All the Headlines from Apple’s VR Headset Reveal and The Beaten Down Stocks Ready to Reverse 6/5/23

0:01Right now on Fast, Apple's big reveal, the Vision Pro headset, the tech giant's first major new product cycle since 2014. Disney's Bob Iger on hand. The stock also hitting an all-time high ahead of today's announcement, but ending the session in the red will break down all the action from the day's event. Plus, Bitcoin blues, the SEC filing charges against the world's largest cryptocurrency exchange, Binance, and accusing them of mishandling funds and lying to regulators. The news sending shockwaves through the crypto space. The latest on this developing story straight ahead. And later, GM's CEO with a warning on the EV road ahead.

0:33Target stock keeps on slumping and a nuclear move higher in uranium. I'm Melissa Lee. This is Fast Money. We're live with the Nasdaq Market Sight on the desk tonight. Tim Seymour, Karen Feinerman, Dan Nathan, and Julie Beal. We start off with Apple's first major product launch since 2014. The company unveiling a mixed reality headset called the Vision Pro at its Worldwide Developers Conference today. Apple calling it revolutionary. The headset, which will sell for almost 3 ,500 $100 will let users watch movies, view videos, play video games, and much more. Disney CEO Bob Iger on hand for the announcement.

1:06Disney Plus will be available day one on this headset. Shares of Apple slipping after the big reveal, falling almost 1%. Apple early in today's session did hit an all-time high, dating back to its IPO in 1980. CNBC's Steve Kovac is out in Cupertino covering the event for us. This is much more expensive than we thought. Did it seem cooler? Not as cool as we thought? Well, I got to look at the device, Melissa, but I didn't get to use the device yet. So they only had it on display in the Steve Jobs Theater. I just got back a few minutes ago after checking it out. And it was basically on a pedestal there.

1:40Tim Cook came out and did his little photo op and showed it off. But right now, no one really outside of Apple has had a chance to use it. So it's hard to tell if it lives up to the promise that we saw in that presentation. But what is the pitch, I guess, is the big takeaway from here besides the price and the release date, of course, and it focused a lot on entertainment. Like you said, the surprise appearance by Disney CEO Bob Iger, that actually sent Disney shares positive today. They were down at session lows until Iger appeared on that stage and popped up. And look, it's all about immersive entertainment and this kind of idea that you can kind of wrap yourself into your content.

2:18For example, a lot of what they talked about, especially in that Disney part of the event, was this idea that you can paste a digital television screen or movie theater screen and make it feel like it's 100 feet tall inside your living room. That seemed pretty cool. But again, we have to try it to see how it works. On the other hand, there is some productivity stuff. I will point out that as far as apps and things that you can do on it, it is going to run every iPad app. That's over 100 ,000 apps, they say. So if you have an iPad app you like to use, you're going to be able to use it on your face pretty soon, Melissa.

2:51And then, but yeah, that is the big thing here. It's now we get to figure out, okay, what is this device for in Apple's lineup? And we're not going to really find out until early next year when it goes on sale, Melissa. The event is the Worldwide Developers Conference. So, Steve, is thinking that, you know,$3 ,500, it's probably too expensive, prohibitively expensive for mass market adaptation. and maybe this is sort of a soft launch for a new device to get developers sort of, you know, in the fold, creating things for use with this? Yeah, that's part of it. I mean, you can buy three MacBooks that they announced today as well on top of that, on top of the headset, and you still won't equal the price necessarily of the Vision Pro.

3:35So it is going to be expensive. It is right out the gate going to price many people out. right off just the price alone makes it sound like more of a luxury item, but it doesn't sound experimental. A lot of people going in today, Melissa, were thinking this is going to be a kind of, they're going to pitch it as an experimental gadget, have developers play around with it. Of course that's happening and they did talk about that today, but they really are making this out to be a kind of mainstream device. I will say that ProMoniker does tell us a lot of how they envision it and, you know, maybe down the line it gets cheaper and more accessible for more people, But right now, this is a high-end, unique entertainment device for the most part.

4:14All right. Steve, thanks. Steve Kovac out in Cupertino for us. Dan Nathan, I'll go to you. You already, before this thing, I saw the light of day. You were slamming this. So now what? Well, it really is the price point. I think the way you laid it out made a lot of sense. They're kind of laying out the gauntlet. They're laying out their future for virtual reality AR, however you see the mixture of it. And it really is about other services that they're going to be layering on. but it's also what the developers are going to do within this ecosystem. So, again, I think that even if they had priced it at$2 ,500, it wouldn't have created any more demand for that sort of product.

4:47If you see what Facebook's doing, they're lowering the price for their Oculus dramatically, and they started at a very high price point. And I do think what Steve said is really important. That was the first thing that hit me. Usually this company introduces a product, and then when they introduce a higher version of that product, then they call it pro here. So, again, I think that for mass adoption, it's got to be a price point that's below a smartphone. You know what I mean? That you're not going to be replacing every year. So, listen, the fact that the stock was trading 185 at an all-time high while this event was going on and then it sold off, it kind of reminded us of the olden days where people got really excited about what new phone.

5:25They used to introduce the new phones at WWDC. So, to me, again, you know, it's a vision for their future. This is going to be a huge platform for them, but just not right now. Yeah, I agree with you who agree and Dan on what this really was. I don't think we're going to expect to see a giant line item of these sales in the next quarter or so whenever they are more widely available. So the stock, I don't know what was priced in today for this. Something clearly, right? And when it came out with the price, then the stock price actually started to get hit. So, you know, it's expensive here. I actually sold some upside Apple calls today.

6:02I just feel like a lot of hype priced in, you know, buy the rumor, sell the news, as you said. And I don't know. This is a hardware thing with software attached. So what's the right multiple for this? I don't know. But as I said, I don't think the revenue line will be huge. So at the moment, nothing's changed. I do wonder, is this a positive or negative for Meta for their product? Does it increase the pie and the interest? Boost interest overall. Boost interest more broadly. Or is it a fight for share already? I don't know. Well, and if you're looking at the market, you know, I would I would make a lot of arguments in favor of meta over Apple for the next leg higher of mega cap tech.

6:39And again, a world where I think mega cap tech is simply whether we believe these multiples are appropriate. And Apple has gotten up to 30 times. It's about 27 times you listen to the street. I don't think that's really the right multiple. I think it's high here. And but but as long as and I've said this before, as long as the market is going to be led by semis and semis will lead Q's and Q's will lead the S &P. That's the only thing I really know. And I don't know when that's going to stop. But in that environment, I think meta of all of them. But back to today. Yeah, I think we're all saying this.

7:09I don't believe this is that big of a day for Apple, other than people want to see what they're doing. I think that the services side might differentiate Apple because of the services Apple can offer native to the hardware, similar to what they're doing with the phone. That's the reason we're paying what we're paying for Apple. If you look at the size of the AR, VR kind of headset market and, you know, different people have. I'm hearing, you know,$25 billion by 2030. The reason we're paying this for Apple is the financial flexibility that the company has. I think their ability to have turned us all into hardware-as-a-service consumers and that the service is dynamic, even though it's not growing where it was five years ago and we really started to up the multiple, it is still part of this on this installed base that grows.

7:52And India is important just because of that dynamic. We're talking about new installed base, even if I don't think India is going to be China. We know what penetration is. That's exciting. Yeah. I mean, the saw off wasn't as bad as one might have thought, Julie, considering we hit an all time high. We backed off and the stock closed down by less than a percent. And so you got to wonder if if people were expecting a lot from this launch and you're sort of erasing what was being built up. It wasn't much. So it seems like the stock moved to an all time high, not necessarily based on this is what I'm getting at.

8:23Yeah, I think it's more clarity on what the what the strategy is for this product. It was such a vague, unclear product. For me, when I think about it, it's not about selling the headsets. It's about the app store because that's where they make so much money. And so it's incumbent on them to really figure out how to get developers super excited to be developing products so that they can continue to take their 30 percent easy peasy without necessarily having to go after their own margins. The thing that's a little bit tricky about this is think about the watch, right? The watch took a really long time to find its footing.

8:55And when it first came out, I don't think we would have guessed how much health would be attached to it. And I think it's a little bit the case here, too, where we launched this product. We're not exactly sure what its best use case is. We're going to leave it kind of broad and open. But I think it will eventually take its footing. But I think it's going to take a really long time specifically with this product. It's interesting. Tim did a little would you rather. Is that what you did in the A block? I'll slip it in wherever I can. If you pick me off, good for you. So it's funny. I would have gone to Microsoft right there.

9:23So you said Apple trading at 30 times, and these companies now both have a very similar market cap, right? About$2.5 trillion versus$2.7 for Apple. You think of Apple as a company. We know that this multiple has to do with this kind of, you know, the valuation they're getting for their services and the install base. But it's got a 43 % gross margin, right? And then you look at Microsoft, it's got 68%. Microsoft actually has higher earnings and higher revenue growth. And, you know, like growing double digits both next year, trading at a very similar multiple. So it's kind of interesting to me when you think that Apple really did run into this.

9:54And maybe it's just passive flows moving in. I mean, all the big names are moving, but it really did feel like it ran into it. When's the last time we've seen a 4 % move from one way to the other in one of these big names? In a very long time, we haven't. So I think there was something built into it. All right. Our next guest calls today a big deal for Apple. Longtime analyst Gene Munster attending the event. Gene is managing partner of Deepwater Asset Management is out in Cupertino, of course. Gene, great to have you with us. You just heard basically all of us say this wasn't such a big thing.

10:23So explain to us why this is a big thing in your view. Well, just simply the math that they announce a new hardware product category once every five to ten years. So that puts it in a special case for a company that is very measured in terms of how they make these announcements. They never jump into a market. So that's noteworthy. And I think another piece why this is a big day is to look at the actual device itself. Understand that the commentary around waiting, this is going to take many years to grow into a big business. I agree with that wholeheartedly. But I do want to point out two things that make Apple product innovation great.

10:59There were two product features in here that no other mixed reality headset has. Number one is the ability for the user to have their eyes on the real world at the same time. There is a primal instinct with humans. This may sound obscure, but a primal instinct that humans want to have some form. Even if it's a passing, they're eyes on the real world. That's one of the reasons why MR headsets, VR headsets have not taken off. They picked up on that. I was glad to see that. Second is gestures, and eyes are what is the controlled interface for this. That's important so you don't have to have complicated ways of interacting with these devices.

11:36This is important. Ultimately, it will take time for the use cases to form, but they are off to a great start when it comes to the technology piece. The price is prohibitive. All of that's true. But you just need to take a step back. Look at the bigger picture here. Our collective lives are going to have a kind of a spectrum of devices we're going to use. And I believe eventually 10 percent of Apple's revenue is going to come from this wearable. Hey, Gene, it's Karen. Thanks for being on. So just how do you think this thirty five hundred dollar price? We all talk about that's going to really shut almost everyone out of the market.

12:08How do you see the evolution of this product and the price, let's say a year or two years out? what's a mass-ish for them market through this? I think it's below$1 ,000. It's a light year away from where we're at today. And I would also add that I think that there's going to be a family of products around here. We are hyper-focused on this announcement today, but Tim Cook has long talked about the power of augmented reality. This is not augmented reality. This is a step before it. Augmented reality is more or less glasses. But to answer your question, Karen, I think it's sub -$1 ,000. 700 actually is, I think, where it starts to get mainstream.

12:46And if you're going to ask me what year we're going to get to that, it's probably 2 ,000, probably five years from now, 2028. So we're many years out. The good news is that a little of this is priced in. Investors are going to be a wait-and-see approach. A little bit's priced in, and there is optionality. As we start to see a family of products come out, the price comes down. I think it gives room for Apple investors to get more excited about what the segment can do. The other big thing that happened today, Gene, of course, is Apple hitting an all-time high. So how do you think about the valuation here, given what you've seen today?

13:19So I think that there's a shift in how investors are viewing the Apple story. This is not about how many iPhones they're signing in a quarter. It's about the active base. We've seen this trend in the stock over the last six months. I think mathematically that base is going to keep rising. And I think that this should have a premium to consumer staple companies. Coca-Cola, if you look at Procter & Gamble, Clorox, those all trade in the mid-20s for multiple. I think this should be in the low 30s. So I think that there is upside. This is not a stock that I think is going to triple in the next three years.

13:51If that's what you're looking for, that's not what Apple's going to deliver. But I think a company that can continue to store, that can continue to move higher, I think it's going to happen because that active install base is going to continue and grow, and investors can sleep well at night knowing that that's growing, and that means higher multiple. Gene, always great to see you. Thank you. Gene Munster. So in talking about valuation, you compared it to Clorox. To Clorox, to diaper maker, to toilet paper maker. I mean, you name it. Tim, what do you think of that? Well, he's going right to the consumer product space.

14:24And Clorox, maybe not Pampers or Charmin. But certainly, if you think about consumer products that become somewhat ubiquitous and are more staples-like, for sure. And I think that's where we've gotten to. or we certainly don't call it a tech company. We call it a consumer company in some way. What are you paying for that? Of course, a premium. And again, I get back to their ability right now with their balance sheet to buy back shares and to actually, and none of this adjusted EBITDA garbage. They're real. It's U.S. GAAP. What they're doing is real. They were able to financial leverage when rates were at zero, was smart.

14:58That's why you own Apple, because in addition to everything else, I think actually it is like owning a T-bill in the tech space. All right. Meantime, the Fed's next few moves up for debate following last week's stronger than expected jobs report traders now betting on a pause this month and then a hike in July. Steve Leisman joins us. The latest expectations for the Fed. Steve, how are they looking? They're changing, Melissa. The pause or skip in June, that remains priced in. But the reaction to the big upside surprise in that Friday job support was to further price in a July hike and price out rate cuts by year end.

15:31Before the job support, Fed Funds Futures had seen at least one rate cut by December, putting the year end funds rate had been at 485. Now it's over 5 percent, suggesting markets now see the Fed holding at that level at least through year end. The result, the gap between where the Fed expects to be and where the market thinks the Fed is going to be, it's narrowed to just about nothing. Had been as high as a full percentage point or 100 basis points last month, now just 16 basis points. So never mind the gap, we might say. Among the reasons for this change, obviously, economic data has been coming in stronger.

16:04Jobs, inflation has been more stubborn. And the Treasury, of course, is rebuilding its coffers after the debt ceiling debate. Some estimates they need to put a trillion dollars in bills out into the market. Meanwhile, while a pause is pricey in for June, futures place a 62 % chance of a July hike out there. So the question is the extent to which stocks have been helped by expectations for rate cuts. Now they face a challenge from a Fed that's believed likely to keep rates above 5%, even when New Year's Day rolls around. Stocks giving back today. Maybe a little bit of what was gained because it could mean they have more Fed more on their radar.

16:38Melissa? Yeah. Steve, I'm curious. You know, when you take a look a year out, where are markets pricing rates at that point? I'm just trying to figure out if the markets and the Fed are also on the same page in terms of higher for longer also. No. Everybody's got cuts. When you say a year out, do you want to know what the futures price is, what, in May of 24? Sure. That's what you got? Yeah. That's good enough. That's what I got. I got 433. And then for year end 24, I got 345. And then I can tell you what the Fed is looking for in terms of their median forecast. I believe it's in the threes for next year.

17:24But yeah, everybody's got cuts built in. It's just it had been this debate over this year versus next year. And that gap now has closed. Hang on, I'll get you that for next year. Fed funds rate 4.3 for the end of the year. So a little bit of difference between the market, but 3.1 for 2025. That's the median right now. Of course, that far out, this stuff's going to move around a lot. Yep, it sure does. Steve, thank you. Steve Leisman. Sure. Just trying to get at the notion of, you know, we can be on the same page as the Fed for the next couple of meetings. But when it comes to this narrative that things will turn south and the Fed will have to pivot, where are we on that?

18:00Julie, where are you on that? Yeah, I mean, I still think it's unrealistic to assume that there's going to be rate cuts unless something really bad happens, because that last squeezing out that last bit of inflation from like five to two percent, which is the stated goal that takes time and it's difficult. So I don't think that we should be hoping for that because that's very bad news for risk assets. And I think, yeah. Sorry, I didn't mean to cut you off, Julie. No, I agree as well. And I think if I look at where that curve is, you know, again, we now have a little less than 100 out one year cuts.

18:36We had an ISM number cameras were talking about this on our call, which is the second lowest ISM print we've had outside of some cartoonish numbers that don't count around COVID all the way back to the financial crisis. So the data is on both manufacturing and then non-manufacturing, which is the biggest part of our economy, doesn't look good. The labor market, I'm sure we debated this in mass last week, so I won't get into it. It's strong, but there are signs that you're seeing some weakening. Fed can't do anything here. They would lose so much credibility. They have to hold the course. Whether it's a pause in June, it doesn't matter.

19:07Yeah, but the market's knowing what the next couple of moves are. I mean, that's upside, I think, in terms of planning. Yeah, it feels like we're melting up into it. And this has been a dangerous period, if you're bearish or short, over the last year and a half, into these kind of earnings periods, which, believe it or not. People like Dan Ather. Yeah. Well, it worked out well last year because it came kind of predictable, right? Like estimates came down and companies didn't report as bad as expected. And then, you know, it was a tradable thing. It's not working out great. Just for all of you people who read the headline here with the S &P in a new bull market up 20 percent off the October lows.

19:41That's not a playbook that worked particularly well until this time. OK, so everything that these guys just said about the data weakening, the feds like has to stay resolute in what they're doing. And then I know we're going to talk about crude oil, but look at how crude traded today. Like crude traded today like there is a global slowdown despite the fact that we are seeing production cuts by the Saudis. So I think there's a lot of pieces like I get it. Like if you're just looking at the stock market, it feels like everything's pretty good and we can deal with a 3.7 percent unemployment rate.

20:11This looks a lot like 74, 75. If you believe the Fed's not going to do what they have to do and you actually saw equities rip into that. I also think that people believe that there's a major CapEx AI tech spending dynamic that's going on here, which I don't, you know, they've been spending this money for a long time. I don't think it's new. Coming up, crypto charges, the world's largest crypto exchange and a CEO facing facing harsh accusations from the SEC. And it's taking on the rest of the space. More on that and what's at stake next. Plus, we're going nuclear with a look into uranium and the news that's sending one miner soaring.

20:43Don't go anywhere. Fast Money's back in two.

20:49Welcome back to Fast Money. Crypto stocks crumbling today after the SEC slapped Binance and its founder with a litany of securities violations. Bitcoin also taking a tumble, falling to its lowest level since March. Christina Parts and Nevelis is here to break down the charges. Christina. Yeah, it's actually 13 charges from the SEC to be precise, not only against the largest crypto exchange in the world, like you mentioned, but Binance co-founder CZ, as he's known, and another company controlled by CZ. The U.S. regulator alleges Binance operated Binance.us as an illegal U.S. exchange, selling unregistered securities and also commingled billions of dollars worth of user funds, sending them to another trading company also controlled by the co-founder.

21:30In a blog post this afternoon, Binance assured customers assets were, quote, safe and secure. And then, quote, because Binance is not a U.S. exchange, the SEC's actions are limited in reach. So in this filing, the SEC claims that cryptocurrencies Cardano, Solana, and others are actually securities, indeed securities, so they should be regulated as such, which could leave implications for trading platforms like Robinhood as well as Coinbase. Coinbase, we know, selling off over 9%. It already received an SEC warning of enforcement action about two months ago, and shares fell, as did many in the crypto sphere today, like MicroStrategy, which holds a lot of Bitcoin on its books.

22:10And then lastly, the SEC isn't the only one going after Binance in March. The U.S. Regulator Commodity Futures Trading Commission, CFTC, alleged Binance and its founder knowingly offered unregistered crypto derivatives in the U.S. against federal law. The fight continues. Christina, thanks. Christina Parts Nevelis. And do not miss SEC Chairman Gary Gensler on Squawk on the street tomorrow. That's 9 a.m. Eastern time right here on CNBC. He'll be asked, I'm sure about all of this and it does seem increasingly that the SEC is very behind in terms of regulating this whole industry which grew up around it offshores out of reach and it did nothing until now Dan yeah I mean listen if you talk a lot of these people at the exchanges they would welcome the regulation they want to know what the rules are right and so like I think that is a huge issue it's a huge issue in the US particularly because there was a lot of innovation here and it seemed to have left and it's gone back to Asia and in other parts of Europe.