Key week for retail on deck... And the next test for housing stocks 8/14/26

22:39He also said that right now he likes Disney's assets, but that he's not dogmatic and he will look at assets if they make sense. DeMar also told me he is not interested in spinning off ESPN or ABC. Melissa? Julia, thank you. Julia Borson is shedding some light on what had been talked about for so long. Tim, what do you make of the strategy here?

23:01Karen Finerman:Well, I don't totally understand how they're going to use technology. and to the extent that I think Josh is eager to make change and has had a chance to see the places that could add marginal value to the stock for sure. I think the experienced businesses was fantastic. I think those numbers were excellent. I thought the streaming business and the profitability, as he alluded to, but there's no question that DTC is growing, is working, so is profitability and so are margins there. I wonder what the real catalyst is. At one point, it was thought to be a sale of ESPN. I don't think it should be either.

23:38Karen Finerman:And in fact, if anything, sports were kind of weak. And that's a bit of a surprise. So I have been a longtime holder of the stock. I don't see a reason to sell it. I'm not sure I feel I need to add to it. And once again, the catalysts are limited. But Josh talks of a new era, and I want to believe. Mike, do you see a reason to own this? Yeah, I mean, for one thing, it's trading at less than 14.5 times forward earnings, which if you take a look at the last 10 years, that's pretty much the trough valuation for this one. And that would make sense if the top line was contracting and things looked grim across the board.

24:16But I don't think they do really. And so I actually am with Tim. I think that, you know, you kind of have to be patient with this one. Some options traders appear to be thinking, though, that maybe we're about to catch a bid for it, because basically, since he took over over the course of the last five minutes, five minutes, five months, feels like five minutes, right after Bob Iger's come and gone a couple of times. But basically, you know, we've seen a lot of improving and bullish sentiment going on in the options market since about mid February. It's about doubled. So it does look like people are expecting that things could potentially turn around.

24:48Yeah. Do you buy that value case? Yeah. I mean, you always want to buy value, but it could be cheap for a reason. Right. If you go back to March, the stock has really done nothing and it had some peaks and valleys. We're really at a peak level right now. So if you're looking at technicals, you probably want to be a seller versus a buyer. But I get what Mike is saying. I think it's interesting, though, that they want to have a absolutely free service that's ad supported. That's going to change the whole dynamic. Even though they're not the first pioneers to do it, this would be big for them. There's a lot more Fast Money to come.

25:20Here's what's coming up next. From red hot refiners to drone stocks taking flight, Lots of fast movers catching our traders' attention today. How to play this week's highest flyers next. Plus, hammering down on housing, a make or break week ahead for the sector, and whether it could reveal new cracks in the foundation. You're watching Fast Money, live from the NASDAQ market side in Times Square. We're back right after this.

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26:56Print postage for certified mail, registered mail, and packages in seconds. Then schedule a pickup right from your home or office. For a limited time, go to Stamps.com and use code PODCAST for a free welcome gift. Taxes and fees apply. Welcome back to Fast Money. A few stocks from different sectors catching your eye today. First up, refiners, Marathon Valero and Phillips 66 hitting all-time highs today. The oil services ETF OAH now up nearly 50 percent for the year. Meanwhile, drone stocks are rallying on word President Trump plans to order import tariffs on drones. Defense tech name Aaron Reierman seeing a bounce of more than one and a half percent today.

27:33And Charles Schwab hitting fresh highs. The online brokerage releasing strong retail trading numbers and new account openings for July. One cautionary note, margin balances are up over 50 percent from the end of last year to the end of last month. I feel like I go to you, Steve, for drones. Yeah, so I pulled up Arrow Environment. And when I look at these, if you go back, it depends on how far back you want to go. But all of this positive news and the stock's down 20 percent year to date. So there's a lot of great headlines that could create a pop within the day. but it just becomes where are people putting their focus, where are people putting their money?

28:10This is definitely the warfare of the next 20 years. It's going to be drones. So one of these stocks or all of them are going to run sustainably. They just haven't. Well, when you take a look at that sort of period of the run, they also had a miscalculation on goodwill. And so there are some questions about their balance sheet in terms of how they reported. And then there is also an increase in R &D spending, which these days people don't like. There were other sort of factors. I completely get what you're saying, though, in terms of the stock performance. Tim, I know that you really follow AVAV very closely.

28:41But what do you want to trade?

28:44Karen Finerman:Yeah, folks, Melissa's referring to me being asked about AVAV about 10 years ago. And not knowing what the heck it was. Not knowing what they did. And in fact, so, you know, people like Steve have been following Drone for a long time. I will say the supply dynamic is fascinating. And I think there is more supply coming to market. But I would prefer to talk about refiners and what I would just say about Valero and some of the upgrades that we've seen. These all-time highs are coming after extraordinary numbers. Remember, they beat EPS by 25 percent. They made Chevron and especially Exxon not look so good in terms of the refining margin.

29:17Karen Finerman:Ninety-six percent utilization rates is something that I think are going to hold. I think this is kind of the key. We know what's going on with product shortages. We know what's going on with crack spreads. Be careful about chasing this. But the upgrades here are real. And I think there are more people now looking at the energy sector lesser on momentum than they are truly as investments. Coming up, giving the housing trade a home inspection with a big week ahead of data and earnings could reveal and where mortgage rates are headed next when Fast Money returns.

29:52Missed a moment of fast? Catch us anytime on the go. Follow the Fast Money podcast. We're back right after this.

30:09Welcome back to Fast Money. Stocks ending the day slightly lower, the Dow shedding about 100 points, while the S &P and Nasdaq were also down fractionally. Those two indices still finished positive on the week. Reddit surging over 12 percent for its best day in over a month. Last night, we brought to the news that the stock will join the S &P 500 effective Tuesday. PayPal rising almost 2 percent into the close. The Wall Street Journal reporting the company is in talks to sell itself to a group of investors, including Stripe and P.E. firm Advent International. Reuters had previously reported on the talks.

30:38And just in the last hour, new details on Berkshire Hathaway's top holdings, disclosing a big increase in its Alphabet Class A and C stakes. Berkshire had invested$10 billion in the company in a private placement back in June. But it appears they bought another$6 billion on the open market. The company also upped its bet on housing, increasing its Lennar stake by 30 percent, worth about$1.2 billion, and disclosing a small new position in D.R. Horton. Sticking with housing, a big week ahead for the sector. We'll get home builder sentiment on Monday, Tuesday. Toll Brothers reports earnings plus.

31:12We'll also get pending home sales and housing starts. And on Wednesday, weekly mortgage apps for more on what to expect next week and more broadly for the housing market. Compass's chief economist Mike Simonson joins us now. Mike, great to have you with us.

31:25Mike Simonsen:Hi, Melissa. Nice to see you. I would imagine on your computer screen you've got the 10-year yield up and mortgage rates up constantly, and you're always looking. But, I mean, in all seriousness, Mike, I mean, you've heard the arguments about why rates here, 10-year yields, should remain higher and go higher. How does that factor into your forecast for mortgage rates and, therefore, for the housing market? You know, yes, mortgage rates are at their highs for the years. And that's slowed down demand, as you'd expect a little bit. The counter to that is a wealth effect that we saw in Q2. So equity markets at their all-time highs.

32:05Mike Simonsen:And so high end of the market with outperformance, high end of the housing market outperforming, generally because some of those buyers can be more wealth purchase demand impacted impacted rather than rate sensitive. So, Mike, when you look at the housing market, every housing recovery has worked in a has been in a rising rate environment. I wouldn't call this a housing rate housing recovery. I would just call this, as Melissa said, you're sort of you don't own. I've always said you don't own a home. You own a mortgage. Are you starting to see people lift a leg on getting out of their home to buy something else?

32:45Mike Simonsen:You know, there's been a lot of mortgage rate lock-in talk over the last few years where homeowners have their ultra-cheap mortgages. And that's one of the things that's keeping sales low. It's also keeping foreclosures very low, for example. Each year, that number of that lock-in rate decays a little bit. So each year we're going to get a little bit of sort of organic growth, fewer and fewer people that are locked in. And so a little bit of growth, even if rates stay elevated for multiple years, we see a little bit of growth that happens sort of organically because there are fewer people locked in.

33:27Mike Simonsen:And so I think that's underway this year, even though we're still bouncing around with mortgage rates in the upper sixes. Mike Bonham here. Thanks so much for being with this. We spend a lot of time talking about a lot of the headline metrics, existing home sales, construction starts, building permits, things of that nature that are pretty well known. As an expert within the space, are there any figures that give us a bit more nuanced look at the health of the housing market or the consumer, whether it be first-time homebuyer purchases or self-financing within the home builder vehicle, company vehicles, things of that nature?

34:06Mike Simonsen:I like watching the weekly pending home sales counts that we do. That one gives me a real insight year over year and week to week. It's not waiting for a step function on a given month of adjustments. So those were up, they're up 3.5 % year to date in terms of counting contracts that come in each week versus last year, year to date. That pace slowed a little bit in July, though. So that's a real insightful one that we can measure really, really quickly. I was trying to get to get you to make a forecast, Mike, with my first question. So I'm just going to go back to it. Where do you think mortgage rates will end?

34:48I mean, do you think we'll see a seven percent and higher given the environment we are in?

34:54Mike Simonsen:You know, there are certainly cases where if inflation comes in hot, there are certainly cases where mortgage rates could spike again. And, you know, if we're lucky and we get faster resolution in the Middle East, maybe we see a drop on that side. I don't see any factors that are broadly cycling things lower. You know, inflation is we got a little reprieve on the CPI this week, but it's still above target. So it doesn't seem like we have the mix for getting back into the five, 5.99 like we saw at the end of February. So I think we're likely to spend much of the year in the upper sixes. We forecast for the year 6.4 percent to average for the year, which is actually right about where we've been now, which was a little higher than many forecasters that were hoping that we would be closer to six this year.

35:51Mike Simonsen:And I just didn't, you know, there seems so many cases where we can get upside, things that push the 10-year yield higher and therefore mortgage rates higher. Things could happen over seven. And if they do, you know, that will slow demand and could have impact on prices like happened in 2022. Mike, great to have you. Thank you. Thanks, Melissa. Mike Simonson. I mean, the higher mortgage rates are, I mean, the more the homebuilders have to buy down those rates, Mike. Yeah, I mean, that's certainly one of the issues. You know, it's interesting if we look at D.R. Horton, Lenar, and Toll, because Toll has typically focused on the higher end homebuyer.

36:39And Mike was just talking about the fact that they're driven largely by a wealth effect. And yet of the three, it's the one that's trading at the cheapest turn relative to its forward multiple, which I find a little bit interesting. And all of those three have traded at certainly cheaper multiples than they are right now. And if we do get slightly hotter inflation data and people are expecting a bump up in the short-term rates, that doesn't necessarily mean that the long end is going to go higher. In fact, it could actually flatten the curve a little bit, and that could go lower and actually keep the 30-year fix below 7.

37:10So to my eye, I think that if we get some nominal pressure on the inflation side, I don't think that's going to drive rates that much higher. I think that we're probably going to stay below 6 in the 30-year. All right. Let's get back to Kate Rooney for another 13F filing that just came out. Kate. Hey, Melissa. Right now we're taking a look at DME Capital. This is the fund run by David Einhorn. Among the fund's Q2 stake reductions, it did decrease its stakes in Acadia Healthcare, Centene, Fluor, and our parent company, Versant Media. It also sold out of its positions in Victoria's Secret. These are also the five investment ideas Einhorn pitched at the Stone Investment Conference on May 12th.

37:50We should note that Acadia, Centene, and Flora are still among the fund's top holdings, despite some of those stake reductions. And as always, reminder, this is as of June 30th, so all of these stakes could have changed since then, a bit of a snapshot, but that's the latest on David Einhorn's positions, Mel. All right, Kate, thanks, Kate Rooney. Coming up, sports cars go back to the future. Robert Frank is live in Monterey with a look at why collectors are pulling the plugs on EVs in favor of good old-fashioned gas guzzlers. Robert.

38:19Karen Finerman:Well, listen, well, from 1937 to 2025, Bugatti is one of those names that defines the top of the top of the car market. We spoke to the CEO about record demand for supercars and why the very wealthy are turning away from EVs. Coming up right after the break.

38:41Welcome back to Fast Money. Electric sports cars were once the future, but now high-end carmakers are pulling the plug and going back to the good old days of loud gas-powered engines. CNBC's Robert Frank joins us from Monterey, California, with a look under the hood. Robert.

38:57Karen Finerman:Now the good old days. Well, you know, you look at Bugatti, this is a brand that is a cult-like following among the super wealthy. Its latest car starts at$4.5 million, and they're already sold out. Now, five years ago, Bugatti was taken over from Volkswagen from Mate Rimats. He is the 38-year-old founder of an EV supercar company. So when he took over Bugatti, everyone expected him to launch an EV Bugatti. Instead, he has launched the largest ever internal combustion Bugatti, paired it with a hybrid, 1 ,700 horsepower. He told me that while EVs are going to gain share in the mainstream market, he said that the very wealthy are going to keep it old school.

39:42Normal cars, normal people, majority, vast majority will be electric. Then the upper segment, like sports cars and upwards, I don't think so. I think it's going to stay combustion for a very long time, exactly like watches. You know, only like 5 % of watches are made in Switzerland, but that's where 90 % of profits are made.

40:06Karen Finerman:And we've already seen Lamborghini, Aston Martin, Maserati either postpone or cancel their EV plans. Of course, we had that famous or infamous launch of the Luce from Ferrari. But I would say the first Luce ever made will auction tomorrow night. It's being sold by Ferrari through RM Sotheby's. Proceeds going to charity. That car will likely sell for millions of dollars. So we'll just see how demand shakes out. But Matei Rimac's message very clear. The very wealthy want these old school engines. You can feel the roar. You can hear the sound. And it's got that emotion that the wealthy pay so much for.

40:41Karen Finerman:This is a 2025 Bugatti. The price here, this will be sold next January, estimated at$10 to$12 million. Guys, wow. Wow. Is that the most expensive car there, Robert, or are there more? No, and you've got a lot of music fans there on the desk, so here's some music trivia. I'll just say I wish you were here. That's a music reference. There's a 1996 McLaren F1 GTR selling for$35 million. The previous owner, Nick Mason, of Pink Floyd. So it's your chance,$35 million, to get Nick Mason's previous GTR F1. So that will likely be, Melissa, the most expensive car sold. Amazing. Robert, thank you. Robert Frank, joining us from Monterey, California.

41:31I mean, Tim, you've got to start saving up your pennies for that one.

41:35Karen Finerman:Yeah. No, and I know you wanted that piece of that music trivia. I mean, you're a huge Pink Floyd fan. Everybody knows that. So, yeah. But it's interesting because Robert was mentioning, you know, these high-end car makers scrapping their EV plans. It's not unlike, Mike, what we've seen with even GM and Ford in terms of EVs not really panning out to be the businesses they once thought they were going to be. I think that's going to change. I do actually think that we're going to go through sort of a double hockey stick situation. There was early adoption. Then there was some identification of inconveniences depending on the climate you lived in, depending on the availability of charging, and actually the standardization of charging.

42:09Now that everyone is moving to NAXPorts, which has basically now become the North American standard, and that's the kind of charger that is used on Teslas, that actually is going to, I think, improve things quite considerably. And that combined with a little bit of additional choice. And also we're seeing a lot more on the hybrid front, which I think is going to be pretty good for companies like Toyota. Coming up at the top of the charts, we will ask each of our traders for their chart of the week and which stocks could be telling the true story of the market. More Fast Money in two.

42:43Welcome back to Fast Money. After a wild week of big stock moves, fresh CPA data, and earnings season entering its final stretch, we asked our traders what their chart of the week was. So we will start it off with Grasso. So SpaceX was a very interesting story, right? We've covered that. The IPO was$135. Saw the stock trade above$200, then crash down to$100 and change,$105,$106. dollars. The one event, the unlock, was supposed to kill the stock, and the stock ran on that date. That was because everyone got ahead of that. Everyone bought or sold accordingly. Overshorted. When you look at it now, we have another unlock late October, early November.

43:21I think people are going to be a little weary about getting short ahead of it. I thought this week was really relevant how it rallied. Mike, I'm curious in terms of the option activity on SpaceX, What did you see going in and then out of the unlock? Yeah, I mean, what we saw was a very big implied move. In fact, it was about 18 % for that week. Well, first of all, you got two bits of information that week, right? Because we had their first earnings release as well as the unlock. And between the two, we were expecting some really big moves. That was about a$250 billion market cap swing that the options market was anticipating.

43:54And it hasn't really alleviated that much. It's not as high now, but a lot of volatility in the future is still anticipated. Tim, what's your chart?

44:02Karen Finerman:It's a 30-year bond. It's the yield on the 30-year bond. We had a big auction this week. This was the week that interest rates went higher, I believe. And so we learned that the U.S. government refinanced at the highest rate in a quarter century. We now know that the interest expense is over$40 trillion and has outstripped the defense industry. We know that fiscal pressures, and not just here, but around the world, are driving up the long end of sovereign bond curves that investors are pushing out. because we have 200 billion of high-grade, long-end, hyperscaler bond issuance. And there's no question that there's a relationship, but there's four factors now pushing rates higher.

44:39Karen Finerman:And I think that's the chart of the week. Yeah, Bono, and your sort of dovetails with Tim's. Yes, I know we're focused on earnings, but, you know, if you look at the volatility within this, you know, USD, Japanese yen, if you want to look at rates vis-a-vis U.S. versus yen rates, I think all that ties to one of the things that is lurking beneath the surface that can kind of blow up the carry trade and introduce additional volatility into the market. So it has roared its head. It is alleviated a bit. But I think that is something that it's worth keeping a pulse on. And, Mike, your chart is something that we don't often talk about.

45:16CDW, IT services. And one of the reasons we don't talk about it is because if you look at this chart going back seven years, it's miserable. Stocks actually trading in the same place it was at the tail end of 2019. And it's basically been a ski slope going down for the last two years. Now, they just recently reported earnings and the stock gapped down on that. And then after basically treading water for a couple of days thereafter, it actually seemed to catch a bit. It's trading at less than 12 times forward earnings. And there's a pivot point from which you get regular investors or growth-oriented investors.

45:45And then you go over to value investors. And I think we're starting to see some value investors potentially creeping into this one now, less than 12 times forward. Interesting. CDW. Up next, final trades.

46:06Final trade time. Bono in. A very similar business model to Costco as it has to valuation. BJ Hosell. Timbo.

46:14Karen Finerman:It was a very, it was quite a really strong week for Boeing. Better delivery numbers, 737 MAX, 7 certified. I think Boeing is sneaky here. Sneaky good. Mike Coe. Rising tide lifts all boats, but that's regional. And the local tide in equities is in financials and health care. And therefore, I like the health care ETF, XLV. Steve. Archer Aviation. They actually did a deal with Boeing this week, earlier on in the week. I like that one. Have a great weekend. Mad Money is up next.

46:47All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by them on television, radio, internet, or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Fast Money participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such.

47:13To view the full Fast Money Disclaimer, please visit CNBC.com forward slash Fast Money Disclaimer.

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