. And if you get credit spreads moving wider, that could certainly halt that. All right, well, two recently struggling mega cap tech stocks bucking the downside trend today. Alphabet getting more than 2% its best day in a month. And Nvidia had a more than five month low early in the session before reversing and ending the day up 1.7% and on heavy volume. What do you make of this relative strength in these stocks? I mean, I really tried to save the market for some time. Yeah, I think it's relative value. I think the way that both those stocks have sold off over the last couple of weeks. As you remember, Google was making an all time high into their print. It sold off after that. What happened there? Well, they had a bump to their capex, they had decelerating revenue growth. I think a lot of investors are trying to look around and say what is the ROI here? Where's the uptake for some of these products and services? And I think we can all see that they're going to be coming. But I think this quarter or the last few months in general, it just tells us that right now, you know, the way in which these companies are spending, it's really hard to figure out like what the long term trajectory of this technology is going to be. And so you threw a $300 billion at this capex spend over the last year and a half or so and they're kind of committed to another 300 billion right now. And if the companies are not growing and you don't hear more and more, so this is a great point actually. So you just gave a stat about how many companies on their calls are talking about, you know, tariffs and all that sort of stuff and what they're not talking about is use cases for generative AI and what that's doing to their businesses. So when we talk about some of the near term effects versus the long term effects about what's going on with this trade policy, there are meaningful effects right now. And the CapEx that's been driving this generative AI trade over the last couple of years has been very important in this economy. An economy that's been basically running at about two and a half percent over the last couple of years. So I think today when you look at the rally that you had in the video, yeah, it was just pressed down. It was down nearly 30% from those recent highs. It was a crowded trade. People got out of it and people are going to be looking for opportunities to get back into both of them. And I think we were correctly cautious since that January engulfing pattern across the desk. And that proved to be right. And today's the first day in terms of price action. You can actually make a case. You can play from the long side. I'm not saying it's going straight up from here, but you know, that 110 low to your earlier point, that was the low that we saw basically back in September, September on heavy volume, which is a good sign. So for me, for the first time in a while, Nvidia actually looks nice for a trade. Coming up, much more of the escalating trade war in today's market action, from the impact on auto stocks to how to protect your portfolio. But first, banks, one of the biggest drags in the market today, the names leading to decline and how our traders are handling the moves. Next and target dropping after reporting results this morning, what the company had to say about price hikes, sales and the state of the consumer. All that when Fast Money returns. Back in tune. This is Fast MONEY with Melissa Lee right here on CNBC. For 140 years, MultiCare has been in Washington prioritizing long term solutions, partnering with local communities and expanding access to care. Together, we're building a healthier future. Learn more@mycare.org Are you still quoting 30 year old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide. And every time you make a purchase with your card, you automatically earn cash back. Welcome to the now it pays to Discover. Learn more@discover.com credit card based on the February 2020 is it time to reimagine your future? The right business skills may make a difference in your career. At Capella University, we offer a relevant education that's designed to focus on what you need to know in the business world. We'll teach professional skills to help you pursue your goals like business management, strategic planning and effective communication. And you can apply these skills right away. A different future is closer than you think with Capella University. Learn more at capella. Edu welcome back to Fast Money Financials posting the biggest losses in Today's market, down 3 1/2 percent. The XLF logging its worst day in nearly two years. Consumer finance names getting hit particularly hard as investors gauge the impact of tariffs on the average American household. Discover, Capital One, American except Express, MasterCard, Visa, all posting outsized losses and only one name in the KBE Bank ETF. Flagstar Financial finished the day in the green. There wasn't that much lift either as the markets tried to pick up midday. No, not at all. And that's something to be concerned about. You know, Karen mentioned Citi. If we have a Citibank chart and we've been collectively bullish on Citibank I think, and that's worked out nicely but we just traded up the levels we saw a couple years ago, which is problematic. We do a longer term chart. So you know, I thought you'd see the rally. I didn't think you'd see this ensuing sell off but you know, again, just valuation if you want to play that game. To me, Citi's the most compelling one out there. If the David Zervos narrative is right, banks theoretically should be the biggest beneficiaries of deregulation. Less regulation out there. Right. So this is the area that you should want to be in. In theory, they've run on hopes of M and A, on the regulatory changes, they've run on the hoping that the IPO market and M and A is all coming back. And they've run, like I mentioned last segment, credit spreads been really tight. And you talk about consumer finance names, they are dependent on selling everything that they create into the market that starts to back up a little bit. And if you think about recession and the impact to the consumer, there's nothing that the banks are more exposed to than the consumer for the most part. So, so I agree the consumer, that's one of the risk that, you know, one of the fears. Flagstar Financial, I think they were actually able to sell some of their real estate rates going a little bit lower but good for them. But I don't know, I think that for the ones that aren't really exposed like a Capital One or, or a Discover is a different, different customer. Right. Than a JP Morgan. So I agree on the, the M and A, it has been and seems like it will be slower. But I do think there's a lot of the deregulation. Right. The allowing more, more, less capital, bigger balance sheet, that's been helpful. Yeah. Last time they did that, 2018, they deregulated the regional banks and then 20, 23, we had like six of them go under, you know, so like I'm not convinced that deregulation. If you think about what happened in the 2000, Danny, remember what happened in 2000. I mean like you give these guys an inch and you know what they're going to do. So at the end of the day, like you're right, they were panicky today, but maybe they're pricing in a recession. And you know, I would take it another step forward and I know that Visa, MasterCard, they don't take credit risk. But if you're pricing in a recession right here, if your financials, then their transaction volume is going to decline. Right? And those things trade. Look at, look at, pull up the Visa chart. I mean this thing looks like it was an AI story from, you know, two months ago or something like that. So that looks vulnerable to me. And then the flip side of that I looked at like Robinhood is down 10% today and went back up on the day. CME Group is trading at, you know, all time highs right now. It's interesting to me to look at some of these areas where they do well when the volatility picks up. And I think that part of the financial ecosystem makes a lot of sense right here. But there would be a lot more to go if these banks were really pricing in recession. I mean we are still solidly above pre election levels, except for bank of America, which is a dollar away from pre election. The bank of America has its own issues, without question. But I think you're right. I mean there's a lot more to be potentially priced and if in fact we're in a downturn. But then it gets back to the question I think that I struggle with what causes a recession? Does a stock market sell off cause recession or is it vice versa? I'm of the belief that when the stock market does what we've been seeing over the last couple of weeks, that's what scares people, that's what slows spending, that what causes a recession. So obviously volatile in the stock market is not a healthy sign. One thing I wondered about Hood, which I think the volumes must be enormous right now. Probably good for them. But also isn't their customer likely one who has been hurt by this downturn? Right, right. And so assets shrink. Yeah, yeah. Coming up, retail earnings taking center stage this week. Target the first report since tariffs went into effect. What they are saying about the impact and how it's affecting their business, that's next. And it's not just retail trying to pass on increased costs. How carmakers are planning to keep their pricing power. Excuse me. While the auto market might see similarities to the start of the pandemic, you're watching Fast Money live from the NASDAQ Marketsite in Times Square, back right after this. Are you still quoting 30 year old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide. And every time you make a purchase with your card, you automatically earn CA back. Welcome to the now it pays to Discover. Learn more@discover.com credit card based on the February 2024 Nelson Report. Is it time to reimagine your future? The right business skills may make a difference in your career. At Capella University, we offer a relevant education that's designed to focus on what you need to know in the business world. We'll teach professional skills to help you pursue your goals like business management, strategic planning and effective communication. And you can apply these skills right away. A different future is closer than you think with Capella University. Learn more@capella.edu. welcome back to Fast Money. Target dropping 3% as its latest forecast stokes concerns among investors. The retailer saying profit could fall meaningfully in the current quarter as a result of consumer uncertainty. CEO Brian Cornell also telling CNBC that tariffs could lead to price hikes in produce in the next few days. Target shares now down 22% over the past year, while its arch rival Wal mart is up 60% in that time. For more, Jan Niffin joins us here on set. He's the CEO of J. Rogers Niffin Worldwide Enterprises. Jan, always great to see you. Target had enough problems and now with tariffs, are they not as well equipped to weather them as others? Well, they're not right now, no. You know, back in 06 I used to call Target the best retailer in America. Then it switched to Costco. Now it's Walmart and Target's way down the list. They don't make the top 10, but you know, they're trying to put it all back together. They're certainly making some changes. They're trying to be more in stock. They've got a lot of things going on, but you know, I was there for three hours this morning. I started at 8 o'clock, even though they really started talking at 9. And having talked to a lot of people there that are in the same boat as me, which is trying to figure out what the Heck's going on? I don't get the feeling that. I know I'm not convinced. I don't think the people I talk to are convinced that it's getting fixed. I think that Walmart is a big problem. If you're Target, when Walmart says to you, my hundred thousand dollar a year customers are the fastest growing thing I've got, that's a problem. If you're Target. And the other problem is of course Amazon, that's not a new problem. But you know, Amazon was a flash in somebody's eye in 1999. You get to today and they're one of the largest growing sellers in the country, just like Walmart is, of course, just like Costco is. Target's not in that league and that's the problem. They're not getting back there yet and maybe they can, but they haven't convinced me so far. I say this, it's somewhat hyperbolic, but is there room for Target in today's world? Because they're in the middle of everything and you don't want to be in the middle in today's retail environment. It's interesting you put it that way. Is there room? Every time I look at a retailer, I say there's really no room for this retailer because every one of them, if you put it on the chart, is surrounded by other good people. Right. It's just how well are you executing if Target was Target like it was 20 years ago and it was convincing you every time it sent you an ad that this was the coolest thing ever and they convinced you that shopping in the store was the coolest thing ever, like they did back then. Sure, there'd be room for them and just take market share from somebody else, but right now, no, I think the way they're currently operating, they're going to be giving share, not taking share. Walmart on the other hand, is operating the best they've ever operated since 1962 when they were invented. Well, that's pretty tough if you're somebody that has to compete with them anywhere. It's not good to be a dollar store right now and have Walmart stopping out the customer. So they're not coming down to you. It's not good to be Target when they're taking your $100,000 to your customer. They're just a machine right now. And I rate them the best country, the best company in the country. And I don't see Costco is a close second. But they used to be first. Right. So Target has said that Q1 is going to be meaningfully down. They've already said that February foot traffic, that there were problems. Placer said that the whole industry in February was soft, but Target was the worst. And Target's not going to give guidance on the short term, only annual forecasts. At this point, in your view, is Target, because of its valuation, worth a flyer or is it just completely a no touch? As I said in my note to you, the only thing I do like about Target is the multiple. But when I look at it, I say, you know, we need some performance to change that multiple. And yes, they're half the multiple of Walmart, but something has to happen for people to want to own them. So do you think the conservatism that they showed is more specific to them or will it affect everybody broadly? Because everybody's saying, let's be conservative. Why, why go out on a limb? But you think they really mean it? Well, think about it this way. January was terrible for almost everybody. Thank God it was in a good fourth quarter and we didn't have to worry about it then. February, which is, you know, the first month of the quarter now for most retailers, has been really soft. But I absolutely think that's the weather. I think the weather in February is worth 600 basis points to people selling a lot of discretionary goods like apparel. So it was that bad. It was the coldest January in 30 years and sixth coldest in 30 years and February followed up with it, but last year was warmer. So the shift is huge. And I do think that is not just the retailers making it up. They have a good excuse. But if you're seeing that and you're Target and you've been struggling anyway, why would you go out on a limb and say anything other than yeah, it's going to be pretty tough in the first quarter? As a matter of fact, I don't know why anybody's saying it's going to be anything other than pretty tough in the first quarter. Jan, thanks. Always good to get your perspective. Perspective. Jan Niffin. I'm not a hater, although it sounds that way. But you know, if you're going to give guidance from 880 to 90, why even bother? Karen talks about this all the time. She might disagree with me, but you drive a truck through that guidance, so it doesn't really help anybody, number one. Number two, the good news maybe is that we traded down the levels we saw in September of 2023, so it gives you something to trade against. But they're just in, in the wrong. Their mix is wrong for what the world is today. I just find it funny that we don't know we can't give you guidance on this quarter, but we can. We feel good about what for the year. I know that doesn't make any sense. And then point is basically consensus. So that was also like you're going to be conservative and say meaningfully down first quarter, but yet your midpoint of the guidance lines up. I don't know. I don't, I don't get. I always think you shouldn't be at the guidance business, but that's not where Wall street works. Well, they're being honest, right? Because they don't know. They're creating that. There's a lot of uncertainty out there. But Wal Mart's very expensive and you know, I love this for a long time, but people are going to hide in it because it's more certain. Amazon and Wal Mart are killing them, killing Target. And when you go to specialized goods, it's a little bit different. So, yeah, Amazon's interesting to me. It's down 16%. I obviously know that it doesn't get a lot of credit for its North American retail. It's been doing pretty decently. It probably trades more like a staple in a more difficult environment. Also, they just release this Alexa plus and it's getting really good reviews and it's actually highlighting how badly. No, I don't use them. But I mean, like, because you're. Yeah, well, I know it's all up here. You know what I mean? So it's like it's the original. I know, but no, but it's getting very good reviews and it's highlighting, you know, how poorly Apple is doing with their Apple intelligence. And so you have that. You have the cloud business, which obviously is decelerating a little bit. But to me, I think this is a stock that, if you get it back towards, I don't know, it's like 180 or something like that on the way down. That's about a 25% retracement. That looks interesting to me. All right, we've got a news alert on Alphabet and the DOJ antitrust probe. Kate Rooney's got the details. Hey, Kate. Hey, Melissa. So Bloomberg Rather now reporting the Google is urging officials in the Trump administration and the Justice Department to back away from a push to break up the search engine. They're citing national security concerns as part of that. Bloomberg here citing people familiar with those discussions. We have reached out to Alphabet. No comment yet from the company, but representatives, according to this report asked in a government meeting for the administration to take what they call less aggressive stance in the US and this is has to do with what a judge ruled to be an illegal search monopoly. There are some deadlines coming up for this case. So that is sort of the backdrop here. There's a deadline on Friday. The case is sort of moving into its next step. This is similar from what we've heard from Google from the get go. But as it moves into what's known as the remedy stage, we're getting a little bit more here and some more momentum. So it sounds like from this report, Google making another push to really push back on this Biden era plan to break up the company. But again, we have calls at. We will let you know if we hear anything but shares up slightly here after hours. Back in the email, Kate. Thanks. Kate Rooney. Coming up, it's not just retail auto stocks in reverse as tariff pains filter through that sector, how the carmakers plan to defray cost increases and how much it could hit your wallet in the car lot. Fast Money's back in two. Welcome back to Fast Money. U.S. automakers underperforming the broader markets today. Data and forecasting firm S and P Global Mobility predicting that tariffs will slash U.S. vehicle production by a third or about 20,000 cars per day. CNBC's Phil LeBeau joins us now for the very latest on this. Hey, Phil and Melissa, we'll talk about that in a little bit. Let me give you some perspective because everybody is saying, well, what are the automakers going to do? We haven't heard from any auto executives. They're not stupid. They don't want to poke the bear. They want to see where this ultimately plays out over the next week before they make any comments that might perhaps aggravate the Trump administration. So what you're looking at right now for the auto industry is that if the costs were put into every vehicle, the estimate is that it would cost the tariffs would cost about $6,200. Incentives are likely to drop. That's the first thing that the automakers will do. And then they may have to eat some of the costs. They are aware of that that will likely be reflected in lower margins if these tariffs stay in place. In terms of daily production. Yes, this is a projection by S and P Global Mobility that you could see it drop by 20% or 20,000 vehicles, I should say on a daily basis by next week if these tariffs are still in place. And they have to make some adjustments here, by the way, in North America, about 70,000 vehicles are produced between U.S. canada and Mexico. And in terms of pricing, I get this question from people, well, how much could prices go up and how quickly we could see what we saw during the chip crisis. Look at the change in pricing for average transaction prices between March and December went up about 6,000 or $7,000 because of the lack of supply. For a point of reference, the current average transaction price, or what it was in January, little over $48,000. Bottom line is this. Yes, the big three have more exposure in terms of total volume. But you're also noticing that Toyota, Honda, Volkswagen, all of the foreign automakers are laying out a game plan. Melissa, in terms of how much of this will they be able to pass along? How much of this will they have to eat and hit into their margins? And when do they have to make that decision? Probably not for a week or two before we really start to see production being cut. And even then, most people believe it's not going to drop by a third. That's one projection that is out there. Phil, why does auto production go down? I mean, parts are not in short supply. Is it just they anticipate demand will go down? Well, no. Why would you build. Let me give you an example. Why would you build the Ford Maverick in Mexico and pay the tariff to go across the border to ship it up here? You've already got good inventory if you're fording. So you want to go through that inventory that's already in country that hasn't been tariffed. And ultimately you may have to make a decision. This is not just Ford, it's all automakers. You may have to make a decision. Is it worth keeping production at the current levels and shipping it to the United States or is it better to pull down production and when you do have to ship up to the United States, do it at a much lower level. Right, Phil? Thanks, Philibo. You bet. What do you do with the automakers here? It's interesting because they just got all their union employee wages in order last year and they are, they went up. So now they're sitting here and their inability potentially to capture that back. And also when you just think about the auto companies, you know, in general, who their. What their costs are, input, that's a direct. They're probably the most impacted in terms of steel. And what if people stop buying American? And one other thing is that used car prices, which we're hoping aren't. It's not going to add to inflation. You have to wonder if used car prices will start to go up if there's lack of new car production, you know, you got to look at these as trades. All right, so if you put A chart at GM in October of last year was a $45 stock traded in a straight line to 61, traded in a straight line back to 45. So if you're looking for a level, I mean all the things Danny just talked about are correct. The question now is has it been priced into a certain extent and can you trade around the edge watches like in video? I think you can hear in gm coming up, a technical take on the market's volatility. The Chartmaster is looking at levels and Maiko is bringing us a way to protect yourself amid all the swings. Plus a purchase in Panama by Blackrock is scooping up ports in Central America and what it could mean for the relationship between Panama and the Trump administration. The details and best money returns. Welcome back to FAST money. Stocks selling off in the final hour of trading but still closing off their worst levels of the day. The Chartmaster says that the S and P falls further. It could see as much as a double digit drawdown. Carter worth of worth charting joins us now. Hey, Carter. Hi. Right, so let's get right to the charts and try to figure out together what the way forward is. Starting with this, you'll see four identical charts, the S and P. But of course, what do we have? We know we've got our Covid bear market down 30 and we rallied hard and we have then our 2022 bear market dropped 27% and then since then, two and a half years ago we've been in this bull phase and we have been in a perfect 45 degree angle. We shot above the upper band. Were we to sell off to the middle of the band, that's a 10% peak to trough drawdown. I think that is highly likely. Next chart, were we to go to the bottom of this well defined 45 degree channel in which we've been ascending, that's about a 17% drawdown and that's fairly normative. What's the big deal? It resets things if you're bullish and in many ways gives one an opportunity, the kind of opportunity Warren Buffett speaks of to add to longs. And if you're bearish, you think it's not going to stop at down 17, it's going to go down 27 again. But either way my hunch is lower from here. Let's also look at the biggest sector. Of course, and this matters. The tech sector is 31% weight of the entire S&P 500. And as is so often the case with many instruments, it trends. There are bullish phases and there are bearish phases. And we're trying to always all of us identify transitions from bull to bear when something rolls over, or bear to bull when something bottoms and turns. And so the real risk here for the most important sector of the market is that it is a full fledged bullish to bearish reversal. Sell Carter, for the S&P 500. What is the level of the next level of support? There really isn't any level to identify in terms of support. But when you go down 5, 6%, remember the average stock is still up on the year. In the S&P 500, seven of the sectors are up. Once you get down 15, 16, you'll find buyers stepping in. But I don't think that this intraday recovery is anything to be particularly bullish about. All right, Carter. Thanks, Carter. Worth of worth charting. So how can investors protect their portfolios amid the volatility? Mike co has an options trade to do just that. It's like an old fashioned tag team options action segment might Mike? Yeah, sure thing. Here we go. So look, when you're trying to figure out how to hedge your portfolio, there's just a few things you have to think about first. The first is what's going to be the proxy for my portfolio. And I think most people have a good correlation to the S and P and so we could use SPY for that. The second thing you want to think about is the timing and the magnitude of the move. And Carter has outlined that. I was actually looking at Q4 2018 and saw that we fell almost 20% at that time. And given how much we've already seen a decline, it's really a move of that magnitude that you're really trying to protect against. And the last thing you want to think about is the price of options. And of course, because we've been seeing such an increase in volatility, the price of options has also similarly risen. And so they are more expensive. So one way you can put on a hedge right now in SPY is looking out to May, which gives us enough time to sort of capture the amount of time it took previous drawdowns to take. Buy the May 550 puts, sell the 500 strike puts and then also sell an upside 610 strike call. When I was looking at that close to the close, you actually would collect a modest credit for that. And you will notice that the downside put that you're Selling is right around that level if you had a similar decline to what we saw in 2018. And the upside call takes us right back to the prior highs, essentially. And of course, we're probably going to run into some resistance there. All right, thank you, Mike. Mike Coe. Coming up, why one major asset manager is buying a ports in Central America. More on the purchase in the Panama Canal. Next, more fast money into. Welcome back to fast money. BlackRock leading a group of investors to buy a majority stake in two ports in the Panama Canal. The ports have been owned by Hong Kong CK Hutchison for over two decades. But that arrangement, that has come under pressure from the Trump administration, which argues it gives China control over the waterway. The deal, which includes 40 other ports around the world, is valued at about $23 billion. This is an interesting way to sort of play the America first, you know, nationalism angle. BlackRock bought global infrastructure Partners last year. That's the business that they're in. They're already buying airport and ports across. With this obviously a big deal, it feels like they probably coordinate this a little bit with the White House. And I think you're going to see more of kind of the private equity firms start to buy other assets in the United States potentially. We're talking about parks and buildings, government buildings and things. And that might not be the worst thing. There's a lot of money out there. But again, the money that has come in to private credit and private equity cannot be underestimated. It's massive. There is a lot that is potentially up for sale in terms of commercial real estate, in terms of buildings that the government apparently no longer needs because they've become so efficient. They don't need so many workers. Be our new studio or federal land now. Yes. And I think everything is fair game in this. I mean, personally, I'd be a buyer of the Parthenon and I would put Carter Worth right in the middle of it. Wow. Wouldn't that be great? Yeah, you'd have to build extensions that because there's so many people in your Parthenon. Yeah, that's a fair point by you. You need a panthenon. I don't know what I mean. Whatever it is, he'd buy it. Up next, final trades, final trade. Danny Moses of Moses Ventures. One trade keeps working this market. That's gold. Long phys sprout, physical gold trust chairwoman. Yes. So we talked about what's happening at Target, Wal Mart makes you think Amazon. I do like it. And they do have that very big cloud business as we all know, Dan, I think the main event this week other than the jobs report is going to be Broadcom's earnings Thursday after the close guy General Motors. Melissa, thanks for watching. Fast Mad Money with Jim Cramer starts right now. All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of cnbc, NBC Universal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. 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