← CNBC's "Fast Money"
CNBC's "Fast Money"
Trump Floats China Tariff Cut… And Cargo Theft Threatens The Supply Chain 5/9/25
00:42:59
President Trump suggesting a cut to China tariffs ahead of trade talks this weekend. The impact the move could have on negotiations, and what one U.S-China policy expert sees coming for the trade war. Plus… Google wraps up a rough week, all the major chip news moving semi stocks, Expedia signals trouble in travel demand, and how criminal gangs are exploiting supply chain tech across the United States. Fast Money Disclaimer
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- [00:02]
Melissa Lee
As America's leading business lender, bank of America is on your corner and in your corner. With $215 billion in business loans and over 3,700 business specialists across the nation, we help businesses thrive so communities prosper. What would you like the power to do? Learn more@bankofamerica.com LOCALBUSINESS bank of America Official bank of FIFA Club World Cup 2025 Copyright 2025 bank of America Corporation. All rights reserved. Hey Fidelity, what's it cost to invest with the Fidelity app?
- [00:36]
Tim Seymour
Start with as little as $1 with no account fees or trade commissions on.
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Melissa Lee
U.S. stocks and ETFs.
- [00:43]
Bono
Hmm.
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Melissa Lee
That's music to my ears.
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Tim Seymour
I can only talk.
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Bono
Investing involved risk, including your surplus.
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Melissa Lee
Zero account fees apply to retail brokerage accounts.
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Carter Worth
Only $0 commission applies to online US.
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Melissa Lee
Equity trades and ETFs and Retail Fidelity.
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Bono
Accounts sell order assessment fee not included.
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Melissa Lee
Some account types and securities excluded.
- [00:57]
Bono
Details@fidelity.com Commission Fidelity Brokerage Services, LLC Member NYSE SIBC.
- [01:04]
Melissa Lee
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. We are counting down to trade talks between the US And China. Stocks holding their breath as we await details. Well, what we hear this weekend be enough to get the comeback back on track. We'll debate that and searching for answers. Investors in Google parent Alphabet want to know where the stock is heading. The chartmaster dives into the trends to get some answers. Plus microchip seeing macro gains after earnings. Nuclear stocks getting powered up in breaks in the supply chain. Courtney Reagan investigates the criminal gangs disrupting U.S. retail infrastructure. I'm Melissa Lee coming to you live from Studio B at the nasdaq. On the desk tonight, Tim Seymour, Bono and Ice and Carter Worth and Mike Koh. We start off with the kickoff of what could be a tariff game changer. High level talks between the US And China get underway this weekend. President Trump already taking to Truth Social suggesting tariffs on China could come down China. CNBC senior Washington correspondent Eamon Javers has got the latest.
- [02:00]
Eamon Javers
Eamon they could come down, Melissa. And the president floated the number of 80% as being something he might be comfortable with earlier in the day on social media. But then we heard from the White House press secretary Caroline Levitt in the briefing this afternoon who I wouldn't say walked that back but kind of said, well that's just a number he's putting out there. Here's what she said.
- [02:21]
Melissa Lee
The president still remains with his position that he is not going to unilaterally bring down tariffs on China. We need to see concessions from that. And again, that's part of the reason that Secretary Bessen is going to talk to his Chinese counterparts this weekend to start those discussions in person. As for the 80% number, that was a number the president threw out there. And we'll see what happens this weekend.
- [02:43]
Eamon Javers
And we don't have any updates yet on Treasury Secretary Scott Bessen's visit to Switzerland to meet with the Chinese delegation. But we do have an update I can give you on his meeting with the Swiss delegation. The treasury secretary is on the ground and along with Jameson Greer, the trade adviser here, USTR here, they're saying both sides agreed to accelerate negotiations on reciprocal trade, that is the United States and Switzerland. USTR looks forward to continuing our negotiations over the next several weeks. So some progress, I guess, in terms of meeting with the Swiss. We'll see about progress in terms of meeting with the Chinese. And one more item for you, Melissa. The president has just called the press pool into the Oval Office. He was expected to sign a couple of executive orders that was going to be closed press now it's open. So we may be hearing from the president here over the next couple of minutes. Back to you.
- [03:33]
Melissa Lee
All right, you better get going, Eamon. Thank you. Eamon Javers at the White house. He floated 80% on Truth Social. The Wall Street Journal had a report saying 60%. Even beyond that, NSC director Kevin Hassett has said 24 deals are close to resolution. Where are we? How are we set up?
- [03:49]
Bono
Well, you know, we're calling these de escalation talks, so that tells you where we are. We're not necessarily even calling them trade talks, but I'm not sure it was an important week to speak to the obvious in terms of trade frameworks. Okay, a Fed that we got a little more direction on. I think the things that we're getting from Washington right now, I continue to believe it's time to maybe have a little more tough talk with the, the toughest of the trade adversaries here, this really was always about China. So for them to come in soft here, why would they? I expect the rhetoric to be aggressive. What's fascinating about this round of chats with China, because even over the years when we've accused China of currency manipulation and all the other things, China's never really pushed back verbally in the global press. And I think China has definitely been, as to me, acerbic back to the US if not more so in terms of their tone than I remember hearing out of China. What does that mean? Who knows if it means anything, but I don't think the White House is going to back down here. I think if I get back to the markets, which look like they're, you know, they're struggling at some really important levels, doesn't mean, though, it hasn't been a heroic run. And again, the letter V looks a lot more appropriate if we're saying, hey, what's that shape of this recovery? It's not a U. It's not, you know, an ass. It's, you know, all these little things that Carter's probably grown up with these things. I'm sure he's got a view. I'll just say going into next week, we've got CPI, but we also have 90% of the S and P having reported. So we're almost through earnings season and the headlines that were kind of distracting us from all this other stuff and I wonder if that's bad news.
- [05:20]
Melissa Lee
Yeah, a steep 10% climb since April 21, that's the V. What shape?
- [05:28]
Carter Worth
I mean, it has to be considered a V. I mean, if we're trying to. Which one of these things matches up? But I mean, that is the nature. If you think about what's the precondition for an aggressive bounce, it's more often than not a preceding aggressive sell off. This is the nature of the beast. So we get a 21% sell off in the S and P, and here we are up about 17, 18% off the low and we're more than halfway back. And there are a lot of statistics that do argue if you climb more than halfway back, you go on and make new highs. But it's really not about that because that's too far out in the future here. And now Monday morning or Wednesday, is one leaning in and increasing exposure or is one pulling back? My hunch is, and we just heard it from the last person on that we've come to a difficult level and it's right to either hedge some of your longs or exit altogether.
- [06:16]
Melissa Lee
Let's pretend I'm telling you what the future is, Bono, and that'd be amazing. De escalation. 80%. Tariffs cut from 145 to 80%. Agree to talks in another week. What does the market do?
- [06:27]
Mike Koh
I think the market trades sideways, slightly up. I think, you know, the setup is, you know, Carter just mentioned the setup. I think the setup is that we're coming from this 145. That just seems like an albatross. Right. So given that Kind of relative positioning coming from 145 to 80, you know, you can't help but have somewhat of a positive bent. But I think once you start to kind of mixed through those numbers, I think the initial reciprocal tariff as it was positioned was around 74 or 75%. So that 80% is still even higher to the eye popping number that was delivered on quote unquote Liberation day. So I think once you start to digest the true facts of what we're doing here, I think the market trades sideways and then starts to pull back as Carter and Tim have both alluded to.
- [07:07]
Melissa Lee
I mean it feels like the market reaction that we saw early this morning in S and P futures as well as an overseas trading. Mike really gave you the full read on what the reaction would be to a de escalation to 80%. Wow, that sounds great. And then, oh, 80% is really super high still and would probably be prohibitive to trade still.
- [07:26]
Courtney Reagan
Yeah, I think the 80% number is a little bit high. I think the other thing we're really going to be looking for is probably not what the White House has to say about these talks, but what China does. Because every single time we hear from the White House, oh, we're having talks and you know, we're making progress as far as China has been concerned. In many cases they have refuted debt. So I think the most positive thing that could come out on Monday would be regardless of the number, you know, that we are making progress if they say so, I think people will view that favorably regardless of what the headline number is. But if they don't, I have a feeling that we're probably going to bump our head here.
- [08:00]
Bono
Yeah, I agree. And I guess I get back to where are we in the economy now? And we had an interesting and a fun debate last night about, you know, hard data versus soft data. And I think the hard data is telling you that things are okay. And I think, you know, until otherwise we know where sentiment is and we know how bad the soft data has been. But until the hard data starts to change and I realize that can change all at once. But that's, that's we've almost become, I think like the Fed here. I mean we really need to wait to see some change. I think investors have had an opportunity to rally this on back. I will say going into these next couple of weeks and certainly going into this weekend and people can ask themselves, did I do this? You know, the premium attached to protecting yourself and hedging downside hasn't been this cheap. In a long time. The Vix close today sub 22 and there is no premium to the downside versus the upside. And I think that's something that's very interesting.
- [08:53]
Mike Koh
So Tim mentioned some of the United States hard debt. I think, you know, that trend holds up as well on the Chinese side. You know, if you look at like the 20, 21% pullback in terms of exports to the United States, a bulk of that was made up, whether it be eu, Latam, Africa. So, you know, both sides still probably likely need to see some pain before there is some capitulation from one side or the other. I think both have dug in their heels. I think politically there's a lot of incentive for both to come across as being tough dealers, as being, you know, large sovereign powers. And there needs to be a real catalyst there. And while the economic data is holding up on both sides, I think it's tough to kind of take that next incremental step without there being the proverbial shoe to drop.
- [09:36]
Melissa Lee
For more on the highly anticipated U. S China tariff meeting, let's bring in CNBC contributor Dwarric McNeil. He's Longview Global's senior policy analyst and served in the Obama administration. Dwodrick, always great to see you.
- [09:47]
Dwarric McNeil
Great to see you. Melissa.
- [09:49]
Melissa Lee
I want to understand what your, what your position is in terms of how China is positioned going into these talks. Bonoit had mentioned the export data. We saw the drop to the US but an increase to other parts of the world. Xi Jinping also has the support of the Chinese people this time. And he went from, you know, Chinese people who are griping about the economic situation to people who are actually willing to withstand tariffs and not give in to bending to Trump. And so where do we stand? What's the likelihood that Xi Jinping has a temperament, has the inclination to make a deal?
- [10:27]
Dwarric McNeil
Well, Melissa, I think it's absolutely clear that both sides need a deal. Both sides want a deal and that includes Xi Jinping. But I think we're way premature to think that that deal will come this weekend. I think this weekend for the Chinese, let's just start. There is people process and issues and goals by people. The Chinese are going to want to know who they're dealing with across the table. They don't know Scott Bessant at all. They do know Jamison Greer. He was the chief of staff for Bob Lighthizer in round one, the 2018 trade war. So they have a good sense of him, but they don't know Scott Besson. So they go want to figure that out. They're also going to want to get some sort of process in place for how they negotiate. And then finally, and I think this is the most important piece that will come out of this weekend, are what are the issues that are being negotiated? Trump talked over truth about opening up China. We've heard fentanyl, we've heard buying more goods. And so the Chinese are going to want to know what are we actually negotiating. If it's fentanyl and buying more goods, that's a very easy lift for the Chinese. Melissa, if it's opening up the market, buckle up. This is going to be a very long negotiation if that is where we're trying to go.
- [11:41]
Bono
Hey, Duodric. Tim. So if the prevailing view on this side of the world is that China's got no leg to stand on, there's no negotiation. They're there, you know, they're a trade exporter. We have a massive deficit. They lose. What can the Chinese do? What do you think is the greatest leverage and what's the highest likely plan of attack, do you think? And I, maybe that's the wrong word, but, you know, what are they going to use? And you know, people always question U.S. debt. We have, we just had comments from at least the White House pointing at the Treasury Secretary, talking about the debt ceiling. There's, there's certainly some angst on this side of the market about the US Debt markets.
- [12:16]
Dwarric McNeil
Yeah, this is a, this is a great question. Look, you know, to use Trump's phrase in terms of not having the cards, neither side here have the cards in terms of the numbers. And so what you fall back on, unfortunately, is the pain point, like who can really outlast the other with respect to pain points. And I think on this score, the Chinese do have a leg up, Tim. They've suffered a great deal from zero Covid period. So we've seen their people prepared to suffer for the national good. I'm not so sure how ready we are. You know, we're looking at four to six weeks, six to eight weeks, depending on who you talk to before. They're going to be some real shortages here in terms of stock on shelves. And, and so I think ultimately this comes down to, unfortunately, who can last longer in terms of the pain. The numbers don't make sense for either side.
- [13:10]
Melissa Lee
That's pretty depressing. Dwarf. Thank you. DWORDRICK McNEIL Longview Global US firms generate $1.2 trillion in revenue selling to Chinese consumers, according to Apollo. That's a lot on the line here in Terms of what these trade talks are all about, Tim, what do you think would be a win? I mean if they came away with some, you know, rare earth gains and a date for fentanyl talks And I mean is that enough for the markets.
- [13:38]
Bono
To think that there is a. I don't know because I mean while the social scourge of fentanyl is something we all care about, it's an easy headline and it's an easy one to, to, to at least go into this with. And I think there are US companies that don't have access to China. Let's talk about an unfair playing field. I think there could be some big wins for some big US companies. Whether they could actually be follow through, I think those are things that are important. I think trying to get to a trade balance with China is, is not what we should be wanting to do. We should be caring about strategic sectors and I think there are plenty of places we want to dig in. I think there are a handful of headlines you could be getting out of the technology space or out of again the consumer products space. That would be big wins over here and begin to kind of break down. What is really the problem here? It's not, it's not, it's not a trade balance with China.
- [14:24]
Melissa Lee
Yeah. Meantime, Alphabet wrapping up a very, very tough week. The stock down nearly 7% by far the worst performing stock in the so called MAG7 since Monday. Is there any hope for a turnaround? We turn to Carter for the charts.
- [14:37]
Carter Worth
Well, before we get to the charts, I mean the one thing about Google is it's the only one of these great be a mis. Whether you call magnificent 20 or magnificent to forget all that stuff. It's the only one that trades below a market multiple. So one might consider it cheap. But let's look at the charts and try to figure it out. Together we have three and they are identical. So the first here you show the COVID low. There you are, the high. Obviously it's been a great winner and yet that drawdown in 2020 to the bear market it dropped 45%. The Q's dropped 37. So worse. And then the drawdown since this year's peak again down 32. The Q is down 25. So we're down to a critical juncture. I think we break trend as depicted there another way to draw the lines. Second chart would be this, that we have now fallen below the prior peak. That would be the 2021 peak that we entered into the 22 bear market. So put them all together. Third chart, which is simply the first two combined. What we have is a stock that exhibits poor relative performance down again today and is the burden of proof is on the bull. The bear points to nothing other than the facts. It's not performing. It acts poorly, as the old time technical expression goes.
- [15:51]
Melissa Lee
Mike, are you a bull on Alphabet or has the narrative changed?
- [15:55]
Courtney Reagan
I think the narrative has changed and it's worth pointing out that this one was part of my acronym for the beginning of the year. It's the G in rising. And I actually wrote an article this week just talking about the fact that I think there is a different story going on here. The fact is it wasn't just Apple coming out and saying that they were exploring AI on the search side. Because I think that reality is essentially what the stock price has been indicating now for quite a while, which is that there's a big secular shift going on that's going to affect their core business. More than 70% of the company's revenues come from the search side. So you can't make it up with YouTube, you can't make it up with cloud. They are trying to invest in that area and they are trying to get basically the AI Gemini thing to go right into the search portion. And this was an area of strength of theirs. But unfortunately, when some of these other businesses start to get a toehold, it is going to be hard to claw that back. I think people's habits sort of become entrenched if they like what they're experiencing.
- [16:54]
Mike Koh
Yeah, I mean, I mean clearly you speak to it, 70% of revenue coming from search. I think Apple's comments there did, you know, create some, some concern. Reasonably so, you know, I will say, you know, you still have YouTube, you still have way more, you have other areas of potential revenue growth. And even on the search side, I don't think it's a zero sum game. I think that there is, there is an argument to be said that this company is trading at a cheap multiple. I think in the short term, clearly when you see the rally that you've seen and the general market and on the tech side and you see the lagging effect, that there's no reason for you to stick your neck out and jump in. With that said, if you have a longer timeline, you know, and you do believe, I don't believe that search is going away. So whether that's a 10% reduction and then you add in, you know, what is Apple's real incentive for the comments that they made, I would say that there's $20 billion worth of incentive there. So kind of parsing that, you know, I think that you will probably look back in hindsight and probably want to add to the position.
- [17:54]
Bono
Yeah, I tell you this, I think this is a place to jump in. I mean I look at the rhetoric this week. I mean what did we learn from, from Q that actually was new? There was zero about competitive forces and zero about the dynamics that I think with, with what we got even on the quarter one dynamics with some of the data on Google. I just think also I would go back to the dynamic that Apple is really probably trying to when on the stand point out because they, they actually have a lot to gain here and I think a lot to lose by, you know, Google actually being taken someplace else other than the 20 billion that they pay on a quarterly basis right now. Still, you know, Safari is default on Apple and Google is there. I don't see that changing. I everything. Carter's arguments are really compelling. That's the hardest part about this for me because the fundamentals to me, Google's not going away overnight and it's wildly cheap relative to the market.
- [18:48]
Melissa Lee
All right, we've got a news alert out of the White House. President Trump just taking some questions ahead of this weekend's trade meetings. Let's get back to Eamon Javers.
- [18:55]
Eamon Javers
Eamon, Melissa, these were the president's final comments before those trade negotiations. He was asked in the Oval Office just a short time ago, you know, if you would be disappointed if Treasury Secretary Bessen comes back from Switzerland without a deal. The president said no, he would not be disappointed about that. And he said, look, in his view, they have a great deal already and the deal is we're not doing business with China right now. So from his perspective, he's fine staying pat where he is, but he also said he'd put out this number of 80% and we'll see where it goes. So the president sort of suggesting he's open minded going into these negotiations about where we end up but not setting a bar for an expectation of a deal certainly this weekend. Melissa, back over to you.
- [19:37]
Melissa Lee
All right, Eamon, thanks. Amy Jabbers. Coming up is a new chip on the way from Nvidia inside the company's latest efforts to stay in China's market and how their competition is planning to compete. Plus, could the Trump administration be about to power up the nuclear trade? The new suite of executive orders that could shake up the US energy landscape right after this.
- [20:00]
Bono
Are you still quoting 30 year old movies?
- [20:02]
Carter Worth
Have you said cool beans in the past?
- [20:05]
Melissa Lee
90 days.
- [20:06]
Bono
Do you think Discover isn't widely accepted?
- [20:08]
Melissa Lee
If this sounds like by you, you're stuck in the past.
- [20:11]
Bono
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.
- [20:20]
Melissa Lee
Welcome to the now it pays to Discover.
- [20:22]
Bono
Learn more@discover.com credit card based on the.
- [20:25]
Melissa Lee
February 2024 Nelson Report we all belong outside. We're drawn to nature. Whether it's the recorded sounds of the ocean we doze off to or the succulents that adorn our homes, nature makes all of our lives, well, better. Despite all this, we often go about our busy lives removed from it, but the outdoors is closer than we realize. With alltrails, you can discover trails nearby and explore confidently with offline maps and on trail navigation. Download the free app today.
- [21:00]
Dwarric McNeil
Got a.
- [21:00]
Melissa Lee
7Am meeting on a Monday.
- [21:04]
Dwarric McNeil
Expensing breakfast because it's in policy wasting all afternoon.
- [21:10]
Melissa Lee
Submitting an expense report for that breakfast.
- [21:14]
Dwarric McNeil
If your company used Ramp, you could submit expenses with just a text.
- [21:22]
Melissa Lee
Free your team from expense reports today. Switch your business to ramp.com welcome back to Fast Money. A slew of headlines in the chip sector catching our eye today. Nvidia reportedly planning to release a less sophisticated version of its H20AI chip that meets requirements to ship to China. The stock has rebounded in May but is nearly 25% off its all time high. Meanwhile, shares of Microchip hosting their highest close in two months after earnings last night. The maker of low end chips raised guidance for the current quarter with the CEO saying they've seen the bottom of a quote, prolonged industry down cycle and Taiwan semi also higher after the company posted monthly, excuse me, record monthly sales in April with revenues up 48% from last year. A lot to chew on there Mike. I don't know where you want to go. The Nvidia news is sort of interesting because the administration basically changed the rules of the game. They had an export chip for China and then that wasn't they would have to get licenses to do that one. So they're making a new one.
- [22:25]
Courtney Reagan
Yeah, they're doing that one. And of course I do see people saying, oh well you know, it's 17 + billion or so that went to China in terms of Nvidia's export exports last year. But then you take a look at Singapore and Taiwan and each of those are actually even bigger numbers, you know, in the neighborhood of 20 plus billion each. And I think, you know, a reasonable person would suggest that some of that those sales have found their way to China. So they're sort of making a pit stop if you will in those other two places. So you know, this is an interesting take because my curiosity now is well, how are they going to feel about purchasing these sort of decremented chips relative to what it is that they actually want to purchase? And you know, I think if you look at it from Nvidia's perspective, it's hard to view this as a positive no matter which way you slice it because it's going to increase competition from elsewhere. They might look for alternatives or they might look to try to, you know, increasingly channel stuff that they aren't supposed to be getting.
- [23:19]
Melissa Lee
I mean a further downgraded chip could mean that the Huawei chip is actually more competitive in China.
- [23:25]
Bono
And again we've seen what the Chinese can do with a lower power chip. By the way, reminding also that semis outperformed the market by about 350 basis points on a rolling five day and they have outperformed the market. So I thought the microchip and we even heard from this, this from Infineon that the cyclicality in auto and industrial chips is actually showing some signs of life. I mean dare I say green shoots. But it's hard to think that given all the headlines in the auto space. But again the inventory kind of correction and the clear out is something that they commented on and that's they are the ultimate cyclicals. We forget that it's not always about the headlines on ultra growth.
- [24:00]
Mike Koh
So I'll take Taiwan to me being that that's the last one that wasn't addressed. And I think that while it's a positive, I think you, you kind of need to take this a bit with a grain of salt understanding that you do have the overhang of the tariffs. How much of this was pull forward. And we've gotten to that debate around pull forward demand, whether it be around, you know, hard assets, whether it be around Nvidia and chips. And now in this particular case you just wonder how much of this is people trying to get ahead of any additional tariff related pauses or supply constraints in the chip space.
- [24:29]
Carter Worth
I mean look, there's so many ways to. It's always you can take the view that is personal to yourself that headlines read Microchip surges 13%. You could write the headline differently. Microchip was down 66% from its 52 high, is now down only 48% for its a big rally in an otherwise damaged stock. I would fade it all right.
- [24:49]
Melissa Lee
There is a lot More fast money to come. Here's a what's coming up next. Going nuclear. The Trump administration considering new rules that would overhaul the country's nuclear energy landscape. The winners and losers of this high energy trade next. And buckle up because CO and Carter are kicking it old school ahead of a huge week of earnings. The technicals and the options trade to get you ready for action. You're watching Fast MONEY live from the NASDAQ market site in Time Square.
- [25:19]
Bono
We're back right after this.
- [25:26]
Dwarric McNeil
Got a 7am meeting on a Monday expensing breakfast because it's in policy wasting.
- [25:36]
Melissa Lee
All afternoon submitting an expense report for that breakfast.
- [25:41]
Dwarric McNeil
If your company used Ramp, you could.
- [25:43]
Melissa Lee
Submit expenses with just a text. Yay. Free your team from expense reports today. Switch your business to ramp.com we all belong outside. We're drawn to nature. Whether it's the recorded sounds of the ocean we doze off to or the succulents that adorn our homes, nature makes all of our lives, well, better. Despite all this, we often go about our busy lives removed from it. But the outdoors is closer than we realize. With alltrails, you can discover trails nearby and explore confidently with offline maps and on trail navigation. Download the free app today. Welcome back to Fast Money. Shares of nuclear tech companies Cameco and Oklo getting a boost late in the day after a report the Trump administration is looking to speed up construction of power plants. According to the New York Times, the Department of Defense aims to quadruple the size of the country's fleet from about 100 gigawatts of capacity to 400 gigs by 2050. That would be a big leap. Tim. You need your lot of uranium.
- [26:53]
Bono
Look, I think nuclear fuel is a future and I would say cheap, abundant energy or for electricity is one of the most important strategic objectives of, of this country right now. And I think you've got an energy secretary, Chris Wright, who follows Jennifer Granholm. This is a bipartisan issue and yeah, there's volatility in here, but I mean look at Cameco. It's going to all time highs. I'm sure at some point, I don't know when and maybe it's even on this run. I mean the chart looks kind of interesting off of, you know, a lot of volatility around just the sell off overall. So nuclear is, is something to me that's been in the plans for, for 15 years. It's getting a lot more attention now and it's never been more important.
- [27:33]
Melissa Lee
Yeah. And it's got to be. I mean I needs A lot of power. Right. So where are we going to get it, Mike? We did see the URA ETF, the Uranium ETF, Global X up by almost 2% on this news too.
- [27:44]
Courtney Reagan
Yeah, I mean obviously we need to supply this power. And I think the interesting thing of course is that, you know, this, this was a space that for two reasons really. I think there was a lot of pressure in the 70s against, you know, people were concerned about it. And the other aspect of course is cost. You know, we seem to have a really hard time managing costs when we're building new plants. But I think what we saw in Europe when they had that big outage reminded folks that one of the things you need is not just more power, but that power needs to be stable to support the grid. And nuclear power is certainly going to have to be a part of that equation if you want to have a stable grid that is able to basically meet the very large power demand we're going to have.
- [28:25]
Melissa Lee
How do these stocks look on the charts?
- [28:26]
Carter Worth
I mean they've what, they've rallied. They're weak stocks that have come to life and had a little bit of a bump today. But you know, you said something about it stuff the future. It's one of the strange things where you something that was the future that never came back to the future. Back to the future. I mean the first sort of operational power plant from nuclear atomic energy was in the 50s and here we are, you know, 75 years later and they just, they were big and then they stopped and a few accidents have set people back, you know, so. But ultimately there has to be a way forward where it's a much bigger contributor to the, to the power grid.
- [28:57]
Mike Koh
You buyer in the space modestly. You know, I don't really think there's much argument against the need for power, particularly you know, with air proliferation. My concern here is around expediting safety protocols and I would just like a little bit more details into making sure. I mean that's one of the causes of the concerns historically. I'd like to make sure that that's fleshed out and that's not kind of like expedited along.
- [29:18]
Melissa Lee
Coming up, how much will tariffs impact Wal Mart when reports earnings next week? Con Carter lay out the technicals and how the options market is setting up for this pivotal print right after this. Missed a moment of fast Catch us anytime on the go follow the Fast Money podcast.
- [29:33]
Bono
We're back right after this.
- [29:41]
Melissa Lee
Welcome back to Fast Money. Stocks finishing the day mixed as investors away trade talks between the US And China, which kick off this weekend. The Dow down 119 points. The S and P down slightly in the Nasdaq, finishing just barely in the green. Lyft shares lifting off after a strong earnings report last night. The ride hailing company also authorizing an upsized buyback. The stock seeing its highest close in five months. Shares of Expedia meantime dropping after its earnings. The online travel company missing revenue expectations, lowering its gross booking guidance for the year, citing weaker than expected demand. And Bitcoin hitting its highest level since January, trading firmly above the $100,000 mark. The world's largest cryptocurrency currency is now up 10% to start the month. And we've got another big week of earnings coming your way on deck next week. Names like Walmart, Deere, Alibaba and Cisco. With Mike and Carter on the desk, we thought we should do an old school options action reports. I know.
- [30:33]
Bono
Roback Friday.
- [30:35]
Melissa Lee
So Mike, what are some of the implied moves here?
- [30:38]
Courtney Reagan
Yeah, we have a couple big ones. Doximity, arguably the biggest. That one is implying a move of almost 20% higher or lower. Take two interactive. That one's implying a move of more than 6% after they report earnings. Deere is going to be reporting. We're looking for a move of more than 5% there. And Wal Mart, a move of almost 5% after they report next week.
- [30:59]
Melissa Lee
Let's focus on Wal Mart. So Carter, what does the chart show there?
- [31:02]
Carter Worth
Yeah, I mean, before we get to it, this is a huge winner. It's one of the. I mean, it outperforms its sector. Of course it outperforms the market, but it's on late and the chart depicts that. So at the COVID low, this is a $30 stock. It goes to over 100. And now you just saw in the last quarterly report a drop in gap that was the first time in five quarters. I suspect that repeats and that too much complacency here, very expensive, and that you are better off selling, not buying ahead of earnings.
- [31:34]
Melissa Lee
All right, so Mike, what's a trade?
- [31:36]
Courtney Reagan
Yeah, I mean, expensive is the word. This thing's trading 33 times and it's basically a big grocery store, the world's largest one. That's pretty expensive when you consider that Kroger is probably trading 16, 17 times and a 2% free cash flow yield isn't exactly getting it done. It's actually a lot more expensive than Amazon as well. My thinking here is that you look at a calendar spread, a downside put spread is the one that I was looking at specifically, I was looking at the June 90s, September 90th put spread. You could buy the September 90 puts, those were about $3.65 each, and you could sell the Junes against it for 165. You're basically targeting a move down to that strike by that June expiration. And then if it is lingering there and still looks weak, you have an opportunity to sell more premium against the longer dated puts that you own, which will of course capture the subsequent earnings as well.
- [32:23]
Melissa Lee
Bonwin, what do you think of the trade? This is really like old school away.
- [32:27]
Mike Koh
Yeah, I mean, Mike tends to do these calendar spreads that just kind of give you the optionality and that's ultimately what you want. I mean, this earnings release is likely going to be somewhat of a binary event. And what you want is the ability to be proactive in terms of setting yourself up and positioning yourself against downside, and then the ability to then subsequently be reactive and reposition yourself once you get the move. So I tend to, I tend to like these trades.
- [32:51]
Melissa Lee
Walmart's just a big grocery store, says Mike Cook.
- [32:53]
Bono
I love that metaphor, that reference. I'm not sure I heard it as obvious as it is. Mike, that's, that's good. And there's no arguing about the valuation here. The, the on the way up, it was because Wal Mart's growing and they're growing margins while they're doing this, and they're doing it at a disproportionate rate. I'm long Wal Mart. I think it's expensive. I wouldn't mind some protection. Nice trade, Mike.
- [33:14]
Melissa Lee
Let's glass out of Wal Mart though. Mike, what other stocks are you focusing on for next week?
- [33:20]
Courtney Reagan
Yeah, I mean, I think the take to one is going to be kind of interesting. You obviously have that grand theft issue that's going on there and it'll be kind of interesting to see what's happening. I think actually the lift move that we just got was also very interesting because one of the things that demonstrated was that in many cases, options may look optically a little bit expensive, but aren't really. Lift was only implying a move of about 12 to 13% ahead of this print. And I've actually been seeing that in a lot of cases because we had this big shift up in volume and then it started to come in very quickly as well. If you have stocks and you're concerned about the earnings prints, you actually can buy some premium here because it isn't really that overpriced. I think the folks that were talking about how the VIX has moved down. Also, I think Tim was mentioning that at the top of the show. That's another indication of this.
- [34:06]
Melissa Lee
What are you looking for out of Baba since that's the B in your band, or bland, I should say, because you added lift in coincidentally prior to the 28% pop.
- [34:14]
Bono
And you're kind because it's had a nice run this year. But, but Boeing's the bean. Bland. But let me talk about. No, let me talk about Baba.
- [34:20]
Melissa Lee
I mean, it's a bnt.
- [34:21]
Bono
It's the bnt. But, but I think with Baba, what we want to hear is a little bit about some of their, their regional e commerce. But I want to hear about Ali Cloud. I mean, I want to hear all about the exciting part of their business that no one really recognizes and something that I think has them very much in favor at home with the Chinese government. Who is your friend if you're an investor in Alibaba for the first time in years?
- [34:43]
Melissa Lee
Yep. Coming up, we are answering your burning questions. From Netflix to Big Pharma and beyond. But first, a CNBC investigation reveals a shadowy world of foreign criminals trying to cripple the US supply chain. A crime costing the cargo industry $1 billion or more a year. End of the Road is next. Welcome back to Fast money. A six month CNBC investigation reveals how criminal gangs in foreign countries are exploiting the very technology meant to protect the US Supply chain. They're targeting companies with cyber attacks, crippling freight and stealing fortunes and cargo at the same time. Here's Courtney Reagan with End of the Road.
- [35:32]
Tim Seymour
America's supply chain under attack. Thieves brazenly breaking into a truck. A hooded criminal loading stolen items through a hole in a warehouse door. Flash mobs hitting trains. It's grand theft. Cargo.
- [35:55]
Melissa Lee
Chp. Search warrant. Open the door.
- [35:58]
Tim Seymour
Merchandise ending up in black market stores where stolen goods are sold after being hijacked. Inside, it looks like a retail store, except the racks are stocked with stolen Lululemon and other apparel. Police say the suspect advertised the store on social media and you could make an appointment to go there and shop.
- [36:19]
Melissa Lee
The product is supposed to go to stores. It never made it and it's being sold online.
- [36:23]
Tim Seymour
Here. Suspects swipe half a million dollars worth of Meta's Ray Ban glasses and Oculus headsets from this Texas warehouse. Nike shoes are another favorite Target. More than $300,000 worth of its Air Jordans found in this truck after being swiped from a train in California. Criminal networks here and abroad are exploiting technology meant to improve supply Chain efficiency and using it to steal truckloads at a time.
- [36:53]
Mike Koh
This needs to be taken seriously, seriously.
- [36:56]
Bono
At the national level and regarded as one of many national security threats we're facing right now.
- [37:03]
Tim Seymour
Lululemon told us it's taking decisive action against cargo theft. Met up declined to comment. Nike did not respond to repeated requests for comment. To see the full story, it's 27 minutes. It's a full documentary. Go to cnbc.com endoftheroad this is just a tiny, tiny sliver of what we uncovered. And it's really fascinating. Most of this is being done online, oftentimes by people in foreign countries that never step foot in the United States. That basically convince legitimate players in our supply chain, truckers oftentimes to pick up loads, deliver them places that then they are never seen again. So in some cases they are outright stealing the cargo and other cases they're stealing the payment. Maybe both. The truckers never get paid. Oftentimes they are also good guys in this and just get caught up in it accidentally.
- [37:51]
Melissa Lee
So the quote unquote, bad guys are in foreign countries. Oftentimes the goods are here in the United States and they're being sold by a partner in the United States.
- [37:59]
Tim Seymour
So sometimes they're sold here, like we found in this warehouse. Other times they do then get shipped overseas and they disappear. Food and beverage is the number one targeted item, which is somewhat surprising. But then again, if you think about it as Scott Cornell from Travelers Insurance told us, well, there's no barcode on a pistachio. And think about how valuable an entire truckload of nuts is. Like, how expensive is one bag?
- [38:19]
Melissa Lee
Right, right.
- [38:20]
Tim Seymour
And then it's gone. It's very easy to sell, to get rid of. It's expensive. The risk is relatively low. This is considered a property crime. They're very often non violent. So these folks get away with it over and over again. It's hard to track, it's hard to find. It happens very quickly. The average loss, 203,000.
- [38:41]
Melissa Lee
Does this bankroll other criminal enterprises?
- [38:43]
Tim Seymour
It very often does. And that is part of the issue. Right. It's sort of this is an easy way to get money to then fund other criminal operations, from trafficking to other very serious crimes. And so there are two pieces of legislation, one that's been proposed by the Senate and one by the House to sort of tackle cargo theft a little bit more proactively.
- [39:00]
Melissa Lee
How do retailers categorize this level of theft? We've heard about shrinkage. I mean, it reminds me of the criminal gangs going into stores, just sort of flash grabbing stuff off the shelves, except at a much greater scale.
- [39:10]
Tim Seymour
Exactly.
- [39:11]
Bono
And is Nike or Lulu or any of these more exposed than others? And is it something that they are going to point to?
- [39:17]
Tim Seymour
Right.
- [39:17]
Bono
Have pointed.
- [39:18]
Tim Seymour
So, so at the end of the day, it depends on how the contract is written, when the goods are stolen at that point in the supply chain, and who bears that cost. So we spoke with someone from Philips and they are shipping Norelco shavers and Sonicare toothbrushes. And they say, said, look, when one of those shipments gets lost, and it has in recent years, he admitted to us he bears the responsibility to then replace that product for Target, for Walmart, for whomever he's shipping it to. So it's usually the shipper that is responsible. They often have insurance, but every time they file a claim, of course the insurance goes up. There may be a shortage of that product. Then they have to pay a lot to replace it. In the end, it obviously can trickle back down to the consumers and the prices that we pay. And then when it comes to, you know, any of these companies being more targeted than others, I mean, thieves watch television just like any of the rest of us. And so when eggs were in a shortage, what do you think they targeted? Eggs. You know, there was $40,000 worth of avocados stolen. I mean, they look for what's in demand because that's how they can turn things into cash very quickly.
- [40:16]
Carter Worth
It's got to be harder moving the eggs and the pistachios.
- [40:20]
Tim Seymour
That probably is. But if you think about it, you know, a nut might be easier to move than say that Lululemon Mercury merchandise. Right. Because that's branded. And so if you're Lululemon and you see that somewhere, you know that was not a legitimate seller unless maybe it's second market. Right. I had a shirt I didn't want to wear anymore, but by and large, they're vertically integrated. You can only buy it in their store. But an almond, who knows, right?
- [40:40]
Melissa Lee
Courtney, thanks so much.
- [40:41]
Tim Seymour
Thank you.
- [40:42]
Bono
Grand Theft Cargo. Going to watch that?
- [40:43]
Tim Seymour
Yes.
- [40:44]
Melissa Lee
A reminder, you can watch the whole doc online. Go to cnbc.com endoftheroad Coming up, we're answering burning questions from our Fast Money fans. From Netflix to pharma and beyond us, we answer more fast money in two. The Sohn conference, May 14 in New York City. When you buy a ticket, you get direct access to the best ideas from some of the world's most successful investors while helping to fight childhood cancer at the same time. On Stage this year, Steve Cohen, David Einhorn, Larry Robbins, soccer star Gerard Piquet and the mentalist O. Spearlman. Find out more more@sohnconference.org it's where Wall street unites to fight childhood cancer. Welcome back to Fast Money. We've been taking questions every Friday on how to navigate these recently volatile markets. Some Fast Money fans who came to our last Fast Money LIVE event were eager to get some answers. So let's get right to it.
- [41:43]
Dwarric McNeil
Hello, my name is David and I.
- [41:46]
Melissa Lee
Have a question about pharmaceutical stocks.
- [41:49]
Courtney Reagan
Putting aside the GLP1 companies like Lill.
- [41:53]
Melissa Lee
What'S happened to them?
- [41:54]
Courtney Reagan
How well do analysts know their pipelines.
- [41:58]
Melissa Lee
Have pharmaceutical stocks which were safe havens? Now just dividend producing stocks like Merck and Pfizer. I've owned Merck and Pfizer forever.
- [42:09]
Carter Worth
Thanks.
- [42:11]
Melissa Lee
Thanks for sending the question in, David. Tim Spizer, we got to go to you for that.
- [42:14]
Bono
Yeah, it was great meeting David and he's right that Merck and Pfizer have been tough stocks. I mean Merck was, was a dream stock from kind of COVID through kind of 2023. But as we've talked about here, I mean the key true to competitive balance, loss of exclusivity and some other parts of the pipeline, Pfizer, we kind of know the story. I like J and J here, David too. I mean, I think this is not a simple story. It's had a big over litigation overhang to it. But there's medical, there's medtech in there and there's consumer products and there's pharma, including oncology. I think that's interesting. You're right to be frustrated. This wouldn't be the time I'd be selling.
- [42:52]
Melissa Lee
We've got another question from a Fast Money fan. Let's take a listen. Hi, this is Diana and I attended the Fast Money Live event back in February and it was just so much fun. We got to see how the show came together and talked with the traders individually and I even got to sit.
- [43:05]
Eamon Javers
In Melissa Lee's chair at the desk.
- [43:08]
Melissa Lee
My question for the traders today is utility company stocks. Do you have any specific recommendations, say a one year timeline given the current interest rate situation and the ever demanding need for electricity. Thanks so much. Take care. Nice to see you, Diana. Thanks for the question. Carter, why don't you take this one?
- [43:27]
Carter Worth
Sure. Diana. Obviously utilities are typically higher yield than the market. But Nextera, I would say that you get the yield that you want higher than the sector, but you also have a growth element.
- [43:40]
Melissa Lee
Here's our Next fan question. Hi, Fast Money.
- [43:44]
Dwarric McNeil
My name is Gus.
- [43:45]
Melissa Lee
I had a fantastic time at the Fast Money Live event.
- [43:48]
Dwarric McNeil
It was so much fun to see behind the scenes. Talk to all the traders.
- [43:51]
Melissa Lee
I have a quick question about Netflix. I have a substantial position, but I.
- [43:56]
Eamon Javers
Don'T want to sell right now.
- [43:57]
Melissa Lee
And it's run up so much lately.
- [43:59]
Dwarric McNeil
With all the talk of tariffs on foreign films. What's the best way to protect my position? Thanks.
- [44:06]
Melissa Lee
Thank you, Gus. Bono, what do you say about Netflix?
- [44:08]
Mike Koh
Well, first of all, congratulations. Clearly this trade has been a winner for you. So capital preservation is probably high on the mine here. I would look at something like a caller where you're buying a downside put, say a 90% put in selling a 1 10% call to kind of fund that. That way you're not just spending money. And if you don't feel comfortable selling that 110, maybe you look at a 115 and just roll out the maturity.
- [44:29]
Melissa Lee
All right. And do not forget, if you want your trading questions answered or you still need a gift for mom before Sunday. You've got time. We've got another edition of Fast Money Live coming up. There are only a few spots left, just a few handful. In the last few days, we've added fans from Kansas, Ohio, South Carolina. Add your state to the list. Join us on June 5th right here at the NASDAQ. Scan the QR code on your screen or get your tickets now@cnbc events.com fastmoney up next, final trades, final trade time. Mike Coe.
- [45:06]
Courtney Reagan
As Alphabet shares have fallen, the options premiums have risen and willing to buy a little bit more lower levels. I'm selling the June 130, 170 strangle against Longstock.
- [45:15]
Bono
Tim Happy Mother's Day, Mom. And to all moms, what a great weekend. It's going to be a beautiful day. I think. David Fast Money fan inspired. James I think. I think it's interesting here.
- [45:27]
Mike Koh
If you've been lucky enough to catch that bounce in April and hyg, I think you might want to look at taking some profits here. Hygiene.
- [45:34]
Carter Worth
Carter Silver is the exact same price it was one year ago. Lunch has done nothing. We think it finally comes to life.
- [45:41]
Melissa Lee
Happy birthday, Mom. Happy birthday. Happy Mother's Day, Mom. And to all the moms out there, thanks for watching Fast Money. Have a great weekend. Mad Money with Jim Cramer starts right now.
- [45:50]
Bono
Now.
- [45:54]
Melissa Lee
All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet, or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Fast Money participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Fast Money disclaimer, please visit cnbc.com fastmoneydisclaimer Got a 7am meeting on a Monday?
- [46:39]
Dwarric McNeil
Expensing breakfast because it's in policy.
- [46:43]
Melissa Lee
Wasting all afternoon submitting an expense report for that breakfast.
- [46:49]
Dwarric McNeil
If your company used ramp, you could.
- [46:51]
Melissa Lee
Submit expenses with just a text.
- [46:54]
Bono
Yay.
- [46:56]
Melissa Lee
Free your team from expense reports today. Switch your business to RAMP.