Fast Money 9/29/25

0:02Live from the Nasdaq market site in the heart of New York City's Times Square this is fast money. Here's what's on tap tonight. America or the mainland after big moves in U.S. and China tech? Which group is a better bet heading into Q4? A would you rather battle royale coming up. Plus, a brokerage boom. Shares of Robinhood hitting fresh record highs and climbing more than 400 percent over the past year, where one Wall Street analyst sees that stock heading next. And later, sofas and streamers have the latest tariff threats are hitting furniture stocks and even Netflix. Gold's rally keeps shining and the options action on Nike ahead of its results.

0:36I'm Melissa Lee coming to you live from the studio. Be at the NASDAQ. On the desk tonight, Steve Grasso, Karen Feinerman, Courtney Garcia and Guy Adami. We start off with big moves and big tech here at home and halfway around the world. NVIDIA, Micron and AMD among the biggest winners in the chip space as the AI RIP tries to get back on track. Data storage names like Sandisk, Western Digital, Seagate surging today, too. Meanwhile, China's AI stocks have been on quite a tear this year. The K-Web jumping more than 2 % today and nearly 45 % since January, led by Alibaba, Baidu, JD and more. Year to date, the K-Web has more than doubled up the triple Q.

1:12So as we start to get ready for the Q4, we want to know, it's kind of an unconventional start to the show, but we will ask, would you rather be in U.S. tech or China tech over the next six months? guy down. Wow, this is a first on fast money. Unprecedented. Can you answer the question? He's stalling. I'm thinking China. I still think it's undervalued. I think valuations are so compelling. You mentioned K-Web. Throw up a K-Web chart over the last six years or so and you'll see. Yeah, we've had a bearish to bullish reversal, but we're nowhere near where we were at its peak. That's suggesting we're getting there, but you look at these U.S.

1:54tech names, all most of them, at least we talk about extended valuations. These stocks have been under the they've been in the penalty box for quite some time. They're just getting out now and valuation is still compelling. So Chinese stocks. We see a Chinese government very supportive of its own tech industry at this point, as opposed to back when we were wondering what happened to Jack Ma. I mean, it's a very different environment for some of these homegrown companies. However, the valuation has changed a lot, a lot, a lot, especially I mean, even the last month the valuation has changed enormously.

2:25So I think a few weeks ago, we looked at Alibaba taking out the cash, which is very substantial. It traded about 16, 17 times earnings. It's now 23, 4. Okay. And Amazon is maybe 33, 4. So I get that at the moment, these companies are seen as the darlings, right? And in the AI race, China wants to have absolutely great entrance. And Alibaba, of course, would be one of them. However, there is still, you know, all the things that we go to the U.S. for, right? Exceptionalism, rule of law. Some of those things have been a little bit battered, but nonetheless, they're still there. So to me, the way I'm set up, I do, you know, I like Alibaba.

3:10I have FXI, K-Web, but I do still think given the run that they've had, that I would rather be in U.S. than China. Right. The rule of law I get, but in terms of exceptionalism, we are setting up in a world where there seems to be two parallel universes going on when it comes to technology, an AI for the Western world and an AI for the rest of the world. And so in that environment, does exceptionalism apply, or are we sort of thinking in this other AI world outside the United States, China, Asia in particular, is Alibaba the way to go? And is that valuation gap, does that not address the fact that it might be the Amazon of that AI world?

3:55Right. I would stick with Alibaba's been a tremendous performer. I think it's in Guy's acronym. So he's blown the cover off. It is, right? Tube. It is in Tube. It's an A in yours. It's a B in mine. That's why we play the game. So that one has had an incredible run. But you also have, to Karen's point, you also have trade. So the deadline for China-U.S. trade is November 11th, a huge wild card. These stocks have already run, to a large extent, into that or with a hopeful outcome. So for the next six months, if that trade deadline is not met and it doesn't look great, these stocks can retrace. Valuation.

4:34Alibaba, extended. JD, not. Baidu, not. So it depends on where you go. You've got to be selective. Why are the other two not extended? Because I think Alibaba has been the way to play AI. And the others, although they have AI, it's not a major tailwind as far as the investor so far. But Baidu, that's your autonomous drive. That is the reason why I have Lyft over Uber, because Lyft can rise a lot more. They're partnering with Baidu, but so is Uber. So you have two people that are pushing Baidu's autonomous drive. J.D. is sort of a lost leader. Not sure. I don't have tremendous feel on that. But if China does move and we get that we get that trade policy more clarity, then I think everything China related is going to run.

5:24Alibaba is already ran. So it has the risk of coming back if it disappoints on the trade front. And I actually would take the Chinese technology trade over the U.S. trade right now, mainly because evaluation, like despite the fact that is way outperformed this year, which most people don't realize. All of our clients we talked to have no idea how much Europe and emerging markets have way outperformed the U.S. And China tech specifically is up like 45 percent this year, despite the S &P is up like 16 percent or so. But even with that, it's still a better valuation than your U.S. tech companies.

5:56And one thing to add on top of this is if the dollar keeps weakening, which it has been, that has actually been a boost for your foreign companies. And if that continues, that's why I would probably take the foreign over the U.S. in that environment. Interesting. So, Karen, I go back to you then. She's pushing you. I feel like she's selling you on this. No, I'm not. My job is not to sell anybody on anything. Right. Except for tonight. No, but I'm curious, you know, how much of a premium should an Amazon have versus an Alibaba, which is dual listed. And so they do have to conform to listing standards here.

6:30So if the concern is rule of law and things like that and visibility into earnings. It's not so much. Let me just first say one thing. I do think Melissa would be an extraordinary investor. I've always thought that. But to move on to the question, it's not about the listing. It's about a, you know, we have a democratic society here. They do not. And if there is some change or some policy or some something or, you know, Xi Jinping and Trump are fighting it out and they say, all right, you know what? We'll threaten to take all we'll remove our listing. Who knows what? I that is a level that that is I can't quantify what that penalty should be on the valuation.

7:14But I do know that the valuation has moved substantially higher while Amazon and I pick Baba because Baba is the Amazon. Right. I pick Amazon rather for Baba because they really write. They have a big retail business. They have an AI business. I guess they're both logistical, I don't know, juggernauts. And I just think that differential is too small now to make Boba the better choice. One fine point for me. If we do enter a rate cutting environment where it's more static going forward, then it's a layup for U.S. tech. Then my choice is going into a rate cutting environment. Is it going to be static?

7:54Is it going to be regular? Or is it going to be case by case, meeting by meeting? So that's why you see the market sort of pulled back. Is it going to be a quarter point at every meeting or a quarter point every other or a quarter and done? Fair. I mean, I think that we raised the question tonight because it underscores this question about the valuation of U.S. tech. So whether it be U.S. tech or China tech, the question is U.S. tech still at this point at these valuations, at this point in the cycle, at this point of where the markets are valued? What's your answer? I think they're more expensive.

8:26Well, I think they are more expensive. I think you can look at it and say, you know what, just on a valuation basis, they're more expensive. Now, to Karen's point, maybe they're justifiably more expensive for the reasons she laid out. But some of the other reasons she talked about, I mean, Alibaba has been in the penalty box since Halloween of 2020. I mean, if you look at the tremendous, that was a Jack Ma announcement, I think, way back when. And it never crawled itself back out until recently, and recently over the last six months. So there's a lot of ground to make up just on the valuation part of the equation, I think.

8:57Yeah. Where do you stand in terms of U.S. tech valuations at this point? You know, I think they're getting expensive. However, it's not to say it can't continue to run. I mean, we've seen this many times. We're nowhere near the valuations you were, like before the tech bubble. So it's not to say that you should get out of that trade. Yes, it's getting expensive. I think it has room to run. In the real world, we don't actually have to choose one or the other. You can't own both of these, which we should. Thanks for highlighting that our game is really built on a false premise. But otherwise, great game.

9:23But, you know, I think what you do like here is, I'm losing my train of thought here, but you want to go with both of these. You want to make sure you have the valuations. And they're really underinvested. Investors tend to be much more focused in the U.S. And this is both retail investors and institutional investors, especially when you look at the amount of GDP that is coming from abroad. So I just think you don't want to lose focus. That's a trade you should be in. So just to we talk about a monolith of tech, but it's not. Sure. Right. There's the AI trade, which I have grown increasingly concerned about and have reduced my exposure.

9:55Collars and NVIDIA put spreads, Oracle put spreads, even short CoreWeave now. It's not a commentary so much on CoreWeave, just that it's sort of the poster child for data center growth. I feel like I know that will grow over time, but that doesn't mean the valuations right now are where they should be. And I think we, I mean, it just seems bubblicious to me. Very. Let's dive deeper into the tech trade and the rest of the market now. Let's bring in Stuart Kaiser of Citi. Stuart, great to see you. Thanks, you do. I don't know if you want to answer or would you rather question U.S. tech or China tech?

10:29Yeah, they should be involved in that. But, I mean, we want to get at this notion of should we be concerned about the valuation of the American AI trade at this point? As far as China U.S., I mean, if you told me one to three months I can be comfortable being in China, you do have some big catalysts coming up at the end of October that you would assume would be supportive. But to Kara's point, I think six months out, a little bit too much uncertainty for me to really want to engage in China tech to the long side. To me, valuations, if all you're coming to me with is valuation, that's really a tough sell to me.

10:57You do have some catalysts at the end of October, though, and I would like some tactical exposure to that just in case. Right. In terms of the build out of U.S. tech and data centers, are we getting into that period where we are looking bubblicious? I mean, it strikes me that just in the past couple of days, week or so on the street, there have been a couple of notes saying, are we in a bubble territory? I mean, like when I see that, that sort of parade of stuff coming into my inbox, I'm thinking, wow, people are really, really thinking about this. Yeah, the question is definitely coming up. I think AI PowerGen and that trade is probably the thing we have the most confidence in, frankly, from a sharp ratio perspective.

11:32To be fair, though, yeah, I mean, there is a lot priced in. Right now, people are, I don't want to say over their skis, but it's a pretty aggressive trade. And I think last time I was on was when Oracle reported, right? And the conversation there was great revenue forecast. They're not going to be able to find the chips and the energy to actually get there. So it's tough. I mean, the tactical valuation might look high. But if you believe that narrative, then you're probably earlier innings in that trade than you previously thought. So, yeah, AI power, Jen, is a theme where we're still pretty strongly behind.

11:58Shifting gears, we've learned to discount government shutdowns. But for some reason, it just feels like people are more dug in this time. Hey, listen, this time tomorrow it all might be done. But concerns around it, what does it mean if it gets through the week, we miss a payroll, those types of things? Is the market moving? You know, not too concerned about it yet. I think this thing would have to last, let's say, beyond a week or two, or you'd have to see the long, long end of the bond yield curve kind of respond to it. Otherwise, you know, not too concerned about it right now. If it wasn't for a payrolls report on Friday, we probably wouldn't be talking about it, to be honest with you.

12:30So, yeah, tactically, not not too concerned right now. It would have to be something that I would say went beyond two weeks to really get our attention. Stuart, when you when you talk about high quality stocks, usually people think about high quality stocks. They think the mega cap tech stocks. How much have you strayed out of mega cap tech to include high quality stocks? And what are they? Yeah, high quality stocks, definitely something we like being in. To your point, five out of the mag seven would screen kind of high quality in our framework, which to us is comforting. We could tell you to be in quality, but you don't have to go like totally away from that.

13:00What else is in there? You know, the JP Morgan's of the world, they're in there. A lot of the large cap financials would fall in there. There's a few, not too much health care, not too much staples, but you do have a lot of tech and financials, I think would be the two biggest exposures. We do like that trade. mostly because of the uncertainty around the labor market. But it's also nice that you have some MAG-7 exposure, too. So get that, you know, what two birds with one stone, so to speak. So you just said something about the long end of the bond market. Are you saying in a shutdown that the long yields would be higher or lower in the long end?

13:29I think I would be worried about a shutdown if it got the long end bond yields higher. So if people started to really, like, talk about, you know, unreliability of government or fiscal deficits and stuff like that, I don't think we're there. But my point is, for the for the shutdown to matter, you kind of have to trigger that type of discussion. Well, that has sparked downgrades in the past or at least, you know, moving, you know, not maybe not full fledged downgrades, but credit revisions in terms of outlooks. Is that I mean, is that a concern? Does that come back into play with with this sort of shutdown?

14:03I don't think we're there yet. I mean, the big one would have been 2011. Back in 2011, the S &P traded 11 times forward earnings, just for reference. I don't think we're anywhere close to getting to that. But look, you've seen two or three times in the last month you had, you know, UK 30-year bond yields moved right after Labor Day. It got the equity markets attention. The same thing happened with JGBs over the summer. So I don't think we're there. But I think for an equity investor, either you're shut down for an extended period of time or the bond market is going to have to, like, you know, poke you with a sharp stick and say you should care about this.

14:32And I don't think we're quite there yet. And are you seeing any rotation out? I mean, lessening exposure to tech and moving elsewhere as we head into year end? You know, you saw you saw that in late August. But if you look at September month to date, the S &P has actually outperformed the Russell. And we've kind of come back to that. I think what's been interesting is S &P outperforming and Russell outperforming. The S &P equal weight is lagging a lot. So it's like the belly of the market is kind of under pressure where people want to have tech on. They're trying to play this catch up trade and small cap.

14:59But we haven't seen the kind of the broadening within the S &P. So look, a little bit here and there. But, I mean, the fact is those trades are still working. Look at MAG7 this month, I think, is already up 7.7 percent or something like that. But that catch-up in small caps, that's still on? It's losing a little steam. I mean, you know, about 80 percent of that catch-up trade was valuation-driven. I think now where you are with the weakening labor market, and now it's kind of a show-me. Like, are we going to actually see some broadening out of earnings? Because we've done a lot of the work on the valuation side already.

15:26It does feel like it's running out of steam a little bit. We've even seen profitable small cap outperforming unprofitable, which tells you even in that area, people want to be kind of safe in terms of what they're buying. All right. Stuart, thanks for coming by. Always great to see you. Stuart Kaiser. Yeah, the IWM small caps, 240, if you're looking at the IWM, 245 to 250, the level that we topped out in November of 2021. We got close. Are we about to break through it or are we about to fail? I mean, that's really the that's the rub right now. If you think the economy is slowing down, despite what the GDP print was, it's hard to get your arms around small caps.

15:59A lot of people don't think it's playing catch up. I'm not one of those people. Yeah, sir, we were talking about the overlap of high quality and big cap tech. I feel like that's where a lot of your portfolio is. Yes. Right. That sort of overlap. I mean, the name is JP Morgan and then a lot of Mag seven, not Apple, but or Microsoft with the rest of Mag seven. And I feel comfortable there. I do feel like valuations are a little bit stretched, though. All right. We've got some breaking news on YouTube. Eamon Javers got the details. Eamon. Melissa, that's right. YouTube, which is owned by a parent company, Alphabet, is agreeing in court papers to settle a lawsuit by President Trump over their suspension of his YouTube channel in the wake of January 6th.

16:40YouTube agreeing to pay$24.5 million as part of this settlement. The lion's share of that is going to go to Trump, but a small portion will go to conservative groups that were involved in the lawsuit process. So yet another settlement here by a large media or tech company related to lawsuits filed by President Trump and clearly a decision by Alphabet and YouTube that in this political moment, this was the option they needed to take based on both the facts of the case and also the politics of the moment that we're in right now, guys. Back over here. Basically, that's pocket change for Google. Eamon, thank you.

17:19Eamon Javers. And we do want to get to more breaking news out of Washington. President Trump just finishing his meeting with congressional leaders. The stalemate and standoff between the Republicans and Democrats continues. The clock is ticking on a government shutdown. Emily Wilkins got the latest. Emily. Yeah, Melissa, the big question for this meeting is if we were going to see a breakthrough or not. And the answer, in short, is no. Leaders from both Democrats and Republicans came out. They're still kind of pointing the finger at the other one for any potential shutdown that happens. Leader Chuck Schumer said that they were still very far apart in where the Democrats were standing versus where Republicans were standing.

17:55Obviously, Democrats asking for certain things when it comes to health care and extension of those Affordable Care Act premium tax credits. But when they came out, Republicans said, look, this is going to be on Democrat shoulders if we see a shutdown begin tomorrow night. And Vice President J.D. Vance was particularly pessimistic. Listen to what he said. I think we're headed to a shutdown because the Democrats won't do the right thing. I hope they change their mind, but we're going to see.

18:23Melissa, of course, as you guys have been mentioning, the impacts of a shutdown is going to depend in part of how long it lasts. I mean, if it goes till Friday, you're not going to see job numbers. If it goes further, that's going to impact the collection of other data, as well as really hundreds of government programs that are either not going to be funded or have reduced funding. We're going to be caught watching very closely as Republicans now return to Washington, D.C., if they think there could be any sort of last minute breakthrough. But unlike what we saw in March, unlike we saw last year, both sides really do seem to be dug in.

18:54And there is not the kind of horse trading and negotiation that's normally happening at this point to avoid a shutdown. Melissa? Emily, how about the threats of job cuts?

19:06in terms of job cuts i mean look if the job numbers do wind up coming out sorry job cuts in terms of the federal government that is a huge consideration that's being hung over thank you that's a huge consideration that's really hanging over democrats heads right now there is a lot of nervousness about what ross fight the trump administration and omb might do in terms of cuts I mean, the last time you had a full government shutdown, you saw 850 ,000 employees be furloughed. Now, it's not likely that all of them would be laid off. The Trump administration has already said those agencies that are in line with Trump's priorities would not be fired and would remain.

19:42But, of course, that could mean huge cuts to a number of departments, a number of initiatives. But at this point, at least for Schumer and for Jeffries, the two Democratic leaders, they're saying, look, if they wanted to fire those folks, they could have done it already. They're saying it's an intimidation tactic. And at this point, it doesn't seem like Republicans are going to get the Democratic votes they need to get to that 60 threshold and pass a stopgap. Emily, thank you. Emily Wilkins, live from Capitol Hill for us. So it looks like we're heading down that path. Yeah, I mean, what do we have?

20:1124, whatever it is, 36 hours left or so. I mean, again, I think we just talked about it with Stuart. It's a bond market thing. I mean, if this lasts, if it happens and it lasts, bond market sells off, maybe that's market destructive. But short of that, I mean, we've gone up right up to the 11th hour before and we've we've circumvented whatever. My instincts are the same thing will happen again tomorrow. From 2018 to 2019, December to January, we're shut down for 35 days. During that time period, the market sold off 13 percent in preparation of the shutdown. Then it actually rallied back to positive over those 35 days.

20:47And then a year out, the market was up 24 percent. So I have a hard time getting excited about shutdowns. I'd rather let the dust settle before I start to make choices on my portfolio based on a couple of days. And that's not even just the 2018 shutdown. The last like six shutdowns you've seen, I mean, the markets have actually reacted positively more than negatively. And I don't think it's that markets like shutdowns. I think they're just willing to look through it and realize that this is more of a political event than a market event. And so I think that's something we don't want to shut down for many reasons, but it's not for the stock markets.

21:19that really, I think, is going to be a completely separate reaction. There are specific sector implications. I mean, the travel industry is supposedly a billion dollars in terms of a hit for every week that the government is shut down. Retail will probably feel some sort of impact. All those workers not getting a paycheck, that has to have some sort of impact on their spending. Yes, but the market is a forward-looking mechanism. And if it's looking forward six months, let's say, which might be the average time frame, there has never been a shutdown that six months from now is still in effect. So now that we've all agreed, we're all looking through it for sure.

21:49It's going to happen. It's going to happen. There's going to be an impact. We'll see. All right, coming up. The Trump tariff effect, how furniture stocks and even Netflix are feeling the pain from the latest tariff threats. That's next. Plus, a shining rally as gold hits yet another all-time high. The miners coming along for the ride. And how the metal moves have boosted the U.S. Reserve. Don't go anywhere. Fast Money is back in two.