A Special Edition Of Fast Money… And Stocks Turn Lower On Trump, Musk Feud 6/5/25

22:44Can we just talk about Tesla itself for one second? Okay, so Tesla is right around where it was the day after the election, which makes sense. A lot's happened, though. I think this is a way worse scenario, right, I think, for Tesla. because when he was elected, we were all, you know, clearly Musk and Trump. There was no daylight between them at all. Right. They were fast friends. And so he had every reason to hope that everything would go his way, Tesla's way. You can imagine now that scenario not playing out in a bigger way at a time when the value of Tesla is so much about robo taxis, so much about full self-driving and robots.

23:22I don't leave that aside for a minute. you can't help but feel like that is damaged, at least in the near term. Remember what Adam Jonas and Morgan Stanley said about Tesla, the$1.1 trillion market cap. Most of it is based on businesses that basically don't exist right now. They're not commercial businesses. And to that extent, yes, Tesla's in a much worse position because who has a target now on his back? Elon Musk does. The contracts are going to be gone. The credits are going to be gone. Which would happen anyway. The contracts in terms of, you know, Starlink, et cetera, those will be gone in theory if this really plays out the way Trump says it's going to play out.

24:00So one of the fine shows, I think it was on Power Lunch, one of the analysts,$120 price target was talking about some of the things you're talking about. And I know on this show we talked about this recent move to 360 was a textbook 50 percent retracement of the all time high in those 220 lows. But now, given this news, I'm sort of with Karen. It's not ridiculous to think we're not going to visit that 220 level. All right, we've got to get to Broadcom right now. Shares at after-hours session lows, despite a revenue and earnings beat. Kate Rooney's got the numbers. Kate. Hey, Mel. So expectations were pretty high for Broadcom heading into this print.

24:33That is part of the stock drop we saw after hours. It did pare back some of those losses. But by most measures, if you look at the chipmaker and the fiscal second quarter, it did outperform, at least for the quarterly numbers. It was driven by strong AI demand CEO, Hawkton, just saying on the earnings call that momentum in the quarter. He called it robust demand for AI networking. Broadcom, of course, is a key player in this whole AI hardware ecosystem. Chan said the momentum is expected to continue into future quarters. He expects growth in AI semiconductor revenue to accelerate to$5.1 billion in Q3.

25:07That comes as their hyperscaler partners continue to invest, as he put it. EPS revenue topped expectations. Same with Q3 revenue guidance. That was roughly in line at$15.8 billion. Semiconductor and infrastructure revenue also topped expectations. Mel, back over to you. Kate, thanks. Kate Rooney. Just to put the decline after hours in context, record high close. So we started off very high on Broadcom going into the print. Yeah, up nearly 9%, right, since the April lows. And, you know, I think it's important to remember 90. 90. I thought you said 90. And that's how we got back to the fateful eight, people, right?

25:42I know you You guys have been dogged with this MAG7. But, you know, it's over a trillion dollars in market cap right now. The one thing I have to say is, like, here's a company that's growing earnings and sales high teens. OK, high teens. And it's trading at, like, I don't know, 39 times or 20 times sales, that sort of thing. So I'm not sure the valuation is commensurate with the story that Haktan is telling. He's already given us massive targets about what custom silicon could be out to 2027. That's why the stock in December rallied 40 percent in two days. So I just think it's important to remember that this stock got cut in half from its December highs to its April lows.

26:15You could say, well, it's important to remember the stock just doubled from there. This is when things get a lot harder for investors when you're trying to process what is in the stock right here. I think a lot is in the stock right here. All right. We've got to take a quick break right now. Guy has somewhere to go. I'm getting up now. I'm getting up and I'm moving. He's going to go check in with our fans to get their trader questions with the folks from D.C., Texas, Arkansas, Georgia, even Australia. Say hello, Australia. what they want to know about the markets, that is next. Also ahead, former J.P.

26:43Morgan chief market strategist Marco Kalanavik is here, and he's got a stark warning for where markets are headed next. That and much more on our very special edition of Fast Money, back in two.

27:13Welcome back to this special special live event. Guys on the ground with our fans. We've got some burning questions. So, Guy, who do you have? I am here. It's hard to hear. I'm here with Natasha. Natasha, stand up, please. In from Australia. Is that correct? Yes. Yeah, I flew here. It took about 18 hours. And it's great to be here. Well, we're thrilled that you're here. And we've all been talking about it since we found out. So, thank you. But you have a question. Yes, I'm just wondering whether you think the worst correction has taken place so far for the year. That's a fair question. I'm going to throw that to Dan Nathan in terms of correction, where we are now and for the rest of the year, Dan.

27:50Well, you know, Guy, we've been talking about this. It seems like billionaire hedge fund investor after billionaire hedge fund investor have suggested we're going to go back and test those prior lows from April. When you think about this, you know, you think about the potential for a recession. Elon Musk, also a billionaire, he's suggesting that there's a good chance that we have a recession in the back half of the year. The thing about the stock market, it kind of sniffs it out one way or another. And we're not there just yet. We're within, I don't know, striking distance of the prior all-time high.

28:16So I think you can probably take cues from the market a little bit, see where the leadership is going right now. It seems like there's a lot of groups that have been acting pretty well away from big cap tech. If you start to see them weaken, that might be pricing in a recession. That said, if we do have a recession, if you do have a retest of that 4850 in the S &P 500, It probably makes a lot of sense to start thinking long term and start dollar cost averaging into what might be another bull run for the market in the years ahead. Karen's in from Washington, D.C., one of my favorite cities in the country.

28:45Thanks for joining us. Thanks for having me here. You got a question, please. I do have a question. I wanted to find out about Nike. Should I invest more or should I fail? I'm going to throw that to Tim Seymour. He's the Nike expert on the panel. Tim Seymour, Nike. Well, let's just do it here, Karen. Thanks for coming. First of all, it's great having everybody here. And it's interesting. We're going to talk about Lululemon later on in this show, down 20 % at last look. The impact for Nike, you could make an argument. It's not just a Lulu story. It could be discretionary. It could be at leisure.

29:15Nike down about 3 % after hours. I love Nike here. So let's just be clear. I think there is some discretionary spend. There's some concern. I think the concern about the competitive landscape overdone. I think if you saw some of that share loss by Hoka, I think, Guy, you have Hoka's on right now. Decker said, yeah, they had poor numbers. Nike's revalued a lot. I think you've priced in a lot of negativity, and I think this company is getting ready for a multi-year expansion. All right. Before I go to Christopher, I'm going to call BS on that. And everybody in here, you can see I'm actually wearing shoes.

29:43So everybody, give Guy Adami a round of applause for not wearing helpers. Exactly. Exactly. Chris is in from the great state of Texas. Chris. Yeah, tiny little dot there on your map. And I just want to first, you know, being that we're each former football players, I think you probably must have been a DB, obviously offensive line for myself. I did read something about the 104 yard intercept. That's a long time ago, Chris. That's a long time ago. Come on, come on. But here. But basically what I want to know is I've been a long term holder of a Home Depot, solid dividend, you know, just like a good family member.

30:22But what I'm wondering is, do I stick with it or do I move on to something, maybe a faster grower like Costco? I think that's a great question. I know who's well suited to answer that. The great Karen Feynman. Home Depot, Karen. So I'm long Home Depot. I have not been long Costco. I always found that to be too expensive. And that was the wrong move. Home Depot, I think, is a great company. We want rates to be lower. You know, it was an interesting story we did yesterday about how much home equity lines people are taking out of their homes. And I think a lot of that will be going to Home Depot.

30:54So stay in long there. Sabrina's here from the great state of Arkansas, some of the best bike riding in the country. Is that true? That is very true. Best in the world. In the world. That's high praise. But you have a question. Yes, I wanted to get your thoughts on CoreWeave since their IPO in March 2025. Well, that's clearly going to the great Dan Nathan. CoreWeave, Dan Nathan, what do you think? Nothing great about the call that I've had on this thing. I still don't think it's a great fundamental story. I think there's a really strong chance that in the next year or so we see overcapacity. I think some of their biggest customers, 70 percent is Microsoft of this one company's revenue base.

31:30I think some of that starts to go away. So I'm not a buyer here, but it's clearly turned into a meme stock. Yeah. You've been watching this, too, Karen, because the short interest is crazy. So what's happening in the narrative, you know, narrative about AI and all of that data centers has nothing to do what's happening with the stock right now. It is a short squeeze. I follow every day. I asked Goldman Sachs, how much does it cost to borrow? Today, it's down to 100%. So that means literally down to 100 % from 200. So if you borrowed it, that's a price for a year. You'd have to pay 100 % on the borrow.

32:01So you are allowed to be shorted. And if the stock went to zero, you would be flat on the trade. So there's a short squeeze here. This is not what's happening in the underlying business. All right. By the way, we'll have many more questions from our fans later on in the show. But first, time to get bearish. Stocks just a whisper away from record highs. But former J.P. Morgan chief market strategist, Marco Kolonovic, says the good times will not last. Why he is predicting a pullback when fast money returns. Stay tuned.

32:41Welcome back to Fast Money. Stocks closing lower as investors digested the president's escalating feud with Tesla CEO Elon Musk. The Dow falling more than 100 points. The S &P down to more than half a percent. And the Nasdaq leading the losses down eight-tenths of a percent. Stablecoin issuer Circle Internet Group making a splash, a big one, in the market debut today. Surging as much as 235 percent, closing nearly 170 percent higher. The stock price set its IPO at$31. And shares of Whiskey Maker Brown form and plunging nearly 18 percent after results this morning. The company missing estimates on the top and the bottom line, setting tariffs and weak spending on alcohol.

33:18Well, the man who is known for moving markets is on Correction Watch. Marko Kalonovic joins us now for his first TV interview since leaving J.P. Morgan last summer. He was a firm's chief market strategist, co-head of global market research. He joins us here on set. Marko, it is great to see you. Thank you. Great to be here. You're looking for a garden variety pullback. Does anything change based on what has unfolded this afternoon? I mean, a little bit, you know, because we got close to all-time highs. I believe Nasdaq was 1.5%. And then you had the sort of Tesla, you had Palantir, you had a bunch of these momentum stocks taking quite a bit of beatings.

33:49So it does remind me on what happened in February 19, if you remember. That was when the sort of Palantir went down and then momentum stock unraveled. So I do think that that could be a catalyst for a bit of a correction because close to all-time highs, but we still have all the problems. We have a trade war. We had sort of signs of economic slowdown. You know, valuations are back to high. So, you know, that's sort of what I'm kind of expecting, a little bit of a pullback here. Does that negative political backdrop, has it gotten worse based on what we've seen this afternoon between President Trump and Elon Musk?

34:24Or is that a sideshow? I think it's a little bit of a sideshow. It's important for a certain company, and it can spill over. Because if you look at it, Tesla is one of the biggest holding of retail investors. They were like kind of a little ecosystem of stocks around it. So I think it could be a little bit of a catalyst, although I think much bigger problems are sort of what we saw, for instance, last three days with ADP, with initial claims, with challenging job cuts. I think that's like a real problem. And the fact that we have this trade war, which almost nothing is resolved yet, right? Marco, a lot of folks want to focus on corporate earnings and really growth, right, as they think about the stock market and potential gains.

34:59But one thing that's really important, if you go back to, let's call it early April, we didn't have a lot of clarity. You know, we had a careening stock market and we had the U.S. dollar, you know, well below, you know, below 100. It got down to like, I don't know, 98 or something. That's a U.S. dollar index. And we also had 10-year yields, which were much lower. Now they're much higher, 4.4%. How important is that disconnect, in your opinion, as you think about the macro situation here? Because you have a stock market that's very close back to its prior highs, but you have the 10-year yield and you have the dollar trading near where they were when the stock market was much lower.

35:29So there is disconnect between dollar and 10-year, right? And 10-year, I think, is a problem, right? Because it sort of drives a lot of different things, real estate, commercial real estate, mortgages, all kinds of things, right? Also, you need to compare equity risk premia and bond risk premia. What are you earning on equities? What are you getting from bonds? So bonds are cheaper than equities. Equities are expensive. So I do think that's a sort of a negative thing. There is a bit of also this standoff between Fed and the president, right? You know, so everywhere else in the world rates are being cut.

36:01Here they are not. You know, eventually there has to impact negatively risky asset classes here. You know, so so bonds sold off a lot of different theories from systematic selling to sort of this like divesting of our trade war sort of counterparts to sort of, you know, inflation risk term risk premium, all kind of different things. You know, like but that's a negative. You know, it's a negative. I do think that bonds are probably oversold at this point. Last two or three days, we are seeing a bit of a rally. I think it's more driven by a weak economic data or signs, hints of weak economic data.

36:35And so I think we could have a bit of a convergence there. So equity is a little bit lower, bonds a little bit higher, just to kind of equalize a little bit these two yields. So a couple of things. First of all, Treasury yields were closed one year ago. The 10-year closed at 439. It closed today at 439. So, I mean, on some level, there's been much to do about nothing. I'd be the first. We've all said there's reasons why we've been concerned about bond yields. And it doesn't sound like you're terribly concerned about a big sell off. I'm trying to qualify. You know, first of all, garden variety means also opportunity.

37:08I'm looking at a market now that also over the last few months has seen real allocation internationally. Any thoughts on that? That's kind of work you guys did at JP Morgan. Look where people are positioned. And again, this U.S. exceptionalism trade is something that got a little a little long in the tooth. Yeah, look, I mean, I was on a Dan's podcast back in November. I said, go buy international stocks. They're cheap relative to U.S. But that has reversed a lot. I mean, look at the sort of DAX. Like, DAX is straight line up, like, to the kind of all-time highs, you know, situation there in Europe.

37:36There is a trade war. They do depend on exports a lot, right? So I'm not so, you know, sold that now is the time to go in that trade. I think that that sort of passed, you know. So with some of these, many of these international instances, literally at all-time highs in the face of trade war, global slowdown, you know, valuations that are reset higher, I'm not sure that's the time now. So I would probably stay away from that. I mean, if you were in that trade, great. I probably even didn't expect it was going to go this far, right? You know, but Europe had some sort of, you know, measures to stimulate.

38:11And so there's some optimism there. I'm skeptical about it. So I wouldn't, I think, probably wait it out a little bit in bonds. There are some cheap aspects of U.S. markets as well, and maybe wait for that, call it garden variety sell-off, that can be maybe 5%, 10%. And if we still don't have the recession probability shooting up, then it's a buy opportunity. But I would keep an open mind that maybe at that point, there is increased probability of recession, and maybe even that 5 % is not a buy at that point. Marco, thank you. Good to see you, Marco Polanovic. Thank you. Coming up, Guy, we're going to send you back.

38:49Get up. Get up. Get up. Come on. You got work to do. Get out of here. I got work to do. We got questions on crypto, gold, cyber stocks, opportunities overseas. That's all next. Plus, Lululemon results are out. Shares are falling on the report. Details and numbers from the quarter when this special Fast Money Live returns.

39:14Welcome back to Fast Money, guys. Where else? Back with the fans with more questions. Guy. I'm here. I'm here with Lance from the great state of Kansas. How are you, Lance? And you have a question. I do have a question. Two things keep me up at night in the heart of America every day. and it's Moody's downgrade of U.S. credit and the increasing debt to GDP ratio. So my question is, does that affect your allocation of U.S. equities? And would you consider using international equities as a hedge against that? Well, that goes right to the ambassador. That Moody's downgrade happened on a Friday. We call that a Friday night dirty.

39:52But Tim Seymour, I know you have the answer to this question. Well, Lance, first of all, we do love your part of the country, too. And I'll tell you what, I think you have an argument for international allocation. I know Marco said something otherwise, but I think if you look at the allocation overweight by foreign investors to the U.S., we're starting to see some of that unwind. I think valuation is still attractive, higher divs. So, yes, Lance, we love USA. We also love international. Jerry's here from Hawaii. We had somebody from Hawaii last show. Jerry came all the way from Hawaii for this show, which is amazing.

40:20We're humbled by that. Jerry, what's your question? Well, first of all, aloha from Hawaii. Thank you. And a quick question I have is I'd like the panel's recommendation on initiating a small position in Bitcoin. That's a Karen Feynman. I mean, Karen, Kay Feyn's been on Bitcoin since Brian Kelly wrote the book in 2014. Karen, what do you got? So if you have no exposure to Bitcoin, then I would say, yes, you get started here. The I bid is an easy way to do it. It's you know, there's a little bit of expenses, but it's clean and easy. That's what I would do. It doesn't matter where it's been before or after.

40:54This administration is very, very pro-cryptive. Dan is here from Denton, Texas, one of the great high school football cities in the country. Is that correct? Yes. Go Ryan Raiders. Go Ryan Raiders, if you're watching. So what's your question? Okay. So I want to get the trader's take on Siemens. That would be Tim Seymour again, sort of an international flair, the General Electric sort of overseas. Tim, what do you got? Love to be in the spotlight. Love to mess with Texas. Miga, right. Make international great again. We joke. But there has been that argument. So part of the whole story in Germany, the great historic kind of moment, I would say about three and a half months ago, was Germany decided they who have the best kind of fiscal austerity would start deficit spending, rearm Europe, rearm Germany.

41:41Siemens benefits directly 20 times forward, not expensive. It's had a great run. I am long in my ETF. Mark is here, and if I'm not mistaken, yep, New York. I mean, upstate New York. Is that correct? Yeah, shout out to Melissa Lee, Buffalo. She's New York not far away. Oh, please. Don't pander to Melissa Lee. What's your question? A question about aerospace. There's been some great performance out of the big caps, Boeing, Raytheon, also small caps. Do you guys have an opinion about the best next place to go? I know Karen thinks about Boeing, and I'll let her take that one. I'll say real quick, Raytheon is now RTX.

42:14I think it made an all-time high today. You juxtapose that with Lockheed Martin. It's been an amazing performer. But, Karen, Boeing. Yeah, so I think you, Tim, and I have all been on Boeing. We all like it. Dan, I don't know. He doesn't like things sometimes. So we still like it. I think this turnaround story is very early, and we are going to start to see cash flow, and that's what's been missing at Boeing. I love K-Fine. I love you, too, Dan. Who doesn't? That's nice. Coming up, more after hours action. shares of Lululemon dropping hard after reporting results of details and numbers from the quarter when this special edition of Fast Money returns.

43:03Welcome back to Fast Money, another earnings alert on Lululemon shares losing more than a fifth of their value even after a top and bottom line beat the athleisure company posting disappointing same-store sales, reducing full-year earnings guidance. At these levels, the shares have erased about six weeks of gains. What a decline, Karen. Yes, quite a decline. I mean, they did. I don't know why anyone provides guidance, because particularly if you're importing like they are so much of their stuff from China, who knows? So they put out guidance was a little bit light. I am surprised how much the market's reaction to it was down 20, I don't know where it is right now, 22, 23 percent.

43:40The guidance was only a couple of a percent miss. So I don't know. I think it's an overreaction, but you don't need to jump. Yeah, it's a really hard time for investors. You know, you're trying to parse out what's going on with the consumer, what's going on, how companies are operating, and then how are they dealing within this trade war? You know, and so that's one of the things I think we're going to continue to hear. I disagree with Karen on the guidance thing. I think incrementally, any sort of piece of news that you can get, especially in a period like this, I think it's helpful for investors.

44:06So this is the sort of thing. You love the story. It's a lot cheaper now. You feel like they're going to have some sort of, I don't know, they're going to get things better on their own execution or the trade war is going to take a long-term view. And this is a great name. So you probably think about, what, three days? Is that what you do, Karen? Three-day rule. Okay. You got a Lulu shirt on, Tim. I do have a Lulu shirt on. So the fashion's nice, but the stock's not. Is it? So maybe we have a case where, look, I just remember this was a$500 stock not that long ago. All we did was talk about the competitive landscape.

44:33All we did was talk about peak margin. I think there's something to not jump into tomorrow. All right. Up next, final trades.

44:47I'm Flew on this show. Final trade time, Tim. I'll tell you what. We have the best audience, the best fans in financial TV and any TV guy. How great was tonight? Did everybody have a good time tonight? We still have some drinks going. This is amazing. Real quick, my final trade, Asa Lawson from the Page Program, his last night. Asa, thanks for everything you've done for us. I appreciate it. Best money. We love our fans. Southern Copper. Copper's going higher, all-time high. Stay there. Karen. Lulu, I agree with Dan, though. Wait. Wait. Dan. Yeah, Broadcom. In a market of disconnects, this is really surprising to me that this stock is not trading lower.

45:25Huge expectations. The numbers were good. The guidance was fine. But I don't know why this thing is knocked down a bit more. I would not be buying it here. Thank you all for watching, especially our live fans, the ones who are here at the NASDAQ market site tonight. We'll see you shortly. See you back here tomorrow for more Fast. Mad Money starts right now. All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet, or another medium.

45:57You 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 forward slash Fast Money disclaimer.