transcript
Speaker 1:
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Speaker 2:
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Speaker 3:
[01:00] Live from the NASDAQ Market site. In the heart of New York City's Times Square, this is Fast Money. And here's what's on tap tonight. Inside, Intel's massive earnings beat and stock reaction. Shares currently trading at what would be all-time highs. Can they keep those gains? We're going to bring you all the details from the quarter and what you should do with the shares right now. And syncing software, the group resuming its downtrend in a big way today. One of our traders says it's headed even lower. They're going to lay out the case coming up. Plus, what's got shares of United Rentals jumping?
Speaker 4:
[01:37] No idea, Joe.
Speaker 3:
[01:38] Isn't that a Karen?
Speaker 4:
[01:40] Yes, it is. Nice work.
Speaker 3:
[01:42] Thank you. I know. I do my... I'm prepared. I'm wearing Lululemon pants. Lululemon goes downward a dog. I'm never sure what to think of that after naming its next CEO. And healthcare headaches, why the Chartmaster sees even more pain ahead for the worst performing sector this year. I'm Joe Kernan, in case you don't know, in for Melissa Lee, coming to you live from Studio B above where SquawkBox is, but we're at the NASDAQ on the desk tonight. We've got Tim Seymour, Karen Feinderman, Dan Nathan, and Carter Wirth. And we're going to start with Intel surging after reporting first quarter results. How much do we own? Can we order in tonight? I mean, as just taxpayers, how much do we own here? The government said that.
Speaker 5:
[02:31] Isn't it the royal we?
Speaker 6:
[02:33] I thought you were saying we can't own Intel shares.
Speaker 5:
[02:35] 274 billion shares.
Speaker 3:
[02:36] We can only own Versant and happy to do so. But we're ordering in.
Speaker 6:
[02:42] Yes, because Intel stock did hit an all-time high, just an after-hours right now. What's driving it isn't just the numbers, it's really where the growth is coming from. Data Center revenue came in over five billion bucks, well above estimates as agentic AI drives a surge in CPU demand. The CFO, Dave Zisner, told me they're so constrained on the server side that they're shifting PC production capacity over to meet data center demand more so in the second half of the year. They've also been raising their average selling costs for PCs as well as CPUs to offset the supply crunch within the CPU part, and then the memory costs on the PC part. But with higher pricing flowing through the second quarter, the CFO said both pricing and improving output will be meaningful contributors to revenue growth. On the foundry front, this is what Wall Street is definitely watching. The segment still has essentially one internal customer. The CFO said 18A yield, which is a more advanced manufacturing process, are tracking better than expected, and 14A, which is not expected until 2028, is already ahead of where 18A was at the same stage. In other words, they are doing better on the both fronts. However, they did not announce a new partner or a new customer. He also said advanced packaging is now shaping up as a multi-billion dollar per customer business. And then lastly, Tarifab. The CFO called the Elon Musk partnership, quote, a great endorsement of Intel's foundry, and said there are, quote, many other customers behind, end quote, with Elon. A detail still being worked out, though, with both CEOs. Intel is trying to turn that foundry from a money pit into a competitive asset. So it is a sign of strength, but they didn't finalize any details about that foundry business deal.
Speaker 3:
[04:23] It's the market cap. I'm blown, well, I was blown away where it was when it was at 18, because I watched it for 40 years, probably. And I watched the AMD Intel wars. And it was always-
Speaker 5:
[04:35] When AMD was two bucks?
Speaker 3:
[04:36] Yeah. And it was always, I remember Jerry Sanders, I knew him. And what's AMD's market cap? All of a sudden, I looked at that after some of the AI deals that it embarked upon. But Intel, this puts it all the way back about 350 billion. What is it?
Speaker 5:
[04:51] 497.
Speaker 3:
[04:51] 497. AMD. Did you know that, Carter, that that was going to happen?
Speaker 7:
[04:55] I didn't have a number at the top of my head.
Speaker 3:
[04:57] Anyway, Christina, thanks. We've got, actually, we do this a certain way. And I always-
Speaker 6:
[05:03] I said we talk about it first.
Speaker 3:
[05:04] Yeah, we're going to. But then we're going to trade it or you want to talk about it?
Speaker 6:
[05:07] I usually, sometimes I sit here and join in, but maybe not with you.
Speaker 3:
[05:11] Please do. Please do. And then you can, in fact, you can come in and talk about it tomorrow at Squawk. I'm personally invited.
Speaker 6:
[05:17] No, the only thing I would add is that the stock, wow, I'm getting a little embarrassed right now for saying that. But the stock has run up a lot because it's been less about fundamentals and more about the narrative. You had President Trump tweeting about it, Elon Musk. You had Google saying that they're going to extend a partnership. And so maybe this earnings report really shows that revenue is climbing and that they potentially margins are improving, et cetera. So the numbers are starting to show some of that narrative and proving it. None of you guys are looking at me, but yes.
Speaker 3:
[05:45] Okay, I won't. I'll look at, I'll look there. Intel results coming after the VanX Semi ETF closed at a record. The SMH added a percent with Texas Instruments, Microchip, and on Semi among the best performers, the SMH up after hours as well, which is not surprising. Tim.
Speaker 4:
[06:04] Yes, sir. First of all, Joe, it's so great to have you.
Speaker 3:
[06:06] Watch out, naturally, I say this. Tim.
Speaker 4:
[06:08] Oh, yes.
Speaker 3:
[06:10] You've been pointing to Semi out performance.
Speaker 4:
[06:13] It's so nice of you to have noticed that, Joe, over the last couple months.
Speaker 3:
[06:16] I knew she liked the United Reynolds, right?
Speaker 4:
[06:19] Well.
Speaker 3:
[06:19] But I knew you'd been talking about out performance.
Speaker 4:
[06:22] And we knew you were gonna bring your special flair today, so it's great to have you. Thank you.
Speaker 3:
[06:26] Thank you.
Speaker 4:
[06:26] It's been a long day.
Speaker 3:
[06:27] It's nice you were welcoming me. And it is hard. It's hard work. It's hard to get back in here.
Speaker 4:
[06:32] It's, well, again, you put in a long day, so great to have you. And it's, I mean, Semi seemed like they'd put in a hard day going into today, and yet look at this move. The fact that we're opening the show with Intel to me is startling, not because it wasn't a startling number and the move in the stock hasn't been extraordinary, but because Intel has been so irrelevant. This renaissance in the CPU, which is what we've talked about, I mean, it's kind of, the game is kind of played right into their hands. I still think that the market is doing too much with this whole concept of Lipton's ability to, you know, asset sales, potentially strategic deals we're hearing about Tesla now. I mean, a lot of this feels a little bit like the Tesla model. Look over here while I'm doing this. The reality is that there are exciting things going on, but there's a limit to what they, I think they can do on the production side, given some supply constraints and some balance sheet constraints. Having said that, as you referenced, Joe, semiconductors are going through maybe their most extraordinary period in the market. I mean out performance and I mean outright absolute moves to all time highs, more so than they have at any time in the last three years when all we've done is talk about semis. That's extraordinary seeing as, I don't know what inning we're in, hopefully in Flushing where it seems like it's late innings early here. I do think we're in middle innings here and it's extraordinary considering we've had a big run.
Speaker 3:
[07:53] Do you have a lot on Intel?
Speaker 5:
[07:56] Well, I do find this quarter just absolutely stunning and going in, the bar was I think getting higher and higher. Obviously, the stock has had a huge run, but the magnitude of the revenue beat is really extraordinary. Ten percent? Depending on which data centers.
Speaker 8:
[08:13] No, but just overall.
Speaker 5:
[08:14] Overall, on every metric.
Speaker 3:
[08:16] Munster says that's gigantic. Supposedly. And you were talking to Santoli.
Speaker 8:
[08:22] I was.
Speaker 3:
[08:22] I love Santoli. Inside out.
Speaker 8:
[08:25] I'm less interested in the ten percent beat and revenue and the guidance up nine percent. I mean, this is a company that's growing earnings off a very low base. So if you want to just say it was a huge beat, I read that a couple of times here. Here's the last time the stock was 70 bucks. Okay. You got to go back to 2021. There was peak earnings and sales that year. Okay. They basically did $79 billion in sales, $5.47 in earnings. They had 57% gross margins. Okay. So this year it's at the same spot. Let's just assume numbers are going to go up kind of big, right? They're expected to do $60 billion in sales. I'm just going to throw that out there as far as the guide, if you want to kind of move that out. They're going to have what? I don't know, 55 cents in earnings. Let's call that a dollar, okay? And 37% gross margins. So we all know how to do math, all right? So the last time the stock was at 70, just like that. Just think about that. So the multiple here is absolutely insane. For it to grow into that is going to be a real problem. And then here's the other thing. They're losing a lot of money on manufacturing. Okay, they lost two and a half billion dollars in the quarter. Now they have one customer, and maybe this TeraFab thing works out well for them. This company does not have a great track record in manufacturing. Now I think it's great that they're going to be bringing manufacturing back here to the United States, but that's also going to be costly. And it's also going to be costly if they're shifting production, okay, away from PC chips over to these CPUs that they could sell into data centers. So to me, I think it's like, it feels like a bubble. That's all I'm saying. And then the SMH is now up 60% in a month.
Speaker 5:
[09:51] I agree with that. I mean, I haven't owned it first. I haven't owned it. And missed the entire run at every point along the way, I thought it was expensive. And I still think it's expensive. And with the move, I particularly think it's expensive. But if you were owning it today for this, I think you're pretty happy with what these earnings are. So whatever excitement and forward multiple you want to put into it, I agree that the Tarifab's great, but that's three years down the road. So the multiple is just way too high for me, but that's been the wrong thing to do.
Speaker 7:
[10:21] So many ways to look at it. I mean, we know that if it opens where it's indicated now, post close, it will finally take out its high, all time high of August. So then what does that mean if you're back to where you were in the year 2000, just the inflation, it means you're still down about 40%. So there's so many ways to tell the story, it depends how you want to do the headline. It's also worth note that Intel's relative performance to the tech sector peaked at around 96. And so again, these are great moments, you can trade this and that's all true, but as an asset, the greatest one of all, right, a whole, it turned out to be the biggest dot of all, right? This was the number one, it was the number one by far. So the question is, and also Texas Instruments, it's not idiosyncratic, the whole group is doing it. And herein is the rub, the only time where you've gone up 45% in a three-week period. It happens during the last part of the bubble in 98, 99, and it also happened in 01, 02, 03 on the way down. When you have these violent counter-trend moves. So we assume we're not in the downtrend, we're in uptrend. Does it mean that we're close to that former peak? It would have to suggest that.
Speaker 3:
[11:30] Do I have to revise everything I said about the Chips Act, how the government can't pick winners? Didn't it look like a bad pick when we gave so much money to Intel, and then all of a sudden, it's like...
Speaker 4:
[11:43] It looked like a subsidy too. I mean, it looked like a bailout.
Speaker 5:
[11:45] But they did get warrants, though, and they did have to meet certain girls.
Speaker 3:
[11:47] But is it working? And I'm not just blaming, it was a bipartisan deal, I'm not blaming Biden, but then the Trump administration went all in on this too. They know how to pick stocks? Obviously, do they? They do?
Speaker 5:
[12:00] Well, yes, actually.
Speaker 8:
[12:01] But didn't they convert the grants to stocks? So again, that was the trick, and have a ball. I mean, that wasn't the dumbest thing we could think of, right?
Speaker 3:
[12:10] I mean, I can't do it. I have to give credit to both administrations? I think I do.
Speaker 8:
[12:15] Yeah, do it.
Speaker 5:
[12:15] Are you going to explode?
Speaker 3:
[12:17] I don't know. I've never done that before. Let's bring in Gene Munster. For more, he's managing partner, Deepwater Asset Management. Gene, it was a story stock on the way up, and now it's real. That's what you're thinking right now?
Speaker 9:
[12:32] Well, let me back up about a year, just at Deepwater, we own a lot of AI infrastructure. We're big believers. We're in the second inning, and we also sold Intel a year ago, never brought it back. And I think as I listen to the conversation here, we're kind of making the same mistake. We're overthinking this. We're looking at what the multiple is. We can look at the revenue multiple, which trades at about half of where TSM and NVIDIA are. So there's a little bit of valuation justification there, but I think we're overthinking this. What's going on here? This is a broken company. This company was on the ropes. I have worked with people who have left Intel because they felt they had no more mojo. And what has happened from going from revenue down 4% in December to up 7% in March, and if they do the same thing to their June quarter in terms of exceeding expectations, exceeding the high end of the same rate, they'll grow at 24%. So minus four plus seven plus 24%. What's going on here is this is a rising tide. Now, I'm not saying we're going to buy the stock tomorrow. I struggle with missing something this spectacular. But what is going on here is this is testimony to everything that we have been hearing. We are still very early in AI. It's testimony to the concept that Elon's been talking about, which is that chips are a big bottleneck. This advanced packaging piece is a major headache for how we're going to basically fuel the AI brain in the next five years. And Intel, whether they have still dysfunctionality with all of their deficiencies, this defines the rising tide lifts all boats. I don't know what you do with that when it comes to do you own the stock, do you not own the stock, but let's just call it like it is. That's what's going on here.
Speaker 3:
[14:21] If Geltzinger were still there, would we be here right now, do you think? Is he somewhere right now just like, is he like this or is he happy? Because he's still got a lot of Intel, probably happy.
Speaker 9:
[14:33] Probably happy. But I think that, I don't want to take anything away from their team, their leadership, any of that. But again, this is, I think, evidence that this rising tide. I saw NVIDIA is down in the aftermarket. There's going to be this conversation about share, taking between NVIDIA and Intel, some distorted conversation around that. And the reality is that we're still very early. And these bottlenecks, we talked about the Tarifab in 2029. I think, Karen, you mentioned that. That's probably the right time to think about it. But think about that context, is we're going to be having this conversation for years. So Joe, I don't know, again, I don't want to go and pile in, just there's a natural reaction not to do that. But there is something still bigger going on here. And I think that we have to look beyond Intel and look at the broader AI trade and recognize we are still very early.
Speaker 4:
[15:23] So, but Gene, how about, I get the fact that we've now rotated into CPUs and we've actually been doing that. But what do you do with then a Texas Instruments? Because again, it's one thing to say Intel has had the market come to them. And I still don't think this bails out Intel, although a lot of people might be throwing money at them, but from balance sheet issues and dynamics that I understand, Lit Butanus has done a nice job with layoffs and trying to refocus. But what do you do with the other names that weren't this beleaguered, vertically integrated player that makes everything it then needs to mass produce?
Speaker 9:
[16:01] Well, not all the stocks are going to equally benefit. Unfortunately, I just don't know a ton about Texas Instruments when it comes to the stock and so I don't want to speak to that. But I do want to speak to, again, back to the broader AI trade. The question comes down to, when I think about this rising tide and impacting a lot of different players, they don't all have to be vertically integrated. There's a lot of suppliers, whether it's on energy or optics that are having meaningful beneficiaries here. The question is not at this point whether or not the revenue numbers are going higher than expectation. The question comes down to, will the market reward that? We have seen Nvidia continuing to raise and raise expectations, and the stock largely has not been rewarded for that. So Tim, as I think about the dynamic and think about this rising tide, it's definitely going on, it's going to go on for years. The question is at what point or how much the market is going to continue to expand the multiple on these companies in anticipation of this growth.
Speaker 3:
[17:01] All right, Gene, thank you. And keep us posted with the details from the call. So are you going to tell me whether to buy this or not? Is that traded?
Speaker 8:
[17:09] No, I think you sell it. I mean, I think it actually gives up a lot of these gains probably tomorrow. I think it's probably pretty exhausted and maybe this is a bit of a short squeeze. It was probably a short headed into the print given where the stock ran and the expectations. But again, I go back to a 10% beat on sales and a 10% beat on the guide. I just don't find it particularly interesting, especially for a stock. It used to be, okay, you beat by 10%, you're up 10%, that sort of thing.
Speaker 5:
[17:35] No, no, not when your revenue is up 10. That's not, you're not counting operating leverage.
Speaker 8:
[17:39] Okay, but I mean, like just, okay, 13%. My point is, is like this is getting a little much, Texas Instruments, again, 9% of their sales. And listen, I'm not like, this is not hurting me one way or another. I'm just saying that if you're going and chasing this right here, I just think you missed it. You missed it once, you missed it twice, you missed it three times. And so it doesn't make a lot of sense to me. And this is probably one reason though, if you've seen Broadcom has gone up in a straight line. So if you're looking for chip plays, you need to do things that are going to play into inference that are getting more specific. And I think that's one of the reasons why Google, one of the only hyperscalers that's back towards its prior all-time highs in this period that we've been, because they have that TPU exposure and they're getting orders outside of their own usage. So to me, there's other ways to play it. I'd rather buy Google here than Intel.
Speaker 3:
[18:26] All right, meanwhile, the software side of tech, that trade dropping, the IGV's losses led by ServiceNow, which saw its worst day on record. The company's subscription revenue taking a hit due to the war in Iran, and the headwinds dragging down names like Workday, as you can see there, Salesforce, also IBM, look at IBM, Microsoft also tumbling after it announced its first ever voluntary buyout, about 7% of its US employees are eligible. Karen.
Speaker 5:
[18:58] Yeah, so I don't own ServiceNow, but I do think this, I mean, first of all, IGV has had an enormous bounce back, so I think it was sort of poised to maybe correct a little, but one could make, if you want to make this as Apocalypse case, the bearish case, you can sort of, I guess, start here. I mean, this is a company normally, you know, Bill McDermott is extremely bullish all the time, and wanted to sound bullish here, and I think the street's just not buying at the moment, like could this be the one that we remember? The stock's obviously down a lot already before this, but this is a pretty dramatic response.
Speaker 7:
[19:36] I mean, just a testament to momentum in both directions, right? I mean, a stock in an established downturn that's dropping and gapping, it did it again. Momentum is a factor, is the single most robust and most quant models, and the opposite is for a strong stock that gets stronger. At some point, you say it's too far, right? You can get a mean reversion, but buying a stock like ServiceNow just because it's down, there's no known technique that makes that a good one.
Speaker 3:
[20:00] I'm ready for anyone to say what they want, but they told me to tease, but I want to give everyone a chance. Tim, you're good.
Speaker 4:
[20:06] I like your pants tonight. How about that?
Speaker 3:
[20:08] They're Lululemon. I like yours. You look pretty good in them jeans. I said that to you too, and I asked whether it's okay for me to- But those are not normal, like those you don't buy like in a normal place. Those are nice. Thank you. You're welcome.
Speaker 5:
[20:23] Thanks for highlighting that I am wearing jeans.
Speaker 3:
[20:26] They're not just jeans. Do they begin with a G?
Speaker 5:
[20:28] They do.
Speaker 3:
[20:28] And end with an I?
Speaker 5:
[20:30] They could. All right.
Speaker 3:
[20:35] All right. That narrows it down.
Speaker 5:
[20:36] That's the tease already.
Speaker 3:
[20:38] That is tease.
Speaker 5:
[20:38] Now, tease again.
Speaker 3:
[20:39] Coming up, Industrials. Oh, you're not the only one. You're not the only one. You're not the only one. I forgot. Industrials in focus, a couple of key names climbing higher in today's session. What's behind the moves and how much higher can they go? Details are next. Plus, we're watching shares of Nike after its latest job cut announcements. The details plus what the Lulu CEO announcement means so that company don't go anywhere fast money is back in just a couple of minutes.
Speaker 1:
[21:15] Trading at Schwab is powered by Ameritrade, giving you even more specialized support than ever before, like access to the Trade Desk, our team of passionate traders ready to tackle anything from the most complex trading questions to a simple strategy gut check. Need assistance? No problem. Get 24 seven professional answers and live help and access support by phone, email and in-platform chat. That's how Schwab is here for you to help you trade brilliantly. Learn more at schwab.com/trading.
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Speaker 3:
[22:44] And welcome back to Fast Money. United Rentals soaring nearly 23% today after boosting its full year sales guidance last night. The stock trading at its highest level of the year. And fellow industrial name Caterpillar, meanwhile, closing at a record up another 3% today. It's now up six sessions in a row. 13 out of the last 14, gaining almost 16% in that time. Karen, as we've been talking about earlier, you are in United Rentals.
Speaker 5:
[23:09] I am in United Rentals. It's a big position. I've been in it for a long, long time. This was a really, really good quarter. One of the things that happened last quarter and the stock traded down was that they had all these great big projects, but they didn't have the right equipment where they needed to have it ultimately. And it cost them a lot of money to deliver it and move it. And they were very effective in getting that, in getting that delivery expense way down. That was excellent. So the margins were good. Also, this is a team that likes to under-promise, over-deliver. So they're going to raise guidance. I'm going to believe them. The thing is, it's not super cheap here. So this is a really nice, it's fine. It's up 22 percent. But if you don't know it today, I don't know that I would have to jump in tomorrow. I'm staying with it for sure for the long term. But good for them. And these projects are going to be multi-year projects. So we know they're going to have good revenue for some time.
Speaker 3:
[23:59] And how long have you been in it?
Speaker 5:
[24:00] At least 10 years.
Speaker 3:
[24:02] 10 years? I wasn't expecting that.
Speaker 4:
[24:05] She's a long-term investor.
Speaker 5:
[24:06] I'm a long-term investor on a show called Fast Money.
Speaker 3:
[24:08] Are you the only person here that is in this?
Speaker 4:
[24:12] I think this is Karen's baby. I mean, she's been on it, she's been right. And I think there's been both a strategic and kind of a secular element of what's been going on in the space. But I'll talk about Caterpillar, if that's fair. What do you think?
Speaker 3:
[24:27] I'm ready to hear that.
Speaker 4:
[24:29] I'll jump in there. Well, I mean, I think there's a story with Caterpillar too, that there actually has been macro that's been very supportive. They're also strategically well positioned in the energy space, especially on pipeline manufacturing, and that's been part of the call for kind of fresh green shoots in the space. But it does, at some point, we all know valuation is a terrible timing mechanism, but Caterpillar as an industrial name is trading probably 35 to 40 percent more expensive than its five and 10 year historical. It's trading somewhere around 43 times on a trailing 12 month, and it's just, again, I get where they're positioned, and I get where there is a lot of infrastructure built out in this country, but at some point, again, this is one of these stocks, it actually looks like it's a data center stock.
Speaker 3:
[25:15] All right. Great. We're going to go now. Unless Carter, you got a chart wisdom?
Speaker 7:
[25:21] I think Caterpillar is great. I like that kind of momentum. I mean, obviously, it's expensive, but that's not a reason to buy or sell a stock. Unless, of course, it's 10 years and that's a different matter. I will point out, just maybe we can end this. Do you know, we're the exact opposite. I've never had a long-term capital gains in my life.
Speaker 5:
[25:38] Really? Oh, I'd love to maximize them as much as I possibly can. If we ever get married, that would be great.
Speaker 7:
[25:47] We will offset each other beautifully.
Speaker 3:
[25:48] Eamon Javers, I am told, urgently in my ear, Eamon, what's going on? This is unplanned.
Speaker 12:
[25:55] Yeah, Joe, that's right. Take a live look inside the Oval Office right now. The president has just called White House reporters in. He's introducing ambassadors from various places in the world. He just put out a Truth Social post. The president said that he has met with the ambassadors to Lebanon and to Israel. You see there, the Secretary of State Marco Rubio is talking alongside Vice President Vance and the president himself. The president in his Truth Social post says that the meeting with the representatives from Israel and Lebanon went very well. The United States is going to work with Lebanon in order to help it protect itself from Hezbollah. The ceasefire between Israel and Lebanon will be extended by three weeks. I look forward in the near future to hosting the prime minister of Israel, Bibi Netanyahu, and the president of Lebanon, Joseph Aoun. It was a great honor to be a participant in this very historic meeting. He's now reading out that meeting to the press pool in the Oval Office. So we'll update you with any details. The significance here, a couple of things, Joe. One is the extension of this ceasefire by a three week period of time now between Israel and Lebanon. That is something that the Iranians had said was crucial to any peace agreement between the United States and Iran. They wanted all along the ceasefire to include Lebanon and Israel to stop their attacks there. The president seems to be going some way here toward what the Iranians want by announcing this extension of the ceasefire. The other language here that's interesting to me, Joe, is the president saying the United States is going to work with Lebanon in order to help it protect itself from Hezbollah, suggesting that there are factions inside Lebanon that the United States has some agreement with already to work in a counterintelligence way against Hezbollah. So we'll see what else the president has to announce in the Oval Office right now, Joe. Back over to you.
Speaker 3:
[27:54] Excellent. I'm glad you were ready, Eamon, and thanks for bringing us that. And keep us updated. All right. We'll have more Fast Money in just a couple of minutes.
Speaker 1:
[28:07] This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information-packed daily market preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key results and statistics that may impact your trading. Download the latest episode and subscribe at schwab.com/marketupdatepodcast, or find Schwab Market Update wherever you get your podcasts.
Speaker 11:
[28:37] She loves it freezing. She loves it hot. The Pod by 8 Sleep ends the argument for good, with independent temperature zones that keep both of you sleeping deeper. Try it at 8sleep.com.
Speaker 13:
[28:51] What made you confident that you could do something that hadn't been done before? I have no fear of failure.
Speaker 14:
[28:57] Trailblazing women changing the game.
Speaker 15:
[29:00] One of my favorite pieces of advice, think about what your boss's boss needs.
Speaker 6:
[29:05] Leadership can look in many, many different forms.
Speaker 10:
[29:08] It really does come down to just trusting yourself.
Speaker 14:
[29:10] Life is short and you just got to think big to accomplish big things. Julia Boorstin hosts CNBC Changemakers and Powerplayers. New episodes every Tuesday wherever you get your podcasts.
Speaker 3:
[29:21] All right, welcome back to Fast Money. You can see shares of Nike right now, flat or so, not much happening after the company announced it was cutting about 1,400 jobs. That's less than 2% of the workforce, but the second round of layoffs this year. And the news comes after, a day after, news that long time Nike exec, Heidi O'Neill, was gonna be the next CEO of rival Lululemon, and she starts on September 8th. Is this a loss for Nike, a gain for Lululemon?
Speaker 5:
[29:54] Well, I guess, Lululemon thinks not, right? The stock's telling you not, maybe. Obviously, Nike has, I used to own Nike, I sold it pretty recently, it didn't work. So people seem somewhat disappointed in the choice in that if Nike, this was someone from Nike, where Nike isn't a shining example of what to do as a retailer in the last couple of years. I think the other thing is, when you get a new CEO, if I were the new CEO, the first thing I do, kitchen sink, kitchen sink, right? That first quarter, just take it down, right? No reason to put the bar high. And so they could end up doing that. I mean, I didn't think I would see Lululemon at this PE multiple, but I mean, maybe it really is, we were talking Carter about, is it an under armor situation? I don't know, I'm not long in here.
Speaker 7:
[30:44] Yeah, it's just the kind of thing, resist the temptation to buy, cheap is a four letter word in this business, or five letter stay away.
Speaker 8:
[30:51] Yeah, it's interesting to note, you know, 1800 jobs, 78,000 base, that's 2%, right? So Meta just announced that they're cutting 8,000 jobs. They also have 78,000 employees, right? So if you're Nike and you're having these execution, I mean, the list goes on and on about their problems and the stock is trading at levels it hasn't seen in 15 years or so. You'd think that they really would. You're saying Kitchen Sink, the new CEO, you just got to take things out. You got to turn this thing around and give people a reason to kind of buy it and just to suck that there's a new plan coming here.
Speaker 5:
[31:22] I was referring though to Lulu as potential underarm or not Nike.
Speaker 8:
[31:27] Yeah, no.
Speaker 5:
[31:27] Okay.
Speaker 4:
[31:28] Yeah, no. Look, in my neighborhood, we had Aloe and Viori and I mean, no one cares about that other than to say, I think there's way too much athleisure other than Joe, I know is a big consumer in that space.
Speaker 3:
[31:41] I mean, they last, I don't have a consumer recently, but I have a lot of Lululemon.
Speaker 4:
[31:46] Well, and the argument against Lulu is also, they went into this downturn at peak margin. So we don't really even know what the multiple is. I, you know, look also at Burke, look at Decker's, look at a lot of this trendy, either footwear, outdoor wear, I think there's a flood of it, and I think discretionary in that corner is part of also the over, I think there's a macro concern, and I think there's a bottom up.
Speaker 3:
[32:13] All right, good. Coming up, we're gonna talk to Bookvar. He always puts out something called the book report. You get it?
Speaker 4:
[32:19] Yeah, I get it.
Speaker 3:
[32:21] He said markets.
Speaker 4:
[32:22] Good read.
Speaker 3:
[32:23] He used to work for a place called Bleeckley to match his thinking almost all the time. Anyway, he thinks the markets have gotten too complacent, and where he's still finding opportunity at this point, Fast Money is backing too. Welcome back to Fast Money. A top investor worries the market is becoming too nonchalant when it comes to risks. CNBC contributor Peter Bookvar is the chief investment officer at OnePoint BFG Wealth Partners. I kind of agree with you, and then sometimes I kind of don't, Peter, because I think that at this point, the narrative is changing, and this is kind of a crowded viewpoint. There's a lot of people saying, we totally underestimated the length of this war at this point. We saw the V shape, it almost looks like Liberation Day, right? Here we are, and there's estimates it could be months and then after it does reopen, months to get things going again. So I think everybody's a little bit more, I don't see a lot of complacency right now.
Speaker 16:
[33:34] Well, at the end of March, when the CNN Fear and Greed Index got to 10, I had wrote that we're right for a rally, just trying to figure out what the catalyst would be, and the catalyst was the messaging out of the White House that seemed to be that they wanted to end the war. And I've been optimistic that that's going, that was going to happen over the last couple of weeks. But each day that goes by, the supply shortages, the supply chain crunches become more acute. And while, of course, the war is going to end, that straight's going to reopen at some point, but longer it drags out, the more I'm worried about accidents beginning to happen. And now that we've come as far as we have, that's where I think the complacency is. Now, the market is rewarding those companies that are seeing good business. Anything touching, of course, this AI data center, build out is doing well. The spenders on that, the hyperscalers, they're not. Those stocks are still below where they were last October. So, I don't care about what the S&P is going to do. I'm trying to find things in between and underneath that are going to do well and avoid things that I think are getting too extended here, like the Sox, which since the mid-90s has never been up in its history 17 days in a row.
Speaker 3:
[34:51] Well, you would say right now that the backdrop, the current narrative for how this is going to play out is that we're still thinking there's going to be something within days, maybe Friday, some type of agreement to extend the ceasefire and reopen the strait because I don't think, I don't see that complacence. I know the market has rebounded and maybe the market itself looks complacent but I think there's still plenty, a huge wall of worry just in sentiment for the market to keep climbing. I think everybody agrees with you right now.
Speaker 16:
[35:23] Yeah. No, I agree with you. I think that there's obviously clearly plenty of risks. I mean, we're negotiating, now it seems like, with the IRGC. I mean, flip a coin on how that's going to go. But just when you have this speed and rapidity of a rally in a very condensed period of time, tells me that the market has pulled forward a lot of optimism.
Speaker 3:
[35:44] I mean, it is pretty staggering that we broke out to all those new highs right in the middle of this. And once that surprise was over, maybe you're right. Maybe here there's backing and filling, or we could go to new lows, theoretically. No one's saying that we couldn't. I know some technicians, Katie Stockton, I kind of kiddin her about it, but she, right before the 13-day NASDAQ streak, she said, oh yeah, I'm 6,100 on the S&P and 58,000 on Bitcoin. It's like, that could still happen.
Speaker 4:
[36:18] Peter, it can, and I guess my view, or my thought, my question to you, Peter, is what if, say war is done, and I understand elongating the conflict only continues to add to inflation pressures. Let's just say decks are cleared, peace is here, S&P's at 7,100, where are you now? And I think we see the world the same way, which includes we kind of like the rest of the world, et cetera, et cetera. I'm just curious, let's just say war has been settled. What do you do with the market here?
Speaker 16:
[36:49] Well, I'm particularly bullish on commodities, and we know energy prices are going to fall sharply when that happens. And the question, of course, is where will it settle out? But I'm of the opinion that commodities generally are going to see a higher low, and that you're going to see 85 being the new 65 when it comes to crude oil, for example. You're going to see global stockpiling, hoarding and strategic reserves of everything. And if that's the case, if commodity prices remain elevated, we're going to see, because of the supply disruptions that will continue even upon cessation of the war, just a general bid, I believe, still to inflation, that's going to make interest rates relatively sticky at current or higher levels. I mean, quietly, the 10-year JGB yield is just shy of its highest level since 1999. The German Bund yield, the 10 years, just shy of its highest level since 2011. So I still think that those are going to be issues. But I do think we also revert back to maybe a weaker dollar, which can benefit international markets, which certainly had a great year last year after 15 years of underperformance, had a good January, February until the pullback, but they've come roaring back too, along with the S&P.
Speaker 3:
[37:59] So, Kerry, we had a couple of Iraq wars we had. We've had so many mirror images of what we've seen this time around. They didn't always have oil as a wild card with the straight clothes. Should this be like the other ones, where we shouldn't be surprised that we got a V-bottom?
Speaker 5:
[38:19] It was worse then when we didn't have, because we weren't self-sufficient, right?
Speaker 3:
[38:23] That's a big part of it, isn't it?
Speaker 5:
[38:24] That's a big part. I remember being very bearish when 41 went on the offensive in Kuwait, and that was the bottom. That day was the bottom. And I remember thinking, oh, this is terrible.
Speaker 3:
[38:36] Right.
Speaker 5:
[38:37] But, yeah.
Speaker 3:
[38:37] And this time, we knew that, and everybody said, you know, usually you look through the geopolitical, but no one really believed it. But it happened again. How did it happen again, though? It happened again.
Speaker 5:
[38:48] We never learned.
Speaker 3:
[38:49] But is it justified to happen again this time, or could it be a terrible trap?
Speaker 5:
[38:56] I guess it could be a terrible trap, but I really believe that you would know this way better than I.
Speaker 3:
[39:01] Peter thinks it's a terrible trap.
Speaker 5:
[39:03] But I think that Trump has really, really not a lot of patience for this hurting the market. He'll do whatever it takes to resolve it, for the market to get back on its footing.
Speaker 3:
[39:17] You can tell a lot of times by what he's responding to, how he's thinking, and he's saying, I don't need to do anything right now. They're the ones that are getting squeezed. We're fine. They don't have any revenue. They can't last. So I'm patient. But when he says that, I think he's-
Speaker 5:
[39:30] Well, he's under the clock of the midterms as well.
Speaker 3:
[39:32] Yeah, he is. The American stomach for a protracted war, which we had a few of those.
Speaker 5:
[39:40] So you're the whisperer.
Speaker 3:
[39:41] What would you say to him? I think you should accomplish what- In 47 years, is this not the best time to try to really do something? In the midterms, I don't know, what are you going to do about those anyway at this point? I do what you need to do. That's what presidents are supposed to do, aren't they? I guess so. All right. Dan, I promised we wouldn't talk, that I wouldn't say the T word and it just came out. I think it was your fault that the T word is Trump. Yeah.
Speaker 8:
[40:13] Oh. Yeah.
Speaker 3:
[40:15] He's winking.
Speaker 8:
[40:15] I thought it was TPUs. I thought you meant TPUs and we already did that in the A block.
Speaker 3:
[40:21] We're not going to do this. We're not a political show. This is federal, you're not.
Speaker 4:
[40:24] We're Fast Money.
Speaker 3:
[40:24] No, CNBC is not a political network. Far be it from me. Thanks, Peter. Coming up, we're at Chartmaster. Carter Wirth sees the health care sector heading. Next, we're going to dig into the technicals with Fast Money Returns. We've got another news alert out of Washington. President Trump making some comments on a soldier that's been arrested for bedding on Maduro's removal. Let's get back to Eamon for that. Hey, Eamon.
Speaker 12:
[40:57] Hey there, Joe, that's right. The president was asked about this ABC News report that crossed us a couple of moments ago. The ABC report says that a special forces soldier was arrested by law enforcement earlier today and accused of making $400,000 in profit in prediction markets, betting on the removal of Maduro. This soldier allegedly participated in the Maduro raid and so obviously would have had insider knowledge of that. The president was asked about that report. He said he doesn't know anything about that particular arrest, but he said in his view the whole world has become a casino. He asked whether the soldier bet that Maduro would or would not be removed. And then he said that this is like Pete Rose betting on his own baseball team. He appeared to suggest that this was a corrupt act, but he said he was not aware of this particular soldier and the accusations against him, Joe.
Speaker 3:
[41:51] Yeah. Now you're making it personal, Eamon, talking about Rose. Rose betting on the Reds was one thing. It was betting against the Reds that would have really been bad. And I don't know whether that actually happened or not. Should he be in the HOF or not, Eamon? We got to go.
Speaker 12:
[42:09] If it's me, no, and I rooted for him when he was with the Phillies.
Speaker 4:
[42:14] I'm on Eamon's team on this one.
Speaker 3:
[42:15] Forty two hundred hits.
Speaker 4:
[42:17] Put me in, coach.
Speaker 3:
[42:18] How many guys had heads the size of pumpkins after the Roy?
Speaker 4:
[42:22] Are there any standards? I mean, what about Barry Bonds? Where are we going with this? I mean.
Speaker 15:
[42:26] I don't know.
Speaker 3:
[42:27] Twenty seasons of 200 plus hits every year.
Speaker 4:
[42:29] I'm not putting Barry Bonds in the hall either.
Speaker 12:
[42:32] I think you wiped out the whole sterile area too.
Speaker 4:
[42:35] I'm not saying anything, but whatever might have been going on.
Speaker 3:
[42:38] We have Pete Roseway in Cincinnati.
Speaker 4:
[42:40] I love Pete.
Speaker 3:
[42:41] But just know Hall of Fame.
Speaker 4:
[42:42] Yeah. Big Red Machine was as good as it got. Think about it.
Speaker 3:
[42:46] Think about it. Think about it. You want me to go through?
Speaker 4:
[42:48] Griffey, Dreeson.
Speaker 3:
[42:50] Joe Morgan. Come on.
Speaker 4:
[42:52] Ben. Sean Gullett.
Speaker 9:
[42:53] Perez.
Speaker 4:
[42:55] All right. You win.
Speaker 9:
[42:58] We got to go to Carter.
Speaker 3:
[42:59] Not Gary. Meantime, healthcare is the worst performing sector this year, down almost 6 percent. And the Chartmaster thinks it might be analing for some time. Carter, what do you see?
Speaker 7:
[43:09] Yeah. Restart as I'm kind of with you. On the body of work, hall of fame for me. But anyway, here we go. Not me, Mr. Rose. Here we go. So here's the chart. What we know is this thing is just meandering and meandering. And basically, the whole thing has gone nowhere. That's the problem. Two years of nothing. Let's clear that and look at the next one and annotate it a couple of different ways. Same chart once again. Is it a double top? It sure looks like that. Let's keep that same annotation. Next iteration. Let's put in the trend line. We are hovering ominously, and you'll see it here coming up. We're hovering ominously right on trend. Next chart if we can get it. And you'll see that the risk is we're going to break trend right here. Let's keep that same trend line in effect since the lows of tariff. Iteration number three. Take a look. Not only is it a double top on the longer term chart, but you'll see here we have something of a head and shoulders. These formations are very real and time tested. And so let's also look at relative performance. Let's look at a two panel and with that. This same set up on top, let's clear. Most importantly, sideways for two years. So what does that mean? Relative performance down and down and down and down. In fact, today, the healthcare is making 10 year relative lows, the S&P. Wow. No premise to be long. All right.
Speaker 3:
[44:28] Thank you, Carter. Karen.
Speaker 5:
[44:30] I am long. Well, the healthcare, that's broader. I'm long Lily. I'm long Novo. I'm long Merck. Tim and I share Pfizer.
Speaker 4:
[44:39] We share some Pfizer love.
Speaker 5:
[44:41] Yes.
Speaker 4:
[44:42] Yes.
Speaker 5:
[44:42] Really?
Speaker 3:
[44:43] Pfizer. They need a weight loss drug, I think, don't they? Meanwhile, shares of Comcast seeing their best day in nearly three years after beating top and bottom line estimates for the first quarter. The former parent of CNBC saying that its streaming service Peacock is approaching profitability for the first time in the current quarter now. Dan?
Speaker 8:
[45:04] Yeah. Media has been a tough place, right? So we had that M&A or that actually, I mean, it went on and on and on. We're seeing spinoffs and I would expect to see as some of the degradation in some of those sub-numbers as we're like, I just can't imagine if Peacock is starting to make money that you're not going to see additional cord cutting. So to me, I think it's a tough place to be. But like you said, that version, that's actually made up a lot of ground. I know you bought it towards the lows here and it looks like. I bought it. I admitted it. Yeah. No, I mean, it actually.
Speaker 3:
[45:33] Did you buy under 30?
Speaker 5:
[45:35] I bought a 41 all the way down to 34.
Speaker 3:
[45:37] You did.
Speaker 8:
[45:37] Yeah, but it trades very well and it seems like.
Speaker 4:
[45:39] It's the only thing I can do.
Speaker 8:
[45:40] Again, we're talking to an audience of one here, a little bit, but it seems like there's some interesting stuff going on there.
Speaker 4:
[45:45] You're like Pete Rose betting on his own team.
Speaker 3:
[45:49] Don't CEOs, when they come in, don't they take a stake?
Speaker 4:
[45:52] No.
Speaker 3:
[45:53] I know I'm going to work hard for Verso, so why shouldn't I be in over?
Speaker 5:
[45:57] Was the president saying he was betting on himself that he was going to get Maduro, this soldier? Is that what he was saying? I'm saying if he knew the game was on, that that was the part that.
Speaker 4:
[46:06] Oh, okay.
Speaker 3:
[46:07] Now, I'll tell you about Comcast, the thing that was most unbelievable. You guys haven't lived and died with every quarter of Comcast either because that was our parent for so long. They finally had broadband ads. You know when the last time they had ads? That ads?
Speaker 8:
[46:23] Thirteen years ago.
Speaker 3:
[46:24] No, almost. I think 2020 in the fourth quarter of 2020 or 21. So that was a big switch. I think that's why it was up. Meantime, Julie would know this. Netflix lost the bidding war for Warner Brothers in February. But could the streamer be looking for another deal now? CNBC's Julia Borstin has the details. Hey, Julia.
Speaker 13:
[46:46] Hey, Jeff. Well, Netflix today making its first big move in the wake of losing that Warner Brothers deal, announcing a new $25 billion share buyback program. This is in addition to $6.8 billion remaining from a previous share buyback authorization. With $2.8 billion in a breakup fee from that Warner Brothers deal, Netflix isn't just using its cash to bolster its stock, but it also said it has built its M&A muscle. Netflix has said the company will be disciplined and opportunistic around deals, and given the limited big assets up for grabs, its next deals are likely to be smaller companies that accelerate key priorities, including growing its ad business and also competing with YouTube for younger viewers. Now, there are a couple types of deals to watch out for. One is rights to sports events. Like the NFL's five-game package that Netflix is currently in talks for, shows around YouTube creators like Netflix's Mark Rober show to help lure younger audiences, ad tech companies to help with Netflix building its own ad stack, and more AI visual effects companies like Inner Positive, which is Ben Affleck's AI company that Netflix bought just last month. So Joe, it will be an interesting period to watch without those big things up for play.
Speaker 3:
[48:03] Right. Okay. Thank you, Julia. Speaking of gamblers, Ben Affleck. Anyway, Karen, what do you think?
Speaker 5:
[48:12] What do I think? I'm long Netflix. It's not cheap. I think that would have been a very big deal for them, Warner Brothers, and somewhat trajectory changing. So I like it here. I'm staying with it. I hope these are just fill ins that like the visual effects which I think could help them on expenses a lot.
Speaker 3:
[48:32] Okay, we're going to come back in a second with some final trades. Final Trade Time, Tim.
Speaker 4:
[48:50] Joe, George Foster, Davy Concepcion, and other members of the Big Machine.
Speaker 3:
[48:53] Cesar, Geronimo.
Speaker 4:
[48:54] They're Cesar. Don't buy the IGV.
Speaker 3:
[48:58] Okay.
Speaker 5:
[48:59] In the Don't Buy theme, you're right, I like it, but wait, you'll have a better chance, and thank you, Joe, for being here.
Speaker 3:
[49:05] Thank you for having me and putting up the dance.
Speaker 8:
[49:07] Yeah. Don't buy Intel here. I said that two days ago, but I would not buy it.
Speaker 3:
[49:11] And Carter.
Speaker 7:
[49:12] Healthcare, don't buy XLV.
Speaker 3:
[49:14] Oh my God, I've got five seconds. What was I going to think of? Tommy Helms?
Speaker 14:
[49:18] Oh no, that's before that.
Speaker 3:
[49:19] Man, he starts out.
Speaker 14:
[49:20] 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 that 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.
Speaker 1:
[49:52] This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key results and statistics that may impact your trading. Download the latest episode and subscribe at schwab.com/marketupdatepodcast or find Schwab Market Update wherever you get your podcasts.