Markets rip higher on tariff hopes… and earnings roll in 4/23/25

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. Today's rally brought to you by the letter T. Trump, tariffs and two strong days for tech. We're live at the White House for the latest in the president's new tone on trade. Plus, from volatility to zero-day options and massive trading volumes. We'll be joined live by CME Group chairman and CEO Terry Duffy, his take on tariffs. The market's had much more coming up. And later, the chartmaster is here. He is ready to hit the sell button on one big brokerage name and nibble on one of the beaten down pharma giants.

0:32A trip off the charts straight ahead. I'm Melissa Lee. Come to you live from the studio. Be at the Nasdaq on the desk tonight. Carter Worth, Dan Nathan, Guy Dami and Mike Coe. We start off with another big rally on Wall Street. The Nasdaq surging more than 400 points, hosting its first back-to-back 2 % plus days since February 2023. The tech heavy index had been up nearly 4.5 % at its highs. But another day like today and it is close to erasing all its losses for the month. Mega cap stocks leading today's gains with the so-called Magnificent Seven adding over$400 billion in market cap today alone.

1:06Broader markets also higher, though all off their best levels of the session. Major indices firmly in positive territory for the week. Today's gains coming after comments from President Trump and Treasury Secretary Besant suggesting that trade tensions between the U.S. and China could ease. Eamon Javers has been covering all the news out of Washington. Let's get to him for the very latest. Hey, Melissa, it's been a little bit of a bouncing ball through the course of the day and a little bit confusing in terms of where exactly these trade talks are actually standing right now. Here's how the day unfolded.

1:36Earlier today, we had Treasury Secretary Besant talking to reporters and saying that there were no talks yet. He said that the talks would have to start at a lower level, and then ultimately they would work their way up to the principal level between Xi Jinping and Donald Trump. But there was also no time frame for that. Then later, President Trump came out here on the North Lawn. He had an impromptu gaggle with reporters. He was asked if there were active talks. He said active. Everything's active. So that seemed to imply that there were active talks with the Chinese. Not clear what level that's happening at.

2:11So I went into the West Wing and spoke to Caroline Levitt, the White House press secretary. She sort of sorted it out by saying that what Bessent was talking about was this idea that there were no talks yet between Xi Jinping and the president of the United States. And what the president of the United States was talking about was just talks in general that were active. She said that there are staff level talks between the two countries that are going on now. So we're working to try to figure out what that means, who's meeting with who, when that's happening and get any kind of readout we can of the details of those talks.

2:45Meanwhile, Melissa, we are expecting to hear from the president any moment now in the Oval Office. Reporters have just been invited in with cameras. He might make a statement. He might not. We're going to stay on top of that. Amen. The response from the Chinese didn't seem to be that thankful. Should I say they were seeing they seem to be a little bit angry about the tone that the president was taking. Yeah. I mean, the Chinese foreign minister putting out a statement that was retweeted, I guess you would say, by the Chinese embassy here in the U.S., accusing the United States of trying to blackmail China and saying this is no way to cut a deal.

3:20If the United States truly does want a deal, this kind of rhetoric and this kind of action is not the way to do it. So you're kind of left in this limbo, Melissa, which is, you know, does the United States have to walk back the tariffs in order to even get trade talks to start with the Chinese? And the White House is saying the president is not going to do anything unilaterally like that. So if you need to bring the tariffs down to start talks, the White House is saying we're not going to do that. So that means talks aren't going to start. But the White House is saying they're open to talks. So you're kind of left in a bit of a box in terms of where things are going from here.

3:55And you're going to need some kind of diplomatic breakthrough to move the needle on this. And right now we don't see any indication that that's happening. Yep. Eamon, thank you. Keep us posted. Eamon Javers joining us from the White House today. So we're in this sort of box here. And yet the markets rally. We want to take this at face value in terms of the situation is unsustainable. Tariff levels will, in fact, come down. Yeah. So for a myriad of different reasons, we find ourselves with one of these, and I'll use the term, Wacky Wednesdays. First, you gave me a mango for fruit. You typically give me an orange.

4:29It was a joke because it's so hard to eat. You can't eat a mango. Exactly. That's why I gave it to you. Correctly. Second, we have a reunification of the old options action team right before our very eyes. Coco beware from parts unknown. And third, the fact that you're trying to navigate this market with headlines coming out left and right. I mean, yesterday, obviously, in the aftermath of what we heard, was a fascinating move. I will tell you, though, today's move was not all that encouraging to me. Ten-year yields, which cascaded lower, went the rest of the day, ratcheting back higher. I think they closed unchanged around 439.

5:02The VIX at one point today was back above 30. So, yeah, the rally made sense, but not to the extent that a lot of people probably hoped for. Yeah, and the other thing is Monday. Let's just think about what happened here. We came in. All we read about was bearish levels, sentiment levels, you know, the April decline, biggest in 100 years. The Powell out. I mean, yeah, it was, you know, everything. It all was at once. On Monday at 5 o 'clock, the silver lining guy was a bit bearish, too, you know. And so, I mean, listen, I don't think anyone was pressing lows right there. It didn't make a whole heck of a lot of sense.

5:32But I think the guy's point about how the rally faded a little bit today, I think, suggests that there's not a lot of confidence. and the back and forth that we've seen since Monday as far as the narrative as it relates to tariffs. And so really earnings are going to take, I think, center stage right here. Obviously, we're in the middle of it right now. It seems like some of the names that we've been watching have done OK. As far as tech so far, you know, Tesla was an absolute disaster. It rallied a little bit. I want to go back to Raytheon and Northrop yesterday. They were both down 10 percent.

6:00These are two massive contractors for the U.S. government. They employ 300 ,000 people together. other, you know, that's not a great look. And we keep hearing about these exemptions that might come from the autos, that might come from Apple, might come from all these sorts of things. If you give every industry an exemption, are they tariffs? Are we in a trade war? Like, what are you trying to accomplish? What are the concessions that you're trying to get out of? And you just use the term in a box. I think they back themselves into a corner. I don't think we actually know what they want to achieve right here.

6:31Is it the lower trade barriers? Is it to protect IP? Like, what is it? Do we want them to buy more stuff? Like, I don't get it. Do they know, really? No, I don't think the administration knows. And I think the Chinese, unless they see a deal from Canada, from Mexico, from the EU, from Japan, they're not jumping first, you know. And I'll just say one last thing. January 2018, that's when the trade war really started in the first administration. They did not have a signed deal for phase one until January 2020. It took two years. I mean, as the primary sort of event of the last day days is the vol crush, right, meaning this unbelievable spike in volatility associated with the drop in the equity market, and then an equally impressive bounce, leaving us literally at the midpoint from the high of February 19th, from which we plunged to the low.

7:17We were down 20 percent. So it's really a jump. This is what a pair of twos is, meaning there are big hands where you bet big and you say, I've got an advantage. I go for it. And there are moments where it's best to be small. So this is a small ball moment in general. I think if one's playing SPY and that kind of thing. But we are not going to get resolved anytime soon. We have goal pulls almost. The highs of February 19th, the lows of two weeks ago, we're up 13%, 14 % off their lows. And this churning is, I would call it, high volatility but low variance. And at the end of the day, it's an opportunity for traders, but you also can get flummoxed and get twisted and get it exactly wrong.

7:52Very hard, and yet that's the opportunity. Yeah, Mike, what have you been seeing? Yeah, I mean, the first thing I would say is that, You know, the last two days, of course, it's not surprising that we see the VIX index down. We look at the VIX futures, which go out a little bit further in time. We can see that there does seem to be some expectation that we're not going to get back to these prior highs. But we're much closer to the predictions that were being made about prolonged volatility from a week ago than we are anything close to what we saw back on January 21st, right after the inauguration.

8:22I think if you take a look at the options markets, what is basically telling you is that we're not done with this by a long sight. And I think that essentially echoes what the Chinese are saying. They're not saying, OK, you can just say, just kidding, and all is well again. We've got a long way to go, I think, before this thing gets sorted out. And I don't think we're going to be seeing the highs we saw earlier this year anytime soon. For more on today's market rally and whether it can continue, Natix's Jack Janosiewicz joins us now. He is the firm's lead portfolio strategist. JJ, great to see you.

8:55Yeah, thanks for having me back. Obviously, it's a very volatile time. But insofar as, you know, it sounds like we've already seen the worst. Maybe I'm being Pollyanna-ish about this. Maybe we've seen the worst the tariffs can be if they're already talking back and trying to relieve the tension between it and China, which is probably the most focused on, you know, trade relationship here. Yeah, and I think you could look back at that April 2nd announcement, Liberation Day, and potentially call that peak tariff. Because if you think about what was really enacted, it certainly came in much more draconian than market expectations.

9:30And between then and basically the low that we saw on the 8th, we had a pretty substantial drop in the equity prices. And, you know, when we look at past drawdowns that are associated with at least mild recessions, you get almost a 20 percent correction. We almost got there. So from a pricing in of a recession prospects on the back of draconian measures there, maybe that 5 ,000 level on the S &P really did define that bottom of the range in here. So it gives us a little bit of prospects in terms of what that downside risk might look like. JJ, how focused on the Treasury market are you? You know, yields in the 10-year today traded as low as 4.25.

10:05They almost got back to 4.40. We know we're working off a level of 4.50 from just a couple weeks ago when things were going haywire. Is that an important input to you as you're thinking about where the stock market can kind of find its level? It sounds like you think$5 ,000 might be a low, at least intermediate term. Sure. And the Treasury market, I think, is going to send some interesting signals. But what I think is a little bit of a cross-current here that's making this a little bit hard to digest is simply the potential for deleveraging and degrossing that we've been seeing. And so I think some of the move that we've seen in the Treasury market is a function of increased volatility.

10:40As a result, you're getting the VAR limits blown out. You're getting a tap on the shoulder from your risk manager saying, you know, you have to delever, degross. And as a result, you're selling treasuries. And I think that might be putting some upward pressure on the market. And so as a result, it's tough to sort of fish through what's technically driven here versus fundamentally driven with regard to what's going on in the treasury market. So that complicates things a little bit. Right. You mentioned the 20 percent or the almost 20 percent drawdown that we've already seen, Jack. But, you know, in typical recession, the PEs, the forward PEs are much lower than where we are now.

11:11So how do you sort of reconcile that drop saying in past, you know, drawdowns, pricing recession is 20 percent versus the turns that we would have to take lower on the P.E. side in order to match a recessionary environment? Yeah. And typically in these recessions, you get a P.E. multiple that compresses somewhere between 20 and 30 percent. But what happens is then we finally start to see that E in the P.E. starting to adjust lower. Right. Prices with regard to the stock market, we already are pricing in that discount where analysts are a little bit slow to adjust. And so what happens roughly about halfway through that earnings downgrade, you actually start to see PEs expand.

11:46That's because you're finally seeing the E catch down, so to speak. So, you know, you get you're pretty close to some of that revaluing with regard to that multiple, maybe a little bit more to go. But again, you put all these things together. It's an art more than a science. And we're pricing in quite a bit of potential slowing here when you get down around 5 ,000 on the S &P. All right. JJ, great to see you. Thank you. Jack Janosiewicz. Thanks for having me. All right. Let's get to a couple of tech stocks here on the move after earnings starting with. IBM shares reversing early gains and now sharply lower after reporting earnings and revenues at topped expectations.

12:19Guidance for the current quarter also coming in above estimates. Texan, by the way, on the other hand, moving higher after a top and bottom line beat. The conference call kicking off in just the last hour. Christina Farts Nevelis is here on set with the latest on both. Christina. First, everybody should listen to this call because he is the most outgoing, dynamic CEO and gives a lot of clarity. And the first question that was posed was really about demand pull through because guidance came in higher than anticipated. That's a major concern across the chip space. He said there was two major reasons why he doesn't necessarily think it's demand pull through.

12:49The first one is it's the bottom of the cycle. So they're seeing demand improve across personal electronics, enterprise, communications equipment. industrials is joining that mix, and that is a big part of their business. And then the second point is that customer inventory levels are so low. So he pointed to those two reasons, but he did say there is potential impact on our customers, our suppliers, and also now on our revenues. And this was in reference to the tariff concerns. And the other third last point that stood out to me is we talk about reshoring all the time. He was just asked about what his customers want when they have all these different fabs.

13:23And he said customers don't ask for domestic manufacturing plants. They ask us for dependable capacity footprints, which I think is telling to a certain degree. And probably lower prices, which won't be achieved by bringing manufacturing back here. So Texas instrument is a good quarter. The guidance was good as well. And look at where it just traded down to. I mean, Carter can speak to this, obviously, but we got down to the October 2023 lows in Texan held now bouncing. So again, you're looking for levels to trade things off of. And this is one of them. Now, I don't get too carried away because we're basically getting back what we lost during the day today, I think.

13:57With all that said, I mean, I think you can buy Texas Instruments here. I mean, it's like so many tech stocks under a lot of pressure. The question is, can you get a balance, a snap, a trade? But the damage is done, and you don't recover the losses of the past nine months quickly. Remember, this stock peaked in November. That's three months before the market peaked. But after IBM, and that's really the headline, it's just a classic example. There's no such thing as good or bad news. There's only news, and it's how the market reacts. The earnings were a beat. The revenues were better, but the stock is down.

14:28So obviously, they were not good. They were bad. Christina, what do you expect? I mean, obviously, all the exposure, industrial, automotive, you just mentioned that. And you talk about the customers who basically don't have an inventory problem, or the inventories were really low, low of the cycle. The CEO is really optimistic. But let's be clear. We're hearing this all around. There's a pull forward, right? And so I just find it like a really odd thing. You had the opportunity as it relates to forward guidance to have a muted sort of thing. So I'm just curious how you're taking that all in. And the guidance came in much stronger, even seasonally.

15:00I think one point that he did say, which was interesting, is that, of course, customers wouldn't tell us why they're buying. And I think we have to keep that in mind for almost every single earnings report out there that has to do with, let's say, hardware or buying products as a whole. Customers aren't going to tell you. So he's going to be optimistic and say this demand is going to continue. But to your point, may not. Right. It's a lot of pull forward and customers aren't going to really tell you why they're doing so. I mean, it seems like a big leap to assume that the demand that you saw in the first quarter is going to you can extrapolate that through to the rest of the year.

15:33He's saying, well, the reason for that is because we're seeing demand actually improve across all categories. And he said it was a real recovery, a real recovery that has nothing to do with a pull forward is what he's implying. But he did also say the customers are not telling them why they're buying. So how can he say it's a real recovery or real demand if he can't tell? You should have been on that call just thrilling him. It makes no sense. Mike Coe, does it make sense to you? Do you believe what Texan is saying about demand? Well, I mean, I'm going to take them at their word. And I think that that does make some sense to do that.

16:08You know, we are trading at what, you know, close to a four year low in this one. And we are looking if they are going to be consistent with sort of what the street was expecting, which and it sounds like it's better than that now. This thing was trading 23 times next year's full year estimates. So it sounds like it's on track to do that. And that would represent 20 percent year on year adjusted EPS growth. So from my perspective, I would take this as a positive, frankly. And I don't know that up 5 percent really makes it all that much more expensive. I would say it's actually cheaper now than it was before the close.

16:47I got something. All right. OK, so we learned this from the supply chain issue in covid, right? Like they might not be telling you what's going on. They cannot. If you're a buyer of these chips, you know, you're double. You're triple ordering right now. I just I'm shocked because I'm sure this I don't know who the CEO is. I don't know what he does. But what I don't know how he makes. I don't know how he makes a living. But it just seems kind of odd to me that you wouldn't kind of give yourself a little more room at this point, Because if they find out when they report in three months, you know what I mean, that the demand fell off, then the company has a massive credibility.

17:17Here's the flip side to this, though. Why wouldn't they take the pass? Maybe it's because they're so confident. They're so confident. Who's confident in this environment? Well, Lam Research, same thing. Their earnings came out today after the bell. Their guidance was a little bit stronger than Street anticipated. And then one last point, China. He did say right before it came on set that competition is intensifying across the board from China. And this was happening well before this whole tariff conversation. All good points. You know, again, this is a technical trade here. I think, you know, valuation is what it is.

17:46But the fact that we traded down the levels we last saw two years ago and held to me is encouraging. Christina, thank you. Good to see you. Christina Partsineblus. Coming up much more on today's Market Rally as stocks surge for a second straight day. What CME Group's Terry Duffy has to say about the recent market moves and how it's affecting his business. But first, a few names on the move after hours as Chipotle, Southwest, Alaska Airlines all report results. The details and the numbers from the quarters next. Don't go anywhere. Fast Money is back in two. Welcome back to Fast Money. Earnings alert on Chipotle.

18:15The stock moving lower after reporting an earnings beat, but revenue miss on Q1. Pippa Stevens is more on the numbers. Pippa. Hey, Melissa. Well, the stock is taking a hit as same-store sales fell 0.4%, contracting for the first time since Q2 2020, while analysts were looking for positive comps of 1.7%, the company pointing to a slowdown in consumer spending. The call underway right now with CEO Scott Boatwright saying off the top that in February they began to see the elevated level of uncertainty felt by consumers starting to impact spending habits, which drove a, quote, meaningful change in the underlying transaction trend, which has continued through April.

18:51The company adding the benefits of its menu price increase was more than offset by inflation. Now, Chipotle did say it expects to return to positive comps by the second half of the year, although they did give tempered full year same store sales guidance of low single digit range compared to prior guidance of low to mid single digit range. Melissa, thank you. Pippa Stevens. They actually did a visitation study where concerns about the economy were overwhelmingly the reason why consumers pulled back on their number of visits. Well, as I mentioned, for me, yesterday was a little bit of a taco Tuesday.

19:24So I went to CMG, believe it or not. Obviously didn't make it into this quarter's report. Maybe they'll save it. But with that said, I mean, these are the worst comps since COVID, which is disappointing. Margins hanging in there. Revenue was up, I think, six and a half percent year over year. So there's something for everybody. It's expensive on valuation. If you believe them, the comps are going to reaccelerate. You buy the weakness right here. Is this one of these stocks, Mike, that they're such good executors? They've got such a loyal customer base, one that's perhaps a little bit wealthier than some of the other fast casual chains, that it's one, relatively speaking, that you'd want to bet on.

20:02Well, I think it's better than some other places that you could go in the space. But I still think that, you know, we basically have a consumer that's under considerable distress. We actually have seen some data on higher end consumers and some delinquencies in areas we wouldn't normally expect it. And that, of course, is speaking to the demographic that you just addressed as a potential reason to buy it on the discount that we have here. If you're looking at maybe 11 % year-on-year growth, then the stock's not overwhelmingly cheap. I think you probably will get an opportunity to pick it up at slightly lower prices.

20:35How does that chart look, Carter? Yeah, my answer is to stay away from this. I mean, some of the real high flyers speaking about brands that are loved, Wingstop, obviously, for instance, Cava, they're all, I'd leave them alone. Stay away. For the first time ever, when it comes to Chipotle, we didn't say the two words. Burrito blowout, baby. Because, you know, people were waiting for me to say it. So I just said it. So, like, basically. Listen, the stock, if you look at it, I mean, it's sold off pretty significantly since, I want to say, April of last year. Really haven't had a meaningful bounce.

21:07So you're getting to levels where, yeah, valuation is still stretched, but not nearly as much as we've been historically. Carter, really quickly, McDonald's. We were talking about it on the desk earlier in the week. It's been consolidating. It's one of the very few stocks I see on my main page that's above its 200-day moving average. It looks like it wants to break out. Are you playing breakouts in this in mind? Yeah, it's funny. A lot of incomings on that. Of course, the last two weeks, the relative strength is incredible, right, compared to Starbucks. It's acting truly like a staple. It acts as well as Coke.

21:33My hunch is it's a trap. It doesn't have the torque or beta to break out. It doesn't report earnings for two, three weeks. Here, too, I'd say stand aside. All right. Coming up, more after-hours action in the airline space. Southwest and Alaska air both out with results. The details from the quarter is next. You're watching Fast Money Live from the NASDAQ Market Site in Times Square. Back right after this. Welcome back to Fast Money. We wanted to introduce CNBC's newest subscription streaming product, CNBC+. It's where you can stream Fast Money and a lot of your other favorite CNBC shows anytime, anywhere, on the go and also on demand.