Credit Card Crunch… And Trump’s Powell Probe 1/12/26

20:39It's smart to always have a few financial goals. And a really smart one you can set? Earning cash back on what you buy every day. And with Discover, you can. Get this. Discover automatically matches all the cash back you've earned at the end of your first year. Seriously, all of it. And we trust you to make smart decisions. After all, you listen to this show. See terms at discover.com slash credit card. Welcome back to Fast Money. A few retail names sinking after giving disappointing guidance for the holiday season. Abercrombie & Fitch dropping almost 18 percent its worst day since May of 2022.

21:16The company narrowed both its sales growth and earnings forecast for the fourth quarter. And Urban Outfitters shed 12 percent today after posting weaker than expected holiday sales growth. Other retail names fell in sympathy. Bath & Body Works, Victoria's Secret, Best Buy, Warby Parker, Macy's also ending the day in the red. Are you worried about holiday overall? No, not really. I mean, of these names, A &F, I do own. So I think the reaction to earnings on December 5th or 6th, whenever it was, the stock went from 66 to last like 130. So that was overdone to the downside. This, I think, is overdone to the downside.

21:54They actually narrowed the range. It didn't even change very much. Clearly, there were whisper numbers or the expectation that something would be better than this. But this is a company now trades at 10 times with a pristine balance sheet and buybacks in place. I like the management team. I think this is really an overreaction to the downside that I got to wait the three-day rule, having not done a great job last year buying Abercrombie, it came down at a similar type of conference where they put this out and the stock got hit really hard. But this seems overdone to me.

22:25Melissa Lee:Urban is, I mean, it doubled since the April low. So I think people are just looking for an excuse to sell it because it weren't disastrous comps. It just weren't good enough. And you see this move. But to Karen's point about the three-day rule, I'll give you the three-day rule. But if this trades 68, which is within sort of earshot of, that's the level to get back in. That's the level of past resistance becomes support. Yeah, I think these kids, they can't get jobs and they don't have any money. I just don't understand how they're buying the urban. They have to start paying back student loans.

22:53Melissa Lee:No, it's just kind of interesting. I mean, this is a category I'm kind of joking a little bit. But it's a difficult category, I would think. And again, we're going to see what margins are, see how much discounting we saw in the quarter. But you also saw Best Buy did not trade particularly well. So maybe this is something we kind of figure out about a consumer that was strained going into holiday season and maybe just didn't spend as much as some folks thought they were. Julie? Yeah, I think I actually am pretty concerned from the margin standpoint, particularly for Urban. it doesn't look great.

23:24And I think the biggest concern we should all have is normally your holiday season is when you're doing better with your full price selling. And in their commentary, they talked about, well, look, yes, margins are probably not great for the fourth quarter, but coming into the next year, we're going to have more full price selling. We're going to be more productive at our stores. And it's sort of like, yeah, this year I'm going to pick better stocks and my results are going to be better. It's like, okay, but how are you going to do that? It's not a foregone conclusion that you're going to be able to have more full price selling.

23:52You obviously messed up on this quarter. So I would be a little bit more concerned. I think it's telling in terms of both the consumer, especially because anthropology was the part that was weak, not the core urban outfitters.

24:03Melissa Lee:Real quick, the flip side of that coin are these dollar stores, which I think we've done a decent job. Dollar Gen made a 52-week high today, and it feels like even just valuation-wise, it still has some room to the upside. And when I say room to the upside, I think the stock could trade about, I don't know,$156, which is another$8,$9 from here. There's a lot more Fast Money to come. Yours is coming up next.

24:49the Nasdaq market side in Times Square. We're back right after this.

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26:15See terms at discover.com slash credit card. It's my first day of work and I need to make a big impression. From executive producer Mindy Kaling. This is our sexual harassment training. Hands off your co-workers. Now sign this saying that I trained you or you're fired. Yes, ma 'am. Work relationships are too messy. I just met the woman of my dreams. You gotta chill out and not come on too strong.

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26:51Welcome back to Fast Money. A new hire at Meta, the company naming former Trump advisor Dina Powell-McCormick as president and vice chair where the company says she'll help guide strategy and execution. Meta also reportedly ready to cut jobs in its Reality Labs division. Julia Borson's more on all of this. Hey, Julia. Hey, Melissa. Well, Meta plans to cut around 10 percent of employees in its Reality Labs division. That's the division that oversees virtual and augmented reality. This according to a report in The New York Times. Now, Meta tells us no comment, but we have seen Meta move away from its focus on the metaverse as it shifts focus to AI.

27:26Meta today announcing a new president and vice chair position for Dina Powell McCormick. The hiring aims to help Meta achieve its AI ambitions, which require massive physical infrastructure, data centers and financing. Sources familiar with the situation tell me that Powell McCormick's first focus will be crafting the company's long-term infrastructure strategy, including strategic capital partnerships. Powell McCormick is a former head of sovereign investment banking at Goldman Sachs. CEO Mark Zuckerberg saying, quote, she'll be involved in all of Meta's work with a particular focus on partnering with governments and sovereigns to build, deploy, invest in and finance Meta's AI and infrastructure.

28:08Also today, Meta announcing Meta Compute. The division's new leaders, Meta's global head of engineering and former safe superintelligence CEO, will work with Powell McCormick on this top level initiative, as they call it, aiming to build tens of gigawatts of energy this decade. Melissa? Should we extrapolate to think that this will go beyond the United States in terms of developing these partnerships? I think absolutely. Just looking at the global reach of Dina Powell McCormick's relationships, she seems incredibly well positioned to partner with sovereign wealth funds, which have already been making big moves into the data center area to see where she can find partnerships to really help co-finance all of the infrastructure needs that Meta is going to have to have to fuel its AI ambitions.

28:55All right. Julia, thank you. Julia Boorstin. Karen, how do you interpret this? I mean, with the significant increase in spending for calendar year 2026, now you have Dina Powell McCormick deployed to actually help spend it and gather new funds. It seems like they're not going to back down from that spending target. And if anything, it could actually go higher. Well, we hope it's not notably higher because that didn't work out last time. That was an expensive word. I mean, Dina Powell is quite experienced in a lot of different things. She worked in W's White House. She worked in the Trump administration the first time.

29:30She worked at Goldman Sachs. I think she did 10 ,000 women. She's done a lot of things. To me, I would think she would be very helpful in navigating Mehta's interactions with government, particularly this one, right? And then also, we know she's married to David McCormick, the senator from Pennsylvania. so she's uniquely positioned I think and she was on the board prior to this so this is an interesting hire

29:59Melissa Lee:you know it's interesting hire after they spent hundreds of millions of dollars hiring engineers right away from a lot of their competitors that they lag behind in AI and you know if there is I think it is about raising money from sovereign wealth if you think the deal that they did for that Louisiana data center they did not want that on their balance sheets I'm sure they're going to have to go with some very, I don't know, creative ways to kind of get the Saudis or some of these other funds to help build this out. And I think having a direct line into the Senate and a whole host of other folks in Washington, that should be just fine, easy to do.

30:33Melissa Lee:I'd say quickly, one more conduit to this current administration. I think that makes sense. And, you know, Facebook reports, I want to say the first week of February. Don't at me if I'm off. But, you know, it has not made it all time high in August. It's sort of sideways to slightly lower since. I think you're looking for a place to get long Facebook into that earnings release. And we're getting, I think, interestingly close to a level of pretty huge support. Coming up, Powell Probe, the impact of President Trump's criminal investigation to the Fed chair and how lawmakers are responding. The details when Fast Money returns.

31:09Missed a moment of fast? Catch us anytime on the go. Follow the Fast Money podcast. We're back right after this.

31:23Welcome back to Fast Money. Stocks climbing back from early losses. The Dow down nearly 500 points at its lows before rallying and closing at a fresh record, along with the S &P 500. The Nasdaq also jumping a quarter of a percent. Metals also hitting records. Gold and silver both settling at records yet again. Silver already up more than 20 percent in 2026. And Alphabet becoming the fourth company to hit the$4 trillion market cap milestone. The Google parent climbing to its own record after Apple announced it would use its Gemini AI to power Siri. NVIDIA is the only other company currently above$4 trillion.

31:56Apple and Microsoft have both hit that level but have fallen below it. Meantime, three former Fed chairs and a host of lawmakers have spoken out against the Department of Justice launching an investigation to Jerome Powell. For more on the congressional response, let's bring in CNBC's Emily Wilkins for the latest. Emily. Hey, Melissa. Well, look, D.C. is really still grappling with the shockwaves that have come from the DOJ opening up a criminal investigation into Powell. And Powell, for his part, he's responded. He said that he doesn't believe that this is really about him providing false testimony to lawmakers.

32:28He says that it is about a pressure campaign to have the Fed do what the administration wants in terms of lowering interest rates. And Powell said in a letter last night that the threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public rather than following the preferences of the president. Meanwhile, a number of Republican lawmakers have come out today saying that they do not believe that Powell is guilty. And some have gone even further than that. Republican Senator Tom Tillis says that from now on, until this investigation is over, he will not be voting to advance any potential nominees to the Fed.

33:10And because of the math on that committee, that means that if Tillis is joining with all the Democrats against a nominee, they can successfully stonewall anyone from getting through to the Fed at this point. You've had a number of other prominent lawmakers weighing in, including the head of the panel that oversees the Fed in the House, French Hill. He said that this was an unnecessary distraction and also said that it could undermine the administration's ability to make sound monetary policy decisions. We're, of course, hearing from more lawmakers as they return to D.C. tonight. The question is, how is the White House going to respond from this revolt within their own party?

33:49Melissa? Emily, thank you. Emily Wilkins. It's interesting, you know, when the story crossed last night, you saw sort of the commentary in the arc of this overnight this morning. You had concerns about Fed independence. But as more and more resistance came out throughout the day, whether it be from GOP lawmakers or from former Federal Reserve officials or former Treasury officials, the market seemed to feel a little bit better about where we stand.

34:16Melissa Lee:Without question, because if you had asked me, we'd play the game. If you told me this, where's the bond market? I always said TLT is down two handles. Tenure yields are north of four and a quarter percent. And obviously that didn't happen. With that said, I don't think this is positive for the bond market at all. Regardless of some of the rhetoric that's coming out in support of Jerome Powell, it speaks to what they want to happen. And they don't necessarily want the Fed to be as autonomous as it's historically been. And I don't think that's a good thing. And again, it's be careful what you wish for stuff, because the bond market will absolutely challenge whomever is next in that seat.

34:49I'm actually surprised more Republicans didn't come out because, you know, that used to be a party of fiscal restraint and kind of things like an independent Fed, things like that monetary policy that is, you know. So that was a little bit surprising to me. But I think what you're when you describe and is what happened, because if you know last night it was not looking this way at all. Gold still, though, gold had a very big day. That's not surprising, even this. All right. Coming up, the who's who of health care descending on San Francisco for the J.P. Morgan Health Care Conference. InSmed CEO Will Lewis will join us on the ground with the latest in this company's rare disease portfolio and what to expect in the year ahead.

35:29More Fast Money right after this.

35:36Welcome back to Fast Money, J.P. Morgan's annual health care conference kicking off in San Francisco today. the largest gathering of biotech and pharma execs, investors, and analysts in the United States. In Smed, among the companies on today's presentation docket, shares have soared over 150 % in the past year, with a rare disease drugmaker reporting preliminary 2025 revenues of more than$606 million ahead of analyst estimates. Joining us for more is In Smed CEO, Will Lewis. Will, great to see you again. Great to be here. And you're actually about to present, I believe, shortly. So you're joining us in advance of your presentation at J.P.

36:11Morgan. The stock is really, you know, rocking today because of your new milestone goals. Can you talk to us a little bit about Aracase sales, if I'm pronouncing that correctly, because you did raise that milestone. What is behind that better-than-expected sort of milestone goal that you have laid out today? So we have actually two drugs on the market now. One is Aracase, which is for the treatment of refractory non-tuberculous mycobacteria lung disease. That's one lung disease. And the other is a drug called Brinsupri, which targets non-cystic fibrosis bronchiectasis. It's the latter drug that has really gathered all the attention, because at the end of last week, we put out preliminary fourth quarter numbers, which showed that in that one quarter, we had addressed more than 9 ,000 patients, which results in a revenue generation of$144.6 million.

37:01To put that into context, that's more than Dupixent did in its fourth quarter in its first year of launch. So this is the beginning of a very strong launch for Brinsupri, and it was matched by the performance of Eracase, which exceeded our raised guidance in 2025. Interesting about both of these drugs with such strong launches that there are other indications for which you're currently in studies to investigate. So, for instance, Brinsupri for HS, which is a skin disease, an Eracase as well, for, I believe, another lung disease. Can you talk us through where you are there and whether or not we will see any sort of applications to the FDA based on these other two indications?

37:41Sure. So the error case trial that's up and running right now called the ENCORE trial will read out either March or April of this year. And if we are able to show success in that trial, it will take the total addressable market for error case from 30 ,000 patients to north of 200 ,000 patients. We've already guided this year that Aircase will do between$450 and$470 million of revenue, so that would obviously be a very substantial expansion of that drug and its opportunity to help those patients. And to be clear, just like refractory MAC lung disease, this expanded or frontline indication, there's nothing approved to treat either of those.

38:17That's matched by Vrensupri, which is being very successful in its initial launch in bronchiectasis, but which is also going to be targeting the disease you refer, Hydra-Adenitis Suprativa, or more simply put, HS. The skin disease, we'll have phase two data for that that will read out in the second quarter of this year. So some near term milestones ahead. And those are coming on the heels of very successful commercial performance.

38:39Melissa Lee:Well, congratulations. Obviously, we're surprised. Well, I shouldn't say that. I'm sure you weren't surprised. I was surprised by the growth not only of overalls, but international sales were staggering number. I mean, is that is that opportunity as robust as it appears through these numbers? It is, particularly in Japan, where the team has done just an exceptional job. That performance was better than expected, even as they raised their guidance throughout the year. And the exciting thing about that is it's still early in the launch in Japan. We have, we're now in our eighth year of launch in the U.S., but Japan is just a couple of years in, and so we're very excited about what they may be able to contribute in 2026 and beyond, not just for Eric Ace, but also for Brent Supri, which we expect will have approval in Japan in the second half of the year and launch shortly thereafter.

39:26Now, of course, Will, the J.P. Morgan Health Care Conference is where a lot of deals get done on the sidelines. There are a lot of partnerships being discussed, inked, et cetera. You've got a lot of drugs that are already launched but will have bigger addressable markets potentially if all the studies go well. Do you have enough money on the balance sheet right now, which I believe is just under$2 billion or so, to see these drugs through a bigger launch, through bigger commercialization? We do, and I would say we have the opportunity to do even more, not just within our own collection or pipeline, as people like to refer to it, but also opportunistically through business development.

40:05And in the fourth quarter, we announced the acquisition of what we now call INS-1148, which is a monoclonal antibody targeting a very specific stem cell factor 248. We're going to be introducing that to pursue indications of moderate to severe asthma and also interstitial lung disease, which are both very substantial market opportunities for which there's a clear medical need. So beyond our internal pipeline, we're adding externally. And I think, as we like to say, this is just the beginning at InsMed because we have an awful lot going on on the commercial front, an awful lot to come on the clinical front, and we're still looking for more.

40:39Looking for more, but on your own, completely on your own, no partnerships, no acquisition. I mean, other than you acquiring. Okay. That is correct. Our ambition is to continue to grow the company, and we've done that very successfully over the course of the last 18 months, as your show has appreciantly tracked. But we're just getting started from our point of view, and that begins with the success of Brin Supri and also Eric Ace, but will hopefully follow with the success of the other indications they're pursuing, as well as our very broad pipeline, which is now arranged across three different therapeutic areas.

41:13So we are focused on respiratory, we're focused on inflammation, we're focused on neuro and rare. And in each of those, we have a substantial collection of assets that we think will be able to be successful. And we set as our target first or best in class in every disease we're going after. These go far afield as Duchenne muscular dystrophy and ALS, for which we're using gene therapy, all the way back to the compound I mentioned that we just acquired, which will first be targeting some substantial indications in the respiratory area. Well, it's always great to speak with you. Thank you. It's my great pleasure.

41:49All right. So he's been steadfast in terms of going at it alone and expanding this pipeline. It's interesting to see the sort of the portfolio. You have drugs that are on the market, drugs where the indication is you're looking for another indication for the drug that's already out there. And then also a pipeline of drugs for completely new indications. It's just sort of interesting. Looking back just two years ago, the market cap of this company was$4.5 billion. It's nine times that now. You've been on this one for a long time, Missy. Well, collectively, especially guys.

42:19Melissa Lee:Collectively, we all have. And it could double from here. And we've said it. I'll use the example. I mean, I think it was 2019 Bristol-Myers bought Celgene, I think, for$74 billion. That's six, seven years ago for$74 billion. This is a very similar type of situation. So, listen, I get that it's going to fluctuate over the next couple of weeks or something. But this is a stock that I do believe could double from current levels. There's a lot more from the J.P. Morgan Health Care Conference on Mad Money. Jim is chatting exclusively with the CEOs of Medtronic, Novo Nordisk, Bausch & Loam, and Pfizer.

42:51You can catch the full interviews top of the hour on Mad Money. Up next, we are revealing the first two trader acronyms of 2026. Will Guy spell out a winner for a second year in a row? Or will Dan earn redemption after last year's photo finish? More Fast Money in two.

43:15Welcome back to Fast Money. It's that time of year. Our traders will be unveiling their 2026 acronyms all week long. They've been hard at work picking the socks they think will outperform Guy's two. He was, of course, our big winner last year, narrowly eking out a victory over Dan's Gen AI. So it's only fitting that we have them kick things off. So, Guy, what is your acronym for 2026?

43:36Melissa Lee:Well, obviously, I've always been very proud of my two, more so last year than any time in my 62-year history. But this year, I'm unveiling my junk to the people of the United States. So let's just take a look at how this is comprised. The J, Jacobs Solution, Neal Jacobs Engineering. This is sort of not necessarily a green play, but getting people up to speed in the 21st century in terms of retrofitting and stuff, a lot in the life sciences. The stock has sold off pretty significantly since it's all-time high. I think you're getting at a very attractive level here in terms of valuation, in terms of stock price.

44:11Melissa Lee:Number one, Unity Software is the you in my junk, Melissa. I'm playing the game correctly. This is sort of a gaming play that's fallen on some disfavor over the last few months. But valuation alone and the potential for M &A here could make it interesting. The N in my junk, and this is I'm very proud of, Novo Nordisk, which we're in the midst of a bearish to bullish reversal. I think we've talked about this story for a while, but finally it's starting to show some signs of life. And I think this is one that could potentially be a 75 % to 80 % winner for me over this year. And then the K in my junk would be Kenview.

44:45Melissa Lee:And why? Because this whole Tylenol thing is going to get washed away at some point. As Karen pointed out prior to the show, some activists getting involved. I think you're getting it at a very attractive level. And a double in this name is not out of the realm of possibility. So I give you my junk, Mel. You present your junk and interesting components to your junk. Let's get to Dan, who was second place last year. 2026 is what, David? Yeah, it's Stash. That's S-T-A-S-H. And what I'm doing here is a little bit, it's not names that have been absolutely disrupted by AI. It's names that actually haven't really embraced it yet and integrated it into some of their products and services.

45:26Melissa Lee:And so to me, the first one would be Snap. And this is a company that's obviously been left for dead. Its products, you know, are still kind of well used. They just don't monetize that well. I think this year they probably have an AI moment. The next one is the trade desk. Now, this is a name. Guy, we had the CEO walk up to the desk the day that this company went public. This is an ad tech company. It's absolutely gotten destroyed the stock here. So I think this is kind of interesting. I think they're going to do a better job with AI. Adobe, another one very similar to what I just kind of described here.

45:56Melissa Lee:And also, this is one that has nothing to do with that theme. This is sweet green. It's just gotten absolutely destroyed. I think you probably have a double from here. And the last one is HubSpot, much like the other ones I said. Do a better job. Integrate AI. So to me, that's my theme. Last year was Gen AI. This year, it's integrating AI into your existing products and services to stocks that have been just smeared. All right. Well, you know, tomorrow we'll get the acronyms from Karen and Tim. We'll see who plays by the rules and who doesn't. Karen. Okay, fine, fine. Up next, Final Trades.

46:38Final Trade Time, Julie Beal. Man, I thought the J in junk was going to be me. Ollie, only detailer I'm not worried about. Karen. Yes, A &F. I think this is overdone, but wait, wait, wait three days. Dan.

46:52Melissa Lee:Yeah, the first S in my stash is snap. I'm going to go with snap. Okay. I'm going to go with general assistant. All right. Thank you for watching Fast Money. See you tomorrow here at 5. Mad Money with Jim Cramer starts right now.

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