← CNBC's "Fast Money"
CNBC's "Fast Money"
Turning Sour On Apple… And Single Stock Volatility On The Rise 1/8/26
00:43:20
A Mag-7 Market Cap switch, as Alphabet overtakes Apple for the first time since 2019. Why a top technician is turning sour on the tech giant, and if the stock is in store for a rough 2026. Plus, Venezuela, earnings, and economic data moving markets, but a top volatility expert is flagging the single stock swings as the metric to watch. Fast Money Disclaimer
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- [00:00]
Steve Grasso
This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key results and statistics that may impact your trading. Download the latest episode and subscribe@schwab.com Market Update podcast or find Schwab Market Update wherever you get your podcasts.
- [00:29]
Melissa Lee
What made you confident that you could do something that hadn't been done before? I have no fear of failure. Trailblazing women, changing the game One of.
- [00:38]
Katie Stockton
My favorite pieces of advice Think about.
- [00:40]
Melissa Lee
What your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself.
- [00:47]
Mandy Xu
Life is short and you just gotta think big to accomplish big things.
- [00:51]
Melissa Lee
Julia Boorstin hosts CNBC Changemakers and Power Players New episodes every Tuesday, wherever you get your podcasts. Live from the NASDAQ markets in the heart of New York City, Times Square. This is fast money. Here's what's on tap tonight. Bad Apple shares of the iPhone maker off to a rough start this year and falling behind a key rival in the tech race. But is there any reason to bite into the stock now? We'll debate that. And we dig into the latest odds on the next Fed chair after reports the President has landed on his pick to replace Jerome Powell. Plus a big box bump. What's driving shares of Costco, harvesting gains in the ag stocks and Constellation brand shining bright today. What's got the beer maker buzzing after earnings? I'm Melissa Lee, come to you live in studio. Be at the Nasdaq. On the desk tonight, Steve Grass, Bono and Ice and Guy Adami and Katie Stockton, founder and managing partner at Fairlead Strategies. We start off with that shake up. Among the max seven heavyweights, Alphabet shares hitting an all time high today, closing within a stone's throw of a trillion dollar market capitalization. The Google parent furthering its lead over Apple, the iPhone maker now in a seven day losing streak, losing more than 5% in that time. And it's underperformed most of its MAG7 peers over the past year. Only Metta has seen a smaller gain in the last 12 months. And after consulting the charts, as she is known to do, Katie Stockton says the damage is not done yet. Katie, in fact you say what about Apple?
- [02:13]
Katie Stockton
You know it does seem like it's more than just a short term shift. We think it's an intermediate term shift. We see it in the indicators. The weekly macd for one has flipped to a sell signal and that is something that should interrupt the uptrend for more than just a couple of weeks. We've already seen this peak lead to a decline of more than 11% from the recent high early December for Apple. That means that we've seen the 50 day moving average taken out and now also our trusty cloud based support level. The next support that we see on Apple's chart is around 243,6 to 7% below current levels and we think it's a momentum shift that bears watching. The good news is that the long term trend is still very much intact in our long term metrics. Monthly indicators if you will are still generally positive.
- [02:59]
Melissa Lee
So there is a sell signal. So you're saying to sell Apple, does that include shorting?
- [03:06]
Katie Stockton
You know we actually don't advocate selling stocks or shorting stocks I should say that are not too far off their highs. We feel like long term uptrends are a little dicier to sell short. That said, we actually did put out a short recommendation recently on Palantir that got a little controversial I think. But we feel that we are going to see this correction deepen from Apple and at a very minimum somebody who's willing to are looking to add exposure should probably wait for some support discovery.
- [03:34]
Melissa Lee
Lower right. What do you think of this?
- [03:36]
Guy Adami
She makes sense. I mean it's a long term uptrend from March of 2020 was probably a $50 stock and those points are pretty. I mean we can draw the trend line as Carter says they draw themselves and into earnings. The weakness is noteworthy I think and others are sort of taking the lead from Apple right now. I think a 243 level makes sense for a lot of reasons. I'll say this, I think Katie would agree with, you know, with passive investing in the amount of ETFs that Apple is in the amount of funds it's very hard for Apple to have a material move lower. But with that said a 243 price target from here is significant. So I agree with her.
- [04:09]
Melissa Lee
There are already questions about its valuation, questions about its AI product or lack thereof so far. There are also now questions about memory prices and what that will do to gross margins with the surge that we've seen in the memory stocks in the demand there, Steve?
- [04:23]
Steve Grasso
Yeah, I mean late to the dancing I think is a tailwind, not a headwind. I think they didn't waste money. There was a huge amount of capex that was probably wasted. If I look at the chart in Meta that doesn't look Very bullish to me. If I look at the chart in Microsoft that doesn't look very bullish to me. If you, if you put your hat on Google and in video those are the best charts in the, in the space. My problem is the install base 2.35 billion. Maybe I missed another million or so there but 2.35 billion with a cloud, with recurring revenue, with a whole bunch of cash that can be used. I would probably say maybe stay in the name and see how it reacts.
- [05:06]
Melissa Lee
Because you are on this desk, I think the guy who probably lets your trades be most informed by the charts. Yeah, yeah. And you're saying I don't care what the charts say right now.
- [05:17]
Steve Grasso
Yeah, no, no, I agree with. Guy started off with saying you could see that in the chart. I agree with her analysis is spot on. But also when you come out and you say when you look at this chart it broke that up trend line. It's definitive that it broke it. But I think we're more on macro now. So 2/3 of all stocks trade with the overall market. So where does the market go? That's where Apple goes.
- [05:39]
Bonawyn Eison
Well, it's really a question of do you want to kind of deploy new money to chase 5 or 6% pullback. So again I'm not a chartist but I understand them well enough. I understand Katie's thesis here. Clearly you've taken out some significant. She mentioned 250 day moving average. She also mentioned MACD. I'm not sure where it is on the RSI but so I understand. I think it's a very cogent argument. I guess my question is if you have a defensive type of posturing. We've already seen a rotation kind of out of tech and into more cyclical names if you are to see a reversal of that. I'm still not sure that people want to get too far away from this name. I think you've got what is it, 100 billion in annual free cash flow or something like that. The, the, the valuation I think is the real pushback. Do you really want to be paying low 30s forward for bond like for a bond like Compounder? With that said that services has gone I believe from 23 to approaching 29%. So that's really where the real margin story is. So to kind of hark in Carter, to me it's more of a pair of twos than it is a, a bearish type of setup. I understand. I don't see a ton of upside absent and I, but I think I'm a little Bit more cautious on going in and saying, actually this is a name that I would either look to get out of or look to establish a new short position.
- [06:58]
Guy Adami
You're looking for levels. I think for most people out there, if they haven't been in the name, they're looking for levels to sort of initiate a long position. So I think Katie's right. What we haven't brought up, and I think there is some existential geopolitical risk here, without question. I mean, the Apple China relationship is still. I mean, it's always been tenuous, but more so now given what's going on. And there's supposed to be a meeting between our president, President Xi, I think in April. We'll see if that happens. But, you know, with what's going on in Venezuela, Tim talks about it all the time. As much as about energy. It's about China. You wonder what the next levers are going to be pulled over there.
- [07:31]
Melissa Lee
To Steve's point, I mean, does the Apple chart look any worse than any of the other mag sevens?
- [07:35]
Katie Stockton
Yeah, it really is more of a mag seven story in some because the deterioration behind Microsoft, behind Metta, even behind Nvidia, it's pretty notable. And it impacts these relative strength ratios in a meaningful way. And that the uptrend drawn back to the April low has now been broken. So that makes us wonder if maybe this shift isn't something that could stay with the market maybe for much of Q1, and, and that might be enough of a reason for some people to rotate. And I think we're seeing some of that already. You know, with the start of the year, will it be as dramatic as it has been where we have the sort of small and mid caps breaking out above minor resistance levels while these mega caps pull back? I think that drama will start to resolve itself.
- [08:21]
Melissa Lee
Okay, but you're saying Q1 is really the key time frame for this sort of.
- [08:25]
Katie Stockton
That's right down the corrective price action. The indications that we have really are only for that time frame. And we generally work under the assumption that technology will lead the market higher. When the market is going higher. Right. We're looking for a volatile Q1 and then we'll see ideally some great buying opportunities.
- [08:43]
Steve Grasso
Yeah. When you look, when you look at the chart and you stated this, the pullback, I find the October level pretty interesting. So the 240, 244 level, I think that's where you could start to say, if it trades down that low, I would be a buyer. That's where it could stabilize when you look at the other charts. I think you do have to wait until see how capex plays out. And if you just mentioned it, mid cap, small cap, those are the ones that took over. When you see 30, 35% of the S and P is this mega cap tech names and the reason why the S and P outperformed a lot of these Max 7 names is that Google and Nvidia outperform by a large margin.
- [09:25]
Melissa Lee
This is a good setup that going into earnings. I mean I granted we're, we're weeks away from earnings but we were just lamenting how banks were running into earnings hard and that is not a good setup. And here we are, we've got the reverse situation points maybe for some sort of catalyst.
- [09:39]
Guy Adami
No, without question but I think, I think Katie's point is it could be a better setup in earnings over the next couple of weeks and that's your catalyst. I'm glad you brought up Microsoft real quick. I mean that's been a complete underperformer now since basically Halloween. I think they report on the 28th. So you're talking about a stock that could be a really interesting setup in earnings. The underperformance of Microsoft could stand out and that could be, you know, this 460 level go back to July of 2024 when it made an all time high right around 465. Katie probably is bringing it up now. That's your ultimate support level and that if it gets down there in earnings could be really interesting.
- [10:13]
Katie Stockton
Yeah, Microsoft is right down on the 200 day moving average as well and it's the first one that shows signs of downside exhaustion from a short term perspective. I'm not ready to go in front of it yet but we want to see a little bit more in terms of the momentum shift. But I think it's promising.
- [10:30]
Melissa Lee
Well, despite Apple's underperformance, Fast money friend Gene Munster is still bullish on the iPhone maker. He's managing partner at Deepwater Asset Management joins us now. Jean, great to have you with us. We're not asking about the performance in Q1 but I'm just wondering what, what do you see as the reason to belong this name for you know, whatever time frame it is, is it, you know, the anticipation of a meaningful sort of entry into the AI market in some way? What is it?
- [10:57]
Gene Munster
That's part of it. I think we have a near term catalyst around December earnings. We have a catalyst I think on the 2026 earnings. And last I think we have just a macro catalyst. There's the catalyst around the Siri release. Then there's a bigger macro catalyst that hasn't been talked a lot about, which is on just a company and what's going on in the AI devices market. And actually I want to start there because I think it's something that largely gets underappreciated. About the Apple story. If we look at what happened with Tesla over the past few years about the car business shifting to a physical AI story, Elon's done a marvelous job of kind of recasting that investment view of just this company that's uniquely positioned to capitalize on physical AI. In the case of Apple, as we, we have a venture business and a public business, there's a lot going on when it comes to, on the, the, the devices, the consumer device side around AI, Lots of investments are being made. And ultimately, I think part of the reason is that there's just fundamentally an opportunity for a company to be an AI device company. And, and that really hasn't happened. We can't point to any devices that are like profoundly AI, But Apple is in a great position to capitalize on that over the next few years. That's kind of the long term. And then just jumping back more to the near term is Apple, of course, tends to beat their numbers. They guided the December revenue for 10 to 12% growth. The street's at 10 and a half. They're probably going to do 13. And so you have some upside to numbers at the end of this month. And then, as you mentioned, this whole new Siri. The jury's out. It's going to be probably one of the most entertaining stories in the first half of this year is how the new Siri does when it comes to tech. But that's going to be a pivotal moment in terms of Apple's multiple.
- [12:40]
Melissa Lee
Let's say all those catalysts come to fruition. Jean, the ones that you just rattled off. What happens, though, to the stock story if China is still a problem, whether it be because of geopolitical reasons or just economic reasons, can there be, you know, a strong Apple stock story if China is weak?
- [13:00]
Gene Munster
You know, talk about that, that risk. I was, I was getting uncomfortable because I think that speaks to, you know, you're talking to somebody who's optimistic about Apple. But that, I think, is the risk, the pressure point here. The simple answer is that if something goes awry with China, with Taiwan. But let me back up. If something goes awry in the trade side, Cook has navigated that, that's not a concern. But if there is Something bigger geopolitically going on. You mentioned Venezuela early and all of that. Apple's going to get pulled down. I'm going to be wrong on this. And ultimately the reason is that 16% of their revenue and 45% of their products are built in China. That's just going to be a hard narrative to shake. And so that probably is part of why, you know, my optimistic view is that probably sits in the back of investors minds as they think about 2026.
- [13:54]
Guy Adami
G and Apple does a great job keeping their suppliers in line in terms of costs. But you know, we talk about yesterday, I think we led the show with all these memory stocks. I mean those costs are starting to get a little out of control. Their margins jeopardized in any way going forward.
- [14:10]
Gene Munster
Yeah, it could weigh on margins. I would say that, you know that that's going to be one of the big focuses going in here. Just as some perspective is that in 2019, 2020, their gross margins were 38%. They had record in the September quarter, 36.7%. So we've had this, that's just a massive increase over the past nine years. You know, can the stock, to answer your question, I think that that is there is some risk around what they say on the margin story. The positive side is that typically what we see with this pricing is that eventually it reverts back to lower pricing. Historically when we've seen some of those increases in pricing within a few quarters, it kind of reverses back. I don't know what that commentary is to Micron and SK Hynix, but as far as Apple, yes, it would be a negative. It's something on my mind going into the quarter but it doesn't really change how I feel about the stock this year.
- [15:06]
Melissa Lee
All right, Jean, great to speak with you. Thank you.
- [15:08]
Gene Munster
Thank you.
- [15:09]
Melissa Lee
Gene Munster of Deepwater Asset Management. So Bonawin, how do you feel about Apple? I mean, so you still say go with the fundamental story. Gene lays out a very positive one. Can you see those catalysts being there? You just don't buy into it.
- [15:23]
Bonawyn Eison
It's not that I don't buy into it. I think that he presented, I mean I didn't really take a massively bull case from, from him. Just like I'm not taking a massively bearish case from Katie. I think it's a balanced approach. You do have this geopolitical overhang. You have some of the price pressures from memory overhang. But you do also have this robust, fundamental, fundamental story and a tremendous install base China I mean, I don't know how to start to handicap that risk there. I don't think many people do. That's kind of like the, the issue there. So, again, I just think it's a, it is a bond like compounder. I think that it's going to retain somewhat of its premium multiple because of its premium execution and the shift towards services. And then you do have the AI unknown, which like Steve said, I think if anything, that will eventually be a tailwind. So it's more a situation as I don't really see a strong catalyst one way or the other. But I do think that the core fundamentals are strong enough where you don't want to get too far away or all sides on this name.
- [16:19]
Melissa Lee
All right, meantime, President Trump making some moves to try to bring down mortgage rates. Amen. Javier, here with the details. Amen.
- [16:26]
Guy Adami
Yeah, Melissa, an interesting post on social media from the President here. Just a short time ago, the president saying, because I chose not to sell Fannie Mae and Freddie Mac in my first term, and a truly great decision, and against the advice of the experts, it is now worth many times that amount, an absolute Fortune, and has $200 billion in cash. Because of this, I am instructing my representatives to buy $200 billion in mortgage bonds. This will drive mortgage rates down, monthly payments down, and make the cost of owning a home more affordable. It's an interesting move, Melissa, because for a number of reasons. One is it continues this theme of attacking the affordability problem for Americans that the President has been on all week. You know, he's taken a number of actions designed to bring costs down in a whole host of industries. This one now also focused on housing, as we saw earlier in the week. And the second is we don't know exactly how this is going to work. The President here is using a vague term, my representatives to purchase this. So which representatives is he talking about is an interesting question. The President has been a proponent in the past of bringing back qe and the idea of the Fed sort of doing that qe. This seems to be sort of maybe a twist on that idea, Melissa, the idea of using Freddie and Fannie's cash reserves as a sort of a QE stimulus going into the new year. Melissa, back over to you.
- [17:51]
Melissa Lee
Is this legal? Can he do, I mean, can these funds that are held by Freddie and Fannie actually be deployed like that at the, at the direction of the President?
- [18:01]
Guy Adami
Well, we'll find out. I mean, I think anything when you move a large amount of money, you can just assume that There will be lawsuits challenging it. But you know, the U.S. government took over Freddie and Fannie. The U.S. government controls them and presumably can dictate their actions to some degree. You know, I didn't go to law school, but it seems pretty clear that the guy who's in charge is the guy who can tell them what to do.
- [18:26]
Melissa Lee
Yeah, me neither. On the law school bit almost. But no, I didn't make it.
- [18:31]
Guy Adami
Big opportunity for both of us.
- [18:32]
Melissa Lee
Yeah, exactly. Still not too late maybe. Eamon. Thank you. Travers. This is interesting. I mean if the problem really is that people are paralyzed in their homes because they've got low mortgage rates, you bring the rates down and it increases the velocity of transactions. If this can happen and if this actually has the desired effect.
- [18:52]
Guy Adami
Guy, it sounds like, I mean he's looking at the Federal Reserve. I mean it's a bond purchasing from the. I would imagine, I don't know what representatives he's talking about, but that would be it. Now that's great. And you know, they're obviously, I don't want to say clutching at straws, but they're trying a lot of different things. It's all how the bond market reacts to this. Right. And obviously you've had a pretty stubborn bond market over the last couple of months. Rates don't want to seem to go down in the duration that they need to. We'll see how it reacts.
- [19:19]
Melissa Lee
On paper, this should have the intended effect. But you don't really know.
- [19:22]
Guy Adami
You don't know.
- [19:23]
Melissa Lee
Right. We've got some breaking news. We want to get to ACA vote in the House. Emily Wilkins got the details. Emily? Hey, Melissa. Well, yes, the House has now passed a three year extension of those tax credits to help keep health care premiums for the Affordable Care act low. You actually saw 17 Republicans, more than I think we were expecting, join with all Democrats to move that bill forward. It now goes to the Senate. Remember, the Senate already considered this proposal and it did not go forward. However, it does show that there is bipartisan momentum for keeping these credits in some way shape and form. And a bipartisan group of senators they met today, they're discussing a two year extension of the tax credits including some income caps to ensure that the tax credits only go to middle and lower income Americans as well as some other things to address waste, fraud and abuse. Of course, something hugely watched by the health care and the insurance industry right now as far as whether or not these tax credits will continue because millions of Americans have already seen their health care premiums double with the of these credits. Lawmakers say they think that if they can get a solution by the time that January is over, they can reopen the exchanges, redo enrollment. But they still have some sticking points to go, including whether they should be using federal funds for abortion and whether there needs to be language in the bill clarifying that. So more work to go, but certainly some big momentum coming out of the House with this vote. Melissa Emily, thank you. Emily Wilkins. And regardless of where you stand on whether or not ACA tax credit should exist, blah, blah, blah, this is good news in terms of the the shock that will be avoided to many American households who face their their bill for health care going up astronomically basically overnight if this didn't get passed 100%.
- [21:03]
Steve Grasso
And with midterms coming up, it's it's a political stance that would be intolerable to let that much of an increase go through. Watch your unh. Watch Centene, watch cvs. Watch Molina. All of those names are the ones that benefited the most. Their stocks should see a rise coming.
- [21:20]
Melissa Lee
Up, shares of GM getting hit after hours, the latest charges taking a bite out of the bottom line. That's next. Plus harvesting some gains in ag stocks. The names continuing to grow and where our traders see the space heading next. Don't go anywhere. Fast Money's back into.
- [21:38]
Steve Grasso
This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions, and key results and statistics that may impact your trading. Download the latest episode and subscribe@schwab.com market update podcast or find Schwab Market Update Wherever you get your podcasts.
- [22:07]
Melissa Lee
What made you confident that you could do something that hadn't been done before? I have no fear of failure. Trailblazing women, changing the game One of.
- [22:16]
Katie Stockton
My favorite pieces of advice Think about.
- [22:18]
Melissa Lee
What your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself.
- [22:25]
Mandy Xu
Life is short and you just gotta think big to accomplish big things.
- [22:29]
Melissa Lee
Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday, wherever you get your podcasts. Welcome back to Fast Money, a News alert on GM shares lower if the company announced a $7 billion charge on its price pullback from EVs and China restructuring. Philibo's got the details on this. Hey Phil.
- [22:51]
Steve Grasso
Melissa, Not a huge surprise given the fact that General Motors forecasted that it would have a series of EV charges going into 2026. That came out a couple of months ago when they took a charge for the third quarter. Well, here's what they're doing for the fourth quarter and all of this spelled out in an AK that dropped after hours total of 7.1 billion in charges for the fourth quarter. 6 billion will be pre tax EV impairment charges as they write down assets deal with contracts for their EV business that is winding down or at least scaling down. Not winding down, scaling down from what it was China operations as they continue to restructure in that country another 1.1 billion in charges. And as I mentioned, as you take a look at shares of General Motors, they forecasted this back at the time of taking charges for the third quarter and they said again today there will be more EV charges in 2025. They took 1.6 billion in the third quarter. Also take a look at shares of ford. You see GM is at a 52 week high, not much different from Ford. They tend to trade in tandem. So it's not surprising that Ford is also at or just above a 52 week high or close to a 52 week high. It announced a while back that it's taking 19.5 billion in EV related charges as it restructures its EV operations. As you take a look at shares of GM and Ford and Tesla, we're only showing the last three months, Melissa, but it's been clear even though the EV business, the market share is 7.4% for all of 2025. Investors are saying we like what GM and Ford are doing. They are prioritizing the high profit in demand vehicles, ICE models primarily that are hot right now and that's why these shares have been moving higher. Melissa Back to you Phil.
- [24:40]
Melissa Lee
Thanks. Phil LaBelle, of course, ICE being internal combustion engine, how do the charts look?
- [24:45]
Katie Stockton
You know, both near their highs or at least recent highs. But There is on GM's chart a long term indication of trend exhaustion that would support a four month consolidation phase. Maybe this could be the catalyst for that.
- [24:58]
Guy Adami
And consolidation could be sideways to slightly lower from here. Doesn't mean it's going to cascade lower. And listen for context, Ford took a. It was three times the size.
- [25:08]
Melissa Lee
Yeah.
- [25:08]
Guy Adami
That GM is taking now. So listen, GM to me is still the better of the two stocks. I don't know necessarily in terms of cars, but I think you buy this pullback in gm. I'm with Katie. They could go sideways but GM has a lot of Runway to the upside valuation.
- [25:22]
Steve Grasso
Yeah, Phil said it. They're selling cars that people want to buy. The number one car that's been sold for the last 20 years is the Ford F150. You knew that, right? And on top of that we look at rates. Rates go lower, they sell more cars. I would still be a buyer of both these companies.
- [25:38]
Bonawyn Eison
Well, there's just no way they're going to get to their pre released EV mandate. What is it, a million cars by 2025? I mean it wasn't going to happen. I think they came out with like 170, 180,000. So I think kind of taking it on the chin a little bit in the short term, which is slightly painful. But like when you think about a cyclical capital intensive business, you probably want to see this capital discipline and acknowledge that, listen, China and this EV is really not where we're making money. It's not the highest margin in terms of our product offering. And so I think it's healthy. But I do think perhaps to Katie's point, it may be a catalyst for some sideways or slightly downward trading.
- [26:16]
Melissa Lee
There's a lot more fast money to come. Here's what's coming up next.
- [26:19]
Steve Grasso
Growing gains Agriculture stocks reaping a hefty harvest today. What's behind the strength and which names could keep plowing higher. Plus, a lot of macro headlines moving markets. But it's single stock volatility catching our next guest's attention and how jobs data and earnings could swing stocks. You're watching Fast MONEY live from the NASDAQ market site in Times Square.
- [26:43]
Bonawyn Eison
We're back right after this.
- [26:47]
Steve Grasso
This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key results and statistics that may impact your trading. Download the latest episode and subscribe@schwab.com Market Update podcast or find Schwab Market Update Wherever you get your podcasts.
- [27:16]
Melissa Lee
What made you confident that you could do something that hadn't been done before? I have no fear of failure. Trailblazing women, changing the One of my.
- [27:25]
Katie Stockton
Favorite pieces of advice, think about what.
- [27:27]
Melissa Lee
Your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself.
- [27:34]
Mandy Xu
Life is short and you just gotta think big to accomplish big things.
- [27:38]
Melissa Lee
Julia Boorstin hosts CNBC Changemakers and Power.
- [27:41]
Mandy Xu
Players New episodes every Tuesday, wherever you get your podcasts.
- [27:48]
Melissa Lee
Welcome back to Fast Money. Deere having its best day since April. Other agriculture and seed sales Stocks like Bungay, Archer Daniels, Scott's Miracle Grow and Caterpillar also in the green today. Steve said it is related to what's going on in Venezuela. How so?
- [28:02]
Steve Grasso
The market always prices in the longer term effects. So we are, we're always about static 30% of exports to Venezuela but we've had defaults. So these companies were never getting paid. Now they're actually going to start getting paid and it could move up to a 50% market share. Corn seeds, oils, you have 30 million people who need food. These are the companies in addition to you listed them. John Deere to a lesser extent. Caterpillar to a lesser extent. But I think you have to look at the corn stocks, the seed stocks, the bio stocks, all these names. When you think about oil, oil is going to take months if not years to get going. This could be at their shores in weeks. That means that profits could be in the bank accounts very quickly. It's a flywheel because now they're actually going to have money to pay for this food versus just acquiring a long balance sheet of never paid goods.
- [28:55]
Melissa Lee
Are there no concerns about the security, about the stability of government like you think?
- [28:59]
Steve Grasso
This is just, I think but if the United States is really overlooking the purse strings to Venezuela, I think there's a huge bet that our companies are going to do a lot of the exporting there. And think about it, who's the competition? Russia and Turkey. We're going to get that share.
- [29:17]
Melissa Lee
Any of these charts look good to you?
- [29:18]
Katie Stockton
Yeah, you know, I'm really interested in the DBA ETF. It's got this interesting breakout above its 200 day moving average. So as another way to take on this trade, actually go for the commodities themselves and it's a great diversifier for a portfolio.
- [29:33]
Melissa Lee
Coming up, volatility on the rise. But as the single stock swings catching our next guest's attention, the name standing out to her and how the macro headlines are impacting in the markets. Fast Money's back into.
- [29:48]
Steve Grasso
Missed a moment of fast. Catch us anytime on the go. Follow the Fast Money podcast. We're back right after this.
- [30:02]
Melissa Lee
Welcome back to Fast Money. A mixed day for major indices. The NASDAQ down about half a percent. The S and P virtually unchanged. But The Dow added 270points of fourth positive session in five and small cap Russell 2000 jumping more than 1%, closing at a fresh record high. Expedia, Tapestry, Valero, TJX and Ulta all hitting records of their own. And shares of Costco rising after posting strong December sales last Night. Analysts at Oppenheimer are saying the company offers a superior value proposition and could benefit from positioning to a relatively higher income customer. They also say special dividend increase the dividends. That could also be a catalyst for investors. Well, the horse race for the next Fed chair heating up. As the New York Times reports, President Trump has decided on his pick. According to Kalshee, the world's largest prediction market. Former Fed Governor Kevin Warsh, now the frontrunner, passing longtime favorite Kevin Hassett. Horsch's odds currently at 40%. He's perceived as potentially more independent than a Kevin Hassett, which would presumably be a good thing in terms of credibility of the Fed.
- [31:05]
Bonawyn Eison
I think that's the biggest question. I'm not really sure that the name necessarily matters, aside from particularly Hassan in particular. It's really going to be, do we have Fed independent credibility? And as I've mentioned before, I do think both rates and precious metals have indicated that there have been questions around that. I think the recent news that we just heard today around Fresh Freddie and Fannie and somewhat kind of undermining the Federal Reserve, call it QE Light or QE Derivative. I think, you know, once some of that gets buttoned up and we, you know, have a one just have some certainty in terms of who's going to be there. And then the other thing that, that I think is kind of flying under the radar is that the terms of the existing governors, I believe, have been renewed for some time. So there will be some continuity. I think right now people are kind of positioning. I think there's been a lot of rhetoric that has created some unease. But ultimately, I think the independence of the Federal Reserve will be established and maintained.
- [32:04]
Guy Adami
Yeah, I think quickly Kevin Walsh would assuage any concerns, far more so than the other Cabinet, in my opinion. So I think that on the margins is positive because I do think he's probably far more independent than the rest of the candidates for the job.
- [32:17]
Melissa Lee
Meantime, the CBO finds investors are shifting away from macro risks to single stock and sector risks. Manny Xu, the firm's head of derivatives market intelligence, is here on set with us. Mandy, great to have you with us. Happy New Year to you.
- [32:28]
Mandy Xu
You too. Great to be here.
- [32:30]
Melissa Lee
So the shift away from macro into individual stocks, is it still Mag 7?
- [32:35]
Mandy Xu
It's not. It's actually there's more sector rotation. And you saw today actually a great example of that. Right. So people shifting away from tech going to some of the sectors that were maybe underperforming last year. I think that the best three Performing sectors this today were the three worst from last last year. So you are seeing more and more rotation underneath the surface, more thematic plays away from Max 7 and away from tech into maybe defense names into you know, other other names, you know that are underperformed recently. So we are seeing that we're seeing in terms of volatility at a single stock level really picking up relative to the index. So that tells you people are more focused on these idiosyncratic risks.
- [33:15]
Melissa Lee
How do you interpret the move away, the churn away from mag 7? Do you see that as of the part permanent? I mean what are you seeing in terms of how they're positioning?
- [33:23]
Mandy Xu
Sure. So we are seeing increasing risk being priced into the tech sector. So whether you're looking at the Kukuq that the, the ETF or we actually recently launched options on the CBO Mac 10 index which is max 7 plus 3 other stocks. And in both instances we're seeing increasing implied volatility or expected volatility for these sector, for the sector relative to say the broader market. So we are seeing that in the options market.
- [33:46]
Guy Adami
You know, many gold has historically been, if there's a downturn in the equity market, sort of a hedge. You're suggesting that maybe not so much anymore.
- [33:53]
Melissa Lee
Yeah.
- [33:54]
Mandy Xu
So I mean gold has been on a phenomenal run rate up 60 plus percent last year. And a lot of people look at gold as a potential hedge to their equity portfolio. You hear it as, you know, it's a safe haven. And especially after 2022 when people got burned with bonds selling off in addition to stocks looking at alternative hedges. And what we've noticed is that over the past couple of months gold has become actually increasingly positively correct correlated to stocks. So that correlation from went from negative to positive. So it's behaving like a risk asset. And that matters obviously if you're holding gold for that diversification benefit. I would say, you know, maybe reevaluate and look at other hedges potentially. But you know, the other reasons to be bullish for gold. But, but as a hedge, I would say that that is something that I would be aware of.
- [34:38]
Steve Grasso
What's the newest product, the newest derivative that you're starting to see some traction off of? That's more of a sign of the times everything that we're talking about now. But is there something that sticks out to you as this is different from the past and people are migrating to.
- [34:50]
Mandy Xu
That, to hedge in terms of hedging, I wouldn't say it's necessarily new, but you know, over the past Year, two years we've seen this huge rise in terms of option based ETFs. In terms of the being gathered, it's kind of a hot new product. Even though the strategies embedded into these ETFs have been around for a very long time and I think they've been very successful as a way easier way for people to access options.
- [35:12]
Melissa Lee
Right.
- [35:12]
Mandy Xu
So instead of learning about calls and puts, what option chain, what strikes now you buy. It's a ticker. You buy a ticker and that fund manages the option strategy on your behalf. And I think another reason why it's been popular kind of time going back to the Gold comment is post 2022, people looking for other ways to head their portfolio options have been a really great alternative that people looked at. So I think those two factors combined, we've seen this big growth in terms of the AUM and these strategies.
- [35:41]
Melissa Lee
All right, Mandy, great to see you. Thank you. Mandy Hsu of cbo. Katie, in terms of hedging.
- [35:47]
Katie Stockton
Yeah. You know in terms of hedging we do look at the VIX products of course, and I know they're very hard to time, but they can be incredibly added value. We have been recommending to hedges since about mid October and with the sense that if we were to see the triple cues or the NASDAQ 100 break down from its triangle formation, that we would increase those hedging strategies because that would increase downside risk, make the correction look like something that could be deeper and more prolonged. So there is risk of that, but as it stands within the triangle, it's more of a neutral formation. So we're not actively saying take that VIX or inverse exposure.
- [36:26]
Bonawyn Eison
Yeah. I'm curious in terms of the comments she was making about people making less macro bets, I wonder if given the constitution of the S and P, the rotation that we're seeing away from the Max 7 means that the S and P or the VIX related to that is no longer the best proxy hedge for your over overall portfolio. When you're seeing a ton of action in names that are 35, 40%, then the Vix is clearly like a nice proxy for you to have there. And so I'm not sure if that's a complete structural rotation away from that or just the fact that the VIX index doesn't make the same type of proxy hedge when you're trading in more xli, industrial and cyclical type names.
- [37:04]
Melissa Lee
Right. Does a comment on Gold concern you?
- [37:06]
Guy Adami
Because more risk on a little bit, but not really because if you heard Mandy say if you're in it for the for the hedge against portfolio it's one thing, but I think the reasons to be long gold clearly outweigh any portfolio management against a downturn in the market.
- [37:20]
Melissa Lee
How does the gold chart look to you?
- [37:22]
Katie Stockton
It looks good. I mean as a technician, you can't really be bearish gold, of course. But what I'm a little concerned by the day to day pickup in volatility for silver. It's not scientific, but it is something that we have found tends to proceed more volatility to the downside versus the upside.
- [37:40]
Melissa Lee
Coming up, Merck's biotech fi how the pharma giant's latest deal to boost the stock Plus a new CNBC initiative raising awareness for rare diseases. We'll bring you more on that when Fast MONEY returns. Welcome back to FAST money. Today we are launching CNBC Cures, a new initiative raising awareness of rare diseases and improving outcomes for people who have them. It's a cause near and dear to our friend and colleague Becky Quick, whose daughter Kaylee is one of the 30 million Americans living with a rare disease. Six years ago, Kaylee was diagnosed with a neurodevelopmental condition called SYNGAP1. Learning how to parent a child with a rare disease changed her world in ways she could have never imagined. You start to peel back and worry about what might not happen for her. And I remember at first thinking, okay, being mad when he said maybe she's not gonna be a Fortune 500 CEO. And then thinking, if we could just get her to college, that would be great. And then thinking, well, she doesn't have to go to college if she can.
- [38:50]
Katie Stockton
Just.
- [38:52]
Melissa Lee
Find something that she loves doing. And then you start rolling it back.
- [38:56]
Katie Stockton
And it's like if she can just.
- [38:58]
Melissa Lee
Walk, if she can just talk, uh oh, if she can just find a friend.
- [39:06]
Steve Grasso
I want to say it was the first birthday party. It felt like awake.
- [39:10]
Katie Stockton
And now for an agreed adopting.
- [39:12]
Steve Grasso
There was something so wrong with it and we were just, we knew we.
- [39:16]
Bonawyn Eison
Were trying to be happy and we.
- [39:18]
Steve Grasso
Were trying to celebrate it.
- [39:19]
Bonawyn Eison
Happy birthday to you.
- [39:24]
Steve Grasso
But she couldn't blow out the candle right like that. We weren't there yet and she wasn't.
- [39:31]
Guy Adami
Able to do that.
- [39:32]
Bonawyn Eison
So we kind of faked it because we wanted to make it feel like.
- [39:34]
Steve Grasso
It was normal and it wasn't normal. And we knew it.
- [39:41]
Melissa Lee
One in 10Americans have a rare disease and as many as 400 million people around the globe. You can check out Becky's new podcast series, the Path with Becky quick. And on March 3rd, we're hosting the CNBC Cures Summit, a live event focused entirely on rare diseases. You can register for that and hear more about Becky's rare disease journey@cnbc.com cures. I do want to say I commend Becky for sharing her story, for sharing that personal side of her life. Very personal. It was very courageous of her to decide to do, but she ultimately, she told me, decided to do it because she felt that CNBC offered a great platform to, you know, hopefully spur companies, spur doctors to start looking into potential cures and to connect families who are going through the same journey.
- [40:28]
Guy Adami
100%. I mean, Becky was one of the first people I met at the network over 20 years ago. I've known Matt a long time as well. I mean, it's extraordinarily courageous of both of them. But you know what? It's important as well because this, what we just saw now, is going to make a huge difference going forward.
- [40:42]
Melissa Lee
Yeah. All right, so do check that out. The podcast the Path with Becky Quick. Meantime, Merck today finalizing its acquisition of flu prevention drug maker Sadera Therapeutics in a deal worth $9.2 billion shares. Getting additional boosts late in the session on reports that the company is in talks to buy cancer drug maker Revolution Medicines. Yesterday, the Wall Street Journal reported that Abbvie was considering a deal for that company, but Abbvie later denied that report. And this just shows you the acknowledgment that there is a patent cliff and that there, you know, that there is a need to acquire all these companies, which makes you think about all the potential targets as well.
- [41:18]
Steve Grasso
Yes. I've been looking at the patent cliff and it's really fascinating to see who has the most at risk, who has the least at risk, but they all have something at risk. So it goes to 70% of revenues, down to 30% of revenues. But what it does amplify are all these companies that are from $1 billion to 10 billion that are takeout targets. So watch those micro cap, the smaller cap biotech names. They're all going to be of interest. Everyone has to advance their pipeline and their profitability because they're going to lose a ton of revenue the next couple of years.
- [41:52]
Melissa Lee
Revolution, by the way, is up in the after hours session on all of this.
- [41:56]
Guy Adami
Significantly flop a chart over the last couple of months. And you'll see, I mean, Steve is right, we've talked about a lot of these names. But you know, to your point about Mark, they've, they've gotten themselves out of the penalty box because instead of playing defense, they're starting to play offense. And I think Wolf just upgraded the stock. Don't at me but I think they put 135 price target on it and I think that's reasonable, quite frankly.
- [42:16]
Melissa Lee
Just quickly, pharma or biotech for you?
- [42:19]
Bonawyn Eison
I think it's biotech. Clearly you're taking more risk, but I think that's the name of the game right now.
- [42:24]
Melissa Lee
Coming up, Constellation Brands jumping after its latest earnings report. But could some customer concerns have the stock sobering up? We'll explain with Fast Money returns. Welcome back to fast money. Shares of Constellation Brands bubbling higher today, up over 5% after the beer maker topped revenue and EPS estimates in its latest earnings report by the company warning about future beer sales, saying economic uncertainty and high unemployment could weigh on Hispanic consumers in particular who account for nearly half of the company's U.S. beer sales. What did you make? It's a very interesting report in terms of how the CEO talked about the business and what they were talking about zip codes, the zip codes that had more than 20% Hispanic population. They saw the impact the most.
- [43:19]
Guy Adami
It's, you know, it's Wilfred Frost, our old friend put out a tweet today talking about this. It's pretty remarkable what's happened to alcohol beer sales over the last couple of years. What do I make of it in terms of the stock? Bit of a relief rally. And Katie can look at this. We just recently traded down to the lows we saw in 2020 and think about what was going on in the spring of 2020. So maybe this relief rally has legs, but I think the business is absolutely challenged, especially if you listen to those comments.
- [43:46]
Katie Stockton
Yeah, I agree with the relief rally having legs. We have almost an inverse head and shoulders pattern which is a bottoming formation that usually has some duration to it. There is an interesting countertrend buy signal in November that allowed for this up move and it got through already a couple tiers of resistance. Resistance next resistance looks like it's at the 200 day moving average.
- [44:08]
Melissa Lee
What do you make of this trade?
- [44:10]
Bonawyn Eison
It's tough for me to get behind it. I mean I'm sure to Guy and Katie's point in the short term you can make some money here. It's kind of, you know, it looks like it's based off of those lows, but I just think that the overall trend when it comes to beer alcohol and then they even saw some, some disparity divergence between their, their beer sales and their spirit sales, their mixed drinks, etc. And that's where you're starting to see a lot of new entrants kind of come, come in and disrupt that space. You have cannabis infused product as well. So I think it just makes for a challenging long term setup.
- [44:40]
Steve Grasso
Over 80% of the revenues are from beer to bottom one's point and it was declining with or without the, you know, immigrant force or whatnot. It doesn't matter. The demographics. The demographics are people are drinking hard seltzers, they're drinking cannabis infused beer is sort of the long tail that's, that's really dying right now. And with over 80% relying on revenues, I probably wouldn't buy it here.
- [45:03]
Melissa Lee
Up next, final trades. Talk to the final trade.
- [45:10]
Steve Grasso
Steve, you weren't here two weeks ago. Last week, whatever it was, you weren't here. But Dan Ives was sitting right here and he gave me Serve Robotics. I bought that one, it was up 56%, sold it. He gave me another one today. Sound 80.
- [45:25]
Katie Stockton
I like Texas Instruments. So TXN has a short term breakout within its five year trading range. It's an emerging player I think in the 70s.
- [45:34]
Bonawyn Eison
Looks like Costco's reversed that short term downtrend.
- [45:36]
Guy Adami
Costco SLB Corp sister.
- [45:39]
Melissa Lee
All right, thanks for watching fast. See you back here tomorrow. 5 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 or its 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.
- [46:07]
Mandy Xu
CNBC nor its affiliates and or subsidiaries.
- [46:09]
Melissa Lee
Warrant its completeness or accuracy, and it.
- [46:11]
Mandy Xu
Should not be relied upon as such.
- [46:12]
Melissa Lee
To view the full Fast Money disclaimer, please visit cnbc.com fastmoneydisclaimer Real talent is.
- [46:18]
Bonawyn Eison
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