← CNBC's "Fast Money"
CNBC's "Fast Money"
Yields Surge and Prepping for Nvidia Results 5/19/26
00:43:42
Yields on long-dated Treasuries hit their highest level in nearly 20 years and stocks ended the day lower across the board. Are equities finally starting to reflect the risks in the market? Plus Nvidia reports earnings after the bell tomorrow. What investors will be watching and how to position now. Fast Money Disclaimer
Loading summary
Transcript217 lines
- [00:00]
Edward Jones Narrator
A rich life isn't a straight line to a destination on the horizon. Sometimes it takes an unexpected turn with detours, new possibilities and even another passenger or three. And with 100 years of navigating ups and downs, you can count on Edward Jones to help guide you through it all. Because life is a winding path made rich by the people you walk it with. Let's find your rich together. Edward Jones.
- [00:29]
Geico Narrator
Member SIPC Geico presents a 30 second podcast between your podcast, today's story is shared by one of our listeners. It's called Betrayed by Bill. It was in that moment I caught who was staring back at me in betrayal or more like what, my insurance bill. With trembling hands, I grabbed my phone and switched to Geico, saving about $900 in the process and never to be betrayed again. Now that was bloody riveting.
- [00:57]
Brian Sullivan
It feels good when the story ends with savings. It feels good to Geico Live for the NASDAQ Marketsite right here in the heart of New York City's Times Square. This is fast money on tap. Borrowing costs blowing up the 30 year bond hitting levels last seen during the financial crisis. Is that what could ultimately break what has been an amazing stock rally? Plus we're all getting ready for Nvidia. Those numbers out in less than 24 hours. Bank stocks flirting with what some call key support. And Home Depot given a read on you, the consumer and housing. Plus, let's disrupt it. The CEO of number 18 on our exclusive CNBC Disruptor 50 list. And now his company is shaking up the experience and outcomes people living with cancer. Hi everybody, I am Brian Sullivan in for Melissa Lee. And coming to you live from Studio B at the nasdaq. On your desk tonight, Tim Seymour, Dan Nathan, Guy Adami and Stu Kaiser. He is head of equity trading strategy at C Cities too. Welcome. Good to see you. All right, stock markets ended the day down but we are going to start tonight's show with a different market, the bond market because that is the big news today. Government borrowing costs, they just keep going up. 10 year yields closing in on 4.7%. But the 30 year treasury is now yielding more than at any time since 2007 nearly 20 years ago and the subprime crisis. But let's be clear, this move in bonds, not just an American issue. You want an example? How about two Japanese government bonds? They're yielding their highest rate in nearly 30 years. And UK yields also higher as well. This is truly a global story. Now back to stocks. Stocks did try to make a comeback today. The Dow briefly positive around 230 this afternoon, or the Nasdaq was. But then fatigue and the sellers rolled in the S and P and Dow dead end down, in fact, near their lows of the session. But context, as always, is key. The NASDAQ is still up nearly 4% this month. All right, Guy Dami, It's a big night. Talk to us about this move in yields. How significant is it and why? Our audience, your audience that you love dearly. Our audience cares.
- [03:19]
Dan Nathan
First of all, welcome, Brian.
- [03:20]
Tim Seymour
It's a big night because you're here.
- [03:21]
Dan Nathan
It's a big night because Brian Sullivan is here.
- [03:24]
Brian Sullivan
I doubled the poundage, by the way.
- [03:26]
Guy Adami
Look at this, too. I think we would take the halftime report panel with Sully. How many points would we give him in one basketball? How many? How many points?
- [03:34]
Brian Sullivan
I honestly, respectfully, the halftime. We take them in everything.
- [03:37]
Stu Kaiser
Yeah.
- [03:38]
Guy Adami
We'd have to give them like 15.
- [03:39]
Brian Sullivan
We have to give them. Spot them on everything.
- [03:41]
Tim Seymour
Just.
- [03:41]
Guy Adami
I just want to say, because not
- [03:42]
Tim Seymour
for nothing, Brian got here. Yeah.
- [03:45]
Guy Adami
This is, this is.
- [03:45]
Tim Seymour
I mean, that's.
- [03:46]
Brian Sullivan
Why do we care about the bond?
- [03:48]
Dan Nathan
You know Jerome Powell, you're familiar with Jerome Powell?
- [03:50]
Brian Sullivan
J. Some people call him J. Yeah.
- [03:53]
Dan Nathan
In years ago, when asked about valuations of the equity market, he said, in a zero interest rate environment, valuations don't matter. Which I was appalled by. But it turned out he was right and maybe it was true. Well, guess what? They matter now. And for a while, we've been saying collectively that rates here, regardless what the Fed is going to do, matter. And as interest rates go higher, to your point, borrowing costs go higher and valuations actually begin to matter. And for whatever reason, the last couple of days, the market, the equity market, has woken up to the fact that the bond market here is deteriorating as, as you mentioned, global bond rates. And by the way, Japan is just a powder keg waiting to happen.
- [04:30]
Tim Seymour
I mean, you can make an argument that we're turning Japanese. That's right. I mean, the vapors. Yeah. Anyway, you know, we'll weave as much music folks into the show as we can.
- [04:39]
Brian Sullivan
I really.
- [04:39]
Tim Seymour
But I think it's a case where, as we've said on this show many times, the Fed can control the short end, they can't control the long end in Japan. What's happening? I was, I was on the air earlier today and I said something, Kelly, where I feel like it's 2021 in Japan right now. I think they're having their moment where inflation is so far out of control and they're going to have to make A drastic policy move. Now, I think that's coming at a time when you have leadership and you have a prime minister in Japan that's actually looking to increase deficit spending and do stuff that may be fantastic for equities, but ultimately a higher dollar and higher global yields are not going to be great for equities. And what's interesting too is if you look at that bank of America fund manager survey, which is often excellent at reading, at least where positioning is, it's not going to tell you about tomorrow. But it does tell you that most fund managers out there think that there's a 4% chance that we're actually going to necessarily have a hard landing, but they think there's a 40% chance that the biggest tail risk is a second wave of inflation and, and that the 10 year, excuse me, the 30 year, gets above 66%, which it hasn't done since all the way back to the Asian financial crisis. So I just. As we say there's, there's a disconnect here. Equities aren't necessarily listening to the bond market. They don't have to listen to 465 or 470, but it's the trend, it's the velocity of the move and it's the breakout that has to feel different.
- [06:00]
Guy Adami
Yeah. To me, when you look at this rise in yields, I mean I go to the things that's been drivers of the equity market, right. And we know what that is. It's the AI infrastructure build and we know what the contribution is to the performance, the s and P500, but also to the earnings contribution, but also the earnings growth. And what is interesting to me now is that all of these asset light businesses historically are really asset heavy. All of these companies that have been using their cash flow and their balance sheets to finance that first trillion dollars which we got probably from 23 into 25, are now looking for other creative ways to, to finance the continued build another trillion dollars over the Next, call it 12 to 18 months or something like that. So now higher yields actually puts a lot of stress on that. Right? It puts stress on those sorts of investments. And if we do have some sort of pullback in economic growth, well then you're likely to see a pullback in that sort of infrastructure spend. So there's a lot of headwinds to me. And it's also assuming that you're going to have all of this demand in the near term for this compute. And so that's how I put it together. I think if we start to see a 10 year, 5%, the borrowing costs going up considerably to build out these products or projects that are not going to actually be operational for three, maybe four years. And there are other bottlenecks as it relates to, you know, energy and the likes here. So to me I think there's a lot of things that actually have the potential to kind of go haywire if we do get to levels that folks are not expecting to.
- [07:26]
Brian Sullivan
So what are the. What quickly, what are those levels? I don't know, because the market, I'm
- [07:30]
Guy Adami
just, I'm like the dumb infrastructure guy, you know what I mean?
- [07:33]
Brian Sullivan
Like, so you're not. Because a lot of that's borrowed money is. Yeah, but my, my point too is this, is that yes, I understand today there was a little bit of wobble, but let's be clear, NASDAQ was briefly positive. The Nasdaq is up 5% this month. It's up 16% this year. Yields have been rising all year and the stock market has gone up even as yields have gone up.
- [07:53]
Stu Kaiser
Well, I think, look, if you look back at the last couple of weeks, you have multiple weeks you had oil up, yields up, equities up. But what was happening during that two weeks? We were printing one of the better earnings quarters we've seen in a while. We're now past earnings, we've lost that umbrella and you have risks kind of reigning from both oil and rates and I think that's why you're seeing equities respond to it more on the inflation.
- [08:11]
Brian Sullivan
The rich uncle walked away and now we're kind of exposed a little bit. You think? Yeah, I do think that's for what, another three months until the next round of earnings?
- [08:19]
Stu Kaiser
Well, we do have a couple key ones coming up. But yes, I mean it isn't, I don't want to say an issue but it helps you be more insulated from those external shocks when internally you're generating a significant amount of EPS growth.
- [08:31]
Dan Nathan
Listen, I think the concern people say energies was a catalyst to this and maybe there's some truth, the oil price, but this was happening long before in my opinion was a slow motion thing that's maybe just sped up a little bit. The bond market will continue to deteriorate in my opinion and I will say this Fed, this Tim said does not control anything. As a matter of fact, if you want to be bullish in the bond market, I said it last night, I'll say it again, the best thing they can do at this point is hike rates, not cut rates. But I think to Dan's point. I don't know what the level is but we're getting precariously close and at Tim's point it's the speed with which we're getting there.
- [09:05]
Tim Seymour
I think you have a case though where the move in the bond market, much like when we talk about equities, I mean I think we've had an extraordinary move in a week.
- [09:12]
Brian Sullivan
Okay.
- [09:13]
Tim Seymour
And what I heard was at least some of the fund flow today or the flows and what was going on the market. There was some block sales of treasury futures, five years, 10 years, things that really push the market around and kind of show some capitulation. So I mean at some point this isn't a one way trade hob higher and I don't think the fundamentals warranted. I mean again at least what we've been evaluating in slow motion and yes, it's been obvious there's, there are deficits, there are refunding issues, there are global rates, they're pulling everything higher. And last week was the week of all weeks for ppi for a hot pie. Not everywhere.
- [09:46]
Brian Sullivan
So.
- [09:46]
Tim Seymour
But let's, let's get a breath here. I mean I don't think we're going to 5% on the 10 year overnight. I think there's going to be in there, I think.
- [09:55]
Stu Kaiser
Is it.
- [09:56]
Brian Sullivan
Could we touch it?
- [09:57]
Tim Seymour
No. Yeah, maybe. But I mean I'm just saying there's been a, there's going to be a real struggle. Struggle between 465 and 5% on the 10 year. I don't think, you know, it's not, we're not going straight there.
- [10:06]
Guy Adami
Yeah, well we're going up 10 basis points a week. I mean we could be there and
- [10:09]
Tim Seymour
we have in the last year.
- [10:10]
Guy Adami
Yeah, well one thing it was interesting article in the Wall Street Journal this morning is talking about buybacks. Right. So we just kind of talked about the infrastructure build and how that's kind of putting strain on free cash flow that a lot of these mag 7 companies been using to buy back their stock and they've been doing aggressively for years and years. You know if you look at Q1 I think the number was 17 billion from at least this is from the article from the Mag 7. That's now 55% below the prior quarter and it's down 71% from last year. Just think about that. So you could say, well if you know Apple is buying back, you know, $50 billion worth of stock on a $5 trillion market cap, it doesn't really mean a whole heck of a lot but that is a cushion that's driven a lot of the market performance over the last, call it, 10 years. And a lot of these big names, because they hadn't been investing hundreds of billions of dollars in data centers, they've been buying back their stock hand over fist.
- [10:57]
Stu Kaiser
Like, you know, to your point, like, I think people are reevaluating a little bit what the impact of AI is going to be here by way. Well, look, it was, I think considered a very deflationary, deflationary impulse because I'm going to increase efficiency, I'm going to reduce labor costs, etc. But what we've seen now is the tokens have gotten so expensive that the cost savings from laying off a person are, aren't as attractive as they were. And secondly, it creates massive demand for real assets. And that real asset demand is sort of translating through to higher inflation expectations. I'm not saying we're going there full stop, but you're starting to like balance the, you know, balance the scales a little bit in investor so quickly.
- [11:32]
Brian Sullivan
Sue, it's an everybody jump in here. It's a fascinating question because you've got 700, $800 billion in capital spending per year planned. Okay, whatever the estimate is, everyone's got their own numbers. That's one and a half times the GDP of Singapore. I mean, this is the biggest number we have seen in 25 years since the Internet was literally built out. Will that power the market higher or will the inflation caused by that ultimately send rates up and markets down? I think that's the only question.
- [12:00]
Stu Kaiser
I think it continues to power the markets higher. But I think the fact that this was 100% positive is sort of being reevaluated to some extent. And if you look at this is a global phenomenon. I mean, our commodity strategists are Max Bullish. Aluminum, for instance. Well, aluminum is an input to a lot of.
- [12:15]
Brian Sullivan
I saw that they 4,000 a ton with a bull case to 5,000, 540. Yes, I read the research. There's a new guy on the desk. Let's bring in another voice this conversation. Alister Pender, hsbc. Alistair, thank you very much for joining us. You tend to focus more on the emerging markets. I've got to imagine that the inflation story that we just talked about, which as we said was global, not just domestic, what's that going to do to the markets that you talk about every day?
- [12:40]
Alistair Pender
Well, I think, you know, Stu was talking about the commodity aspect here. I mean, for me, you know, the higher inflation, the higher oil Prices, the higher commodity prices that's massively bullish for Latin America. It's one of the reasons why we've been overweight Brazil, you know, playing that aluminum trend, playing the copper trend as well in places like Chile. And I think the one thing that we don't talk enough about and when it comes into, you know, air and tech, which is that DRAM and semiconductors are also a commodity. Right. And they are the players that are benefiting the most. You're talking about that $900 billion of capex which is creating that inflationary environment. I mean with DRAM prices up what 10 times over the last few months and 20% of that $900 billion CapEx number going straight into memory. To me it is that Asia tech space which is the best way to play the theme at this point.
- [13:27]
Brian Sullivan
Well, EWZ, which is the Brazil ETF that was red hot, went from 22 to 40. It's backed off a little bit, down a couple of bucks from that. Do you remain bullish on Brazil?
- [13:35]
Alistair Pender
I think we remain bullish on Brazil. I think within Brazil you could be a bit selective where you're going to be. You're talking about the inflation impulse here. One of the issues for Brazil is that it's basically has reduced the likelihood of rate cuts. But in the commodity space, in the energy and the material space in Brazil that to me feels like a very attractive place to be right now.
- [13:54]
Tim Seymour
Alister as a kindred spirit here we also see inflation and we see higher interest rates and historically for em they were the death knell. Now AM's at all time highs and because the weightings especially attached to memory and Taiwan semi alone are these are the greatest trades that we've had anywhere. But are you worried about this because again 25 basis points in the 10 year from last week to this week has meant underperformance of 3 and a half percent of the EEM or pick your emerging markets.
- [14:24]
Alistair Pender
And yes, so I think you just have to be selective within emerging markets. I think the issue that we have inflation is that there's some countries in emerging markets that are really punished by this. ASEAN is a clear one where they are the big importers of the oil, where the consumer, you know, 40 to 50% of that consumption is things like food, oil, they get squeezed. India is another area that gets squeezed by this inflation shock and they're also getting hit by the fears that that economy gets disrupted, not benefited from AI here. The one thing that I would say though, you know, comparing emerging markets, developed markets in this context of higher inflation, higher bond yields, you know, in developed markets, you take the UK and its budget deficits and its current account deficit, it's worse than most emerging markets at this point. So actually we come into this situation where the fiscal and the current account situation for EM is much stronger than other developed markets. And I think that is what is new for EM compared to, you know,
- [15:20]
Brian Sullivan
does that just benefit those markets? Because the capital that would go to maybe some of those markets, the UK or Germany, whatever, is now going to filter out to Brazil and other markets like that.
- [15:28]
Alistair Pender
I mean that's what we've seen so far is that money still continues to rotate into select emerging markets.
- [15:34]
Brian Sullivan
From what into what?
- [15:35]
Alistair Pender
Well, I think it's, you know, out of areas like Europe, which again is a, you know, oil importer, a gas importer and going into the areas which are less impacted by that. So I do think you start to see a global rotation, maybe not out of the US but out of other international markets into EM right now also.
- [15:51]
Brian Sullivan
Really appreciate you coming on. Fascinating stuff. I mean Tim, going back to you, the kindred so spirit the incense which is idea this, this battle which kind of got to us too here, which is this idea that inflation is going to hurt those markets more but at the same time it may benefit them because people are going to pull their money out of developed market.
- [16:11]
Tim Seymour
Well, we were seeing that pre war. Okay, there was a reallocation Trade Mag 7 had choked the oxygen out of the room. And by the way, it's. It's foreign investors getting back to equal or overweight their own markets. It's less about US investors who by the way look yourself in the mirror at home and look at your portfolio and I bet you're underW International and I bet you have been for a long time. And by the way that's probably worked. I think Alister's key points are that the fundamentals, it's less about fund flows that the macro and M in a lot of these places has never been better, at least relative to the developed world. And so when you get the fundamental story when the fact is the same thematic secular trades that have been heroic in the United States that also exist in emerging markets. We're also talking about power utilities, we're talking about money center banks. I mean these are some of the names that we are long. I run an international etf. I'm biased on this but I mean I think things look very good not just because it was a trade but because that the macro is warrants it
- [17:04]
Dan Nathan
Just a Segway real quick because he brought up commodities, I mean gold. To me it's something going on here. Higher rates are not bullish for gold and I think there's some liquidation going on in the back of risk off. But I will tell you if what is happening, what we've all been talking about in terms of debt and global yields, if it continues to sort of manifest itself, the snapback to the upside in gold is going to be violent. And I think we're close. We traded almost down to the 200 day moving average. I think if it gets there and holds get out of the way because then gold's going a lot higher.
- [17:30]
Brian Sullivan
Higher. Even though central banks have reportedly been selling.
- [17:32]
Dan Nathan
But you know what selling we've heard that, we've heard obviously out of the Middle east when the war started there. I have no verification.
- [17:40]
Tim Seymour
Why would you reverse that trade here? Why wouldn't you be buying weakness? I mean, I think the same reasons you're buying gold when you had some of the dynamics that were great tailwinds for gold are even more in play now. You've got, you've got, you've got fiat currencies that look like. I know you're looking at me like I'm Brian. Sorry. Anyway, the point is I think strong dollar fear of inflation, these aren't good for gold in the short run. But if you're telling me that central banks are going to start selling gold because there's inflation out there, they're the ones that are driving this trade.
- [18:11]
Brian Sullivan
I guess the reason I was looking
- [18:12]
Tim Seymour
at you were looking at me funny.
- [18:14]
Brian Sullivan
Well, I was, I was debating whether to call you pal or buddy because you were asking me the question. You asking me the questions, pal?
- [18:22]
Tim Seymour
You know what I mean? Look, we could.
- [18:23]
Brian Sullivan
Nobody.
- [18:24]
Tim Seymour
If you want to do this, we can do this. I mean we. I could call you champ. I could call you
- [18:29]
Brian Sullivan
ambassador. That's why Melissa takes a day off more than everyone. So anyway, if they're selling, why would gold go up? I guess that's my very average question.
- [18:43]
Dan Nathan
You're assuming that they are. I don't know that that's happening to Tim's point. Listen, the Chinese have been buying gold handover fist for the last 25 years. Yeah. Have they stopped? Maybe, maybe they slowed down. It's not going to stop because what I have said, I think Tim would agree, Tim is sitting right there. That central banks are now hedging their own ineptitude and they're seeing it play out in real time in terms of what's going on with rates globally.
- [19:04]
Tim Seymour
You know, I think, I think Alastair is a cool name. I think badass.
- [19:08]
Alistair Pender
Yeah.
- [19:09]
Guy Adami
I feel like, what would you call
- [19:10]
Dan Nathan
him if like, as a, as a.
- [19:11]
Brian Sullivan
Can I call you guys gtd? Just Guy, Guy, Tim, Dan. That's kind of a cool. It sounds like a car.
- [19:17]
Tim Seymour
Take that on as a name.
- [19:19]
Brian Sullivan
It might take it on. All right, coming up, Google's flagship AI show kicking off today. Does it have the answer for anthropic or has it already won the AI battle? Plus Toll Brothers earnings. They're out. We're going to dive into the moves and what they are telling you about the housing market. Don't you go anywhere, pal. Fast money is back into.
- [19:45]
Bank of America Narrator
What would you like the power to do?
- [19:47]
Tim Seymour
Don't worry, you got this.
- [19:51]
Emily Wilkins
Whoa.
- [19:51]
Bank of America Narrator
Hear that?
- [19:52]
Brian Sullivan
I did it.
- [19:53]
Bank of America Narrator
That's the sound of you helping your child find confidence that lasts a lifetime. Bank of America invites kids 6 to 18 to join golf with us for a limited time. Sign them up for a free one year membership, giving them access to discounted tee times at thousands of courses as we champion the next generation. Who dares to ask, what would you like the power to do? Restrictions apply. Activation required. CBFA.com Golf with us for complete details.
- [20:16]
Capella University Narrator
You've never been one to settle. Stand down or stand still. You're a lifelong learner, energized by excellence. There's a fire inside you you can't ignore. You've got competition to outrun, momentum to build on, and your own high standards to meet. Stop now. Not a chance. At Capella University, we help you catch what you're chasing because you've always had the drive. Now go earn the degree. Capella University. What can't you do? Visit Capella Edu to learn more.
- [20:46]
Julia Boorstin
What made you confident that you could do something that hadn't been done before?
- [20:50]
Trailblazing Woman Speaker
I have no fear of failure.
- [20:52]
Trailblazing Women Narrator
Trailblazing women, changing the game.
- [20:55]
Brian Sullivan
One of my favorite pieces of advice. Think about what your boss's boss needs.
- [21:00]
Mackenzie Segalos
Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta
- [21:06]
Brian Sullivan
think big to accomplish big things.
- [21:08]
Trailblazing Women Narrator
Julia Boorstin hosts CNBC Changemakers and power players. New episodes every Tuesday. Wherever you get your podcasts.
- [21:17]
Brian Sullivan
Fast money, Google IO kicking off today that is considered Google's most consequential event of the year. We just don't hear about the inconsequential ones. Shares of parent company Alphabet hitting an intraday record yesterday. Down a little bit with the market today. Mackenzie Sagalo says a market alert from the event in Mountain View, California. Mac, what's going on?
- [21:41]
Mackenzie Segalos
So Brian, Google came into IO with the total backing of Wall street, but the product story that it told on stage today was more about practical use cases for the consumer, which was not what investors wanted to hear. The headline was Gemini 3.5 flash, a faster and cheaper version of its flagship model. Google says that it gives users frontier level capabilities at a fraction of the cost. That's now going to be the default inside of the Gemini app and AI mode, something that search chief Liz Reid told me that she is very bullish on. But investors came in looking for a more obvious generational leap, something closer to Gemini 4 that would put it ahead of Anthropic on the leaderboard and instead it got a message around cost, speed and distribution. But walking around the demo stations here shows that this lighter model does enable some pretty compelling agentic features. There is a new personal AI agent inside of Gemini. Meanwhile, Search and Chrome are being totally redesigned, redesigned around AI. And perhaps the biggest talker today, a first look at Gemini powered smart glasses, a category which has become a surprise hit for Metta with its Ray Bans. Right?
- [22:50]
Brian Sullivan
Yeah. I mean was there like one sort of super hot take today? I saw the great interview, we had it on Power Lunch as well. But like what was like the McKinsey Seagalos hot take of the day.
- [23:00]
Mackenzie Segalos
Wearables are where it's at in terms of their back. Google the generative. Well I know, I think that, I think that everybody wants to win Wearables and Meta has seen this unprecedented success in the last two and a half years and they now have this heads up display and the right lens of your glasses. And Google wants in and Apple and OpenAI reportedly do too because it is not decided at this point who's going to be the ideal or what's going to offer the idea ideal physical hardware to be that ideal interface for the generative AI era. And so you have Jony I've of course former Apple alum over at OpenAI reportedly working on this family of devices that combines glasses and a necklace, pendant and headphones because we just don't know the best way to optimize on that and to kind of thread the needle here. Brian, what Google has is Maps, it has Gmail, it has all of your data for decades and if you can integrate that experience into glasses, it could be pretty huge.
- [23:55]
Robin Shaw
Could be.
- [23:55]
Brian Sullivan
We'll see if it's a little better than the Google glasses. Mackenzie Segalos thank you very Much. I mean, listen, let's go back to the stock, Dan. This was a $92 stock two years ago. It's now 350.
- [24:06]
Guy Adami
Well, forget that. I mean 387, you know, six weeks ago it was trading at, you know, 275 and here it is at 387. It's gained a trillion $5 in market cap. So you know, that move, I think while a lot of investors are excited about the vertical integration, the distribution that they have, the progress of the models that they've made, you know, really the uptake of TPU's and their ability to kind of rent out capacity. Pew today they announced a deal with Blackstone where they're building a new company. It's basically a Neo cloud. Right. So they had so many things going on right here. So the undisputed winner at the moment now we don't have a great look through on what's going on at OpenAI and Anthropic to some degree that we do. And I think they benefited from the fact that it's probably the best story as Microsoft is actually kind of laid down a little bit over the last six to nine months or so. So to me expectations were really high. I think what I saw from there and what I read there is it's all good, man. And they have this great distribution and they have models that are clearly as good as the others and. But I'll go back to how they're monetizing it open. I would love to be able to monetize through selling ads for consumers because people are not going to be paying subscriptions. Google has this.
- [25:14]
Brian Sullivan
The winner. Dan, is Google the winner?
- [25:16]
Guy Adami
They are right now. And again, I mean I think that OpenAI is probably going to be like a third at some point in the next year or so.
- [25:24]
Stu Kaiser
Look, I think the challenge as you mentioned, just very, very high bar. I mean this is a consensus long they had the best model coming in. Everybody knows the TPU story. Look at if the best thing they have to talk about is new glasses, which is sort of an old theme. It just suggests that, you know, they're a little bit later in this, in this sort of bullish cycle. I think, you know, Google is. And it's a big challenge and this fare too.
- [25:43]
Brian Sullivan
I mean to Dan's point, they added two Walmarts in value in a couple of months. Months, yeah, but it's similar even for Alphabet.
- [25:49]
Stu Kaiser
I agree, but you think of like even going into the Nvidia print, I mean there is, there are so many headlines out there, so many gtc, so many earnings. It's a consensus, bullish position that it's just very hard to kind of surprise to the upside. And I think Google is sort of suffering from their own success to some degree the same way the stock and
- [26:06]
Brian Sullivan
investors certainly have not been suffering from 92 to 387, from 275 to three, seven a couple of months. All right, big interview tomorrow morning, 8:00 Eastern Time. Jeff Bezos live. That is going to be a big one. That's actually from his Blue Origin rocket factory. So. Yeah. What do you mean?
- [26:24]
Tim Seymour
Come on.
- [26:25]
Dan Nathan
No, that's incredible.
- [26:26]
Brian Sullivan
Look, look at Bezos. He's totally changed in the last couple years.
- [26:29]
Guy Adami
All Jack, you know, also changed his wife.
- [26:34]
Brian Sullivan
That's a fair point.
- [26:35]
Dan Nathan
She did.
- [26:36]
Brian Sullivan
8:00am Eastern Time tomorrow right here on CNBC. Jeff Bezos, Blue Origin there's a lot more fast money to come. And up next, we're tracking the after hours move in Toll Brothers on its latest earnings report. You are watching Fast MONEY live from the nasdaq. We're back. We hope right after this.
- [27:03]
Julia Boorstin
What made you confident that you could do something that hadn't been done before?
- [27:07]
Trailblazing Woman Speaker
I have no fear of failure.
- [27:09]
Trailblazing Women Narrator
Trailblazing women, changing the game.
- [27:12]
Brian Sullivan
One of my favorite pieces of advice, think about what your boss's boss needs.
- [27:17]
Mackenzie Segalos
Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta think big to accomplish big things.
- [27:25]
Trailblazing Women Narrator
Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday, wherever you get your podcasts.
- [27:34]
Brian Sullivan
All right. Welcome back. Shares of Toll Brothers, the high end home builder, they're higher right now after posting better than expected earnings and revenue for the latest quarter. More importantly, Toll Brothers lifting its guidance. Diana Olich joining us. Diana, what's going on?
- [27:49]
Trailblazing Woman Speaker
Well, Brian, it was a very strong beat across the board for the luxury homebuilder that led CEO Carl Mistry to say in the release, based on our year to date performance, we are raising our full year guidance across all key home building metrics. Now, I want to highlight margin specifically because Toll stands out here. They reported adjusted home sales gross margin of 26.2%. That was versus estimates of 25.3. Toll does not have the margin pressure that the other builders do because they don't rely as much on incentives for buyers, the high end buyers. They also don't worry as much about mortgage rates and buying down rates since their buyers have much more cushion and many don't even use mortgages Anyway, there's actually no mention at all in today's release about mortgage rates, although they will likely field questions on that on tomorrow's analyst call. You remember rate, of course, rates spiked higher in March at the start of the Iran war. Now, Toll's average home price rose to $1,009,000. That's from $977,000 in Q1. Orders were up 7% in units and 8% in dollars year over year. So again, it's that luxury end of the market, Brian, that's really doing well. We saw it in the realtors report. That's where you're seeing sales higher. Not so much in the rest of the world.
- [28:58]
Brian Sullivan
No. No mention of mortgage rates.
- [29:00]
Trailblazing Woman Speaker
Nothing. Not one where I was looking for the quote to put in there. Nothing?
- [29:04]
Geico Narrator
Nothing.
- [29:05]
Guy Adami
Wow.
- [29:06]
Brian Sullivan
I kind of find that shocking, Diana. Thank you, guy.
- [29:09]
Tim Seymour
Damage.
- [29:09]
Brian Sullivan
You find it shocking?
- [29:10]
Stu Kaiser
Toll Brothers did not reference mortgage rates.
- [29:12]
Dan Nathan
Diana just broke it down extraordinarily. Well, higher end consumer. I'm sure a lot of these deals, as crazy as it might sound, are all cash deals. Now again, north of $1 million, their margins are hanging around. So good for Toll Brothers. But I don't think if you'd say that's good for all the home builders, I think you're making a big mistake. And I get the bounce in Toll Brothers. But in a world where the consumer is worried about his or her job for I think a lot of different reasons, not least of which in a world where rates are going higher, where the consumer is probably strapped, I don't think you can be long home bidders here, in my opinion.
- [29:44]
Stu Kaiser
Brother.
- [29:45]
Tim Seymour
Do you mind if I talk about Home Depot for a second?
- [29:47]
Brian Sullivan
One that earnings.
- [29:48]
Tim Seymour
Yeah, yeah, they had Home Depot. And while we're talking about housing, I just, you know, I think it's important to note that Home Depot came in with the same store sales number that actually missed consensus a little bit, but beat a bar that it needed to beat and kind of de risked. What I think also is a read through into Wal Mart and Target and some other big box. But I mean, I, I think those Home Depot numbers were interesting. And as someone that would like to be nibbling at Home Depot here, I think these, this was a print that gave you the confidence. By the way, the stock at one point traded down, you know, 4 or 5% and finished flat to up small in the day. So I said, interesting.
- [30:21]
Brian Sullivan
You said interesting. There's two ways to use that word.
- [30:23]
Tim Seymour
Interesting.
- [30:24]
Brian Sullivan
All right. It was like, oh, that's interesting. Or how's dinner? It's interesting.
- [30:29]
Tim Seymour
Yeah, no, no, my was a half full interesting.
- [30:32]
Brian Sullivan
Okay. Because the stock is the same price it was five years ago.
- [30:36]
Tim Seymour
We're not talking about five years ago. We're talking about the price action in Home Depot which got to a point where it's actually gone from 400 down to 300 and it looks like it actually might be turning and interesting. Anyone can look at that chart going backwards, Chief.
- [30:51]
Alistair Pender
Whoa.
- [30:52]
Tim Seymour
And oh, 96 degrees.
- [30:54]
Brian Sullivan
Outside it's humid. The temperatures are hot.
- [30:56]
Dan Nathan
Temperatures are high.
- [30:57]
Guy Adami
They're high.
- [30:58]
Brian Sullivan
Inside everybody's.
- [31:00]
Guy Adami
I'm fired up.
- [31:01]
Tim Seymour
I gotta apologize for that. I was out.
- [31:03]
Dan Nathan
I was.
- [31:03]
Brian Sullivan
That was absolutely fine in the commercial break question.
- [31:07]
Tim Seymour
And there I was.
- [31:08]
Brian Sullivan
I tried to. I got deprobed. Stu.
- [31:11]
Stu Kaiser
Look, I think, I think both those on your porch kind of hit on key themes which is K shaped economy, impact of interest rates, impact of higher oil and gas prices. Frankly, I think we really get the answer to this on Thursday morning when we get Wal Mart earnings and they're going to talk about both the strength of the lower end consumer and also potential trade down. Are we actually seeing incremental progress and high and middle income. So these are both, I think good previews to that.
- [31:32]
Brian Sullivan
But to me it's how closely are you and your team watching Wal Mart?
- [31:36]
Stu Kaiser
Very closely. I actually think it's more important than Nvidia this week in terms of what the signal.
- [31:40]
Dan Nathan
Hold on.
- [31:40]
Brian Sullivan
Don't say that.
- [31:41]
Dan Nathan
Hold on. Dan Nathan last night led the show with Walmart being more important than Nvidia. So maybe you should watch our show.
- [31:48]
Brian Sullivan
I was off yesterday.
- [31:50]
Dan Nathan
Excuse me?
- [31:50]
Brian Sullivan
I was off.
- [31:51]
Tim Seymour
Off as in like not working or actually just not, not always a little off.
- [31:57]
Brian Sullivan
It happens like your raise, your razor took the day off. It's all good. Coming up, we are going to set the table for the biggest earnings from the most important cup. Nothing is more important than Nvidia earning. I mean nothing except for Walmart apparently. We're going to talk about what the traders are watching and of Nvidia's report less than 24 hours from now. More fast money right after this.
- [32:27]
Stu Kaiser
Missed a moment of fast.
- [32:28]
Alistair Pender
Catch us anytime on the go Follow
- [32:30]
Stu Kaiser
the Fast Money podcast.
- [32:32]
Brian Sullivan
We're back right after this. All right, stocks falling as long term interest rates. We led the show with hit nearly 20 year highs. The Dow down about 300 points. The S and P. The NASDAQ did close out their third straight day of losses. That is actually the first time that's happened since March 30. Meantime, stocks of the move include Kava the restaurant chain jumping had a top and bottom line beat. Also raising its full year. Guidance. All right, so Nvidia, we just talked about it. Set to report their quarterly earnings in less than 24 hours. Company has beaten profit estimates at 18 of the past 20 quarters. That's almost all of them, Tim. And analysts are expecting revenues of $80 billion.
- [33:22]
Guy Adami
Tough or more.
- [33:23]
Brian Sullivan
Investors will be focused on the new Blackwell and Rubin production. That's their next generation of processor, as well as any guidance on where margins may be headed. Shares of Nvidia hitting a record last Thursday. It's got a market cap of $5.7 trillion though. Stock down about 7% still. You said that you're watching Wal Mart maybe a little more than in video, but I got to imagine video still a big deal on the Citi desk.
- [33:51]
Stu Kaiser
Yeah, it's hugely important. Obviously it's been a, it's been a big market leader. It's underperformed a lot of its semiconductor peers, which I think kind of speaks to a little bit of the fatigue in the stock. You know, Dan touched it earlier. I think buybacks is going to be a huge part of this report as well. Folks are going to want to see how they're, what they're going to do in terms of returning that cash at a time when other Mag 7 stocks are doing the opposite. So it's going to be important. But you know, the implied moves about 6%. It really has not been realizing its moves the last few quarters. You know, people are long the stock, but I don't think they're over their skis long the same way they might have been two or three quarters ago. So an important print. But again, I think the bar is pretty high. We might be a little oversaturated on Nvidia headlines and information lately. So at this point I think they need to deliver on margins, they need to deliver on sales, but the incremental trade here might actually be the buyback.
- [34:35]
Guy Adami
Yeah, to your point about the implied move, it has not been matching that and it's actually been trading lower on pretty decent quarters. Good guides, I think expectations. If you're looking for 70 plus percent earnings and sales growth year over year, that's what it's expected on like a $360 billion base. I mean, you're getting to a point where it's just going to be hard to really beat those sorts of expectations. And you know, we've been waiting for a print where they actually guide down and at some point that's going to happen. And so the question is it's such a crowded trade. I mean does it absolutely get murdered and take the whole sector down? Who knows? Maybe that's just not it. But at some point they're going to guide below high expectations of 73% up year over year.
- [35:14]
Brian Sullivan
Not to talk my own book but Guy, what's amazing about Nvidia, when you look at the Rubin Blackwell chip and you look at the Rubin and then after that I think it's called Feynman. Feynman. The power demands, the cooling demands, the water demands are so high. There's so much exponentially higher than Blackwell. There is a part of me that kind of goes to the Dan Nathan camp a little bit I think, which is where's the power going to come from? Will the power be there with the cooling, be there with the water, be there to meet the market's earnings demand?
- [35:43]
Dan Nathan
You reported on the deal yesterday. I'm sure. I mean that's why names like Bloom Energy and all these other names, Caterpillar to a certain extent is exactly what you're talking about. Their power gen business. So yeah, you're with 100% without question that should be concerning. The market has not cared. We'll see if it cares. Now I'll say this. Revenues that come in around $80 billion will probably guide to 90. To me it comes down to margins. Anything north of, excuse me, anything south of 75% gross margins, then we can start having a different conversation. 75, percentage of bogey, something we haven't
- [36:14]
Tim Seymour
really talked about is also just the H200 China impact. What we've heard over the last week or so, I mean it's significant and I think there's been a massive headwind China wise for Nvidia. The stock, it's not stopping their business and demand and but, but again we heard that their hyperscalers, ByteDance, Alibaba, Tencent, you name them now have clearance. I think this is going to be a meaningful part of the commentary tomorrow. I don't have any problem with the valuation here and I'll also say that yeah, the stocks underperformed some heroic names out there. But I don't sense sentiment in Nvidia is anywhere near where it has been. I don't think the bar is that high going into this print. The bar is obviously the one that's set by the real bottom up stuff in terms of a margin profile. But I don't think, I don't think the market needs something heroic.
- [37:01]
Robin Shaw
Yeah.
- [37:02]
Guy Adami
You know one thing I'd say you remember when Satya Nadella was on Brad Gerstner's podcast. I think it was like late October, maybe the first week in November. And he said they're no longer capacity constrained. He said as it relates to chips, it was really a power constraint. Go back and look where Microsoft closed on October 31 or November 1 or so. It was basically within a few percent of its all time highs and look what happened afterwards. Right. And there's a whole host of other things that have happened. But if we get a whiff that these guys are able to fill these guys being in video a bunch of these orders, well, that's when things probably start to deteriorate a little bit. And that was going on about six and a half weeks ago. That was really what the sentiment was like. And then, then you have a 45% move in the largest market cap company in the world that's now five and a half trillion dollars. I think it's priced to perfection. And that valuation that folks were really focused on when it was really cheap, it probably doesn't look as cheap right here, right now after that big run.
- [37:54]
Brian Sullivan
I will say they can only meet those orders that the customers can fill. The energy can fill, the cooling can fill the water. And the power demands just keep going up, up, up. I'm sure these will be topics for Nvidia CEO Jensen Huang who will join CNBC Thursday morning to talk about their quarter sales. China power demands. I'm making all this up because I assume those will be the topics. We're going to find out. Thursday morning, 10:00am Eastern, 7 Pacific, 8:00am Mountain time. All right, coming up, Mountain time. What, you still use that term? I mean honestly, it's a time, it's a real thing. Coming up in Boise. Coming up, we're going to sit down with the CEOs of one of the year's Disruptor 50 standouts. There it is called Time Care. It's got a really important interesting story. Net Founder straight ahead.
- [38:54]
Robin Shaw
All right.
- [38:54]
Brian Sullivan
Welcome back to fast money. CNBC's annual Disruptor 50 list is out spotlighting the most innovative startups driving breakthrough technologies. Timecare coming in at number 18 in its D50 debut. It's an oncology company and it's transforming cancer support through its tech enabled platform connecting patients of personalized care to improve treatment outcomes. For more, we're joined now by timecare CEO Robin Shaw as well as Julia Borch.
- [39:22]
Julia Boorstin
Julia, thanks so much. And Robin, thanks so much for joining us here. And congrats on being named to the Disruptor 50 list for the first time. Why don't you start off by explaining to us what is timecare's business model? Because treating cancer is so complex, so costly. How are you approaching it?
- [39:41]
Robin Shaw
Yeah. Thank you, Julian. Thank you for having me on the show. Sorry I'm not there in person. I had our second child six days ago and would be there if it weren't for that. But just thinking about a bit about timecare. We're oncology platform focused on people that are living with cancer. And our business model is centered today around partnering with health insurance plans and taking risk along the cancer patients that they have or their members that they have that have cancer and providing a better experience, a better outcome at a more efficient cost in collaboration with their local providers.
- [40:12]
Julia Boorstin
When you say better outcome, how do you measure that? And what kind of impact have you seen since you launched six years ago?
- [40:19]
Robin Shaw
Yeah, when we think about outcomes, we think about access, we think about getting to your physician as fast as possible. We think about the patient experience throughout that entire journey and the outcomes that we've seen in our business. Today, we are driving greater than 5% medical expense reduction for many of our health plan partners and expect that to grow as we invest in more areas that drive value to our patient population.
- [40:39]
Julia Boorstin
And so how does AI play into this? And how are you making sure that by helping providers cut costs, you're actually improving the quality of care, not giving patients less care?
- [40:51]
Robin Shaw
Yeah. So our platform is really centered around a virtual care navigation system powered by humans. We have over 500 care navigators. These are oncology nurses, nurse practitioners, physicians, lay health navigators. That entire team is powered by a software platform, an AI system that we built in house that allows our care team to be surfaced the right information at the right time when they're guiding people through their journey and collaborating with their physicians. We're having millions of interactions with patients, and we're sitting on all of this data to make sure that we can support cancer patients the best way throughout their journey as they're navigating through treatment and thereafter.
- [41:30]
Julia Boorstin
You have about 85,000 patients right now. What's your plan to scale and ultimately, what's your goal in terms of outcomes for these patients?
- [41:40]
Robin Shaw
Yeah, so we've actually scaled the business pretty meaningfully since the end of last year, where we ended with 85,000 cancer patients that had access to our platform. We now support over 120,000 patients, which represents nearly 8 million Americans across the U.S. of those that percentage of 120,000 or so, that are those that are diagnosed with cancer. We expect to continue to grow the platform in 2026 and expand the new service lines, meaning other insurance types, that our program is going to be accessible to patients.
- [42:11]
Julia Boorstin
Well, certainly a very important time to be helping both improve outcomes for patients and also manage costs. Thanks so much for joining us. Timecare CEO Robin Shaw.
- [42:21]
Robin Shaw
Thank you so much, Julia.
- [42:23]
Brian Sullivan
Doing good work there, Julia. And by the way, also a new father as well. So congrats to him. Julia Borson, thank you very much. All right. Take a short break. More fast Money right after this. Got some breaking news out of Washington. The Senate just voting on the War Powers Act. Emily Wilkins has more. Emily?
- [42:51]
Emily Wilkins
Hey, Brian. Well, the Senate has actually gone ahead and advanced that War Powers act that will put some limits on the strikes that Trump can do in Iran without further congressional approval. Now, it's not fully passed yet. This is just a process vote, but notable because this is the eighth time the Senate has voted on this and the first time they actually have the votes to advance. And that is in part because Rand Paul, Susan Collins, Lisa Murkowski were joined by Senator Bill Cassidy, who lost his Senate primary over the weekend after Trump endorsed one of his opponents. And several other members that Trump has also spoken out against wound up missing that vote. So we'll be keeping a close eye on what happens yet. I mean, this entire thing is about sort of whether Congress is going to exercise their ability to put a check on the ability for Trump to have military action in Iran. And we are slowly seeing now more and more Republican senators joining with Democrats saying, yes, we want to put that check in place and we want Trump to come to us if he wants any further military action. Brian.
- [43:57]
Brian Sullivan
All right, Emily Wilkins, thank you very much. All right, back to the markets. State Street Bank ETF KB has been testing a key support level over the last week, finishing the day just above its 50 day moving average. Bank of America closing just 7 cents off its 50 day moving average. JP Morgan, it's been trading below that for the better part of the week. Tim, you flagged this earlier.
- [44:18]
Tim Seymour
Yeah, I just, I look at moneycenter banks and I do think that their charts are telling you something more about the conversation we started with tonight. If you if the credit spreads are at all time tights, I think we had a great set of bank earnings. It's going to be a while since we hear it will be a while till we get to hear more about this bottom up story. So I would be pausing here. I think there's a lot of cyclicality in that sector, even Though I think US Money center banks are to be owned long term.
- [44:40]
Brian Sullivan
All right, that's it for that. Coming up next though, we're going to keep going.
- [44:45]
Dan Nathan
No, the music's playing. When we come back, your final trade. Something like that.
- [44:50]
Brian Sullivan
That was a good tease.
- [44:53]
Tim Seymour
Solid.
- [45:00]
Brian Sullivan
All right, it is time for the final trade. Let's go around the horn. Tim Seymour, kick it off.
- [45:03]
Tim Seymour
That was a compelling oncology story in the Disruptor 50JJ. More than 25% of the revenues are coming from oncology. Very defensive in this tape. I like J and Jam Long Stu Kaise.
- [45:14]
Stu Kaiser
I'll stick with the AI bottom neck trade through SMH and the semiconductor sector.
- [45:18]
Brian Sullivan
What is the bottleneck trade?
- [45:20]
Stu Kaiser
Bottleneck trade is anything that is under supplied to AI, whether that's power, memory chips, etc. So I'll use SMH to reflect that.
- [45:26]
Brian Sullivan
All right, Dan, you know, I'll take
- [45:28]
Guy Adami
the other side of that and I don't know what your time horizon is on that. I just think that the expectations are so high in Nvidia. The SMH is so heavily weighted towards Nvidia and Taiwan semi. So I'd be a seller of the SMH into the Nvidia, put a bet on it.
- [45:41]
Brian Sullivan
Like little bit of money there, just did it.
- [45:42]
Dan Nathan
The original protect this house model, that would be Eric Abagu. Well, his brother and mom and his niece and his grand niece are watching the show right now in California. So hello to the IBAGU family.
- [45:54]
Brian Sullivan
Big fans.
- [45:54]
Dan Nathan
Grew up in Cronin on the Hudson, moved to Irvington which was.
- [45:56]
Brian Sullivan
Is there a final trade in this
- [45:58]
Dan Nathan
APA Corp. Brian, thanks for being here.
- [45:59]
Tim Seymour
Thanks for being here, Brian. Great job.
- [46:01]
Brian Sullivan
Formerly known as Apache. We appreciate it guys. Thank you very much. It was both interesting. Interesting and informative. Thanks for watching Fast Money Matt with Jim.
- [46:11]
Trailblazing Women Narrator
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 made you
- [46:44]
Julia Boorstin
confident that you could do something that hadn't been done before.
- [46:47]
Trailblazing Woman Speaker
I have no fear of failure.
- [46:50]
Trailblazing Women Narrator
Trailblazing women, Changing the game One of
- [46:52]
Brian Sullivan
my favorite pieces of advice Think about what your boss's boss needs.
- [46:57]
Mackenzie Segalos
Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta think big to accomplish big things.
- [47:06]
Trailblazing Women Narrator
Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday. Wherever you get your podcasts.