Fast Money 9/30/25

0:00Live 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. A credit crinkle, banks taking a hit ahead of earnings, consumer finance names slumping, and private equity in the doghouse. Are these credit concerns a potential warning sign? We'll talk about that. Plus, a discount drug deal, how the White House is teaming up with Big Pharma to lower drug costs, the impact it could have on your wallet and the stocks. And later, CoreWeave and Meta's AI Power Partnership, how retail investors are missing out on some gains due to their so-called stock loyalty, and a betting blitz, the way Amazon is priming its parlay in the sports betting space.

0:36I'm Melissa Lee, home to you live from the studio, be at the NASDAQ. On the desk tonight, Karen Feinerman, Dan Nathan, Guy Adami, and Mike Coe. Well, markets wrapping up Q3, trading in the green. The Dow closing at a fresh record high. The S &P notching its biggest third-quarter percentage gain since 2020. And the NASDAQ now in a six-month winning streak. We'll have more on the market moves in just a moment. But we start off with what could be bubbling concerns about credit in this market. Look at the big banks today. Citi, Wells Fargo, Bank of America, all notably lower. The KBE Bank ETF down almost a percent on the day.

1:07Private equity and alternative investment firms feeling even more pain. KKR, Apollo, Carlyle Group, all falling at least 3%. And then take a look at the consumer finance space. So many of these names suffering, Affirm, SoFi, Klarna, and Capital One. All of this happening at the same time as two auto sector names have filed for bankruptcy. Partsmaker First Brands, subprime lender Tricolor Holdings, underscoring just how much stress the low-end consumer is under. So you piece all these things together. Does it start to paint a picture of a consumer starting to hit a wall of sorts when it comes to borrowing and spending?

1:44And should we be concerned when it comes to banks and financial firms and the markets, Sky? I believe so, but I also think, well, I don't think, today was quarter-end, month-end, obviously. So maybe there's some rebalancing. So I want to make a huge deal out of it. But with that said, credit scores are now falling the fastest pace since the great financial crisis or the global, depending on what your G is for that. I'm a global guy. I'm a great guy. 90 day plus delinquency rates for credit cards north of 12 percent. That's the highest we've seen, I think, in 14 years. That's with, by the way, the average rate being about 21 and a half percent, one point two trillion dollars.

2:21So, yeah, there are a lot. And I could write off a few more. There are a lot of reasons to be concerned about the consumer and all those things on the credit side, but it has not manifested itself in the market at all. HYG is hanging in there like a champ. And yes, today the banks were under pressure. Maybe it's a rebalancing thing or maybe we're right to focus on it going forward. Yeah, you know, it's the access to credit maybe is the thing when you think about a Klarna or you think about some of these other buy now, pay later is obviously a firm. When you go to buy something on the Internet, there's like four choices to extend those sorts of purchases.

2:50And I think that might be something unique to this cycle. The other thing I'd say about Klarna is like, yeah, it had that first day pop after its IPO. It broke price within like a week and a half or so. It was barely seen an uptick. So maybe investor demand a little bit is kind of something that we should have been thinking about. Because, you know, maybe this is just a one day thing. Maybe it's a quarter end thing. Maybe a lot of these kind of fintech and some of these other like alternative lenders have had a great quarter, you know, and that. And we keep hearing about a resilient sort of consumer.

3:16But, you know, this kind of push and pull between the Fed's dual mandate of kind of full employment and stable prices, they're kind of going at different directions now. And we had the PCE last week. It wasn't too hot. It wasn't cold. It wasn't anything. It was just still sticky. And then you think about this jobs number we're going to get on Friday. I mean, it may be the sort of thing where people are going to start focusing a bit more on this lower end consumer. And I think that's where this buy now, pay later really falls. And I think the narrative has always been the consumer as a monolith has been strong.

3:45But if you take a look at the breakdown the consumer this is the trend that we've been hearing except that it was underscored last week when CarMax reported They said you know what our our subprime customers those with FICO scores under 550 They are having the most trouble where we're increasing loan loss reserves We see that in the tricolor bankruptcy where a lot of their Borrowees did not borrowers. I should say did not have credit scores or if they had it the average was something like 600 So they are also in the lower end So this sort of highlights this sort of lower quality consumer. And when, if at all, should we be worried about that trickling up into sort of other effects?

4:23Well, it's funny you said that because I love saying things aren't a monolith. The market is not a monolith. Consumers are not a monolith, right? That's why we see various ratings. And so we will start to get a sense two weeks from now when banks start to report. Those are going to be, I mean, J.P. Morgan, that's going to be a very different customer than what you're referring to here. Capital One or whatever, yeah. We'll see Capital One also. That will be informative. I do think that I am still along the banks. First, I don't love hearing data like this, but it has not shaken me from what I think is still an economy that is doing okay, that I think most, that the employment picture is still good.

5:05I think what could maybe rattle it a little if there is a shutdown for some short amount of time. But I feel like the higher end is still doing fine. And I think that will be reflected in the bank earnings. Yeah. Mike, your thoughts? Yeah, I mean, it's probably a little bit surprising to me. I would have thought that American Express would have held up better today on a relative basis. I mean, it's not that surprising, I guess. Capital One got hard hit. All those names you first mentioned, all of these things saw well above average put volume. And that's probably what we would expect to see. American Express, I actually would have thought, given that their demographic skews higher, and I would have figured that that meant that there was less of a spending capacity issue there, less of any kind of credit risk issue, that that wouldn't be hard hit by expectations of cuts in consumer spending going into the holiday season.

6:03And yet it was hard to hit. MasterCard and Visa actually held up pretty well. But I agree with Karen that I think J.P. Morgan and Capital One together are going to give us that tail because you do have those two very different customers at those two institutions. Yeah. I mean, the other thing to keep in mind is a high income consumer, they may just be feeling cautious and may not spend. It's not necessarily stress that will cause them to pull back. It's just worry that could cause them to pull back. Right. That's true. But also think about the high end consumer also probably has assets in the market and that has done well.

6:37So they could still be cautious, but I still think they're doing fine. You know, a good example of that. I was just looking at the Robinhood chart. It was up this month. OK, 45 percent. I mean, think about this stock was up 45 percent. Now, the stock is also up 400 percent off their lows. I mean, there was a lot of money made in the markets. I'm just using that as an example. And as a comparison, you know, IBKR Interactive was up like 14 percent this month. Schwab, I think, was flat on the month. So there's a lot. I think what's interesting about the Robinhood thing, it shows you that investors or traders are alive and well.

7:09That is sort of animal spirits. It probably flows into consumer behavior, that sort of thing. So, again, I just thought that was actually remarkable. I just looked up and look at that one. But we're seeing delinquency rates move with basically full employment, And understanding that the employment picture might be a little cloudy here, but you're still talking about a historically low unemployment rate. And we're talking about these things that happened 15, 16, 17 or so years ago. So something doesn't add up here. And then you hear from the retailers talking about this huge trade down. Now, the average Walmart customer, I think 75 percent is one hundred thousand dollars or more of income.

7:44Understanding that one hundred thousand dollars isn't what it was five or so years ago. But the theme continues to sort of perpetuate itself. And again, you talk about the high end. True. I mean, they're impervious to just about everything. But the middle and the low are getting squeezed. And I really think once the unemployment rate starts to tick higher, which I think is inevitable, you're going to feel it in some of these retailers. The thing about the tricolor and I think the first brands bankruptcies, though, that sort of bring back that muscle memory of the GFCG being great or global, whatever your pick, is the notion that that loans were made.

8:17Loans were repackaged. Those packages were sold to investors, and they felt the losses. They will feel the losses. And some of these investors are hedge funds and private asset managers. And that sort of just brings back that, wow, have we seen this before? And that may not be parallel completely, but it sort of makes you think, oh, are we in that situation again? I think we could be. The one that's parallel to me, though, is the AI boom. That reminds me of something else. It's possible. But I do still think that ultimately that hangs on employment. And as long as they're employed, we haven't yet seen the AI job cuts.

8:59That'll be an interesting overlay. But I do still think as long as they're employed, it will be all right. Well, consumers are planning to spend less and start shopping later this holiday season, according to a new survey by JLL. For more on the results, Naveen Jaggi joins us now in an exclusive interview. He is JLL's president of Retail Advisory Services. Great to have you with us. You heard our conversation about the concern about credit, et cetera. What are you seeing in terms of consumer behavior? Does it reflect any of these worries? I think in many ways it does. We've done a survey for over 1 ,000 consumers, and it's quite telling, and that tells us that for the overall broad consumer, they're pulling back.

9:34They're spending less money this year than last year. But it's a complex story. As we talked about earlier today, we can see that the top 10 to 20 percent of household owners in the USA are going to spend more. It's the bottom 50, 60, 70 percent that are holding back. And that's pretty consistent with what we expect from the market exposure, as we talked about in this table a minute ago. Only 50 percent of U.S. households are actually in the market. There's a whole 50 percent that aren't in the market. For them, when the market goes up, it's kind of irrelevant to them. So for them, they're looking at how long will the dollar go, and as a result, where do they shop?

10:04And they're going to shop at Walmart, Target, Dollar General, Ross Dress for Less, TJX, as opposed to Nordstrom. Right. So for for your the retail clients that JLL handles, at what point do they start making decisions about space for the next year? And it doesn't hinge on this holiday shopping season. So they're trying to sort of overlay where you're seeing spending pullbacks along with the retailers and what they might do. So that's a good question. So retailers really think in two ways. There's the operating company, the Opco. Then there's a real estate group. The real estate group right now is looking at product that they're going to open up in 27 and 28.

10:37not right now. So they're making a real estate decision for a consumer and a retailer that says, how's the market looking in 24 months? And in most cases, I've talked to every retailer you can think about, they're bullish on the consumer on the long haul. What happens today, next week, or next month isn't what they're betting on. They're betting on two years, three years from now. Obviously, the employment picture is first and foremost in terms of the spend. But outside of that, in your sort of studies, what scares the consumer from spending? What type of event? Well, there's a number of events.

11:07First of all, this soft job market definitely scares them. Secondary, this constant talk of tariff puts unease. They actually don't know what it's going to cost them, no matter what the retailer does. And money retailers have said they're not passing that cost to increase to the consumer. That doesn't matter. There's a bit of doubt in their minds. So between what's happening at the pump, what's happening at the home level, what's happening at job security, and then the last piece, which I don't want to think is minimized. Look, there's a lot of stress in the world out today. Wars in Ukraine, wars in Israel, all those things start to seep into your mind.

11:36You ask yourself, do I need that or do I want that? And sometimes wanting gets passed up for need. And that's what we're seeing most consumers decide right now. So, I mean, thanks for being here. A question about direct to consumer. We're looking at Nike was out today and, you know, they went way too far direct to consumer and back. What does that mean for people looking for retail space? Do you think we have found the plateau level? I think for the most, yeah, yeah, I think for the most part, the retailers have said, we don't see the U.S. consumer going heavily into online only. Roughly 16 % of U.S.

12:09consumers surveyed said they were going to be online only. Otherwise, 84 % are saying going to shop at the brick-and-mortar stores. We are at a long historical supply shortage in retail real estate space. We haven't had this kind of problem in about 40 years. We won't solve that demand until we just start building real estate space. So to give you some context, what that means is during the heydays of the 2000s, we were delivering 200 million plus square feet of real estate space per year. Right now, we're doing less than 40 million square feet right now. So from 2010 to 2023, we delivered less than a billion.

12:43But between 2002 and 2007, we delivered a billion. There's a severe shortage in real estate space. So retailers right now are looking at second generation space, not new space. There's only a few states where you really have significant development going on. Florida, Georgia, Texas. Other states, not so much. Wow. So going back then to this notion that a retailer has to forecast or the commercial real estate group or the retailer has to forecast 24 months out. That's 24 months ago. We couldn't have predicted where we are today. That's right. It's almost an impossible task to do. So. So what's your take or guess on what they will do in this environment, knowing that by that time, things can be very different?

13:23If you think about two categories that we pay attention to a lot, the luxury category and then the everyday grocery category. Those two things tend to tell us tale, right? So if you think about Walmart, Walmart has 20 % grocery share. That's significant. If you go to Walmart today, you're going to be able to get a family visit that will include grocery, plus Monopoly, plus some jeans, plus a shirt. So if you're thinking about a family going somewhere, you're going to go someplace like Walmart. So in the ways I've answered that question is retailers say to themselves, as long as we can find space, second-direction space, we're going to continue to grow because they believe in the economy.

13:53Unless there's a significant event, a great financial crisis, a recession, a war, of those kind of things, retailers will continue to place a bet long-term on the U.S. consumer. Naveen, thanks so much for coming by. I appreciate it. Thank you. It's good to see you. Naveen Jaggi, JLL. You're going to have him back. By the way, he's a handsome man, and that's a good-looking jacket. He's sitting here still. I know. Sharply dressed. My takeaways. Yes. It's a lot of the same themes we've been talking about. You know, the consumer looking for value. I mean, that's been true for quite some time, more so than ever.

14:24Walmart's sitting in the catbird seat. A name we didn't mention in this conversation, but probably the best operator out there is TJX. And look at what I think that stock made an all-time high today. If it didn't, it was yesterday or a few trading sessions ago. I mean, there are retailers that absolutely get it. And then the flip side of the coin is places like Target and some of the other retailers that clearly don't. You know, it's interesting you mentioned inflation, right? And so the uncertainty about tariffs and that sort of thing. So you put inflation and uncertainty about tariffs. and then you kind of throw in this sort of who's going to eat the tariffs, that sort of thing.

14:53So, you know, it'll be interesting to see how much promotion we see into the holiday season because that and the maybe not wanting to kind of pass through those higher tariff costs to the consumer could be an interesting dynamic for a lot of these retailers. All right. Now let's get to an earnings alert on Nike. The sportswear giant moving higher on a top and bottom line beat. Our Sarah Eisen has been listening into the call since the top of the hour. She's got the very latest. Sarah. Hi, Melissa. Good to see you. Certainly signs of a turnaround taking shape here at Nike. Or in the words of Elliott Hill, who is speaking right now on the call, what he just said, Nike's journey back to greatness has only just begun.

15:27So let's talk about the results. For one, revenue growth of 1%. That was a surprise. Nike itself had guided to mid-single-digit revenue decline. Why? Well, progress in North America, which grew 4%. Progress in wholesale as well. That's the Dick's Sporting Goods and some new announcements there, like Aritzia and Amazon. John, wholesale overall growth growing 7 percent. And then running really called out as a bright spot. Hill just revealing that running grew more than 20 percent just this quarter. Now, these are important areas because they're three areas that Hill has focused on. He's been there as CEO for about a year now, was brought back by the board, veteran of the company, to turn around a multi-year sales slump.

16:08But there is still more work to do, as Hill himself referenced in the release. Here's what he said. He said, well, we're just we're getting early wins under our belt. We still have work to do to get all sports geographies and channels on a similar path as we manage a dynamic operating environment. So here's where there's work to do. Greater China still declining down 10 percent this quarter without the impact of the weaker dollar. Nike Direct. You guys were just talking about direct to consumer, primarily the digital business. It's still declining. Converse. They just announced a new leader there.

16:39That's still declining more than 25 percent. Overall, Hill has put in place a new leadership team, a new structure for that team. They announced that last quarter and has shown some innovation wins. But the environment is tough. Tariffs remain an issue for this company. Most of its product is manufactured overseas. Remember, last quarter, Nike CFO said that would cost the company a billion dollars. We'll see on the call if they update that at all now that we have some trade deals under our belt with some new tariff rates. But innovation wins is really what the street wants to see here as well.

17:12In running, for instance, what's worked so well, they redesigned the Vomero running shoe, the Peg Premium. And Hill gave a shout out to the team for working and moving so fast on some of those wins. The other reason why the stock might not be up more, Melissa, is that Hill just reiterated a comment that was in the release from the CEO, Matt CFO, Matt Friend, who said progress will not be linear. But they are certainly moving in the right direction. All right. Sarah, Karen's got a question. Hi, thanks. Thanks for the rundown, Sarah. Inventory. It looked like inventory declined meaningfully less than the street was expected.

17:49Yeah, inventory was down 2 percent. But that, you know, that is progress. Last quarter, it was flat. So they've been doing a lot of work to clear the shelves of some of the old inventory and make space and room for the new innovation. I think that Nike and some of the analysts, I know Randy Connick, who Jeffries is a strong buy on the name, said actually that's good, that now inventory is declining, which makes room for more margin improvement. They're still seeing margin declines, as you know, because selling prices are down as they've had to clear this inventory. It's offset a little bit by also some of the tariffs as well, some of the inventory improvement.

18:26But I think they would look at that as a plus, that they're feeling good, that it's moving in the right direction. Yep. Sarah, thanks. Good to see you. Sarah Eisen from the NYSE. Mike, your thoughts on this Nike turnaround. Enough from the quarter to believe that it is intact? I think these are all positives. You know, I would say this. You know, it's still the valuation is a little hard for me to get around. I would like to see something better than 1 percent year on year growth to make this one look competitive when you consider that it's trading, what, 30 times 20, 27 numbers right now. And certainly it's not a grower on the top line yet.

19:04So there is room for margin expansion. I mean, 7 % versus, I think, 13 % is what they achieved at their peak. I don't think we're going to go back to that. But if you got back to, say, 9 % and get like a 3%, 4 % top line growth, then you start to justify the current price. But we're not there yet. I mean, I think that's an interesting way of putting it, like taking the revenue growth 1 % and thinking about how much it trades at, which is the equivalent of some MAG7 names carrying in your portfolio. Yes, I know. And actually, what I'm thinking about this earnings release is this was a bad risk reward for me to be long going into this earnings today.

19:36If this is what they released, which was fine and good enough. Right. But all the but many of the other outcomes could have been not so good. And if this was a, you know, OK, they're making progress. You would hope that the stock, which has really gotten crushed, would have more of a bounce than this. Right. Last quarter's last quarter, June 26th. I think that's right. I thought it was an unmitigated disaster. I think the stock was trading about 64 and a half. We talked about it. Conference call came out. Within a week, the stock was trading 75 to 80. Tim Seymour talked about it, and he called it that day.

20:10This quarter is better than last quarter, in my opinion, just looking at a swath of metrics. Karen mentioned the inventory down a couple percent. Maybe not exactly what the street is looking for, but that should clear things out for margins to improve. 1%, yeah, not great, but I'm surprised it's not higher on the back of this, quite frankly. We said last night you can't be short on this number. I'll stand by that. The stocks should go higher from here. Coming up, a discount deal. How the White House is teaming up with Pfizer to lower drug prices and what it means for the pharma industry and your wallet.

20:39Plus, Instacart under pressure as analysts flag an increase in competition. But one of our traders says this name may finally be ready to deliver, and you'll never guess who. Don't go anywhere fast when he's back in two.

20:57We've got breaking news on the U.S. taking a stake in another company. Eamon Javers has got the details. Eamon. Melissa, U.S. Energy Secretary Chris Wright was on Bloomberg News just a short time ago, and he said that the United States is going to take a 5 % stake in lithium Americas. Now, remember, there was reporting last week that the company was in negotiations to give up a 10 % stake. And what Wright said today is that actually it's going to be at 5 % stake in the company itself and then a 5 % stake in this underlying lithium mine that the company is renegotiating its loans over. Now, that mine is a joint venture with General Motors and Lithium Americas, so they will be shouldering the burden of that equity in the mine itself.

21:40So this is another deal where the U.S. government is going to, in exchange for, in this case, government loans, is going to take an equity stake in an American company. And, Melissa, the word I get around here in talking to folks is we should be expecting more of these deals are in the works. It's not clear which companies in particular might be at the negotiating table for this kind of a deal. But what the president has been asserting here is that if companies need loan guarantees, if they need regulatory approvals or other U.S. government action, they should be prepared to give up a revenue stream or give up an equity stake in order to make those deals happen.

22:15Back over to you. Eamon, this is really a confirmation of a report that we got last week, correct? That's right. Yeah. The reporting last week was that they were in negotiations for a 10 % stake. This is a 5 % stake in the company and then also a 5 % stake in the mine, according to the energy secretary on Bloomberg a short time ago. We'll reach out to Lithium Americas and see what they have to say about it as well. All right. Keep us posted. Eamon Javers in Washington. Thank you. We were talking about this, how, you know, Department of Energy could take stakes in various companies, make loans to various companies that supply critical minerals.