AI buildout financing in focus... And stretching into Lululemon results 9/3/26

22:16Brandon Gomez, thank you very much. Tim, coming over to you.

22:20Seth Meyer:Well, remember, Lulu went into this downturn at peak margin, and that's part of the problem. It may appear cheap. It may appear cheap on multiple, but we still don't really know where the margins are going. The fact is, when you're cutting back on marketing in a world where it's so fiercely competitive, it's not waving the white flag, but it's certainly not looking to compete. And I just think that when you look at the landscape and you look at the macro, I mean, they complained about the macro in China on the tape here. They complained about where North America and some of these installations haven't worked out.

22:52Seth Meyer:It's hard to see what really is working. So what is probably working best for the stock is the P.E. is somewhere low teens. And that's something that's pretty extraordinary. I'm just not sure it's time to buy. And this move in the after hours tells you it's definitely not. Well, by the way, look at the P.E. It's actually sub 10. It's about 9.3 right now. Dan, I know you switched over to Aloe and Viore. You stopped wearing Lulu. What do you make of the quarter? I was also looking at the numbers. Inventory, pretty much flat year over year. It seems like they have a lot of this inventory that people don't want.

23:22Very similar to Nike. Well, that's the thing. I mean, these guys can speak to it far better. I mean, it seems like we've seen this again and again, right? And, you know, we had an instance with Adidas last month. It just seems like athleisure is in an odd spot. Certainly footwear is. And just, you know, I don't look at women walking down the sidewalk and what they're wearing. But I see far less Lulu, I think. That's just purely anecdotal, you know what I mean? And I see a lot more Aloe and Viore. Hey, Karen. Hey. So, hi to you, Neil. Well, we have finishing her garden leave from Nike, which is, you know, I don't know.

23:58I guess she could have left any whatever. Anyway, but this is a gift to her, actually, to not have this be on her. We always you know, I always think if you're the new CEO, you come in, you kitchen sink that first quarter. Why not lower the bar as much as you can? I mean, this has been a I'm sure there's all kind of downward dog jokes about this spiral, but it's difficult. At some point, it will bottom out. But honestly, I would have thought that at least$25 ago or more. So I would wait and watch and probably own it higher when things are better, significantly higher when things are better than hope to buy it here.

24:36And I also think, I don't know where it is in the after hours, but if it's going towards$100, I think it'll go below$100. Yeah,$101 right now. We actually had this conversation before about some competition in athleisure guy. Like people talking about, in all seriousness, aloe and Viore. What's your take on just the competitive position that Lululemon's in as a consumer has like a lot of choices. They're choiceful, a lot of CEOs say. You saw Goodfellas, 1990? I did. Remember the end of the movie Ray Liotta? It's in the courtroom. He said, now's the bad part. Remember that scene? Well, now's the bad part.

25:06And why do I bring it up? Because when things are going, when you create your own vertical, which Lululemon did, you have no competition. Margins are ridiculous and growth is there. Then competition comes in. And as Tim just said, look at peak margins and look at where the stock was. It's been down ever since. So they're a victim of their own success. And I don't think it's a valuation story at this point. It'll bottom out, but it hasn't come close to bottoming out yet, in my opinion. Yeah, by the way, tariff refunds also increased gross margin by 560 basis points. So let's put that all in perspective.

25:36All right, there's a lot more to come here on FAST. Here's what's coming up next.

25:41Seth Meyer:Tesla revving up as it gets ready for tonight's CyberCab event. What to expect from the EV giant and the impact it could have on the robo-taxi race. Plus, Japan's currency conundrum. The yen's sudden spike reigniting intervention talk. The potential ripple effect it could have on global markets. You're watching Fast Money, live from the NASDAQ market site in Times Square. We're back right after this.

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27:54Welcome back to Fast Money. Shares of Tesla jumped more than 5 % today. It's now fully recouped losses since July's earnings report. The gains come ahead of Tesla's much-anticipated cyber cap event in Austin tonight, where the company is expected to unveil new details about its robo-taxi. Here to break down what we might hear is our Phil LeBeau. Phil. You know, Frank, we're waiting to find out exactly what we will hear definitively from Tesla tonight. There are some reports from analysts and others who are speculating on some of the things that they would like to hear from Tesla tonight. There will be rides for influencers and others who have been invited to Austin for this event.

28:34And that's expected to begin in the next hour. Among the things that Wall Street will be focusing on with regards to this event and what we might hear from Tesla, first of all, this is an invitation-only launch. And at some point, the question becomes, when do we see retail rides begin? Will they make that announcement tonight? And by retail rides, I mean you or I just fly into Austin. Hey, I want to get a ride in a cyber cab and I can do it. Right now, that's not the case. When does that officially change? And then finally, when will we get more definitive numbers, definitive numbers regarding deployments as well as timeframes when we might hear about some of this?

29:12Morgan Stanley analyst Andrew Porcoco out with a note basically saying this is what you can expect in terms of the stock reaction. If Tesla successfully launches 25 to 50 cyber crabs, cyber cabs, excuse me, across Texas in the days and weeks following the launch event, we expect the stock to react favorably. There is also the possibility that you get Elon Musk saying, hey, it's going to be great. It's going to roll out. Be patient and it'll happen. And if that's the case, you may not get the same reaction. Quickly, I want to take a look at Tesla annual deliveries. They did better than expected in the second quarter.

29:49Will that continue? In the first half of this year, they delivered more than 838 ,000 vehicles. And many believe that at the rate they're going, they should be able to eclipse the delivery total from last year. As you take a look at shares of Tesla going back to July 28th. Remember back then? That's when the stock was down almost$100 from where it is right now. It's been a heck of a run over the last little over 30 days for Tesla shares as they continue to move higher, up another 5.4 percent today. So, again, Frank, we're waiting for official details and nuggets of news from Elon Musk at this event tonight.

30:27All right, Phil LeBeau with the very latest. Dan, coming over to you. Yeah, you know, this is, I think, the way Phil laid it out. I mean, we've gotten really accustomed to how Elon kind of rolls these sorts of products out. I mean, this one's really quizzical in a way, like a cyber cab with like two passengers. It just seems kind of odd. And, you know, we don't have the data from Waymo about how many rides have more than two passengers. It just seemed fairly limiting. But this is the sort of thing we're talking about dozens of cars being rolled out. And this is really imperative to the future of this company.

30:56And if you look at Alphabet and if we're playing Would You Rather and you want to kind of look at what Waymo means to them, it doesn't really mean a whole heck of a lot right now for their future. whereas obviously what I just said with Tesla is a very different thing. So again, this is a pure play almost on robotics and CyberCab, but I just wouldn't hold your breath for CyberTaxi or CyberCab being a huge part of this company's, at least their financials, anytime soon. Tim.

31:24Seth Meyer:I think it's a play also just on how quickly FSD is going to be employed and that value driver for the sum of the parts on Tesla. So that to me is what this is really proof of concept on. That data is critical. I also just think that Tesla has kind of become a SpaceX play. And if you look at the correlation to that move in Tesla, which Phil outlined has been extraordinary, it's also been, I think, a pretty strong run with SpaceX. So I do think that stories are intertwined, and I do expect them to be more than intertwined somewhere in the future. All right, coming up here on Fast Money, the yen jolt, Japan's currency, surging against the dollar as Intervention Talk builds.

32:04This guy's been one of the guys talking about it inside that move and whether it could spark another broader unwind. Much more on it when Fast Money returns.

32:18Welcome back to Fast Money. Stocks posting back-to-back gains. The Dow adding 600 points, the S &P rising 8%. The Nasdaq and the Nasdaq 100 also rising over 1 % each. The crypto trade in rally mode today. Bitcoin topping the$81 ,000 level, its highest since May the 15th. That move, boosting Coinbase and Robinhood, each rising double digits. Adobe down after hours. The company announcing that CEO Shantanu Narayan will step down from his post to become executive chair effective December 1st. Adobe reports its earnings next Thursday. And speaking of earnings, Zscaler and DocuSign each moving higher after topping earnings and revenue expectations.

32:54Asana shares are dropping on weak current quarter guidance and Samsara surging on better than expected results. By the way, you can catch some SARA CEO tomorrow on Closing Bell Overtime at 4 p.m. Eastern. Meantime, the yen moving sharply higher against the dollar today, trading at its highest level since February. This comes on speculation of additional intervention by the Bank of Japan. For more on the yen and what's next for the markets, FedWatch Advisors founder and CIO Ben Emmons. He joins us right now. Ben, it is always good to see you. Good to see you, Frank. Welcome to the show. So we were just showing the chart just a second ago.

33:27The yen gaining on the dollar is shown the other way. The dollar, I guess, losing against the yen. What level on the yen are you watching right now? What's the potential impact on U.S. markets if we continue to see the yen decline, specifically the Treasury markets? Yeah, I think, Frank, we're right here at this 155 level. I was actually looking at that and then looking back at August of 2024 when we when we were at that level, too. And then we got that so-called yen carry trade unwind that sort of played through the, you know, the Nikkei and other Asian markets. and then came back to our market.

34:00I think this time, Frank, it is indeed by the treasury market because yields were a little bit lower today, but not much against this yen move, which was quite strong. You know, it was like almost down 2 % against the dollar and emerging markets. But it does speak to that people are looking at this Bank of Japan likely to raise rates a little faster against a backdrop of a Fed still uncertain if they will or will not raise rates. So the yen will get more pressure here to the downside, meaning stronger. And yeah, if we break to these key levels, you get a bit of the carry trade unwind. How will play out this time?

34:33Which market? First, we'll see. But it always is a negative for the markets initially. So let's watch it.

34:40Seth Meyer:Hey, Ben, it's Tim. Another part of the carry trade and the dynamic here is also the scuttle that I'm hearing. I'm guessing you're hearing about Japan's government pension fund calling for a meeting, leaning on the powers that be, that it's a time they have to be very cautious. And again, in terms of returns and also, frankly, repatriating some of that pension money back into the Japanese JGB market. Any thoughts on this? Yeah, it's a good point, Tim, because, you know, that is a big deal, actually. You know, GPIF, the biggest pension fund, they're the largest holder of Japanese bonds. But, you know, historically, they were much larger holders.

35:19They hold almost like 45 % of their portfolio in JGBs in the mid-90s. Today, it's 25%. And that meeting was indeed kind of curious why that suddenly happened. It typically doesn't happen. So people are speculating, like, is this fund going to start turning its tanker different direction by starting allocating back to JGBs? And that, too, can, of course, strengthen the yen as they then get out of foreign bonds, maybe out of foreign equities, back into JGBs. So to be watched here, too, it's a slow moving tank, I have to say. But it's something about this market of like they're trying to maneuver their own life insurance companies back into the JGB market, which has been a relentless rise in yields.

36:01Yeah. You've mentioned it, Ben. It was the third quarter, 24 yen intervention. It was a Thursday in July. Then subsequently what happened in August. Bank of Japan raises rates over the course of a couple of months. global markets lost north of$5 trillion and was the highest VIX print since COVID. Again, I'm not saying history is going to repeat itself, but it certainly looks eerily similar to what we saw a couple of years ago. Yeah, I think you're on something, Guy, because this is a kind of a tension point in the markets for this particular trade. You know, what's interesting is that when that carry trade on wine happened, people thought at that time, and I was one of them, that, you know, this was a pretty big unwind.

36:40turned out to be about 250 billion, which is not insignificant. But what it really looked like is that this yen-carrying trade has only got bigger since. You know, the yen has only weakened since. So if you think of this next, whenever unwind this will happen, it could be sharper potentially because of the size of the trade, which Bank of International Settlements sort of estimates around 3-4 trillion outstanding today. So I think we're in an eerie similar episode. But it does come down, I think, to what happens to our interest rates, to what the Fed will do. If they do raise rates, then maybe the fallout for the yen will not be so sharp, meaning stronger yen suddenly.

37:17But let's see how it goes. Ben Emmons, great to see you as always. Thank you very much. Thank you, Frank. Karen. Well, I was surprised actually with him saying the yen carry trade may be bigger now. I would think that having been burned by that trade then that you wouldn't come back into it. Well, that would be really bad if that unwound again. And, you know, could happen, right, Guy? Could happen. I mean, the difference now than two years, a couple of years ago, is the interest rates in Japan and debt levels here in the United States and other places. I mean, so in some ways it might actually make it worse.

37:51I'm not trying to be alarmist, but there's clearly something going on. And this is the Thursday before a long weekend. I can almost guarantee that you're going to hear something over the next 24 hours to give people something to think about over that long weekend. And it wouldn't surprise me to hear something out of Treasury, more maybe Operation Twist or more about this Japanese yen intervention. Are you worried about the idea that if the yen stays weak, again, people could unwind their holding of treasuries, that could raise bond yields just more broadly? Yes. Okay. I mean, that's been a concern for a while.

38:22It hasn't really manifested itself, but, yeah, it's the sort of Damocles that is out there, Frank. I don't even know what Damocles is, but I'm just going to take your word on it. Go to Google, Michelle. All right, coming up, following the AI money, out. New wealth is feeding through to the real estate sector, and the housing market's already seeing some big gains. Fast Money's back right after this.

38:53Welcome back to Fast Money. New money coming from the AI buildout could have a major impact on residential real estate, especially in California. CNBC's Diana Olek joins us with the latest from the Property Play podcast. Diana. Well, Frank, I spoke with the CEO of Coldwell Banker from a 20-plus million dollar home in Beverly Hills. She said we are on the cusp of a big luxury home price gain in California and beyond as all that money comes rolling into real estate. That's an 18 percent increase in prices just year over year in the city of San Francisco. So that's just one year of AI money. And we just had the SpaceX IPO here in Southern California.

39:36And right now we're still in the lockup period, but I anticipate that towards the end of the year, beginning of 2027, when that money becomes liquid, you're going to see the high end in Southern California really start to jump. So$20 million homes like this one are just going to be flying off the market. Flying off the shelves, flying off the shelves. So most SpaceX employees live in the South Bay. We're in Beverly Hills right now in Truesdale Estates. So most folks live in the South Bay. So cities like Manhattan Beach, Palos Verdes, I think you're going to see the high end there really thrive.

40:07But, you know, everybody wants to live in Beverly Hills. So certainly I think some of these communities that are a little bit further away from the South Bay are going to see big gains as well. For more from Lane on how AI is impacting her business and her clients, check out the podcast on YouTube, Apple and Spotify and the link in the Property Play newsletter, CNBC.com forward slash Property Play. Frank. Diana, thank you very much. Our Diana Oleg. Tim, coming over to you.

40:36Seth Meyer:Well, the residential real estate plays, and we've seen this in some of the REITs, especially those in these affluent areas, have continued to be very steady despite shocks here and there. and I think you should continue to follow that trend. It's also what's fascinating and that is seemingly happening for the first time in the residential real estate market is that blocks of stock for some of these companies that are pre-IPO but late stage, whether they be the Anthropics of the world, are actually being pledged in real estate transactions at a discount but allowing buyers to buy up. And on some level, it all feeds back to the story that we talk about every day, which is that the valuations of these things are extraordinary, and let's hope they're worth it.

41:19Guy? You know, we mentioned, I've got to keep coming back to Home Depot, how poorly it trades in the wake of what everybody seems to think is this robust consumer and housing market. Well, Home Depot is telling an entirely different story because this is a company, last I looked, that made its all-time high more than two years ago. And, you know, valuation isn't stretched, but the stock trades very poorly. I think, I believe, if you just look at Home Depot, I'm cherry-picking a little bit, but I think it's trying to tell you something. You know, Karen, does everybody want to live in Beverly Hills, you think?

41:46Does everyone want to? I know a lot of people who didn't want to and left. But, yeah, you know, it's sort of a famous place to live. I prefer New York for sure.

41:55Seth Meyer:Tim? I love New York. What can I tell you? I thought you had something else to say about this. All right, coming up, Gold Shining Bright. I'm sorry, I cut you off. Go ahead. All right, Gold Shining Bright. How to trade the precious metal, pop, and some of the major moves one country is making with its reserves. And here's a sneak peek at the Kramer cam. Jim's chatting exclusively with the CEO of SoFi. There's that full interview at the top of the hour on Mad Money. More Fast coming up in two.

42:30Welcome back to Fast Money. Gold catching a bid today as Treasury yields pull back further. The precious metal up 10.5 % over the last month. The gold miners ETF GDX also with some big gains led by Gold Fields, Harmony Gold, and Agnico Eagle. Tim.

42:45Seth Meyer:I like gold, as most people who watch our show know. Just to recap where we've been over the last couple weeks, we've learned that the Chinese central bank's been in their buying. We understand that there have been dynamics around other central banks that have continued to add to gold. We know that ETF formation has added another 25 tons of gold demand, and that's often been a trigger to reignite this trade. What we're seeing both in Bitcoin, what we're seeing in treasury yields, what we talk about with dollar yen, these are reasons to buy gold. So I think the interesting part of where we are in this trade is I think silver is the buy relative to gold.

43:24Seth Meyer:I think as we start to see this trade pick up momentum, that's the place to play. Guy? French took their gold out, I think, 129 tons out of New York earlier this year. The Dutch just announced, I think, 80 tons that they're repatriating. This is a physical gold story. People are talking about geopolitical risk. It's a de-dollarization thing. And gold goes higher. And, you know, all the things we've talked about seemingly on a daily basis, all roads lead to gold. Now, I understand until recently it traded poorly, but this is the environment that gold works in. And when you see all these different countries saying, I want my gold back, that's a warning sign.

43:58So right here, would you rather have gold or Bitcoin? I don't understand Bitcoin. I would much rather have gold. I can hold Bitcoin. Karen, what do you think? I mean, is it digital gold right now? Is this the moment for digital gold with the same setup the guy's talking about? Or do you want the real physical material? Well, I can tell you how I'm positioned. I own Bitcoin. I've owned Bitcoin for almost 10 years now. I never quite got the gold story, although a lot of the fundamental underlying principles of gold also apply to Bitcoin. I think Bitcoin, though, is much more susceptible or have a benefit of potentially if somehow the Clarity Act gets done, which if it does, I think that would be a very good thing for Bitcoin.

44:40Dan? Yeah, I'm less interested in Bitcoin. I think these guys have been really correct that buying pullbacks in gold for the last couple of years has been the way to do it. And I think as they've been raging bulls and they've laid out lots of different ways why it works. I mean, the idea of having a small allocation to it is, what, under 5 percent or something like that has made a lot of sense. So, again, it's not something I'm involved in, but I understand from my esteemed colleagues why it makes sense. And they've been really right. Fellow panelists. Yes, fellow panelists. You guys have nailed it, you and Timmy.

45:09Tim, coming back over to you, I mean, in your mind, is it gold versus Bitcoin? Is it silver versus Bitcoin? I mean, we're looking at ways to kind of hedge geopolitical tensions and volatility. Which way do you want to play it?

45:20Seth Meyer:I think Bitcoin has a place. I think Bitcoin will continue to have a place as regulation around it becomes that much clearer. The Clarity Act is very important, and I think it's very important for digital assets, period. Gold is no question to me the way to play the concerns around global deficit and fiat currencies and just having a store of value. And it's something that I think will continue. Remember, this isn't a three-year trade. And the trade that got overheated in the spring was just that. But this is, look at a 25-year chart on gold, and it's the best chart out there. This is not something that happened overnight, nor is the dollar going to zero overnight.

46:02Seth Meyer:Nor will, I think, ever go to zero. Certainly don't hope it does not. But gold is how I would be playing it. I'm just saying, in terms of a trade between gold and silver for the next couple months, I think silver is going to outperform because it typically does when you upshift in this trade. All right. Coming up next here on Fast Money, we have your final trades. Don't go anywhere.

46:31Welcome back. Time for final trades. Let's go around the horn.

46:34Seth Meyer:Tim. Silver ETF, SLV. Karen. Yes. I've been selling some upside Dell calls after this run. And a shout out to one of our favorite viewers, Melinda DiVenedetto. Dan. Yeah, I'd sell the news in Tesla. A very happy birthday to Sue Cannell. That's Stanley Cannell's one. She rocks. Let her see. All right. Thank you for watching Fast Money. Mad Money with Jim Cramer. It starts right now.

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