Fast Money 8/27/26

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0:43All curated just for traders. Plus, guided learning paths with content designed to fit your unique interests. And no sifting to find exactly what you need, so you can spend your time learning to trade brilliantly. Learn more at schwab.com slash trading. Live from the NASDAQ market site, this is Fast Money. Here's what's ahead. The Jackson Hole Countdown. Fed Chairman Warsh on the clock, set to deliver what will arguably be his most important speech since becoming head of the Fed a couple months ago. Plus, the sizable software surge. Salesforce fueling a rip-roaring rebound with its best day ever, but is that revival for real?

1:21And then, inside NVIDIA's half a trillion dollar day, breaking down the dollar store dilemma, And we'll have a rather meaty, beefy conversation about Big Macs and McDonald's, Big Blues. Hi, everybody. I am Brian Sullivan in for Melissa once again coming to you live from Studio B right here at the NASDAQ. And on your desk tonight, we've got Dan Nathan, Guy Donnie and Tim Seymour. Welcome, everybody. It's going to be a big show, a ton to do. Let us jump right in and begin with the Fed, the chairman on the clock. Kevin Warsh, just hours away from delivering his highly anticipated keynote at the officially named Jackson Hole Economic Symposium.

2:04It is arguably, as we said, the most important speech since he took over as head of the Fed. We're going to get to Steve Leesman in a moment. But, Domi. Hello, Brian. You guys are throwing me off here. You're right there. Tim Seymour is remote, so I'm trying to figure it out. Is it that difficult? No, it's a little bit odd. By the way, the folks in the radio audience have no idea what you're talking about. What do you want to hear from Kevin Warsh tomorrow? Stay the course. Who's Stan? Stand your ground and stay the course. That's what I want to hear. He's been hawkish. He's been sort of dug in on this.

2:40It's a new Federal Reserve. I'm sort of on board with all this stuff. Again, he's been hawkish. Good for him. But does what's happened over the last week and a half in terms of what Treasury Secretary Besson has done, And does that change the narrative? I hope that it does not. And I hope to hear that tomorrow. Tim Seymour, how about you? Well, I don't think we're going to get a whole lot from him. Jackson Hole, historically, at least under the Powell regime, was a place for big headlines and possibly policy changes. And I just don't think that's where we are. Not only is the communication salvo not a salvo, but I think there's a sense that the Fed really is watching data that on different parts.

3:21The labor market is not getting away from us, but inflation is absolutely above. We're hearing from multiple Fed governors now that they believe the time to act is now. These are quotes out of today's regional Fed headlines. So I think a market that is looking for the Fed to be aggressive against inflation is probably not going to get that. But I don't think the Fed is going to give reasons for, call it bond bulls, to give the market a reason to actually rally. I don't think rates are coming down here. I feel like, Dan, we're in the streets of Pamplona because all the bulls are running, right?

3:56You've got the bond bulls running. You've got the stock bulls running. Energy's running. Crypto's running. Gold's running. Are we running on empty? That's why they pay you the big bucks here, Brian. I mean, that's some good stuff. I don't know. You know, I'm in like a slightly different camp. I'm not like some great Fed watcher. I'm certainly not an economist. I kind of feel like, you know, Warsh comes in. He kind of sets this kind of new tone about how they're going to communicate, you know, Fed policy. And, you know, to me, I feel like he's going to actually get painted into a corner a little bit.

4:26I think the market may do a thing. It might be the bond market. It might be the stock market. It may be all the markets. And, you know, I go back, Guy, to Q4 of 2018, you know, which Fed Chair Powell was in the seat for, what, about a year? He was kind of raising interest rates coming off that zero interest rate bound. And what happened in Q4, Guy? The stock market dropped? 19.9 percent, Brian, from Halloween until Christmas Eve. Right. And it forced Fed Chair Powell to pivot. I mean, and this is not something he wanted to do. And so from, you know, like the last year or so, we haven't minded rates going or at least, you know, inflation causing the rate picture to stay bid higher for longer.

5:01And, you know, we went from this kind of, you know, dovish stance of the prior few years to this hawkish stance. And, you know, here we are. Nothing's been done. And I don't think there's going to be anything done until after the midterms. But I do think there's a really good chance that the stock market, the bond market, maybe all of the above, kind of force his hand to give a bit more guidance and maybe actually do a pivot. And that's the point I was making about that. What was it? Christmas Eve, I think, where there was this big Fed pivot and then the market just took off. So guess what? So we're talking about stances, right?

5:32We've got the hawkish stance. We've got the dovish stance. We don't have the Nina Cherry Buffalo stance, although that was a quality song for the mid 90s. You know who probably knows? Steve Leisman. He's Steve Leisman, because he's actually there in Jackson. Also, Steve, here we go. So Tim said he didn't expect his own view. He didn't expect a whole lot from Chairman Walsh. But I also know that Chairman Walsh is not going to get up to the podium, I think, and go, hi, I'm Kevin Walsh. I'm the Fed chair. Thanks for coming. Goodbye. I mean, he's going to say something. Best guess? I think he's going to give the market more than it expects, but not as much as it wants.

6:08That would be the thing I would make, the best guess I would make. I've got three options where I think he could come out. One is he could sort of stick to his old guns, and that didn't work very well for the market. If you think about the options that he has, we're calling them for better or worse in terms of his options that he has, just because the pun was there to be had. And what you come up with, he could give a little bit more affirming that he would handle inflation with rate hikes. The market wanted to hear that last time. And he could give views on the economy, but no policy outlook.

6:38Look, my guess, guys, is he's going to basically make a distinction that, hey, I'm not going to give you all that stuff after a press conference. I'm speaking for a committee, but I can give more here when I'm speaking for myself. What markets want and what they expect to get, though, take a look here at our CNBC Fed survey. 32 % thought he'd be hawkish, 19 % neutral, zero dovish, and 45%, I guess, they sided with Tim Seymour, thought he'd give no guidance. Here's the danger, guys. As Warsh's colleagues in CNBC interviews and other media have not been shy about offering their outlook. So the danger for Warsh, they end up driving market expectations, rightly or wrongly, and not the chairman.

7:16That means greater uncertainty, Brian. If you're going to go into that trade it section, you've got to have more wider uncertainty bands about what the Fed's going to do. Yes. OK, so let's dig into that a little bit more, because I get we get it. He's not going to go up and say, well, you know, I want to raise rates and I'm calling on everybody to raise rates or cut rates, whatever it might be. But in giving the his economic outlook, I mean, your job, sort of all of our guests on CBC's job is kind of to try to parse through that riddle and figure out where the policy position may be. Is it not?

7:51Yes, that is absolutely what we try to do. And we get more or less information. And look, Brian, I've talked to people who say, you know, there's all this talk about everybody's like whining. They don't give us the information we had. But that's not what's happening. All they're saying is, if you want me to price something this narrowly, give me the information I need to price it. If you don't give me the information, I'll price it this narrowly. It's not whining. It's not emotion. It's just pay me if you don't actually give me the information. If that's the world we want to live in, if that's where Kevin Walsh thinks he has a better bead on policy, he should do that.

8:23That's fine. But the bond market is just going to react. The stock market is going to react. The problem is, Brian, as you know, the world is a very uncertain place. One of the things we thought we could do was game out what the Fed would do with interest rates. Well, if that's going away, well, that's just another uncertainty we have to deal with. And Warsh is not Powell. And we had a rather, you know, fiery but a substantive debate on Power Lunch with you and Rick and Jeff Kilburg earlier, Steve, about what, I guess, what Warsh will be different or how Warsh will be different than Powell and everybody.

8:56By the way, every Fed chair is going to be different from Bernanke to Yellen to Powell to Warsh. But Warsh is a markets guy originally, right? Working in the financial markets. Brian, when an anchor prompts a debate like you did, you should take a victory lap. That was one heck of a debate. And you did a good job fostering it. And if you take a step back from that debate, which I think is a fascinating one. And my colleagues, Rick and Jeff, have good points. And I think they were wrong, but I'm not going to belabor that point. The real question gets down to this. Is the Fed need a major overhaul or not?

9:36Is the process broken? Do we need regime change? And has Warsh made the point for the need to it? That's one of the things I'm reporting here. We're the elite of the central banking, monetary policy, economic community here. has Warsh convinced them that this regime change program that he's on is one that is needed and one that will lead to better monetary policy? Because if it's better monetary policy, I think you'll sign up every one of the attendees at this conference. If it's not, he's going to have continued opposition. Steve, you might have said this, so I apologize, but what are the thoughts on the following?

10:13Typically, the markets have been reacting to Federal Reserve and the rhetoric around it. Now he's saying, you know what, we're going to sit back and we're going to let you figure things out and we'll sort of react to markets. Is there is there some sort of truth in that? By the way, I'm all for it if in fact that's what's going on. So there people do think that's a good idea. I have a hard time figuring it out because it's the Fed that has to set the overnight rate. That's how the system works. I can't think of a market guy that would do the one that would do the setting. Which market do you want it to be?

10:50The tips market? The bond market? Is it the overnight rate market? Is it the gold market? Who should set that overnight rate? And which market guy, you have to ask yourself, will incorporate the congressional mandate of price stability and low unemployment? That is not any market that would do that. And plus, Guy and Tim and all the people around the table there and Dan, they have different interests. You guys don't have the same interests. Dan wants to go to more rock and roll shows. Timmy wants to play drums. Guy, I'm not sure what it is you do for your hobby, but you have different interests, and you would invest differently along that way.

11:25Brian wants to drive sports cars, right? So you all have different things you want to do. Are you going to set the rate at what level for that purpose? I do like it. And he's not wrong. Although we didn't get to Guy O'Donnell's Volare. No. You drive a Volare. I don't drive a Volare. I like to fish like Steve likes to fish. I like to fish. I think Steve's probably a much better fisherman. That's just my guess. I mean, fishing, it's not about being better at something. Fishing is actually a passion. No, no, no. I think Steve's a better fisherman. Tim Seymour, if you were going to put the hook in the proverbial water.

11:57Sammy is screaming in the back. If you're going to put the hook in the proverbial fed water, Tim Seymour, And I know you said you're not expecting a whole lot of firm headlines from Chairman Walsh. What would you want him to say that would keep this stock market rally going? What would be the best bait he could do for this market? See what I'm trying to do here? Yeah, I'm not taking your bait. I don't want him to spur the stock market on at all. I don't need him. I don't need him to light a fire under the equity market. It's got its own fire. In fact, if anything, I think that's what he's trying to stay away from.

12:31What I do want him to acknowledge somehow is that we live in a unique time in terms of global capex and the inflationary impacts of that. And I understand that there's a, you know, we tend to strip out food and energy and commodity volatility. But you can't tell me we're going to talk about NVIDIA a lot tonight. And we're going to talk about what essentially means that 1.3 trillion in capex around AI next year. That to me is inflationary. And so I think there's that entire dynamic and the fact that we've been above the Fed's target for five years. So I want to hear recognition of that. I think the bond market wants to hear recognition of that.

13:09And I don't care about the equity market. I care about the equity market. And I'll just tell you. I care about it, but I'm not looking for him to do that. I know. You care about the small caps in the equity market, Tim. But I'm looking at a VIX at 14 and a half. And I'm looking at the S &P. If I look at the SPY, the options market is implying less than a half a percent move tomorrow in either direction. I think that's really interesting, the level of complacency. I think the market is actually in Tim's camp right there because, you know, you just see you would think that the market would be pricing higher volatility, especially if you consider how important this speech is, Brian, how you staged it versus his last speech.

13:46In the last speech, there was some volatility after that. Steve. Yeah, just real quick. Everybody I talked to, just another answer to Guy's question, everybody I talked to said no matter what the Fed does, they will still try to price not what they think the Fed should do, but what they think the Fed will do. Warsh said the market is now looking at the ball, not the referee. Well, my argument with that is the Fed is the ball, not the referee. Well, I would say they're looking for maybe Warsh to be an estimated profit, but I will say this, that based on your backdrop, Steve, and lighting a fire under the market.

14:23We definitely have a fire on the mountain. That's Marshall Tucker. No, it's not Marshall Tucker. That's Stella Blues. Steve, let me go. Steve Leisman, despite that, have a good night. Steve, thank you. Thank you. All right. Joining us here on set, Robert Tipp. He is PGM Credits Chief Investment Strategist, head of Global Bonds. Robert, good to have you on. Good to be here. Thanks very much. All right. Is there anything, I know you're the debt market guy, but you're a macroeconomist. You could talk to this. Is there anything that Warsh can say tomorrow? I mean, I guess there is. But do you expect him to say something that could derail everything?

15:00Oh, no, I don't expect him to say anything. He's going to say something. He's going to be there, but you know. What's he going to say then? If everybody says he's not going to say anything, he has to say something. Yeah, you know, he's in a tough spot. Inflation has been high for five years. But what people don't realize is the rate of job growth in this economy has decelerated from 5 % year-over-year growth to 4 % to 3 % to 2 % to 1%, and now it's at zero. That's over the last five years. The other thing that's not appreciated is when you look at the CPI, core CPI, it has decelerated a lot. It was above 6%.

15:32It's come down. By some measures, the last few months, I mean, we had a negative reading. It's extremely low. Now, so he is resetting the table. This was an easy job. Inflation would be down. The economy would be doing great. but he wants to come in there get his committees regroup this will also get him past the election maybe and then start setting policy aggressively if it needs to be changed next year or not well if he's he's in that that sylin charybdis sort of rock in a hard place moment right you see what that reference there it's educated reference where he's stuck between those rocks how does he navigate those two mandates?

16:11Sure. Well, I think he's going to wait six months, you know, or a few months, a few more months, and see how things shake out. I mean, you've got negative job numbers from positive, and the inflation numbers have dropped. So is this temporary? And I think the World Cup has possibly introduced some noise here as well as Amazon month. The stats are very difficult. So the economy is doing very well. Inflation is decelerating, but so is job growth. he could easily knock this thing, you know, down into the recession. And they're always a surprise. So one of his committees is on productivity, job growth.

16:44We all know the AI things out there. It's going to make sure that what we're seeing in decelerating in jobs isn't something to do with what's going on with all the CapEx. So what you seemingly are saying, correct me, please, as most people do, I mean, inflation is a problem, albeit seemingly getting better, and the labor market is deteriorating. That's not a good place to be in, as Brian just said. That is the word stagflation that nobody seems to want to say, but apparently it's not that far away if you sort of look at the numbers. Yeah, the headline, the top line growth in this economy is really good.

17:15The profit growth is phenomenal. And job growth doesn't usually go negative. Well, even away from the AI, it's still extremely solid. And you usually don't get a job market recession when profits are rising strongly. So I don't think there's a risk of that. The market now is already braced for a couple few Fed rate hikes. That's totally different than where we were for a year. March of last year through March of this year, Mark was looking for the Fed rate to go down to three. It's braced for a couple of hikes. So I think we're in for a consolidation in the next six months. It should be OK for the markets.

17:49And then we'll find out next year what the real plan is. But we'll also know more about the economy. How big of an event, very quickly, how big of an event is September 9th with the Treasury? That's when the Treasury's going to be buying. Right. That's their next operation. That's when they're going to set the schedule for the next quarter. Yes. And everyone wants to know what are they going to do. Yeah. Given Besson's recent announcement. Yeah. And, you know, everybody likes to be a critic. I'm just watching what's going on out there. And I will tell you, for the last year or two, the U.S. long bond has been the best performer relative to France, relative to Germany, certainly relative to Japan, the U.K., relative to whether you're looking at interest rate swaps or in absolute basis point changes.

18:30So I think the Fed has held off on issuing more treasuries. You can argue about whether you like that or you don't like that, but they have been successful. They saw some rise in interest rates. They've stepped in to boost this program and uncap it. They're going from$0 to$2 billion max to what could be a$4 billion floor for each of the purchases. So, you know, he could be successful in containing the long rates. Robert Tipp, PGM. Robert, really appreciate your insight and your time. Thank you very much. Thank you. Yeah, I think something Tipp said is really important, and I don't think it's kind of focused on enough.

19:04You know, if you think about all this CapEx, it was kind of reinforced today by the numbers that we saw, obviously out of NVIDIA, but it was also the security guys. It was also out of software, and you might see like a ramp up in software CapEx too, right, in the SaaS enterprise space. Very inflationary. Right. And if I look at the market and I look at what's performing and I look at that earnings growth that, you know, he just mentioned here. Think about how many different sectors in the market now are being driven in and around this A.I. CapEx boom. There's energy components of it. There's industrial components of it.

19:33I mean, the list keeps going on and on. And so to me, I think that, yes, this feels great today. But at some point in the not so distant future, if there is a rate shock like Guy has been suggesting, if there is a continued energy shock, if there continues to be this bipartisan political backlash against creating these data centers, I just think there's a lot of things that people are not pricing in right now. And I do think that it's taken up a good bit of the economy and some of the growth that we're seeing right now, which, make no mistake about it, is extraordinary. Well, and by the way, not only is that extraordinary, we're going to take a break and talk about all the other extraordinary stuff that's going on.

20:13Coming up, the next trillion-dollar chipmaker. That's what NVIDIA's Jensen Wong said about Marvell earlier this year, what the just-reported numbers could do for the stock. Speaking of NVIDIA, that stock having its best day in more than a year, adding an intel in value today. We're back in two minutes.

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22:00All right, welcome back to Fast Money. Marvell, the semiconductor company, taking a leg lower in the last few minutes, down about 4%. The earning call coming out, it's ongoing. Christina Parcinel is here to take us inside the numbers, take us inside the call. Okay, same message we're hearing everywhere. We know this. The AI build-out is accelerating, not cooling off. Stock still falling, actually down 6 % now. The good. CEO Matt Murphy raised the company's revenue target for next year to roughly$18 billion. You actually saw the stock turn around after hours when he said that on the call, and to roughly 50 % growth next year.

22:32The engine is the data center. Again, this company makes custom chips, also does networking. Murphy says that the business is now growing more than 60 percent driven by the optical parts that connect AI servers and by custom chips, which he expects to more than double. Why is the stock falling, though? I got asked that from a producer. I know it's very dramatic, but. Why did you just sing that? I don't know. It's been a long day. It comes back to that big warrant deal with Google from last week, the one Wall Street treated as upside on top of everything else on the call. The CEO said the revenue from that deal for next year is already baked into Marbell's numbers.