Fast Money 5/14/25

0:01All right, live from the NASDAQ market site in the heart of New York City's Times Square. This is Fast Money, and here's what's on tap tonight. Lurking in the shadows while tech's been on a tear and the MAG-7 are back on the climb. Rates are quietly backing up to the upside as well. The 30-year, within a whisper of 5%, is a rate reality check coming soon. We're going to debate that. Plus, wheels up for Boeing. The aerospace giant making a record deal from Qatar Airways as part of the president's Middle East investment tour. Can this deal keep fueling a Boeing surge? And then later, inside the numbers of Cisco and Core, we're checking out Walmart ahead of earnings tomorrow.

0:39And the latest of eToro's big debut on the IPO market could unlock the entire IPO pipeline. I'm Dominic Chu, in for Melissa Lee, coming to you live from Studio B at the NASDAQ. And on the desk with me tonight, Tim Seymour, Karen Finerman, Steve Grasso, and Julie Beal. And we're going to start with the tech melt-up that keeps rolling and rolling on. The Nasdaq gaining 136 points today. And just since Monday, the tech heavier index is up nearly 7 percent. The MAG7 names Tesla, NVIDIA, Amazon, Alphabet leading the charge. Tesla, by the way, rallying 26 percent over the past week. NVIDIA is up a very respectable 16 percent.

1:20NVIDIA, by the way, turning positive for the year today and overtaking Apple in terms of market cap. But lurking in the shadows of those outsized moves, a slow, steady climb in treasury yields, the 10-year yield back above 4.5%. And check out the 30-year long bond. It's within just a whisper, a stone's throw, a 5%. Whisper. A 5%. These moves could, while these are all coming, while gold, by the way, quietly falls more than 6 % over the past five sessions. So is this a sign the market rebound has come too far too fast? Tim, that's the open question. Well, Dom, so many puns to open with, and it's great having you two days in a row.

2:04So, you know, what I'll say is, first of all, gold is going to rally. If you're as worried about the Treasury yields as some may be, then you buy gold here. And I think you're buying gold anyway long term. But I'm less concerned about the 10-year where it is. I mean, I think, you know, part of this is really truly being reassured that the economy is OK. having some sense that, yes, I think there's some concern on deficit dynamics in a world where I think this White House is going to start talking about tax cuts. So, I mean, it doesn't surprise me that we are where we are. I think you don't really start talking about the impact on equities from the bond market until you're north of five percent.

2:42And I think we have an auction or two ahead of us that would be the place to really start to get worried. This is just this is a snapback. And if I look at the trend from whether I'm going all the way back to July of 2020, or whether I even go back to that CPI kind of blow off top in October of 22. From the peak of inflation to present, the long bond, or at least, excuse me, the 10 years done, almost nothing. So I'm going to say I'd rather see rates here than at 350, which is what I said yesterday. And I think I'll say it like that for a while. Now, Karen, one of the words I heard a lot more in just the last month or two that I haven't heard a lot of in the last week or two is stagflation.

3:23Okay. Stagflation. That's the word. I heard it a lot over the last couple of months, but no one's really mentioning it now. Right. Yields keep going higher. Is inflation as big of a worry or is this maybe yields going higher because there is an anticipation of a growth story that's there, maybe longer term? Yeah, I think the latter. I think some of it is the lack of a recession story, which was really starting to be the consensus view after Liberation Day. So I think that has I think the odds of that a lot of houses are taking the odds of that recession down. And I think, you know, Tim always talks about rather have a five percent 10 year or 30 year rather in a good market, good economy than a three and a half percent in a weaker economy.

4:07But to me, the you know, and I look at the cues, the bounce is so extraordinary. And, you know, the VIX, we saw it in the low 50s not that long ago. And now it's 18 and change to me. I'm lightening up a little. I'm always long, always. That's how I always go. But, you know, I have some QQQ put spreads that I put on a couple of days ago, lost money in that already. But I think it's a little more prudent to I don't know. This feels a little toppy. This is the VIX is an interesting point. We don't talk about it all that much because it is very kind of idiosyncratic and very inside baseball for professional traders.

4:44But it is a gauge of volatility. And it was massively high just two to three weeks ago. And all of a sudden now it's like it was before Liberation Day even happened. So if you rip Van Winkle it and just fell asleep for three or four weeks, what gives? And the stat that if you buy the you should buy the market when the VIX is above 35. Volume exploded on the lows in the equity market. Tim talks about the 10 year yield. I'd rather it be lower. It's not lower. But let's look at it through this. You said stagflation. Yesterday, we got some relief from inflation, right? With CPI, the lowest increase since February of 2021.

5:28Doesn't that give you some hope that the stag inflation is not there right now, presently? And if you look at the overall market, if you look at it on a 30-year basis, the dot-com bubble, the market fell 77%. Financial crisis, 57%. The European debt crisis, 22%. Pandemic, 34%. We're always higher. On average, the market increases by 10 % a year historically. So if you've missed the 30 best days in the last 30 years, you've given back 83 % of your performance. So it's the old, what's the line, Dom? It's not timing the market. It's time in the market. It was nice how you guys did that. Could you do that again?

6:14Yeah. I knew where he was going to go. He's a master of these cliches. But the point is, I'm not bullish every day. I'm bullish every year. Stay in the market. Unless you have a daughter that's going to school or a son that's going to school or you're retiring. Or you need a down payment on the house. You need a down payment on the house. Set it and forget it and take these little hiccups. Karen's always, always long because she's a value investor. She's got to be in the market. I like to play it from the hip. I'm long in the market. All right, so Julie, let's bring you into the discussion now as well.

6:51For the price action that we've seen off the recent lows, it seems like we've gotten back to what we've always done, which is to buy big cap, mega cap technology, telecommunications and services and everything else like that. Is the MAG7 trade something that you're looking at as the blueprint for any possible upside to come? Well, I think where investors are going is where the earnings growth is. And so that is still the place where there is the most dynamic and meaningful earnings growth. We're not seeing it in small cap. We're not seeing it in mid cap. And a lot of large cap just doesn't have it.

7:27And so to me, it makes sense when we rotate into this. People really want to be at the forefront of the AI theme. They want to feel confident that they are positioned to benefit from that. And, you know, my question is always the same, which is in terms of technology disruptions, it's not always the disruptors for whom the economic gains accrue, right? It's not always the disruptors who make the most money. So I think it's really important to be thoughtful about why you're investing in these companies. If it's because they are quasi-monopolies, that's different. I kind of agree with that. But I think the overall outlook for AI to me is still uncertain.

8:01And I think that you're probably better served by being a bit more diversified and focusing on quality. All right. So there is an interesting way. This is the charcuterie plate, right? Because now we're going to get into a big part of the discussion here. For more on the impact of all the stuff we just talked about and higher yields in the stock market and everything else, let's bring in Andy Constant, the CEO and chief investment officer over at Damp Spring Advisors. Andy, I think you've heard the conversation here. It's an interesting debate that's happening right now. I wonder if you could frame for us what your thoughts are about whether a stock market continue higher in the face of rising interest rates?

8:39Right. So I think that what's happened over the last since election has been really a tale of two men, a almost a Dr. Jekyll and Mr. Hyde sort of environment where initially everyone expected as soon after the election for President Trump to be Dr. Jekyll like he was in the first term. And markets began pricing that. But after inauguration, Mr. Hyde appeared and he was quite bad for markets. Since the tariff pause, Mr. Hyde has come, Dr. Hyde has, Dr. Jekyll has come back, sorry, and markets have recovered. This chart shows the ratio of stocks to bonds. So when it's rising, stocks are outperforming bonds.

9:35And when it's falling, stocks are underperforming bonds. And really, from inauguration to the day that the tariffs were paused, it was bad for stocks, good for bonds. And that's because of the policies. Dr. Jekyll's policies, observable in term one, expected after the election and certainly last month, were to cut taxes, modestly cut expenditures, allow the deficit to rise, which drives growth in this environment, likely sticky inflation, and also creates supply of bonds. And so Dr. Jekyll measured his success with growth in the economy and rising stock prices. Mr. Hyde was very different and measured success with the 10-year rate.

10:23His policies were aggressive deficit reduction via spending cuts and a complete reshaping of global trade via tariffs. Those policies were heavily anti-growth, And Mr. Hyde was great for bonds and bad for stocks. And so, Andy, I just got a question, though, because in the past when this has happened, there have been those folks out there who find value in getting a four and a half percent yield on a 10 year treasury or a five percent yield on a 30 year long bond. There is an argument to be made that capital is going to flow because people want to take those yields and take advantage of them. How much is that going to be to the detriment of the stock market?

11:09Yeah, I mean, I think that's the question, which is if we continue on this Dr. Jekyll path, bond yields are going to continue to rise as the deficit rises, as growth rises, as inflation may may not have the one off tariff increase, but may be stickier for longer, keeping the Fed on hold. And so if we continue to have a Dr. Jekyll-type environment where the administration pumps stocks and pumps growth, I think long bond yields can rise quite a bit before they start impacting stocks. All right. There's the view on the stock versus the bond market. Dr. Jekyll and Mr. Hyde. Andy Constant, Damp Spring, thank Thank you very much.

11:49We'll see you again soon, sir. Sure. All right. Let's trade this, guys. If it is a scenario, Karen, where there is competing, I guess, returns in terms of where the bond market is and the yield you get versus what's happening in the stock market, and people feel as though it's attractive enough to be in the bond market now, I would argue that that takes away some of the fuel from the stock market. Agree. I think it takes away, you're saying it takes away dollars or what's happened that would make one go into bonds? I think dollars for sure. Right. Yeah. Well, we'll see. You know where they're in.

12:22They're deep in knee deep, neck deep. I don't know how deep in tax policy now. We'll see that push or pull about will there be any realistic hope for deficit reduction? Right. If there is, I'm skeptical. If there is, that would be good for bonds. But I'm a little skeptical that I think it'll be more of a party for the equity market. What do you think, Tim? Well, I don't know whether Robert Louis Stevenson was a buyer of stocks or bonds here. But I think the most important question is, is after the blink or after what went on in Liberation Day, are foreign buyers and are they Dr. Jekyll or Mr. Hyde?

12:57Because the bigger issue to me is whether U.S. Treasury markets became less investable to the rest of the world and how long term the damage might be from that. I'm one who says not only reserve currency, but reserve bond market for the foreseeable. I do think that there are elements of what have gone on in the last three months that have had a lot of foreign investors puzzled. I don't think a 450 10 year or a 5 percent long bond is enough to move people that are not investors in in those bond markets to be moving out of equities into bonds. No way. I think there are bond investors that obviously are looking for five to 10 relative value basis pickup points and find, as you said, some value here in the 10 year.

13:35But again, it gets back to look, we're already getting a sense of the rest of the White House policy. The White House policy is geared towards things that are probably deficit unfriendly. Remember the campaign trail? It's all we talked about. We talked about a deficit. And Andy's been on this show before at times where we spent a lot of time just on the refunding schedule. This is more about those dynamics. It's not about our yields too high to derail an equity market. The equity market's fine if the economy is fine. And what we heard from this earnings season is very conservative company management that weren't willing to stick their neck out.

14:06This is a snapback based upon being at the total extreme, again, Jekyll and Hyde, of where the market's confidence was. And just because we've gone back to 450 doesn't mean it's a danger sign. By the way, less mention of stagflation and less mention of bond vigilantes as well in this whole discussion. And we didn't mention the basis trade really quickly where the unwind happens, which can be as big as$1 trillion notional. So that's having a huge impact on yields right now. Stay the course. speed on socks. Okay, let's talk about what's happening right now in Boeing shares in the green today. Qatar Airways signing their largest deal ever with the Planemaker to buy more than 200 jets.

14:45Phil LeBeau has the details on why this is so important and just what questions are still left. You know, Dom, when we report on wide body orders for Boeing and Airbus, it's typically 40, 50, maybe 60. That would be a big order. Today, what we saw from Qatar is far larger than that. Now, Boeing says it is the largest wide body order that it has ever received. A total of up to 210 planes. Here's the breakdown. These are firm orders, the 130 and the 30, 130 Dreamliners, 37 777-9s. That's the 777X that is yet to be certified. And then there are options for 50 more planes, a mix of the 787 and the 777.

15:29So let's start first off talking about the 787. The backlog there is for 759 planes. They are making progress about gradually increasing production at the plant in Charleston, South Carolina. And they expect to do that later this year. And then in subsequent years, they're at five right now per month. The expectation is that they'll grow from there. With regard to the 777X, as I mentioned, it has not yet been certified. Could that happen by the end of this year? If it does, then you'll start to see it go into production. The backlog, and there's demand out there for this aircraft, 496 planes. Take a look at shares of Boeing over the last year.

16:09The delivery so far year to date, 175 planes. But the belief is that they are showing the kind of progress that you want to see when it comes to the 737 MAX. And as a result, you are likely to see monthly deliveries gradually increase throughout the year. Also take a look at shares of GE Aerospace. Why are we showing you this? GE Aerospace is the primary 787 engine supplier. They have about two-thirds of the market when it comes to the Dreamliner. And then when it comes to the 777X, they are the sole engine provider with that aircraft. Big day, not only for GE Aerospace, for Boeing. You don't see these orders too often, Dom.

16:49And fittingly, that the president is over there that he would want to announce it earlier today. Total value of this, when you look at Boeing and GE, about$96 billion is what the expectation is, especially if you go at list prices. Remember, these aircraft are never sold at list prices. All right, Phil LeBeau, massive deal, and Boeing has become a lot for this administration, maybe the standard bearer of policy for business across the entire world. Phil, thank you very much for that. Let's trade this. I'm going to start with you, Steve, on Boeing. This has been no shortage of news, and it feels like the 737 MAX stuff is almost very distant in the rearview mirror at this point because it's all very forward-looking with these orders.

17:31It does, but the FAA, there's still some manufacturing restrictions on these. The old restriction was 38 per month of the 737 MAX that they were allowed to produce. Now, I understand if you're friendly with the administration, that could easily change. But I think the regulatory scrutiny, the certification, as Phil alluded to, were said, there's a lot. There's a host of issues, safety concerns. So I would probably be on the side of selling on POPs versus buying. This is a stock that's already up north of 15 percent on a year-to-date basis. Tim. Well, I mean, you know, it's not a joke. I mean, this is the B in Bland.

18:09And by the way, I really think this was a— Licep or Bland? Bland. So I'm banned, but I'm always dropping in that L wherever I can because I'm holding on to Lyft for whatever reasons for multiple years. But no, I think you're buying you're buying weakness in Boeing. This is a company that, you know, I mean, Carter talked about the chart. This was the conversation from yesterday. Yesterday. If you're going to have if you're looking for trade surplus, this is the company to do it with. This is the company to Kelly Ortberg to walk hand in hand with Donald Trump around the world and say buy our planes.

18:38And the White House and Trump particularly are fascinated with the aviation sector. This is exactly why you're buying Boeing, not just because of the headlines here, but because and Steve's right. I mean, there's plenty of regulatory scrutiny. Wide body, by the way, equals wide profits. I mean, this is the most profitable airline. Excuse me. 787, 777s make them a lot more money than the 737s. This is a company that if you think about where they sit in terms of the recovery of their free cash flow, I think the street and I think investors can be caught at least a little bit off in terms of how quickly this company becomes positive on free cash flow.

19:15All right. That's the Boeing trade coming up on the show. After hours action to bring you shares of Cisco and Corweave both on the move after reporting the results. The details from those respective quarters coming up next. Plus a done deal in the weight loss drug space. Novo's latest scoop up as the company doubles down on its oral GLP one bet. weight loss, diabetes, the details when Fast Money returns in two.

19:45All right, welcome back. We have a news alert on the Wall Street Journal reporting a potential deal between Dick's Sporting Goods and Foot Locker. Foot Locker is exploding higher on the news and our Kate Rooney has the very latest details. Kate, what can you tell us? So, Dom, You can see shares were up more than 67 percent on this Wall Street Journal report shares of Foot Locker, I should say, that there could be a mega merger in the apparel space. Wall Street Journal reporting Dick's Sporting Goods is close to a deal to buy Foot Locker Journal here citing people familiar with the matter. They say the deal that both sides are discussing the deal.

20:20It would be about 24 bucks a share. That equates to roughly two point three billion dollars. If you look at it in terms of a premium, it's about a 90 percent premium on Foot Locker's current price. Journal saying deal could be finalized as soon as Thursday, barring any sort of last minute snags here. But both of these companies had been hit by tariffs, which upended supply chain and cost. Foot Locker stock with that supply chain and tariff hit had been down as of Wednesday's close. About 40 percent, as I mentioned, shares surging after hours on this M &A news. Dick's Sporting Goods heading the other direction, though, down about five percent.

20:55Don, back to you. All right. Kate Rooney with the latest there on a potential mega merger in sporting goods. Let's kind of talk about this really quickly. Karen, this is a name that you've been kind of in and out of. I would like to know whether or not you think this is a good deal. A good deal for Foot Locker, yes. For Foot Locker, it's a stock that's down 43 % in the last year. Yeah. You know, so Mary Dillon came there with great fanfare. She obviously did a tremendous job at Ulta, and she had this multi-year lace-up plan and really wanted to make the stores somewhere that, you know, Like there's a few great footlocker stores as opposed to tons of stores in every mall.

21:33And it really ran into trouble. And then you had Nike sales down. And they also all of them had the huge bubble of spending in the early pandemic and then the huge fall off. And they were just never able to turn it around. I think I mean, it's not crazy expensive. So I could see how Dix would want to do that. And it could be profitable for them. I can also see how Foot Locker would, this is a lifeline for them. It's not like they're not going under. It's not that, but they have not been able to generate that. To me, I'm just trying to understand what the strategic vision is. I mean, why? For dicks, for dicks.

22:11For dicks. And by the way, 14.5 % short interest in Foot Locker has something to do with this scramble here. That's a massive short interest to be chasing this deal. So you're going to be a very big wholesaler, right? More leverage. Right, more leverage with Nike and On and Hoka. and whoever. So I think that's that has to be part of the reason. And then maybe also in apparel. I don't know. I think it's just well, in a prior administration, maybe if maybe a retail deal like this wouldn't get done in this one, in this world with Foot Locker being as small as it is now, I think this will get done if there is indeed a deal.

22:48Hey, Julie, these are two very well-known brand names when it comes to sporting goods and retail and footwear and apparel. I'm just curious what your thoughts are given what we, I mean, again, this is source reporting from the journal, so it's not a done deal, but there's obviously kind of where there's smoke, there's fire coming out. Yeah, absolutely. I don't think we'd be hearing about this if it weren't a serious opportunity. For Dix, you know, this is a management team that has done a pretty admirable job in terms of capital allocation. Retail is among the hardest spaces. And I agree. I think for them, the opportunity is really in having more bargaining power with the wholesalers, particularly as all of these companies have turned to more direct-to-consumer.

23:25I think they're really trying to be able to counter that and have really relevant conversations about, look at how much distribution we can really give you, especially if we can turn around Foot Locker. The points and the retail and the real estate that they have is valuable, and I think that that's really what they're going to try to push. Look, if we can make Foot Locker work, it's going to be a big driver of your business. And I think that's probably the positioning they're taking. All right, Steve, what do you think? Yeah, this definitely, to that point of leverage over Adidas, over Nike, this gives Dix that type of scale.

23:56And then if you close, there's going to be some overlap on stores. So there's going to be a lot more efficiencies that come through this deal. So I think it's a positive for Dix. It doesn't have to get done, but I think it's net-net. It's a positive if you own Dix. I would stay along the name. If you're not in it, I would dabble. I would probably try to see if there's some upside here. Karen, I'm going to give you the last word on this. I mean, these are two different store formats, by the way. Yeah. Foot Locker versus Dix. I'm wondering. I don't know. This is just my thinking about it just on the fly about this wholesale issue, right?

24:26Nike's biggest customer wholesale is Foot Locker. So that's some big leverage for Dix. I think for Mary Dillon, who's a great operator, I think that this is not a tremendous outcome. When she got there two or three years ago, I think her plan called for margins much, much higher than here and a stock price that would have been significantly higher. And I'll just say really quickly, this is hugely opportunistic by Dix. I bet this deal wasn't even on a thought about, you know, before the tariff dynamics. I mean, this is something and, you know, while Foot Locker has recovered somewhat in the post, you know, the same market run up, it is still essentially trading below where it was, even in the world where we knew pent up demand, which had been kind of filled and oversaturated after after COVID.

25:10I think this is a deal that really is a scramble, and I think it is part of the strategy that they're talking about with Nike. All right. We'll see what else comes of this on this news from the Journal. Coming up on the show here, Cisco and Corweave on the move. The numbers behind the action coming up next. You're watching Fast Money live from the NASDAQ market site in Times Square. We've got more Fast right after this.