Gold Glistens To New Highs… And Reddit Readies Its Pre-IPO Roadshow 3/8/24

0:01Live from the Nasdaq market site in the heart of New York City's Times Square. This is Fast Shares of GE hitting nearly seven-year highs today. The once-mighty Dow component now up more than 30 % this year. Is this breakout for real? We'll debate that. And later, a new milestone for Bitcoin, another revved-up day for Rivian. And the Oscar goes to... We are live on the red carpet with the stock winners and losers ahead of Hollywood's big weekend. I'm Melissa Lee coming to you live from Studio B at the NASDAQ. On the desk tonight, Tim Seymour, Steve Grosso, Guy Dami, and Rebecca Patterson, former chief strategist at Bridgewater.

0:47We start off with the market's latest gold rush. The precious metal soaring to a new record high today, tapping the$2 ,200 mark for the first time ever. It just notched its best week since October and is up 20 % over the past year. The latest rally coming alongside Bitcoin, which topped$70 ,000 during today's session. Rival crypto Ethereum also hitting a record. But stock markets taking a breather, ending a topsy-turvy week on a down note. But the Nasdaq shedding over a percent while the Dow shed 69 points, posting its worst week since October. So what does this apparent flight to the safety of gold tell you about the strength of this market rally?

1:23Rebecca, happy International Women's Day. You too. What do you make of this gold move? I think what we're seeing with Bitcoin, gold and stocks today, they're completely separate. There isn't one big macro factor driving this. In the case of gold, I'd highlight two main things, China and China. China's central bank put out data yesterday showing that they bought gold for a monthly for 16 months in a row. They're continuing to diversify reserves. That's not going to end given where U.S.-China trade tensions are likely going. And then China consumer, you saw what happened in the two sessions policy meetings this week.

1:58They're not going to stimulate growth enough. The consumer can't make money in property, in stocks, in wealth management products, bank deposits. They're going into gold. And I think that's likely to continue, too. The rate story for gold is a risk because it could go either way in the short term. But overall, I think there's some important structural supports there. In 2022, central banks put... Hold on, can I stop you for a second? Of course you can. Because you've had a lot of jobs out there. He's worked at Domino's. Yes. He's been at UPS. Yes. Where else have you worked? Shake Shack. Shake Shack.

2:25Uber, Lyft, not Uber. In addition to all those fantastic jobs, yeah, this man was a gold trader. So I want to listen to this man's view on gold. Yes, yes, but for real. No, for real. For real. And he didn't have to wear a hairnet. Did he wear a hairnet at Goldman Sachs? Only on the strange days. Central banks in 2022 bought 1 ,141 tons,$70 billion worth of gold. It was a record. Last year, they basically did about the same. It was, again, a record. This year, I'm sure they're on pace. Rebecca's right to bring up China. Central banks, and we've said this, they're hedging their own ineptitude, and I absolutely believe that.

2:58And gold's one of those things, and this is going to sound somewhat glib, but it's not meant to be. It's not a story until it is. And it's becoming a story because we're leading tonight with it. And this could be one of these weekends where we walk in the same way we walked in a couple months ago and gold has this ridiculous move on a Sunday night. That's what it's setting up for, because everybody might be bullish of gold, but the market is not long of gold yet. And when people start getting in the institutions and they try to put the amount of money they're putting into equities into the gold market, the gold market is not that big.

3:28And I think people will take notice. Gold tells a much different story than other risk assets. And I think it's trying to tell the market something right now. Is this move higher in advance of the Fed pivot of rates going lower? I think gold has been sniffing out that the Fed has peaked somewhere. So we had a payroll number today, which on the headline looked good. We'll maybe get into that. We may not. But end of the day, this was a number that showed that the Fed certainly has a little bit more momentum on their side in terms of the labor market. I think gold, and I've said this, I'm amazed.

3:58People say gold is crazy. What's this move gold is doing? I'm saying, what took you so long? To me, gold was actually trading phenomenally well at different times over the last couple of years. But at other times when we thought, and I realize Karen says this all the time, there's an entire checklist of reasons you could say you want to own gold. And they seem to almost be for whatever flavor you want. But the reality is gold has a 20-year chart. I've said this a lot. I think it's the best chart you can find right now. And the point is that over the last 20 years, the central banks have been slowly doing this.

4:26They haven't been rushing in. What's going on now is it's a combination of Federal Reserve dynamics. It's a combination of central bank buying. It's a combination of some sense that I think investors are piling in. I think digital gold people are buying regular gold. And I think there's a lot of reasons why that's happening. And I'll just throw in the holders out there. Well, you want to call them they're buying gold. Part of the reason Bitcoin exists and its reason for being is that there's fear of fiat currencies and central bank dynamics without having to take a political view because no one wants and cares about my politics.

4:59You know, if you watched the State of the Union last night and you watched the rebuttal, I don't care which side you're on. We've got two different countries. And that's why gold is going higher. Gold traded today at a 91 RSI. That's usually like no big deal. But, you know, for tech stocks. But when gold trades at RSI and Guy, I think you're saying this like this is actually a time you want to buy gold when it looks like it's frothy, because I think actually it's you're seeing real allocation. So I do believe it was Powell. And Guy talks a lot about this. What is the national debt right now? $34 trillion.

5:31It keeps going. It moves pretty quick. $33 trillion and then some. It's probably closer to$34 trillion right now. Debt to GDP is 123 percent right now. And I do think it was more Powell than anything else. I think China had a case in it. But I think you're going to see Bitcoin and gold continue to skyrocket because of those reasons. I mean, if you're doubting sovereign credit right now, U.S. sovereign, I mean, you're a buyer of gold. It seems like everything is in place for that thesis as well. Yeah. And to your point, you know, political uncertainty, geopolitical uncertainty, we're all focused on the U.S.

6:06election this year, reasonably so. But there's also elections in the Middle East. There's elections in a lot of big countries. If you look at political certainty indices, they're not looking good. Right. There's a lot of question marks around major governments around the world. And that, again, we can think about U.S. buyers, buyers in these emerging markets right now who are worried about their currencies being devalued. They're going to gold. People will say, well, then Guy, Tim, Steve, Rebecca, miners should be trading well. Yes. No, they're trading at different. I'm in your. Are they calling out everybody's name while they're doing that?

6:38I'm not sure. But since we're all here. Well, you know what happened last night? I mean, we had a situation where. He called everybody panelists. So I wanted to be crystal clear tonight that I knew people's names. But with that said, you know, I understand. I think the equity community is saying, you know, we've burned before with miners. We're not going to bother until gold actually proves itself. Well, it's starting to now. And I believe this, and I've thought it for a while incorrectly. When the catch-up trade happens in miners, it's going to catch everybody off guard. And you saw sort of glimpses of it on the surface, all the GDX closed unchanged.

7:08Some of these miners are on a hair trigger. So if you believe in gold here, you should actually foray into some of these mining stocks. And it has to go higher. It used to be a three-to-one beta on the gold miners would outperform both up and down three-to-one. The problem to this is the reason why they're not performing is that labor costs, feasibility studies have skyrocketed. Lubricants that are used in some of these digging for these gold mines. I didn't know that lubricants were not. That's the first time that works. Have we ever used that word? I think that we have. So you have a bunch of stuff, input costs.

7:41I'm blushing. So I don't think those costs are coming in anytime soon. You're not a favorite of GDX, but you do like gold. I do like gold. I like the idea of gold. And one last data point is pre-COVID, you had a Fed balance sheet of$4 trillion. It ran up to$9 trillion. Now it's back down to$7.7 trillion. And QT is ending. That still gives a tailwind to gold. Are you worried about miners? Or do you think miners should catch up? I would have been scared to use the word lubricants, but Steve did a good job with that. I would say that Steve's right to point out that the inflationary aspects of what have been going on in the mining industry have actually put a lid on the operational leverage you would think miners actually have in this time.

8:18So pointing out that historically gold miners were three to one to the price of gold up or down. They've underperformed outright. Forget a beta of three, the price of gold by about 27 percent in the last year. So gold is outperformed. And I think that is a dynamic with inflation. But I agree with Guy. I just think I think the gold miners will catch up and I think they're catching up. Now, I've been adding to GDX all week. I'll give you a caveat. If stocks go down, if political uncertainty rises, if there's worries over growth, then miners are going to underperform gold in a major way. I would just keep that macro point in there.

8:55But to that point, Rebecca, I mean, you had mentioned that the moves in these various Bitcoin, gold, stocks separate for today. But in a way, what gold is telling you has to tell you that there are risks to this rally. No? To the gold rally? To the equity rally. The stock rally? I mean, I think the stock rally, you have to go back and say we've got a Fed that now is priced for maybe three cuts this year instead of six, which was the case in January. So higher for longer, bad for stocks. However, we've had an incredibly resilient consumer, consumer 68 percent of GDP. So that's been the dominant factor, helping everything.

9:32And then you have idiosyncratic stories like AI helping tech, et cetera. So to me, even though the payrolls today suggested the Fed can take its time before it starts cutting, you still are seeing payroll growth moderating but strong overall. You're seeing the JOLTS survey this week moderating but strong. You're seeing the Beige Book, more labor supply but the economy resilient. So that story hasn't changed. And I saw J.P. Morgan was on just before us. They just revised up their GDP forecast again. Certain people in our world are legendary. Paul Tudor Jones, for example. Stan Druckenmiller, I think on February 19th, there was the announcement that he dumped some tech stocks.

10:10He actually bought mining stocks. And that, again, you don't have to agree with him. But you absolutely have to sort of, you have to pay attention when somebody, like, does something like that. He hadn't been in it in a while. And now he's in the miner. So he probably doesn't know what lubricants cost in his defense. Well, he's older now. So I don't know what lubricants cost either. I'm moving on. You should. You're looking at me. I didn't even do it. Gentlemen, it is international women. This doesn't seem appropriate at all. Anyway, TD Securities today telling clients to take profits in gold.

10:41Dan Ghali is behind the call. He's a firm's senior commodity strategist. Dan, great to have you with us. Why give up on this move higher? Yeah, listen, thanks for having me on. Listen, over the last few weeks, a few things that you've been discussing have been absolutely correct, right? The first part is that investors have been historically underpositioned in gold into a Fed cutting cycle. But when you fast forward to today, a few of those things have changed, right? Firstly, macro traders, and I'm calling that the traders who care about things like macroeconomic expectations, the number of Fed cuts priced for 2024, their positioning is now a lot more consistent with rates market pricing.

11:25The rest of the community, mainly algotrend followers and Chinese buyers, have also bought an extreme amount of gold over the last week alone. So from here, I think the easy part is over. The risk-reward to higher gold prices is now dependent on macro trends deteriorating. So thank you for the comments. Next week, we've got CPI and PPI. Obviously, they're going to be important as we think about what the Fed's going to do, timing, size and speed of rate cuts. Obviously important for gold as we think about the opportunity cost of owning gold. If you got lower than expected CPI, would that affect your view or is your view beyond that one print?

12:09No, absolutely. Look, we're forecasting gold price of$22.50 for the quarter. So I wouldn't say necessarily that we have a bear call. I would rather say that the easy part is probably over here. If we do get lower inflation and continued evidence of disinflation, then that would support more Fed cuts for 2024. And in turn, macro traders, that's really the last community that you need to start to buy gold. And that would certainly help that. Hey, Dan, Tim, thanks for joining us. Talk to us about correlations between the various PGMs. I know you're bullish on platinum and palladium. I think silver has underperformed gold if you look at at least historical ratios between the two.

12:48So again, there are trades that are based upon industrial use. There are trades that are based upon macro and there are just long term relationships between these. Talk about any part of that. Sure. So listen, the most exciting part of what you said is silver, really. Right. So the PGMs are trading exceptionally weak against gold. That relates actually to a trend of de-stocking. And, you know, it's funny because over the last year, we actually had exceptionally strong fundamental information come in in PGMs And they just traded far lower as a result of speculative selling activity and physical destalking.

13:22The piece I think that is most interesting for the next year or two is in silver markets. And I mentioned that because there's a few assumptions that we all have about these precious metals markets that might be challenged. And one of them is that we have enough silver available above ground to satisfy the tremendous demand growth coming from solar cells. I think that's going to come under challenge over the next year. All right, Dan, got to leave it there. Thanks so much. Dan Ghali of TD. Silver or gold? Wow. Brol eyes. Silver or gold? Well, the bull case for silver at this point, people say gold's at an all-time high.

13:57Silver's 50 percent of its all-time high. So by definition, it's got to catch up. And that's been out there for a while. Yes, that can happen. And I hear what Dan's saying. Totally get it. I still think gold, this is the setup that I think every gold bull over the last 10 or 15 years has been waiting for. Central banks running amok. Obviously, bond yield, bond moves we haven't seen historically over the last five years have been ridiculous. And again, the fact that Steve brought up debt to GDP, which I think is on people's radar screen, that leads to gold, my opinion. All right, let's get to NVIDIA now having a rare down day after rising as much as 5 percent and hitting a new high.

14:30It closed down more than five and a half percent. That's a 10 percent move on the day. Let's bring in the chart master Carter Braxton Worth for more on this. Carter, great to have you with us. You just put out a note on NVIDIA saying that this was a key day for the stock. Yeah, just briefly, there's something known as a key reversal day. It can happen after a long downtrend and then a reversal, or in this case, a long uptrend. For criteria, you need a stock that's an increasingly steep intermediate advance. That's the case in the context of a long-term advance. We have that. Number two, on the day in question, the stock opens yet again very strong, often with a gap.

15:08Nvidia gapped up today. And then number three, it fades intraday, actually goes from being up quite a bit, it was up almost 5%, to unchanged and continues to slip and closes down on the day meaningfully, closed down about 5%, 6%. And then volume is at or near a record. Typically, it marks the end of an intermediate move. And it usually has follow through to the downside. So we shall see. But my hunch is if one is big here, reduce a little bit. Are there certain support levels you're looking for NVIDIA to hold next week in order to prove to you that maybe this is just a near-term phenomenon as opposed to a longer-term trend lower?

15:49Right. I mean, obviously, follow through. Not following through on Monday, Tuesday, Wednesday, not having another down week would say a lot. But actually, interestingly, on the screen, there is some talk of NVIDIA being quite similar, or maybe is it, to Cisco. And so I thought we'd do an exercise here. This is the past 10 years. NVIDIA 2014 to present. And what you have is the stock's been compounded annual growth rate of 72%. Now, just to put that in context, let's look at its Cisco in the 10 years prior to its peak. It was an entirely different animal, right? Cisco is a 95 % compounded. It went from$0.09 to $69 versus NVIDIA 450 to where we are,$9.75.

16:31So just to put that in context, look at the table that comes up next. And what you have here is what would have happened if you have$10 ,000 invested in NVIDIA from 2014 to 2024. That turns into$2.3 million. $10 ,000 in Cisco in the 10-year run to its peak,$7.9. NVIDIA is nothing even close to the excess that was seen in Cisco. And Right now, Cisco's 5.25 percent of the S &P, and Cisco peaked at about 5.25 percent of the S &P. Carter, thank you. Carter Braxton Worth of Worth Charting. We made that comparison, obviously, because there's so many comparisons to the Internet bubble and what AI is.

17:16But before we get to that, in terms of NVIDIA, if we do see downside next week, we've asked the question before, can the markets go higher without Apple? But I think it's more pertinent today to ask, can the markets go higher without NVIDIA? It's interesting, right? I mean, Apple actually caught a bid today. So it all actually makes a lot of sense. And originally, I thought with Apple trading the way it was trading, the S &P, I thought, would have been around 4 ,200, 4 ,300. Clearly, that didn't happen. We're at all-time highs. But I think the tech leads the way here. And when you think about the market cap that NVIDIA lost today, there may be 15 or 20 companies that size in the world, yet it loses it like this.

17:54That, to me, is not a particularly sign of a healthy market. And when you look at who's been doing the heavy lifting, it's been NVIDIA and it's been META. The other names haven't contributed at all. Tesla's down. Apple's down. Google's down. So they haven't been doing any lifting. If you take them out, can the market move higher? It could move higher. It's going to be a lot more of a slog because you have XLV, which is your health care. That's up 8 percent. And then you have industrials, which is up which are up 8 percent. They're smaller on a percentage weighting of the overall market. So it's going to be a tough load to lift, but it still can move higher.

18:26I think if you look at the rest of the market, it is rallying. And I would argue that over the last three days, you've seen the isolation of it's not just it's the semiconductor space. So semis are up 30 percent. They're outperformed as a group, whether you're looking at the SOX or the SMA, ETF, the S &P by 28 percent from January 4th. To me, it's all about semis. But what are we talking? We're talking about banks over the last three weeks. We're talking about retail. We're talking about health care, other parts of the market that were in bear markets. I mean, we're talking about where were banks last July, August, last summer and all the dynamics.

18:58You can make an argument. We have the same economy. We have the same job market. We have the same consumer. And maybe they're even a little bit weaker than they were. Yet banks have finally started to catch up. I think some of that can continue in a benign Fed environment. Yeah, I agree with that. And I think to your point, maybe it's more of a slog because there are smaller weights in the overall index. But if you have things like banks being able to participate a bit more along with other sectors, you mentioned, industrials, health care, etc., I think you can go higher. To me, what was really interesting this week was how strong Powell was in his comment about not going too crazy with the bank regulations.

19:32And the fact that they're identifying the weaker banks, they're telling them you've got to have a plan, doesn't mean we won't have more problems, but it does definitely shorten the tail risk on the left side for that sector. All right, we've got some breaking news on Sam Altman and OpenAI. Let's get to Steve Kovach for the details. Hey, Steve. Hey there, Yeah, the information is reporting OpenAI is about to rename Sam Altman back to the board. We know all the drama going on here. He was ousted as CEO, kicked off the board, came back within days. In addition to that, we're information is reporting several other new board members that are supposed to be made.

20:10This is, I'm reading here, Sue Desmond Hellman, a former CEO from the Bill Gates Foundation. Also, Nicole Seligman, a former president of Sony, and another name that we're familiar with here, Fiji Simo. She is the CEO of Instacart and a former top Facebook executive. We're still waiting for official word from OpenAI on this. I have calls out like crazy right now, but that is what the information is reporting. I wouldn't be surprised if we hear something official from OpenAI quite soon here. All right, Steve, keep us posted. Thank you, Steve Kovac. Coming up, some electric trading. First, General Electric hitting its highest level since 2017.

20:44and analysts are taking notice what Wall Street is saying about that one next. And shares of Rivian continuing its surge this week. The EV maker revealing just how many car buyers are already rushing to place orders for its newest SUV. We're charging into that trade when Fast Money returns. This is Fast Money with Melissa Lee right here on CNBC.

21:13Welcome back to Fast Money. And a GE quietly in rally mode in 2024. That stock got more than 30 percent so far this year today, hitting levels not seen since 2017. That after J.P. Morgan upgraded the stock this morning, calling it a premier name. It had been at a sell rating for about a decade. So what's powering GE's rally? And I know you remember the day that GE got downgraded by J.P. Morgan, Stephen Tusa. This is a career making call for him. It was a tremendous call. And here we are back to buy. Industrials, I mean, the aerospace, there's a lot to like about what General Electric is doing, without question.

21:47They seemingly turn the corner. And the stock, you could probably still make an argument that I don't want to say it's relatively cheap, but at least it seems to be growing in the valuation. Of course, the problem is Honeywell, which we've talked about for years, had been eating their lunch. Now, maybe the gap between the two is being closed, and that's why you're seeing this. But I still think if you want to play a little stock market here, I would rather Honeywell at these levels, despite the fact that it's when, you know, whisper of its all-time high. The General Electric has had a ridiculous move.

22:14I know, it's Friday, Guy. I can't do that? You just did it on your own, man. You're not allowed to play that. There's never time to break the rules. You know what, Mel? That's a fair point. I'm sorry. I'm not real. Well, here's another fair point. Larry Culp was, I think he's done a phenomenal job at GE. It's easy to say that now. I think people were very critical in the early days. What's really profound to think about, but yet it's kind of obvious in hindsight now, is he's the first outsider to run GE in 125 years. This is a guy that knew what businesses were dead weight, which businesses actually were low growth.

22:46They were a conglomerate. They were the definition of conglomerate. And they were all over the map. They were in real estate. They were in entertainment. We know that formerly our parent company. So you have a dynamic here where I actually think into aerospace and aviation and core businesses. I think it goes higher. I held it for a long time and sold it way too early. Sold some upside calls. This, by the way, is where selling covered calls can hurt you. Yeah. You own it? No. I don't own it any longer. I owned it for years. And with the split, I don't even know what's the split adjusted price on this thing, because it's always confusing to me.