← CNBC's "Fast Money"
CNBC's "Fast Money"
What’s in Store for Warsh, and Countdown to OpenAI IPO 5/22/26
00:43:36
Markets higher today, and the Dow setting a fresh record, as Kevin Warsh is sworn in as the next Fed Chair. We dig into the moves, and how the central bank is positioning its policy under the new head. Plus we’re all waiting for OpenAI to file to go public. What one top VC sees in store from the slew of incoming IPOs. Fast Money Disclaimer
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Melissa Lee
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Melissa Lee
Live from the NASDAQ Markets side in the heart of New York City's Times Square. This is fast money. Here's what's on tap tonight. The new Fed chair sworn in Kevin Wash officially taking the reins of the central bank today. But what awaits him as inflation pressures continue to dominate? And what could he mean for policy and the markets? And countdown to IPO open air about to become the latest mega unicorn to file its prospectus. What we can expect from the stock when it finally hits the market and what what's in store for all the other heavyweights filing this week? Plus, is there trouble lurking in a bitcoin market? Dell soars ahead of earnings next week and a chip ETF post solid gains without the help of its biggest component. What in video's underperformance this week says about the state of the semi trade? I'm Melissa Lee, come to you live from CDO B at the Nasdaq on the desk tonight, Tim Seymour, Carter Braxton Worth, Steve Grasso and Bono and I said we start off with a strong end to what has been a volatile week. The dow gaining about 300 points, setting a record close for a second straight day and hitting an intraday high high for the first time since February. The S and P and NASDAQ also with solid gains. The S and P notching its eighth straight week in the green, its best run since the end of 2023. That seemed well out of reach just on Tuesday when the yield on the 10 year treasuries were closing in on 4.7%. The highest level in over a year. Inflation fears putting pressure on rates. And while yields pulled back by some on Friday, this morning's final read for consumer sentiment in May came in at the lowest level on record. That is the kind of economy being inherited heritage by Kevin Warsh who was officially sworn in his Fed chair today. President Trump, who has long been calling for lower rates, suggested he wouldn't put the pressure on the new central bank chief.
- [02:40]
Carter Braxton Worth
I want Kevin to be totally independent. I want him to be independent and just do a great job. Don't look at me, don't look at anybody. Just do your own thing and do a great job.
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Melissa Lee
So what can we expect from Walsh and the Fed and what will it mean for the markets? Tim, what do you think?
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Tim Seymour
I think we can expect him to do what needs to be done. I do think we can also expect him to not really be able to, to do much and we had also an additional, you know, the consumer readings were also on inflation out one year at least long term inflation readings went up to the highest they've been in seven months. We have all kinds of dynamics in terms of what we're getting from the inflation readings. I'm sure we'll talk a lot more about that but I just look at the market going into a long weekend and the fact that matters. We hit fresh new highs on Sammy's tells me where the risk appetite is again this would be a place to be paring. I have a Vix down with a 16 handle on it. I have a dynamic where we have nothing new in terms of an Iran US settlement and yet equities, especially the parts of the trade that we've been talking most about over the last couple of weeks, that rotation within the AI innovation trade continues to work and other parts of the economy I thought was a very interesting day for industrials is an interesting day for the fundamentals around health care. There's a couple of drivers there we'll probably talk about. So I thought it was a very strong week. We were in a very different place last Friday. You're right, we were talking about, we were talking about yields.
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Melissa Lee
Was it a strong week, Carter?
- [04:04]
Carter Braxton Worth
Well, I mean the key thing about yields of course is that while the 10 year pulled in 2 year closed at or near the high right the 210 spread coming down and that's really the tell, right? If indeed and it speaks to obviously there's a new person in the seat. It's unclear how you know, politics aside how you want you to be independent but maybe you didn't want the last guy to be independent aside. And so the question is from here is are higher rates the boogeyman? I mean that is ultimately it, right? Because if you have the nirvana, if I can always count on a ten year cost of money at four and a half, I can play with my multiple. I as an analyst, I as investor, pm an individual. I can make it any multiple I want. And so we have had that Goldilocks experience and for now, you know, rates are still quite benign at the long end.
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Melissa Lee
Even when we tested 4.7%, it's rate of change, right.
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Carter Braxton Worth
If we kept going and we pressed on, but pulling in from almost, you know, what was looking kind of scary. Notice the market all of a sudden
- [05:07]
Melissa Lee
shook it off, right? Yeah, that's true. You know, there's some unknowns about Kevin Washington. He hasn't expressed his, his views on the economy or interest rates for a very long, for months now at this point, Steve. And all of a sudden we're going to, we're going to get a peek of that. June 17 in the first Fed meeting. I'm just wondering what you think, if he has marching orders or the impact on the markets here.
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Steve Grasso
So I think that President Trump is going to be okay with Chairman Warsh. It's hard to get used to saying a different name. If the markets continue to rise, I think the President will be okay with rates where they're at. And if the, if the market does fail, then he'll, then he'll look back on interest rates. But let's look at where Kevin War started, 2006 or so. I believe the Fed's balance sheet is what his real target is. He wants to shrink that. How does he shrink it without raising rates? That's the problem that he's going to run into. But I think we're going to be focused more on the balance sheet and how he goes about it than the actual headline rate. And as long as the headline rate stays here, companies have been growing earnings by the tune of 12, 18, 25% depending on which ones that you count the biggest mega cap names or down to the smaller name. So I think the market's okay right now and I think the Fed is okay right now and I think Trump's okay.
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Melissa Lee
Maybe the ability to use the balance sheet instead of an actual outright hike is sort of his out bottawin in terms of complying with what President Trump wants. I mean he has plenty of COVID not to do anything right now. Correct? I mean, given the data and the uncertainty, etc. But if you go ahead with the balance sheet maneuvering, you could accomplish a rate hike effectively by doing that and still be able to say, I'm not hiking rates.
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Bono
Yeah, I tend to agree. And it seems to be, you know, given its history and some of previous statements, the most likely path forward. With that said, I would like to remind everyone that we did have the whole 2019 incident. So just the pace of duty and whether or not those reserves are withdrawn at a rate that the interbanking system can deal with and sustain is going to be, you know, the, the way forward without creating an additional need for volatility there. So I do think that that is a kind of way of threading the needle, but I do want to emphasize that that is not a foolproof method either. Harken, back seven years ago, you mentioned
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Melissa Lee
the interesting market dynamic. I mean, I'm just wondering if you think the Fed is just going to be sort of background noise right now because we have so much macro, just economic inflation pressures in the forefront to deal with in terms of the markets.
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Tim Seymour
This has been an interesting discussion because, I mean, what Carter said is, is really true. And Bruce Kasman, who's the chief US Economist at JP Morgan, who's been doing this forever, and I think he's one of the best he has. His piece is Goldilocks is leaving the building. And Goldilocks really is that at least inflation was somewhat tethered around a level that people felt good about. I think the Fed has a much bigger voice here than we might want them to. And, you know, the fact that Scott Besson has given our new Fed chairman the chance to, you know, giving Wash a chance actually to have some cover, to really do nothing. But you had Chris Waller out there, another Fed governor, that really basically says remove the easing bias. Yeah, so, so, so I think the Fed is, is a lot more in play, but I think the Fed's a lot more in play because we have bottleneck inflation, we have input price inflation from higher commodities that didn't just start this year. And again, the, the, the, the dynamic in Silicon Valley around some of those bottlenecks, I don't think we've even yet to feel.
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Melissa Lee
Yeah, I mean, the Fed being in play, I mean, in terms of like the uncertainty surrounding what the next move is, because you can make an argument that it is almost equal to the odds of a hike or a cut at this point, who knows?
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Tim Seymour
It's futures have done it. I mean, futures markets have told you we got a hike coming.
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Melissa Lee
So, I mean, that's dispels volatility. I mean that sounds like volatility to me in the markets.
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Carter Braxton Worth
Yes. And in fact, and it's obviously been a very volatile. The equity market has had despite vix. Right. Because that's not really measuring volatility as, as you imply here. It's the huge run up, the equally impressive collapses and then the ricochets that take you on to new highs in individual areas of the market. That's very volatile. And the question is, of course, which we all ask is, are we due for some sort of volatile pullback? Because continuing higher here for a ninth week, that's not volatility. Right. It's if you get drawdowns as we saw in semis, as we, as we saw in certain banks over the past three or five weeks, my hunch is that the volatility in the market is higher and you get a higher VIX Bottom.
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Melissa Lee
I'm curious how hedged are you at this point in time with the markets where they are and where we are in the Iran conflict?
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Bono
Hedge in terms of option contracts, not very, just because I don't see the point in spending premium at this present moment. But hedge via barbell approaches, that is. I definitely am active in the treasury market on the front end of the curve. I own some of the air and adjacent I have broadened out into some of the more industrial type of complex names, utilities. So hedge in terms of. I'm not willing to just solely be extremely beta levered to high beta, high growth, non revenue type of names. I find myself not really chasing trends. So hedged in terms of that certain.
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Melissa Lee
Yeah, Steve, how about you?
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Steve Grasso
Yeah, so if you, if you think about it, right, so the market has done what the Fed could have done with raising rates. So I don't think they have to raise rates. The market did it for him so I don't think they have to pile on there. But also to Carter's point, volatility. We're going to go from Mag 7 to Mag 3 names that are coming out in IPO. If those names, it's a zero sum game to a large extent in the marketplace. You're going to have to make room for those names in your portfolio. There's got to be some forced selling because there's going to be passive buying right after those names come out. You have to make room in them and that could come as early as the next week, week and a half, making room for those. So that could be pressure on everyone's portfolio.
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Melissa Lee
All right, let's bring in Ben Emmons. Founder and chief investment officer at FedWatch Advisors. Ben, great to great to see you and good to get your take on on this new Fed chairman. What do you think is his biggest priority is is at this point coming in?
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Ben Emmons
Good to you too, Melissa. It's his biggest priority will be to try to strike this balance between those who want to potentially see the Fed raise rates because of inflation concerns against him actually trying to push forward the reform which will really be I think the hallmark of that is that balance sheet that that you were just discussing. And I think he's going to try to get to a point where he's got the committee on this on his hand to say let's continue to shrink that balance sheet and try to keep rates unchanged to press against inflation. And that's a tightrope. That is a real tightrope policy. So we'll see if he succeeds. If he does and inflation moderates, it would ultimately be a Goldilocks opportunity for bonds and stocks together. So we'll see how it plays out. I think for June, the Fed meeting, quite contentious meeting I guess but it will keep the cars close to invest and not make too much statement on rate increases.
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Melissa Lee
Particularly do you think the statement changes as Governor Waller was advocating in terms of taking out the the bias, the easing statement.
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Ben Emmons
There's a good chance that that happens and because it will be probably worded that it becomes more like neutral, neutral enough that he has the option to go either back to Ray Kuso or if needed then raise rates. I guess that's what it comes down to. But it's not an easy discussion. Right. Because for him I don't know if you saw this headline, but right before the show President Trump was out there like we're going to bring down rates quickly now that this indicates to me again that he has high expectations that was follows through on that on that particular part of the mandate. So it's a tough decision, but I guess, I guess they will take it out.
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Tim Seymour
Ben. So it's Tim, thanks for joining us and I both reading your notes and this conversation. So we know that the curve flattened this week. It was kind of a bear flattening, although maybe you can argue that the long end actually just came down off of oversold levels. Thinking about for investors who probably care less about what's going on with the yield curve, but they know possible implications for banks and other cyclical parts of the economy. Do you think that we're going to see the yield curve steepen or is there really not a lot of room I guess this is just getting to the conversation of how much volatility is, is in the rates market today.
- [14:05]
Ben Emmons
From here, actually they might, I think that you could steepen if Wash, you know, gets sort of his consensus around that balance sheet policy because what that does is actually you drain the reserves and kind of replace reserves with short term Treasuries, which brings those yields down. At the same time you putting pressure on the long end of the curve because the Fed owns more than 35% of the outstanding of 10 and 30 treasuries. Right. So that will be the steepening part and that would actually benefit the banks. We know that banks trade well on steepening yield curve. So I would say that it could happen. What you saw this week was more of a, I guess a bit of a counter reaction because the rate hike itself is now fully priced at the end of this year. That wasn't really in the yield curve. That's in the yield curve now. So I think we can potentially see the steepening again if particularly wars gets his way with this balance sheet strategy.
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Melissa Lee
And so you're, you're actually saying be long financials. I mean you're sort of positioning around that scenario.
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Ben Emmons
Yeah, I do. I mean I think that, that it's not only the financials that could benefit is also actually indirectly the trade because you know, utilities, power companies, they, they actually benefit from a steep yield curve too and maybe even some of the cyclicals. So a steep yield curve is unnecessarily negative. It could actually be for the markets a signal of like you're bringing the balance sheet down, you're trying to press on inflation and actually support growth that way. And that too will be reflected in the yield curve, you know, higher growth expectations. So I think it's ultimately a signal to, to markets of like, we're not slamming the brakes here, we're trying to keep the economy going, which was the message from the president to watch today. Don't get in the way of the strong economy. If you don't do that then, then it's actually a broadening trade.
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Melissa Lee
How does the trade benefit from a steepening yield curve?
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Ben Emmons
Well, I mean many of the Melissa of these companies, particularly I think of indirect companies, right, like utilities or power companies or related infrastructure companies. They tend to be performing better when, when the yield curve gets steeper. Just like the banks, I guess they are able to fund themselves more favorably and therefore rally in that way. That's, I think the indirect way of the trade is benefiting on top of that growth expectations. Are driving the economy I think is good for the semi trade in itself because it's really driving the economy.
- [16:28]
Laura Rippey
Mm.
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Melissa Lee
Ben, good to see you. Thank you.
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Ben Emmons
Thank you.
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Melissa Lee
Ben Emmons, do you agree with that assessment in terms of a steepening yield curve? And I mean I always think of the borrowing aspect for the.
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Tim Seymour
Ben's a thoughtful guy and I'm thinking about things that was a pretty bullish interpretation of what was could mean the guy that was supposed to be. Yeah. You know, now independent and typically a smaller Fed balance sheet and less Fed is. Are tighter conditions typically. But that's. That is very bullish in a sense to the market that there's a commitment there to. To essentially get the balance sheet under control. However they do that. I do think that banks look very interesting here. I think in a world where we can actually go at least hold serve in terms of where the economy is growing and actually get some of this under control. What we've seen also just on the levels of the charts, I don't know if cars are going to view that a lot of the banks, the money center banks actually had a chance to sell off a lot more and those are uptrends that have kind of held. Is that.
- [17:23]
Ben Emmons
Yeah.
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Carter Braxton Worth
I mean a very sort of mixed bag. Right. So Citi's been sort of the standout but yet bank of America, Wells Fargo really have rolled over hard JP in the middle. The two best standout charts absolutely would be Goldman Sachs and Morgan Stanley. But I think it's important to state this, of course, that the sector overall financials over the past year is up 3%. I mean it could not be worse. Now obviously there are big things like Berkshire and the big insurance companies to be up 3% when the market's up, you know, 30, that's a problem.
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Melissa Lee
Oil prices settling slightly higher today, but down for the week. Markets continue to look for signs of progress and talks between the US and Iran. As we head into the long weekend, CNBC's Eamon Javert has the latest developments. Eamon.
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Eamon Javers
Hey there, Melissa. A news agency affiliated with the Iranian Revolutionary Guard Corps is is quoting a Foreign Ministry spokesman pouring cold water on the idea that negotiations with the United States are close to a deal. The spokesperson saying we cannot necessarily say that we have reached a point where an agreement is close. This report said. Now that comes after the Iranian Foreign Ministry's spokesman said yesterday that Iran was reviewing the Trump administration's latest proposal for bringing an end to the war. President Trump has said that he was prepared to wait a few more days to get answers from Tehran. Now, earlier in the week, he said he was holding off on additional US Strikes on Iran in the hopes that these negotiations would bear fruit. Still, the latest comment seems to indicate that the protracted stalemate in the war continues for now, with the US Military unable to force a reopening of the Strait of Hormuz and the Iranians unable to force the US to stand down on its own blockade of Iranian shipping. Now, one indicator that is raising eyebrows in Washington is that President Trump said today that he's not going to go to his son Don Jr. S wedding this weekend, citing the ongoing situation in Iran in his comments to reporters yesterday for that. So whether that means he expects a breakthrough over the weekend or not is a little bit unclear.
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Melissa Lee
Melissa, back over to you, Eamon. Thank you. Eamon Javers, although as I understand it, he actually got married in Florida. I mean, legally married in Florida. But anyway, it is it is something to sort of like what is behind that. Could there be a breakthrough coming? Could there be strikes? I don't know. You could look at the other way, Bono. And it is amazing, though, that the markets tend to look at everything optimistically.
- [19:54]
Bono
Yes. But as Carter mentioned earlier, we're coming from a Monday and Tuesday that had an uptick in volatility. So I think coming from that place, we're establishing that as key zero. We've transitioned. We haven't had a blow up. We haven't had any additional volatility around that. We've had some statements that seem to be coming out of Iran that suggest that they're going to put together a governing body of the state of Hormuz. But we haven't had an exacerbation of the situation. And I think the longer we go with this being here and we see the implications, I think the latency of that allows people to focus on other things to a certain extent, that is.
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Melissa Lee
Yeah. Steve.
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Steve Grasso
Well, first of all, by President Trump's comments, I see that as there'll be an escalation because he could take a victory lap in the Bahamas a lot easier than he could call for strikes from the Bahamas. So I think you're going to see an escalation potentially. I favor that those odds a little bit better. When you look at the overall market, though, the broadening out to me, healthy, but still for me, it's people just betting on the fact that we have 18% on average earnings growth. And until that subsides, people are still going to rush into this.
- [21:13]
Melissa Lee
Coming up, chip makers rallying to records. But the biggest of the big is setting out the move, why Nvidia isn't getting in on the party and what it spells out for the semi trade next. Plus bitcoin bumbling along. What's behind the crypto's meandering move lower and why options traders say this trade could be fundamentally broken. Don't go anywhere. Fast Money is back in tune.
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Melissa Lee
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Hear I did it.
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- [23:18]
Melissa Lee
Welcome back to Fast Money. Semiconductors closing out the week on a high note. The SMH trading near records with a weekly gain of three and a half percent. Some big winners too this week, ARM up a whopping 46%, Astera Labs gaining more than 30% and Qualcomm up almost 20. But one chip giant notably sitting out this rally. And that, of course, would be in video, closing out the week down four and a half percent. The stock failing to get off the mat even after reporting another blowout quarter on Wednesday. So what do we make of this? We all sort of pointed to relative. I mean, it had run into it. But before that, underperformance relative to the sector. And then we have the performance this week.
- [23:54]
Carter Braxton Worth
Yeah.
- [23:55]
Melissa Lee
So this is curious here.
- [23:57]
Tim Seymour
Look, I don't, you know, I don't think we should vilify Nvidia for even how it's traded to this point. It's just a big underperformer relative to peers. I mean, it had had a nice run. These numbers, I'm not going to rehash them. We all know what was going on there. And, and I just think it's more about the move in Texas Instruments and Qualcomm that makes Nvidia look so astounding. But this is the same rotation. I mean, Qualcomm now is basically got, you know, three product categories where suddenly there's fresh new life, there's the industrial chip part of their business, and it's global in nature. But that the, the CPU offering is something that's going to continue to, to kind of expand across those, those two or three different product lines. So I think it's more about that. By the way, you could have bought Qualcomm for all those people that have been watching this and, you know, the pullback, Qualcomm traded below $200 as of, you know, some point intraday on the 19th. So it is a case where you've had some big moves in some of these names. I'm less here to say Nvidia is a failure than I am to say that there's just other stuff people want to own.
- [25:00]
Melissa Lee
Yeah, they're looking for the next sort of a play. I mean, take a look at the upgrade for Texan today. The analysts at Seaport saying it's power chips now. Right. Controlling the electricity distribution is very important now. So Texan is going to win from that. So, Steve, we're just seeing this sort of again and again where people are fanning out, looking for the next AI pop.
- [25:21]
Steve Grasso
Yeah, they're looking for beta in the marketplace. Nvidia has run and it's been a stellar name, but everyone is making their own chips and sort of diversifying away. And Nvidia is still crushing it and still has market share there. But to your point, they want to see where they could capture lightning in a bottle. A lot of these names have also run already. I find the valuation on AAM a little suspect, though. But I do appreciate that they have 99% market share in phones and that's 50% of their revenues. So they're not going to lose phones. So anything incremental that they get is another tailwind. But I would not be a buyer of Nvidia. But I've been saying that for the last year.
- [26:09]
Carter Braxton Worth
I mean, I think it gets back to some of the classic rules of investing which we know are, well, not infallible.
- [26:16]
Tim Seymour
Remind us what those are.
- [26:18]
Carter Braxton Worth
Infallible, but reliable. And we know that the foreshadowing is a real thing, just as it is in life. And Nvidia, as we've talked about, was foreshadowing. I've not kept up Alpha. I'm the big one, I'm the champion. I'm the most valuable enterprise in the world, but I've not kept up for one month and six months and eight months. And that relative performance is a factor. It's what Alpha is all about, is key and momentum. And Dell's been very strong and it's stronger today. I mean, these are some of the most. And the second thing, of course is that there's no such thing as good or bad news, right? There is only news, right? Media came out with good news that was, it was just news. But no, no, it was good. The dividend, they went from a penny to 25 cents. They did a buyback, the thing was better on the top line. Better. Well, if the stock is down, then it's bad news. There is no such thing as good or bad news. It's how the market, right away, after the print market said not good enough.
- [27:10]
Melissa Lee
So is this a pair of twos or worse than a pair of twos?
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Carter Braxton Worth
Well, in and of itself, it's a poker game here. That's right. It's a perfectly healthy chart. Right. But if given choices, it is not keeping up. And that's what the job is, is not only keep up but to beat the competition in any endeavor. And so whether it's getting great inflation or in anything you do, if you're the last in the group but you're still up, it doesn't, that doesn't mean anything. You underperformed, okay?
- [27:40]
Melissa Lee
There's a lot more fast money to come. Here's what's coming up next.
- [27:43]
Fast Money Promo Voice
Bitcoin going broke, why options traders are souring on the crypto. And whether a policy pivot in one Washington can reignite this stalled out trade plus IP opening the floodgates. The wave of big name companies racing to go public. What early filings are revealing and how a trio of trillion dollar listings could reshape the market. You're watching Fast Money live from the NASDAQ market site in Times Square. We're back right after this.
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Melissa Lee
I did it.
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The Second World War was the largest
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Carter Braxton Worth
event in human history.
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Oliver Renick
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Melissa Lee
Every single person had a story. These are the stories that make us who we are.
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Melissa Lee
Welcome back to Fast Money. Bitcoin under pressure ahead of the long weekend, even as risk appetite, at least for techs, sends stock markets higher. What's more concerning for crypto investors is how this notoriously volatile asset now seems to be stuck in a rut. In fact, some options traders think bitcoin is fundamentally broken. Oliver Renick is at the CBO in Chicago with more on this. Oliver.
- [30:12]
Oliver Renick
Thanks, Melissa. A lot of things went right for the market this week. Vix fell back below 17. The Dow made all time highs. Software stocks back in a bull market. But what's not going right is crypto. Bitcoin shed another $3,000 and Michael Saylor's strategy dropped 9%. Here's the options angle. The market's biggest movers lately have been propelled by heavy bullish options trading. And we're just not seeing that kind of enthusiasm in the crypto names. One big tell is that implied volatility in the Ibit Bitcoin ETF just slipped below 40, an all time low since Options traded on the product starting 18 months ago. For an asset whose volatility was its main appeal, that's a bad look, possibly fundamentally broken, especially when bitcoin's down, when stocks are up. And then there was one final gut punch before the weekend. A $100 million deep in the money call sale in MicroStrategy MSTR five minutes before the bell. That's big capital just giving up on this name. Or in crypto parlance, perhaps a beached whale. Melissa.
- [31:24]
Melissa Lee
Oliver, thank you. Oliver Renick at CBO Bonwin, you're the options expert today, tonight. So I go to you, is that how you would interpret, you know, the verdict on Bitcoin?
- [31:36]
Bono
Well, I agree that it's a high beta player, historically has been a high beta play and that is the appeal of options traders. And the fact that you're seeing implied volatility collapse means that we haven't realized that volatility. I'm not sure if I can tease out directionally whether that's good or bad. In fact, I would likely, given the history of the name, I'd probably be a better buyer of options given the fact that you typically want that insurance when you least expect that you'll need it.
- [32:04]
Melissa Lee
That is a good point there, Steve. You're pointing out bitcoin. I mean, Oliver's point is as a measure of risk, it doesn't work either anymore. And it used to.
- [32:14]
Steve Grasso
Yeah, nor does gold, quite frankly. So the two things that we thought we sort of quasi figured out, we have no clue what they're doing. I think the stablecoin topic has really sucked a lot of air out of the room. If you think about it. You have two stablecoins that are probably 80% of the market and you have Bitcoin and Ethereum that are, that used to be 80% of the market and they gave up probably about 10% to stablecoins. The way I look at it is I'm staggered owning Ethereum now because the infrastructure that stablecoins are built on are on Ethereum's infrastructure. So bitcoin can be broken and bitcoin can have a tough time and a tough slog. But it's usually when everyone is betting against it where you see a massive face rip rally. I'm hoping for that. I'm hoping it's not what he said, that it's broken. I'm hoping for a rally back, but I don't really see that happening anytime soon.
- [33:15]
Melissa Lee
What do you think, Carter?
- [33:16]
Carter Braxton Worth
Well, so many things come to mind. The first thing is, listen everyone. What happened? All those people, those, those laser eyes with the laser eyes. All those bitcoin view the laser.
- [33:24]
Melissa Lee
Yeah, yeah.
- [33:25]
Carter Braxton Worth
What happened?
- [33:26]
Melissa Lee
I don't know. Lasers went out.
- [33:27]
Carter Braxton Worth
Lasers went out. The enthusiasm is gone. It fads are fads now as to whether this thing is a fad or whether it has enduring unknown to all of course but my own hunch is look, it's a bad chart here. Other things that offer better opportunities. Why fool with it here and now?
- [33:45]
Melissa Lee
Now coming up, euphoria building on Wall street as a slate of private heavyweights gear up to go public. We'll dig into the head turning valuations and why this could be the biggest test of investor demand yet. That's when he's back right after this.
- [33:59]
Fast Money Promo Voice
Missed a moment of fast. Catch us anytime on the go follow the Fast Money podcast. We're back right after this.
- [34:10]
Melissa Lee
Welcome back to Fast money. Stocks higher across the board to close out a winning week. The Dow rising to fresh records adding nearly three points. The S&P gaining almost half a percent and notching its eighth straight weekly gain while the NASDAQ eked out a gain of 2.10of a percent. Apple rising over a percent to fresh records stock close out with the ninth straight week of gains now on its best stretch going back to 2017. China tech stocks coming under some pressure after Beijing announced a crackdown in illegal cross border securities trading. The K web down almost 3%. PDD TAL Education and JD.com among the biggest laggards. Shares and Goldman Sachs shares hitting a milestone topping the thousand dollar mark for the first time ever though closing just shy of the level. The stock getting a boost amid investment banking enthusiasm after SpaceX selected the company to lead its IPO. Bono and you flag Goldman today. You like it here?
- [35:01]
Bono
I do. I still think it's best in class in terms of execution on trading and asset management fees. And listen, I think Ben Emmons makes a very compelling case for the banks and I want to be in a bellwether that can produce beta to the upside.
- [35:18]
Melissa Lee
All right. Well, speaking of IPO euphoria, Space X just one of the high profile names getting ready to make its debut. Wearable tech company Aura filed confidentially to go public yesterday and OpenAI could be next on the list. Our next guest is an early investor in Aura Alumni Ventures. Managing partner Laura Rippey joins us now. Laura, it's great to see you.
- [35:37]
Laura Rippey
Good to see you again, Melissa.
- [35:39]
Melissa Lee
And you've also been an investor in recent IPOs. I'm wondering how you think about Space X and the impact on the IPO market market or is it such a unique issue that how it trades, how its place that doesn't necessarily impact the likes of an aura?
- [35:53]
Laura Rippey
Yeah, well I think any time a venture firm has four companies file to go public or go public in a
- [35:59]
Melissa Lee
three or four week period, we're excited
- [36:01]
Laura Rippey
about the unlock that it represents. And you mentioned aura. We are very excited about that prospect and I hope we get a chance to kind of come back to it. But your question was around SpaceX, of course and you know, our point of view is that it is very exciting because of the energy that it represents in the market for space but then also afterwards for the startups that will likely follow, both the ones that have come right behind it and are going to be the new sort of up and coming space players, but also all of the new innovation that's going to happen as a result of the IPO where there's employees who are fiery founders and with new capital and new excitement they can come out with their own startups and that re energizes the entire space opportunity.
- [36:49]
Tim Seymour
Hey Laura, it's Tim. Thanks for joining us and boy, huge, huge congrats because yeah, this is an extraordinary time and, and I guess in terms of the seat you sit in and both the, the competition for kind of the next wave of these, I'm just curious also just about what you're seeing in terms of the demand from your investors and really how rapid it feels out there. Because independent of what we're talking about every night in the public markets, my sense is there's a whole new wave of investors, a lot of wealth that's been created into the market and they want to be also on the leading edge of where they should be investing. I'm just kind of curious about on the, on the fundraising side.
- [37:27]
Laura Rippey
I love that. That is, that is a great question. So just as a level set, Alumni Ventures is a top 20 VC. We're the only one in the top 50 that cater to those individual retail investors and we've raised about 1.6 billion from them. So this is dear, dear to our hearts. So I think what you have to understand is when you get in and the price you get in matters and that is really relevant when a company comes up to that ipo. And I'll use Aura again as an example. So we got back into Aura in 2019. The valuation was literally less than $100 million. They're now valued at 11 billion. So simple math, that's 111 times our money. Which is really promising but only will come to fruition in this case when they go public. And candidately it could be even more right. All of the workings of Aura seem very, very promising. They have 4x their revenue in a couple of years. They have five and a half million rings out there in the market. Folks stay with Aura so they can understand their sleep. 80% of the people stay after that year renewal rate. So they are doing exceptionally well. So the key thing of your question is what's coming next and how can
- [38:43]
Contessa Brewer
you be a part of that?
- [38:44]
Laura Rippey
And I would encourage folks to join the venture community to come in as an individual accredited investor so that you can get the hundred million dollar valuation, not the $11 billion valuation when you first come into a stock.
- [39:00]
Melissa Lee
On the other side of things, Laura, I mean we're talking about fantastic exits but when it comes to putting your money to work for the next sort of wave in your portfolio, is it a tough time now because valuations get lifted for all these hot areas.
- [39:14]
Laura Rippey
So again most of our entry points are seed and a Melissa. So we come in at that early days. We are looking around the corner at what the next trends are. What does it mean when we reassure so much manufacturing? What does that mean when 25% of the population of manufacturing employees is retiring in the next couple of years? That means you have to bring AI to manufacturing and the people who are going to bring AI to manufacturing are startups that have innovative solutions. We enter those at the early days and yes, we need to be patient for when that fully comes to fruition in terms of their exit either through M and A or ipo. But by investing early when innovation is happening, you get lower valuations and there couldn't be a better example than in tech bio right now. That's a great opportunity at Series A and we are taking a lot of advantage of the spectacular companies that are coming to market and coming in at relatively low valuations.
- [40:10]
Melissa Lee
It's a very busy. Laura, thank you. Great to see you. See you soon.
- [40:15]
Laura Rippey
Nice to see you too.
- [40:16]
Melissa Lee
Laura of Alumni Ventures. A lot of exciting areas that she's investing in and has invested in for sure.
- [40:21]
Tim Seymour
Yeah. And I think the investor community is also are trying to look around the corner and I think the venture community is only going to continue to grow. I just this is the structure of the markets that we're in. I can't tell you how many investors come to me and are looking for not only access to the IPOs that we were talking about and they're asking about them they were asking about them two years ago. I mean, they know what's going on out there. So it's putting pressure on public markets.
- [40:44]
Melissa Lee
Coming up, Q1 earnings season largely in the rear view. But tech investors are gearing up for a couple of big reports. Still ahead, what to expect when Dell and Salesforce report next week. More fast money after this. Welcome back to Fast Money. We've still got a couple of big tech names reporting earnings next week. Let's start with Dell, which spiked nearly 17% to a new record today. Several analysts raising their price targets ahead of Thursday's report. The company also benefiting from optimism over fellow PC maker Lenovo's results results overnight. Salesforce, on the other hand, has struggled this year, down 32% as the software sector struggles. That company scheduled to report on Wednesday. I don't know, Steve, where do you want to start? Here?
- [41:28]
Steve Grasso
Yeah, so. So. Well, if you look at where you said Lenovo gave a little bit of a hat tip to what Dell can expect. Dell's big growing revenues, right? Upwards of 40%. If you look at it on a year to date performance, it's up over 130%. So things don't grow to the sky and never come back down. Look at the point of entry. They had a conference a couple of weeks ago. The Stock is up 30% since then. I think the bar is pretty high for Dell. Even if they knock it out of the park, knock the COVID off the ball, you could see the stock run flat to a touch higher. I wouldn't be disappointed. You've had an incredible year and CRM really quickly when you think about software or AI stealing from software, they're in the target zone. We haven't seen whether the CFO is going to say let's buy this or we can replace this. They're not the infrastructure that a service now is or that a workday is for that matter.
- [42:31]
Melissa Lee
Yeah. Carter, what do you see in these charts?
- [42:33]
Carter Braxton Worth
Well, the equal and opposite of one another, right. Dallas up into the right and exhibiting incredible relative strength. The other is down 55% from its high. And it's the opposite. Momentum is a powerful thing. One has bullish momentum, one has bearish. I, I myself would not chase Dell, especially since the rerating today ahead of earnings so long, only trim. And I wouldn't touch CRM.
- [42:54]
Tim Seymour
Yeah, I think with CRM right now, there's just not a pathway to visibility. I mean, ultimately this is a case where you need to see some kind of organic acceleration in the second half. And this look, they they may be able to communicate enough on the kind of the post earnings call that will actually give the market some comfort. I don't think there's going to be anything in the numbers. Yeah, 23 times, you know, really cheap relative to itself for a reason.
- [43:20]
Melissa Lee
Coming up, a potentially record breaking Memorial Day travel weekend lies ahead. But with gas prices rising, where are consumers cutting back and what it signals about the summer travel season? That's next back into. Welcome back to Fast Money. This weekend marks the unofficial start of summer and millions are projected to travel in what could be a record setting Memorial Day holiday. But with rising gas prices and persistent inflation, not everyone's travel plans are seeing the same impact. CNBC's Contessa Brewer has more on this Contessa.
- [43:59]
Contessa Brewer
Well, Melissa, look, you've got drivers filling up this Memorial Day weekend and on average they're shelling out a $50 more than they were a year ago at this quick check. That's right off the New York State Thruway. A few months ago it was 2 bucks cheaper a gallon. And still it's not keeping people off the road for this long weekend. AAA says the vast majority of the 45 million Americans expected to travel are going to drive, drive, because look, it's still cheaper than flying. And this will be another new travel weekend fairly. In fact, we haven't seen year over year growth this flat in a decade. That small bit of growth is really driven by Gen Z and millennials who are prioritizing experiences over stuff. Now, maybe they're camping, maybe they're sharing Airbnbs because the hotel bookings look softer for this weekend too. According to travel intelligence company Sojourn, they say it's down 8% and its data shows that travelers are not just downsizing international trips to regional trips, they're just sitting it out altogether. Bank of America put out a summer travel note saying 40% of lower income Americans have no travel plans and their credit card data shows lower spending on travel so far this year. It's really the middle and the upper income spending more on travel. And in fact, MGM told me that Vegas, Melissa, is totally booked thanks to bts. Nothing like a Korean superstar boy band
- [45:33]
Laura Rippey
to bring about, right?
- [45:34]
Melissa Lee
Exactly. Yeah. No, Tim's a huge fan of bts. I'm wondering, wandering contestant though, when, when the decision is made to travel, if there are other ways where they cut back and I don't know if you can speak to the, you know, in the casinos and sort of those resorts, if they get there, if there's less gambling or if there's less, you know, going on property and spending at restaurants,
- [45:55]
Contessa Brewer
for instance, about those, about those booking windows, it's so interesting because MGM CFO said on its most recent earnings call that the booking windows are really short. So, so they're having a hard time looking out toward the summer and trying to decipher what the trends are going to be. I'm also hearing the same thing about World cup travel, that a lot of the people, even if they've bought tickets, they have waited and waited to book their travel. And that's why we've been seeing this real lull, far less than expected in terms of hotel bookings across the host cities. Sixteen host cities.
- [46:32]
Melissa Lee
That really speaks to the uncertainty out there in the economy. Contessa, thank you. Have a great weekend. Safe travels to you Contessa Brewer. Up next, final trades, Final trade time.
- [46:45]
Bono
Bono in Better Seller TlT Stephen J.
- [46:50]
Steve Grasso
Frog on a Dell collaboration.
- [46:53]
Melissa Lee
Carter Alcoa, Larslon Timbo have a rainy
- [46:57]
Tim Seymour
happy Memorial Day weekend.
- [46:59]
Melissa Lee
EWZ thank you to all who serve. Thanks for watching. Fast Mad Money starts right now.
- [47:06]
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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 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 what would you
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Melissa Lee
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Laura Rippey
Whoa.
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Melissa Lee
I did it.
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