Markets React to Jobs Report… And The State of Emerging Markets 8/7/26

23:02Karen Finerman:But at their core business, very strong back to back nights, double digit growth there. This is a couple of quarters in a row with that. That's been there. I just look at the stock and the chart and it tells me this looks like a software company that the market is now ready to reward on fundamentals. Well, the other thing is that the demand for travel is persistent. And in spite of other pressures in terms of your discretionary spend, it looks like especially American consumers, but it's happening globally. There's a prioritization that is happening for travel. What's interesting, though, is when they're talking about AI, Mike, it's happening within the ecosystem that there's they're just they're using the database of their own customers and then just churning out product faster and faster.

23:47Yeah, I mean, look, the big concern for a lot of these businesses was that, you know, these technological innovations were somehow going to challenge these businesses. And instead, they're basically facing that challenge using some of these improving technologies. And despite this big rally that we've seen, and it was obviously a very big one, it's not hugely expensive here. I mean, this thing is trading at 30 times forward earnings. It's going to do 30 percent adjusted EPS growth year on year this year. It's got better than 5 % free cash flow yield. It's got probably$7 billion to$8 billion in cash on the balance sheet.

24:22In fact, it's trading at about the same multiple as other hospitality companies, like a Marriott or a Hilton, and they're not growing at anywhere near the same pace. Now, granted, you've got more business, and it's not exactly a direct comparison. But if I had my druthers, and I do, I'd rather own Airbnb than those others. All right. We have a lot more fast to come. Here's what's coming up next.

24:47Karen Finerman:DraftKings rolls the dice and investors are liking the odds. Why Wall Street is looking past a weak second quarter and what's ahead for the sports betting giant. Plus, Latin America's consumer in focus, the trends Mercado Libre is seeing among shoppers, and how the e-commerce giant is cashing in. You're watching Fast Money live from the NASDAQ market side in Times Square. We're back right after this.

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26:47News alert here. We have news on an IPO filing, and Julia Borson is coming to us with those details. What do you have, Julia?

26:56Karen Finerman:That's right, Contessa. Bloomberg is reporting the data center operator Switch has filed confidentially for an IPO. Now, back in July, Reuters reported that the company had hired investment banks for an initial public offering to raise about$10 billion, which would value the company nearly$80 billion. So Contessa, certainly one to watch. Back over to you. All right. Thanks, Julia. DraftKings jumping nearly 8 % today, despite missing both the top and the bottom lines. The company reaffirmed full-year outlook ahead of what is critical for these sportsbooks, the NFL season. Among many topics, CEO Jason Robbins on Squawk Box this morning talked about the company's early momentum in prediction markets.

27:39Karen Finerman:And predictions is just a huge opportunity for us. We're going to be disciplined in our investment there. We're not going to do anything that the data or that the numbers don't justify. But we are just seeing absolutely enormous growth. The customer acquisition costs are unbelievably efficient. So we're expecting huge things this fall. I think we're going to have millions and millions of customers engaging with our predictions offering. And really remarkable here, Tim, when they're saying they don't see any crossover from their existing sportsbook customer, like they said, 1 percent to the prediction platforms.

28:10They think that what they're seeing, not just on their platform, but across Calci and others, is that it's a professional trade happening on prediction markets.

28:19Karen Finerman:Yeah, and that may be true. And also they're arguing that we're also involved here so that they're kind of trying to play both sides of the demand story. and also they're not seeing the erosion in their core. What I think is most interesting for investors in DraftKings, it's always been about a macro trade. It's always been about a TAM. It's always been about to the extent that they were going to at least outspend on the customer acquisition cost. I love the fact here that that's become a lot more efficient. I think this was one of the biggest problems of where these companies started out is because it was so competitive in the trenches between DraftKings and five other players that we know their names.

28:56Karen Finerman:So, you know, this is encouraging. Ultimately, I think the market and the investor community is still not totally sure what the prediction markets are going to wage in terms of a threat. But it's not surprising to hear them talking that they're not. They also talked a lot about having three key layers of the prediction markets in-house, that they've got the brokerage, they've got the exchange, and they're a market maker, and that that all sort of creates a flywheel for DraftKings moving forward. I guess, but I do feel like there's competition. There's others who are creating different flywheels, right?

29:31Karen Finerman:So, I don't know. I don't own DraftKings. I feel like the competition from so many places is just so intense that it's going to be hard. I think it will also be interesting to see where the World Cup actually should be like a tailwind for them. That actually brought a lot of people into sports betting. A lot of people watching soccer would never watch before, and the U.S. got very into it. But that isn't always sticky. Some of these people aren't going to stay around and continue to bet. So I think what's going to be interesting to see is how much does that translate into people staying around?

29:59Karen Finerman:And does it translate at all into both of their markets there? And within the sports betting industry, there's a lot of questions about whether the growth of prediction markets might encourage some of these states to go ahead and legalize online sports betting, because that's the opportunity and that's where the states make their tax revenue. We'll have to watch and see. Coming up, we have the chart of the week, why traders are fired up about beauty, chips and small caps. But first, the pulse of the consumer across Latin America. The CFO of Mercado Libre waiting in the wings. His take on e-commerce spending and the company's AI ambitions when Fast Money returns.

30:36Missed a moment of fast? Catch us anytime on the go. Follow the Fast Money podcast. We're back right after this.

30:47Welcome back to Fast Money. Stocks finishing higher to end the week. The Dow added 150 points, the S &P up half a percent to close at records, and the Nasdaq rose by more than 1 percent. Celsius Holdings surging 17 percent after the founder of Rockstar Energy told CNBC he's built a near 5 percent stake in the beverage company and is pushing for a leadership overhaul after disappointing earnings. Shares still down almost 40 percent year to date. Meanwhile, Under Armour falling 4.5 percent, the retailer lowering its revenue growth outlook, driven by softer demand in North America and Asia Pacific.

31:23Mercado Libre ends the week down 3%. The Latin American e-commerce giant gave second quarter results Wednesday, reporting record revenue of$10.2 billion. And while EPS contracted for a third straight quarter, it still came in ahead of expectations. Here to dive into the results is the company's chief Financial Officer, Martin de los Santos. It's nice to see you, Martin. Thank you for your time today. Great to see you. Thank you for having me. Well, give me a sense of for how long your company is willing to pursue growth over profits. Yeah, what we're doing right now is we are willing to trade a short-term margin of short-term profits for growth.

32:10Just to put it in perspective, we are growing at 50 % year-on-year revenue. We have been growing for more than 30 % for the last 30 quarters. That's more than seven years. So we are delivering tremendous growth, but we're also making profit. We are a profitable company. We generate cash flow. We're just selecting to reinvest some of the leverage that we get into areas of our ecosystem that require investment in order to capture a very large opportunity that we have in front of us, both in fintech and commerce. Remember, we run the largest commerce platform throughout Latin America, but also one of the largest fintech ecosystem in the regions.

32:46So we are, again, we are investing where we're seeing tremendous results and we're very excited with the results that we're delivering.

32:53Karen Finerman:Hey, Martin, it's Tim Seymour. Thank you for joining us. I've followed your company and owned it at various times over the last 15, 20 years. You're often called the Amazon of Latin America. And you just talked about where you're choosing to invest in your business. Is there a real focus outside of fintech and some of the other areas like your ad business is is extremely strong based upon e-commerce? You've also at various times not been afraid to go out and essentially buy TPV growth as opposed to organic GMV. How are investing and again in a world where the Amazons of the world who I understand this is a very it's a similar company.

33:35Karen Finerman:It's a very different company. But people have been very critical of spending at times. And I think, again, given the growth you've had in fintech, given the growth you've had year over year, the numbers are pretty extraordinary. Yeah, I think it's just a point in perspective. We delivered$3 billion of profit last year. We generated more than$1 billion of cash flow. We're just electing to press a little bit our margins, reinvesting, like I said, in areas that are growing very rapidly, profitable areas of the business that are growing very rapidly, like advertising or a credit business. We're electing to reinvest that in other areas that require investment, like we're growing our CVT business that requires investment.

34:13We're growing our credit card portfolio that requires investment. But it's very important to our ecosystem. We mentioned this quarter that we're growing our user base by roughly 30 percent. But more important than that, users that interact with both our fintech and commerce platform that are the ones that are more valuable to us are growing at 37 percent. And part of that is the investments that we're making. So like I said, we're investing for the next 20 years. We think that the opportunity that we have in front of us is enormous when you look at the underpenetration of e-commerce in Latin America and the other developed nature of the financial services in Latin America.

34:50And again, we're willing to make those trade-offs between short-term margins with long-term growth. But we are very disciplined in the way we make them. And we also measure the results. And we are very excited with the results that we're seeing. Martine, there's been some highly publicized coverage of the health of the consumer in Latin America. I mean, wage growth has been sluggish. The costs of transportation and food are still high. And yet you have posted extraordinary results. And even in your credit business, you say that those low performing loans, non-performing loans are near record lows.

35:28What's driving the health of the consumer? And when you're seeing that spending, are you taking share from other companies or is it just that there's a lot of consumer confidence? I think several things happening on the commerce side. Obviously, we ride a secular trend of people moving online. And we, as number one player of e-commerce throughout the region, play a significant role on eliminating friction and bringing more people online. So we are growing very rapidly because more people are moving to e-commerce. And within e-commerce, obviously, we are gaining market share because of the investments that I mentioned before.

36:02On the fintech side of the business, I think the fact that we're in a complex credit cycle in Brazil and Argentina, our NPLs not only are under control, but they are actually lowering. And that's a testament to the discipline that we have in terms of underwriting credit. We leverage a lot of information. We leverage the technology that we have. We have built models that are very accurate at predicting default rates. And that's the reason why we have a very profitable, rapidly growing, but also very sustainable credit business within Mercado Pago. Martin de los Santos, thank you, sir. Have a great weekend.

36:39Thank you very much for having me. Up next, are we losing the need to show off and show out when we get behind the wheel? A new survey from J.D. Power says, yep, Phil Lebeau is here to explain why BASIC is getting the better of luxury. for more and more car buyers.

37:00As our country celebrates its 250th anniversary, CNBC spotlights the leaders driving business and the nation forward. If I had to sum up 250 years, what I would say is that we are a country that is incredibly ambitious. I'm Jason Liberty. I'm the chairman and chief executive officer of the Royal Caribbean Group. I think my journey is an incredible reflection of what we've seen from many, many generations here in this country. You work hard, opportunities present themselves. I certainly did not imagine that I would be running this incredible organization. So in 1969, the World Caribbean Group was formed, focusing really out of leisure travel out of here in Miami.

37:44And then over time, we've now grown to 70 incredible ships. Those ships sail all around the world. We are a set of dreamers, so we really focus on dreaming on what tomorrow could be on a vacation experience standpoint. And then we infuse innovation into that. One of the reasons why a lot of the innovation takes place in the U.S. is, one, about 80 % of our customers come from the U.S. Also, some of the best talent in the world is sitting here throughout this incredible country. And our ability to bring them here, that is very advantageous to us. When I think of what America's ultimate superpower is, I do think it's grounded in ambition.

38:23We are a collection of different cultures that have come together in this country, but ultimately focused on making sure that our country gets better and better each and every day.

38:40Welcome back to Fast Money. premium automakers having a tough year. Mercedes, BMW, VW, seeing double digit losses in 2026. And now new data shows the prestige of owning a luxury car may just be losing a bit of its luster. Here to tell us why bling is no longer a thing, but you have to do it in rhyme, Phil LeBeau. Well, it's going to be a long report then. Look, I'll just give you the data from J.D. Power. and the numbers are fairly convincing when you look at what's happened, not just in the first half of this year, but it's been happening over the last couple of years. The share of premium or luxury auto sales in the U.S., 13.3 % in the first half.

39:20That is the lowest since 2020. And yes, they believe there is a shift to mainstream models. This is according to J.D. Power. You might be saying, well, that makes sense. The average transaction price right now is almost$50 ,000. People are trading down. No, that transaction price is pretty much stuck in the same area. What they are doing is transitioning out of luxury models. Not all the people are doing this, but the people who are moving into mainstream models, here's what they're doing. They're going first into compact cars, then it's midsize SUVs, and then compact SUVs. This is according to J.D.

39:56Power, which raises the question, if you were Mercedes or BMW or Volkswagen with the Audi brand, how do you change this? Well, it's not going to be easy because the problem is that the gap between luxury brands and mainstream brands here in the United States, that gap has narrowed both in terms of perception, drive quality, the surveys of people who own the vehicles, fit, finish and technology. And as a result, Ford, GM and especially Toyota are benefiting from people saying, I may not buy a luxury model, but I'm going to take a mainstream model, Contessa, and I'm going high end. I am going to make it so it has everything I'm looking for.

40:37And yeah, maybe I'll pay$45 ,000,$50 ,000,$55 ,000,$60 ,000. It may be mainstream, but I like what I'm getting. But you know what it doesn't do, Phil? It doesn't tell all of your neighbors how rich you are. No, you are correct about that. And look, that is still part of the appeal for the luxury brands. And that's still part of the sales process. And I've got neighbors who drive luxury cars. That's one of the first things they say. Look at me. I've got a Mercedes or a BMW or I have an Audi, whatever it may be, a Lexus. That is part of the appeal for luxury autos. All right, Phil, thank you. Let's trade it now.

41:18What do you think? Are they in trouble? Is this an opportunity for GM?

41:23Karen Finerman:Well, one thing that we didn't talk about is so GM, a car like a truck, Silverado, that's where they make so much of their money. Right. The margins on that are fantastic. And with all of I mean, and the sales have been great for Ford as well. Trucks as opposed to the luxury end of like Cadillac, for example. I think that's what's driving GM. It's still Silverado. Mike. Yeah, I mean, General Motors, I think the stock is cheap. I think to Karen's point, you know, where their bread is really buttered. They don't have competition really in that area from some of those premium luxury European makes, for example.

42:01I think Toyota is obviously very well positioned. You'll notice that what Phil was talking about also highlights the fact that we are living in an environment of elevated gas prices. And so I think we are seeing some consumer preference shifts in that area, too. And then I'm just going to throw something a little sort of off the wall here on a company that's losing cash hand over fist, but I think is well positioned to hit that same sweet spot on the EV side, and that's Rivian. So they've only got about$5 billion in cash, and they're burning through over a billion a quarter, which is a little bit challenging.

42:29But this R2 starts at$46 ,000, runs to$60 ,000, and they're printing orders for that thing about as fast as they can take them. So if they can raise the needed capital and build the production capacity in that Georgia plant, I think Rivian might be an interesting play, and it recently got added to the Holley Index. Tim?

42:49Karen Finerman:Well, ultimately, I just I would lean into what Mike said about the price of GM. GM at six and a half times forward is wildly cheap, as the Deco just said. They not only they re-firm, they raise their guide on 26. And when I hear about a special high end package, a platinum package that gives me massaging seats and leather and this and that, I think I think I think about margins and I think about where Ford and GM really have had a turn here. But Ford doesn't trade like a company, just back to how the stock trades and the characteristics of that. That's a stock that doesn't trade like the market has confidence.

43:24Karen Finerman:GM is one that does. Talk about distracted driving. All right. Up next, charts of the week. Why Karen is getting all glammed up and Courtney's thinking small. Mike's rocking heavy metal and Tim's sweet on one specific semi. Stick and stay. Fast Money's back in two.

43:46Welcome back to Fast Money on this Friday in August. As we wrap another big week for markets, we thought, what better way to close things out than with our traders. Charts of the week. Tim kicks us off.

43:58Karen Finerman:Well, NVIDIA has not been weak. And in fact, I think it punctuated the move in semiconductors that outperformed the SMH by 4 percent this week. But it's outperformed semiconductors as a group by almost 15 percent over the last month. It's very much underperformed over six months. And that's been the story here. So this breakout this week to me is is some combination of I think the conditions changing, but ultimately a market multiple on arguably the most important company in the world. I think you stay there. Karen. So mine is Ulta, which is up, I don't know, maybe fifty dollars in the week for no particular reason.

44:32Karen Finerman:I like Ulta a lot. What I don't love often is when setups get too hard going into earnings when already people are so, you know, excited, hopped up on what the earnings might be. I love Ulta, though, so I'm not trading out of it, waiting around for earnings. I'll probably be in this one for many years. Courtney. I thought small caps were interesting this week. I mean, we've been in this market for so long where essentially it was like the MAG 7 or nothing. And I think the fact when you look this week, small caps are up over 3%, about the same as the S &P 500, just shows you are continuing to see this broadening.

45:03Karen Finerman:Even after we get really good earnings from the tech giants, you're still seeing people are rotating to other areas. And I think that's a really healthy sign of the broader markets and why you do want to maintain the diversified portfolio right now. Mike. Yeah, Olalou spoke about diversifications with metal and gold specifically at the outset of the show. Gold obviously caught a big bid here, but it's still below the long-term moving average. The miners are at the long-term moving average, but the largest constituent of the miners is Newmont. And that one broke above the long-term moving average.

45:31I think it's a tell for gold generally. I think it's a tell for the miners. And I think if you want to be in this space, and I think you should be, Newmont's a good way to play it. Up next, your final trades.

45:58Let's do this thing. It's time for final trades and around the horn. Tim.

46:03Karen Finerman:Fantastic. Great having you today. GM, great owning this stock. I think the$10 billion in free cash flow for next year should be bought. Mike. I like materials and I like metals and not just the precious ones either. I like copper and therefore I like southern copper. Copper is pretty precious right now. Courtney. I like international. I think specifically emerging markets is a good thing to take a look at here. So I would take a look at VWO, which is the way to play that. And Karen. Did you like it? Did you have fun here, Contessa? So great. It's so great to be here. It was fun to have you. Thank you for being here on a Friday night in August.

46:37Karen Finerman:Mine is UNH with all of the tech swoomed down and then back up. Looking for something somewhat uncorrelated. UNH last earnings were great. Stock really didn't move much from there. So that's my final case. All right. So Karen, Courtney, Tim, Mike, thank you guys. Thank you for watching Fast Money. Mad Money with Jim Cramer starts right now. Enjoy that weekend. All 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.

47:09You 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. To view the full Fast Money Disclaimer, please visit cnbc.com forward slash Fast Money Disclaimer.

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