In short
The episode covers three main market drivers: the Fed’s March decision to hold rates (3.5%–3.75%) amid hawkish Powell messaging on sticky inflation, oil-driven uncertainty, and what that means for stocks and private credit. Key claims from guests: deglobalization and supply shocks are “inherently inflationary,” so the Fed is likely to stay on hold; productivity gains may be AI- and post-pandemic-related; oil at ~$100 is manageable but ~$150 is dangerous.
Notable examples
S&P/Nasdaq down ~1.5% with the S&P closing below its 200-day; Brent near four-year highs; FedEx and Lululemon discussed as upcoming/retail signals. Micron is the focal stock: revenue nearly tripled to ~$24B, gross margin doubled to 74%+, CapEx raised to $25B for FY and +$10B in 2027; debate centers on “buy-the-news” vs long-duration AI capex risk.
Guests
Tim Seymour, Dan Nathan, Guy Adami, Michael Cantopoulos (Richard Bernstein Advisors), Steve Leisman (Washington), Melissa Otto (S&P Global/Visible Alpha), Dan Dulliv (Mizuho).
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Chapters
Tap a time to open that second in VOFed Holds Rates Steady
1:44 to 2:12
Discussion on the Federal Reserve's decision to maintain interest rates.
“Deputy Chief Investment Officer at Richard Bernstein Advisors.”
Market Reactions to Fed Announcement
2:12 to 2:42
Panel discusses market reactions following the Fed's announcement.
“The index closing below its 200-day moving average for the first time since July.”
Inflation Concerns Highlighted by Fed Chair
2:42 to 3:24
Analysis of Fed Chair Powell's comments on inflation risks.
“It's one of those things where it's a repeated set of things, and you worry that that's the kind of thing that can cause trouble for inflation expectations.”
Supply Chain and Inflation Dynamics
3:24 to 4:30
Exploring the impacts of supply chain issues on inflation expectations.
“I have no intention of leaving the board until the investigation is well and truly over with transparency and finality.”
Deglobalization and Its Inflationary Effects
4:30 to 6:14
Discussion on how deglobalization may contribute to lasting inflation.
“That's how you learn not to touch a hot stove, right?”
Fed's Long-term Economic Outlook
6:14 to 8:08
Examining the Fed's long-term economic outlook and productivity changes.
“And I think they'll start talking hikes at some point.”
Oil Prices and Economic Sentiment
8:08 to 9:14
Panel examines how rising oil prices affect economic sentiment and policy.
“Steve, how how short of a honeymoon period do you think Kevin Warsh is going to have, given what he's about to walk into?”
Tensions Between Inflation and Economic Growth
9:14 to 12:04
Exploring the balance between inflation pressures and economic growth prospects.
“And if we have one hundred and ten dollar oil through to June, where's the Fed on rate hikes in 26?”
Earnings Growth and Market Disparities
12:04 to 14:01
Discussion on recent earnings growth amidst economic disparities.
“One is the economy and one what's going on with profits and the stock market.”
Market Concerns and Micron's Position
14:01 to 15:22
Learn about market concerns regarding supply-demand dynamics and Micron's pricing power.
“What are they going to be able to say to sort of assuage the concerns of market participants?”
Show all 27 chapters
Micron's Impressive Earnings Report
15:23 to 17:17
Discover the details of Micron's earnings report, including revenue growth and future guidance.
“After the chipmaker beat street expectations on the top and the bottom line, revenue coming in nearly$24 billion versus$8 billion a year ago.”
Investor Reactions to Micron's Performance
17:18 to 19:13
Understand the investor reactions to Micron's performance and stock movement after earnings.
“It's been the one bright spot in the market where you've made some money.”
Investing in the New Era of Technology
19:14 to 19:59
Examine the implications of investment in technology and the challenges posed by higher rates.
“I mean, how do you think about all the CapEx that hinges on the AI story continuing?”
Leadership Changes at Disney
21:58 to 25:50
Review the key points from Josh DiMero's first day as Disney CEO and future priorities.
“Disney shares down about a percent today.”
Market Trends and Expectations
25:51 to 28:00
Analyze the movements in the stock market and expectations for upcoming earnings reports.
“We'll bring you the headlines of what one top analyst says is in store for the stock, her take on the results, and the rest of the semi-space.”
Market Reactions to Lululemon's Performance
28:00 to 28:40
Explore Lululemon's stock movements and earnings insights.
“The stock initially falling but closing out the day nearly 4 % higher.”
Anticipating FedEx's Earnings
28:40 to 29:25
Discussion on FedEx's operational improvements and upcoming earnings.
“I tell you, I think everything this company is doing right.”
Micron's Revenue Surge and Market Expectations
29:25 to 31:29
Analysis of Micron's impressive earnings and future guidance.
“Is this just a case of it's everybody expected amazing numbers?”
Industry Dynamics and AI's Influence
31:29 to 33:40
Understanding the impact of AI and capacity expansion in the tech sector.
“I mean, I think I don't know what your projection is in terms of increase.”
Concerns Over Debt in Tech Stocks
33:40 to 35:26
Examine the implications of rising debt for major tech companies.
“Melissa, thanks so much for stopping by.”
Retail Sector Performance and Consumer Trends
35:26 to 36:24
Insights into retail stocks and consumer behavior based on earnings reports.
“And so, you know, this is one of those stories where it goes back to the companies that have a lot of concentration with OpenAI.”
Concerns in the Fintech Market
36:24 to 38:31
Discussion on the risks facing fintech companies due to private credit issues.
“A few retail movers catching your eyes today.”
Analyzing Consumer Credit Dynamics
38:31 to 42:02
Exploring the performance of fintech companies and consumer credit trends.
“Fintech names taking a big hit today as investors worry that the private credit turmoil is spreading to the consumer loan space.”
Analyzing Credit Cycles and Delinquencies
42:02 to 44:31
Insights on credit cycles, delinquencies, and market perceptions.
“Great for their story until there's a credit cycle.”
Gold Market Trends and Predictions
44:32 to 45:58
Discussion on the current state and future of gold and gold miners.
“Gold under continued pressure, hitting its lowest level in over a month, settling below$4 ,900 an ounce, with little change in prices after the Fed decision.”
Final Trades and Market Outlook
45:59 to 46:36
Participants share their final trades and market predictions.
“The Mets are here in the NASDAQ, by the way.”
Final Trades and Market Outlook
47:22 to 48:36
Participants share their final trades and market predictions.
“severe obstructive sleep apnea, OSA, and adults with obesity.”
Transcript
Automatic transcript. May contain errors.0:00At Edward Jones, we believe rich is more than caring about the latest and greatest. It's also taking care of what gives your life meaning. That's why your dedicated financial advisor meets you where you are, with personalized financial strategies that help protect what matters, so you can preserve your progress while creating a path forward. The key to being rich is knowing what counts. Let's find your rich together. Edward Jones, member SIPC. Are you as confident as you should be when it comes to growing your business? Is your strategy ready to execute today? If cash flows aren't where they need to be, growth could be at risk, especially in the eyes of your investors, board members, and the business press.
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1:28Plus, Brent crude settles at nearly four-year highs. Disney's new CEO headlines a company's shareholder meeting. And Macy's big day, what the department store had to say that had investors buying in today, and whether the rally can hold. I'm Melissa Lee, coming to you live from Studio B at the NASDAQ. On the desk tonight, Tim Seymour, Dan Nathan, Guy Adami, and Michael Cantopoulos, Deputy Chief Investment Officer at Richard Bernstein Advisors. Welcome, Michael. And we'll get to the action of Micron shortly, but we do want to start off with today's Fed decision. policymakers holding rates steady as expected, maintaining the outlook for one cut this year despite the recent surge in oil prices.
2:03Stocks closing at session lows. The S &P and Nasdaq each off by more than a percent, while the Dow led the losses, shedding over 750 points for its worst day in almost a month. The index closing below its 200-day moving average for the first time since July. Treasuries, meanwhile, weakened across the curve. The benchmark 10-year yield adding six basis points. The two-year hit its highest since August. For more on all this, let's turn to Steve Leisman in Washington. Steve, a little more hawkish today, huh? An eventful press conference and statement. Fed officials leaving interest rates unchanged at their March meeting, the range of 3.5 to 3.75, saying in their statement that developments in the Middle East had increased uncertainty for the outlook for the U.S.
2:41economy. But Fed Chair Powell in his press conference sounded a somewhat hawkish tone by suggesting the Fed might be reluctant to cut in the future because of inflation now running above target and continued price increases from tariffs. It's one of those things where it's a repeated set of things, and you worry that that's the kind of thing that can cause trouble for inflation expectations. And so we worry a lot about that, and we are very strongly committed to doing what it takes to keep inflation expectations anchored at 2 percent. To be sure, the Fed chair in his penultimate meeting as chair was anything but definitive about how the Fed would react to the historic rise in oil prices.
3:24He made clear that there's risk on both sides of the mandate with the potential for inflation to rise and or growth to weaken the Fed chair, adding he intends to stay on as a Fed governor after his term as chair ends May 15th, at least while he's still being criminally investigated. I have no intention of leaving the board until the investigation is well and truly over with transparency and finality. He said he had not made up his mind if he would stay on as governor after his term and the investigation is over. Melissa, I didn't talk about the forecast because the chair himself said there's so much uncertainty that they were just kind of placeholders.
3:59Yeah, for sure, Steve. Going back to inflation, though, I mean, in his forecast, it sounds like it sounds like overall the risks are to the upside when it comes to inflation remaining high. Because he also mentioned that, you know, back when we had supply chain shocks from COVID after COVID, you know, we thought inflation would be transitory. It wasn't as transitory as we thought it would be. It was transitory, but it lasted longer. So it seemed like there was an acknowledgment that even though these are shocks and should traditionally be looked through, that they could actually persist for much longer than we think.
4:29Yeah, Melissa, you raised small kids. So did I. That's how you learn not to touch a hot stove, right? You just went through a period when the inflation stayed around longer. It was transitory. It was around a little bit longer before it cooled off as a result of massive rate hikes by the Federal Reserve. And so the Fed's just going to be a little shy here. This time around, you just looked through inflation. You have had a continued run, almost five years of inflation being above target. So I just think the bar is maybe a little bit higher. We have a lot of economists in the Fed survey. we're saying the Fed will focus on weakness.
5:04And I think that's true if you're talking about definitive weakness of job losses. But I think the story is right now, if it's a close call, Fed's going to be worried about cutting rates with inflation above target. Was that your take, Michael? You know, my take is simply that inflation is here to stay. And I think the Fed is starting to wake up to that. Chair Powell, very on the margins, acknowledged this idea of a series of supply shocks. Steve, I don't remember the exact language that he had mentioned, but it was something to the effect of, you know, some outlets out there, something like that, allude to this.
5:39What he's talking about is deglobalization. One of the biggest reasons why you had a decline in interest rates over 30 years is because of globalization. And starting with President Trump's first presidency in 2016 and then supercharged by COVID in 2020, we are in a period of deglobalization, and deglobalization is inherently inflationary. And I actually think this is on the Fed's radar. I think they're waking up to it. Core PCE, which is what the Fed cares about, bottomed April of last year. You know, you got the PPI numbers today. War is inherently inflationary. Inflation is not going down. And I think the Fed is probably going to be on hold this year at the best case scenario.
6:18And I think they'll start talking hikes at some point. Melissa, can I just have a quick word on that, which I think is super important, because if you think about what globalization means, When the Fed thinks about supply and demand out there, if you have a rise in demand in a globalized world, the entire world is around to supply what needs to be supplied. We found that in the pandemic, when you had the supply disruptions, that that could lead to inflation. And you may be on the cusp of another situation here where a de-globalized world creates the issue where the world is not around to supply what needs to be supplied in the face of higher demand here in the United States.
6:54I thought the other thing that was interesting in the press conference, Steve, was the discussion about productivity moving higher within the GDP and how, you know, that is probably due to AI. But too early to call at this point. We spoke to Alan Blinder in the last hour and he said it's not going to be big, but it's something on an ongoing basis in terms of the continued benefits that we will see. Yeah, and we had a nice conversation with Professor Jeremy Siegel who pointed out that the Fed had raised the long run potential growth from 1.8 to 2 percent. It doesn't sound like a lot, but 0.2 over a long period of time can add up, and it suggests that there is some confidence.
7:33You're right to say it's not necessarily AI. What Powell pointed out and was clear in the data is that the increase in productivity, the sustained increased productivity began several years ago and may have come from the pandemic. I'd like to think about the idea that all of a sudden the workforce became something you get all over the country because of remote work and right sizing and lots of things that happened in the pandemic that I think were positive. Whatever happened, the productivity did run and began began running hotter in the wake of the pandemic. And it has remained there. And the Fed seems to be incorporating that into their long run view.
8:08And I think investors probably do, too. Steve, how how short of a honeymoon period do you think Kevin Warsh is going to have, given what he's about to walk into? I think in guy inherent in your question is the idea that it will not he won't even have a honeymoon. Right. If he comes in and inflation is running above target, if inflation expectations are hot, if the idea of whether or not, pardon me, you have inflation from a headline bleeding into the core, there will be no honeymoon. If you suggest that a honeymoon is the ability to cut rates without being too much scrutiny. I don't think that's going to happen.
8:48And, Guy, it is fascinating the way the market is trading. Essentially, if you look at futures markets, they do not see the new Fed chair acting until December. So he sits there. He does nothing when he comes in in June, nothing in July, goes to Jackson Hole, comes back, doesn't cut rates in September, maybe in October, but more likely in December. That's the markets bet right now, Guy. Steve, put your Fed, excuse me, your economist hat on. You just put your Fed's hat on. And if we have one hundred and ten dollar oil through to June, where's the Fed on rate hikes in 26? So that's why I asked that seemingly geekish question about the staff, what the staff has said in the past, which is apparently what the staff has said is that you have this increase in oil prices, which creates a drag on consumption.
9:34But that ends up over in a higher production, which kind of offsets it from a growth standpoint. Right. So, by the way, Tim, I'm going to throw this out to you. But I think one of the things that we're learning here is that there's two basins. There's an Atlantic basin and a Pacific basin when it comes to oil. So, and if you notice, Brent is trading higher than WTI. We have an ability in this country to respond to shortages, or over a long period, to respond to deficits. That may not be as true in the Pacific basin. You could have this widening gap. So, yeah,$100 oil I think is okay. I think it's$150 oil that's the problem.
10:13And I will say, I just talked to John Kilduff, one of my favorite oil experts. He says this damn straight. Did I say that? Damn straight. Better be open by April 1 or that's when you're going to have a quantum leap again in crude prices. Right now, people are sort of acting in a way that it's going to open again. And then we'll have another conversation about what it means to have really surging crude prices on the other side if this thing lasts longer. Steve, it's always great to speak with you. Thank you. Pleasure. Steve Leisman. So April 1 is a magic number on the equity side. you know, two to three weeks in terms of the conflict, having to see an end in sight in order for we for us to sort of move on with our lives in terms of the market move higher.
10:53I mean, it's all coming down here to the next couple of weeks here. Yeah, I think what was clear listening to that presser is there's a high level of uncertainty. We talk about it all the time. And so really, you got to think about obviously low end earners are going to have a hard time with this. They already are. And they were already in somewhat of a difficult spot before we had this rise in oil. And then it comes through in a whole host of other things that you keep people talking about fertilizers. If farmers have to pay twice as much as they were paying a couple months ago for fertilizer, I mean, sooner or later, that's going to work its way back into food costs that we've already seen go up dramatically.
11:25And the other thing is, and maybe Michael has some thoughts on it, I mean, the cumulative nature of inflation over the last five years is massive, and it doesn't really matter if it gets down to the Fed's 2 percent target, whether it's 2.4 percent, whether it works to 2.9 percent. I mean, we're in a spot right here in the economy. And, you know, Joe LaVorna was on one of the shows this afternoon, and I'm listening to him, and he's saying the fundamentals of the economy are sound. I mean, I think they're like the opposite of that. If anything, they're very fragile, you know? And if you just see the sort of shocks that we have potentially and the uncertainty that we have, I just don't know how anybody can go out and talk about how sound the economy is right here.
12:04So I think there's two things. One is the economy and one what's going on with profits and the stock market. From an economic perspective, I agree with you. I think, you know, there's a lot of fractioning in the economy. You obviously have a K-shaped economy. I mean, how many times can we say that? We see stress in private credit. You see stress all over, really, right? On the other hand, you just had near 17 % earnings growth in Q4. And so corporations are actually doing quite well. And in fact, you're starting to see earnings growth start to broaden, or at least you did in the beginning of this year.
12:36And so it's a little bit of a strange dynamic. You know, the rich are getting richer. The poor are getting more and more hurt. higher oil prices is only going to exacerbate that because either you're going to be able to afford it or you're going to get really, really hurt. And so I think there's just going to be massive dispersion, which creates opportunity from a trading perspective. I agree with that. I think Dan's bringing up a good point, though. I mean, it may be that the year over year numbers, the comps get easier for inflation, but you can't tell me that people aren't absolutely worn down over three years of this.
13:03And I would get back to a place where, say, it's$65 WTI, our blend, our basin, is actually something that was a major tailwind in hindsight. So it may not have felt that way when we were going there, but part of this EPS growth is a lower cost of energy. You can't tell me it doesn't feed into everything. I think we're going to look back at consumption and trends when the K-shaped consumer, the one on the lower end, had$65 gas or oil leading into gas prices and energy prices. I think that's as good as it gets for a long time. And I think the spending attached to that, especially for people like Walmart, is something that you have to watch.
13:38The test is going to come in the form. Now you have crude back. I think the last I looked at you had Pip on in your prior show. Closing bell overtime. The OT. Talking about how TI now is back above 100. So, I mean, the administration clearly, I mean, that's got to be a magic number. So with the stock market having a day. But what can they do? Sorry to interrupt. You can roll back tariffs all you want. You can't roll back this more. That's my point. What are they going to be able to say to sort of assuage the concerns of market participants? They're running out of bullets on that front. I just, you know, listen, I didn't mean to call Joe out.
14:10I mean, he's an economist. He's a brilliant guy. You know, that sort of thing. I just, like, that was the one thing that I kind of took away from listening right after the presser. It just seemed like it was about as clear as mud. The one thing I'll say about that 17%, you know, earnings growth that we're seeing, and yes, it is broadening out, but it's still really, really focused on those top 20 names. And, you know, when you think about what's going on over the last couple of years or so, all of a sudden we're going to talk about Micron. Think about the pricing power this company has. Think about what that means for margins of the companies that have to buy those products.
14:40And I think we're seeing that across the board, especially if you do not see the slowdown in infrastructure spend for data centers. I mean, the supply demand dynamics are not going to change anytime soon. The only thing that changes it is less demand. And who knows if that's coming? Because you could have been or me, I would calling for a slowdown in a while. And it's only accelerating when you have like an Amazon basically moving their CapEx up. What was it? 120 to 200 billion this year, that sort of thing. But that will be inflationary for a whole host of other things. Energy, not, you know, like think about that.
15:12We're talking about price at the pump right now. Think about what's going on with utilities to heat your home and all that sort of stuff. So they're getting, you know, consumers are getting a lot of different ways right now. All right, let's get to my car now. The stock is down by about one and a half percent. After the chipmaker beat street expectations on the top and the bottom line, revenue coming in nearly$24 billion versus$8 billion a year ago. It also gave strong guidance for the current quarter. CNBC's Mackenzie Stigal has got all the details here. Matt. Hey, Mel. A staggering beat across the board from Micron on what were already considered to be extremely aggressive analyst forecasts.
15:44And the memory chipmaker reporting revenue that nearly tripled in the second quarter. And then on the call just now, CEO Sanjay Mehrotra saying that CapEx is going to be raised to$25 billion for this fiscal year and says that it's expected to rise by another$10 billion plus in 2027. CFO Mark Murphy also weighing in, adding the two second quarter gross margin nearly doubled due to higher pricing. The CFO adding that they expect higher prices and lower costs to contribute to gross margin expansion in Q3, which is especially noteworthy given that gross margins already more than doubled to over 74 percent in Q2.
16:19Also hearing on the call that they expect to increase their fiscal 2027 OPEX as they ramp R &D investments in support of an unprecedented set of long-term opportunities and memory and storage. That's how they put it. So the story on the call right now is all about ramping production. Shares, though, you said it, now close to 2 % lower. We'll hear from CEO Sanjay Mehrotra tomorrow on Squawk on the Street, so be sure to listen in for that. Mack, thanks. Mackenzie Cigalos. It's different this time around. It is different this time around. It is no longer supply and demand, except that they're increasing supply a lot by the second half of 2027.
16:55But still, I mean, there's a lot of demand for the memory products even beyond the increase in supply. This is not a demand question. It's not a demand question. It's a demand story in terms of what's there. But I still think investors are going to start to look at the capex spend, too. These are massive numbers for Micron. These are numbers that they've never been involved in either. So I don't know. I mean, the price action is fascinating. This is a stock that was, you know,$400 going into last week. It's been the one bright spot in the market where you've made some money. and I think is a very overweight trade.
17:26So we'll see where this trades. But there was a lot of news in there that tells you demand is great. We knew that. Those numbers were about as good as they could get. And this is what the stock's doing. They were stunning numbers. And the gross margin numbers were stunning numbers in terms of how much, the degree to which they beat. And yet here we are. But it's up 60 percent this year, 6-0 percent. Yes, it is. The guide was ridiculous. I mean, to Tim's point, I don't I'm hard pressed to understand how much better it possibly could have been to get the stock to react. So it's all about the reaction of the stock.
17:59Right. I mean, the quarter is in the guidance is extraordinary. The reaction, at least in the last whatever, an hour or so, is not that good. Is that going to be a tell? I have no idea. Let's see how it trades tomorrow. But I think what the market is saying right now is we knew these numbers going to be extraordinary. This might be a buy the room, buy the into the news, sell the event type of thing. Yeah, I mean, the stock rallied 30%, right? So just think about this. And, you know, if you were around for this thing when it was, you know, I think it was up a few hundred percent into the kind of top in the dot-com sort of thing, not too dissimilar than what's happened over the last year.
18:33I mean, this stock lost 90 % of the value. I'm not saying that's what's going on. But if you asked anybody over the last 20 years who knows this stock, who knows this industry, the subsector, if this would ever be a half a trillion dollar market cap company, you'd be it'd be really hard to find anybody who could ever see it. This is the hundred year storm for a name like this. And it's a good storm, but it actually has the potential to go the other way, too. So I look at this thing. I just don't like remember what three years ago was that May quarter in 2023 when NVIDIA put up a number like this.
19:03this stock's up 1 ,000 % in five years. So it's just a very different... It was a$65 stock less than a year ago. It's now a$460 stock. Yeah. I mean, how do you think about all the CapEx that hinges on the AI story continuing? Yeah. I mean, I think it's obviously a very tricky story to get behind at the moment, especially with higher rates. I mean, the whole idea is that this is going to realize cash flow in the future. And so essentially, a lot of these stocks are long-term bets and long-duration bets, if you will, within the equity market. And that makes it pretty hard to get behind. I mean, we've seen this play out many, many times.
19:43I would liken it more to the telecom bubble than the dot-com bubble and building out all the infrastructure around the telecom sector in 1999 and 2000. Not to say you're going to have a global crossing event and they're going to go bust, but Cisco didn't go bust either. Micron didn't go bust either. And you obviously had some pretty big drawdowns. Going from asset light to asset heavy, not necessarily in Micron's case, but just in general, is a tough business model to get behind with these levels. Coming up, we're keeping an eye on shares of Micron as its conference call continues. All the headlines from that and what one analyst sees in store for the semi-stock.
20:15But first, a whole new world for Disney. The media giant starting a new chapter as Bob Iger's replacement steps in. What to know about the new CEO and what it could mean for Disney's future. Don't go anywhere. Fast Money is back in two.
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21:19So while others are busy talking, we're busy building. That's Venture Global. That's unstoppable energy. It's smart to always have a few financial goals. And a really smart one you can set? Earning cash back on what you buy every day. And with Discover, you can. Get this. Discover automatically matches all the cash back you've earned at the end of your first year. Seriously, all of it. And we trust you to make smart decisions. After all, you listen to this show. See terms at discover.com slash credit card. Welcome back to Fast Money. Disney shares down about a percent today. The key to the Magic Kingdom officially passed to Josh DiMero, who took over from Bob Iger as CEO at today's annual shareholder meeting.
22:07CNBC's Julia Borson's got the details. Hey, Julia. Hey, Melissa. In his first day as CEO, Josh DiMero laying out his priorities for the company at Disney's annual shareholder meeting, thanking Bob Iger. DiMero saying, quote, While others in our industry are consolidating just to compete or struggling to be relevant in a fragmented and disrupted world, Disney is in a category of one poised to accelerate into our next era of innovation and growth. DeMauro laid out some of his key areas of focus, saying Disney Plus will continue to evolve beyond a traditional streaming service to become the digital centerpiece of the company, connecting stories, experiences, games, films, and more in new ways.
22:46He also pointed to a huge opportunity to grow internationally, and he stressed the importance of embracing new technologies to empower storytellers, but said it would not be at the expense of creative partners or of trust. Now, analysts are hopeful tomorrow will be able to bolster the stock, which is flat over the past year. But 85 percent of analysts have a buy on the stock. The rest have holds. No sell ratings. Melissa. Julia, thanks. Julia Boorstin. So what do we expect? We can be hopeful. Right. Well, there's no question. This is an exciting era of change. And he just referred to the next era of growth and innovation.
23:24And that's really the question. We all would love to know what it is. We met Josh at a Disney princess event in New York. The Disney treasure, the launch of the latest cruise ship. Really exciting. And boy, this is well before, at least outwardly, this was a concept of a new CEO was in the market. And he's an impressive guy. He's a guy that actually really does resonate vision and leadership. So as a shareholder of Disney, as someone that has been frustrated by really the lack of catalysts, because getting the DTC positive and really those early victories they could have are things that we really now need to take it to a free cash flow, a margin dynamic and something that I think is still a little bit a ways away.
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24:05I'm just thinking when Tim said Disney Princess, you know, I think of Tim as my favorite Disney princess. Well, I mean, you know. We'll just throw this out here because it's worth throwing out. We've had a lot of extraordinary people come through. Yes. CNBC's Fast Money. Jason Farkas is one of them. Jason, who may be watching now, invited us all. I did not attend, but you went to this Disney Princess event. And you came back saying that this gentleman was well-suited for the seat, and now he's got the role. Now, the question you have to ask yourself, do they sandbag, do they kitchen sink the quarter on May 13th?
24:36Why wouldn't you? And does that set up for the buying opportunity for the first time in many, many years in DIS? Yeah. Well, I mean, the consumer has to remain strong, though, in order for this story to work. I think where he comes from, you know, this is an area that's been strong despite some of the consumer headwinds that we've seen. So, again, I think investors, especially after getting two bouts of Iger over the last, you know, what is it, 10 years? He left, came back, or that sort of thing. Stock had said nothing in 10 years, by the way. Yeah, and by the way, that guy is going to go down, I think, as one of the best CEOs, despite what's happened with the stock.
25:07He transformed Disney with all those acquisitions that really just, I mean. I mean, he made some of the best media acquisitions that may ever happen. So now it is a great opportunity for somebody to kind of pick up the baton and make Tim some money on it. Well, I will say, in terms of making money, I still think ESPN is undervalued. And I think that there was a time when people were waiting to see what that spinoff would look like and what it would bring them. I don't think it's going anywhere. And I also just think as much as Paramount Skydance stock has absolutely plummeted since they closed on this deal, I still believe that Disney's properties intrinsically are valued a lot higher today than they were before Warner Brothers was sold off.
25:45I mean, it just shows that there is value in some of these properties. And I think Disney doesn't get any credit for that. Coming up, Micron's conference call about to wrap up. We'll bring you the headlines of what one top analyst says is in store for the stock, her take on the results, and the rest of the semi-space. You're watching Fast Money Live from the NASDAQ MarketSite in Times Square. Back right after this.
26:28So while others are busy talking, we're busy building. That's Venture Global. That's unstoppable energy.
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27:16Just tell it to your driver, and they'll enter it in their app before the ride can start. Hey, what's your pin? Mm-hmm. 2538. That way, you know you're in the right car taking the right trip, and your driver knows you're the right passenger. Make sure your ride is your ride with pin verification from Uber. One more way Uber is putting safety at every turn. Learn more on the Uber app. Welcome back to Fast Money. Stocks selling off and closing at the lows of the session after the central bank left rates unchanged. And Fed Chair Jerome Powell said inflation isn't coming down as much as hoped. The Dow falling more than 750 points to its lowest close of the year.
27:51The S &P and Nasdaq both dropping nearly 1.5%. FedEx on deck to report results after the bell tomorrow. The stock is up more than 21 % so far this year. And shares of Lululemon reversing after yesterday's earnings report. The stock initially falling but closing out the day nearly 4 % higher. Lululemon toping EPS and revenue estimates but giving weaker than expected guidance as tariffs, higher expenses, and the proxy battle with founder Chip Wilson weighed on the company. Guy, you pointed out this reversal that we saw. We talked about it yesterday. We had one of the great retail analysts of all time, Dan Nathan, you recall?
28:23Dana Telsey. Dana Telsey. And she talked about how, you know what, she was wanting to start to get optimistic on the name. And we talked about the quarter was good and the fact that maybe they were turning the corner and that the stock actually shouldn't have been lower. And here we are today. So I think for a bounce, you can still play Lululemon. How are you thinking about FedEx tomorrow, Tim? I tell you, I think everything this company is doing right. I know UPS is getting a little more attention in terms of their operational improvements because, frankly, it was off of such a bad base. But FedEx is really clicking along here.
28:52I want to hear what their margin profile is. I want to hear what's going on, especially in a slightly higher price environment. We're not going to hear from this quarter anything related to the current conflict and what it's mean for transportation companies. On some level, it's a bit of a headwind. I want to know what's going on with ground and express. Those are the places they need to show it. All right, let's take another check on shares of Micron. They are now down about 3 % in the after hours, close to after hour session lows, announcing revenue tripled from a year ago. For more on the quarter, S &P Global Visible Alpha's Melissa Otto joins us here on set.
29:21She is the firm's head of research. Melissa, great to have you with us. Thanks for having me here. Is this just a case of it's everybody expected amazing numbers? I mean, these numbers are off the charts. They're insane. I mean, there is probably a bit of sell the news atmosphere around these numbers, but the guidance is just off the charts. It blew away CapIQ consensus significantly on top and bottom line. Looking out to next year, I mean, these numbers, I mean, they just look like we could see very significant upward revisions from the market, especially around the ASP growth. ASP growth coming in mid-60s, consensus was at 38 percent.
30:10Second half of the year is between 7 and 10 percent. I mean, this is just incredible. Talk us through where the new areas of demand are, aside from data center build out, inference, training. I mean, they're talking on the conference call about robotics, for instance. Help us understand why this time is different, because when we hear this time is different, you want to laugh at that, right? I mean, it's like it's time to sell. So why is it, in your view, this time is different? Right, right, right. No, I mean, I remember when the Japanese used to own the space and they don't anymore. It's now a U.S.
30:49company and two Korean companies that essentially own the space. Very boom and bust in the past. They're adding a ton of capacity. So, I mean, I think absolutely there's reasons to be concerned. But for right now, it seems like all systems are go. I mean, we could have said that about NVIDIA two years ago. I saw the upward revisions flying two years ago. And here we are. It's the same thing. They are adding capacity, though, at a pretty, I mean, it seems like a lot, right? They just bought clean room capacity from a Taiwanese company yesterday. They're going to build another one on that same site.
31:28They're going to open one in the United States. I mean, I think I don't know what your projection is in terms of increase. But another firm said 20 percent increase in global capacity by the second half of 27. That seems like a pretty big increase. It's possible. We'll see where consensus heads to what the market says. What's the first sign of the potential turn to the downside? Like, what's the one thing we should be watching for? I think the macro could be a big concern because right now what we see is the CapEx numbers for the big four hyperscalers is almost$650 billion for this year alone.
32:09So if that comes down to five, boom, there's your catalyst. Melissa, yeah, let's talk about what they pointed out. I mean, they've said demand stays really tight till the end of 26. But how far out do you need to look and how far in will you price that? Because I think the market is that discounting mechanism we all know. We just heard about this CapEx number, which starts to sound a little scary. So I'm just curious, again, from measuring out the CapEx spend against the demand that we know is there now, but may actually start to ease in 27 because of all this CapEx. I mean, this is the thing.
32:44I mean, this is the million dollar question. Are we in an AI bubble? I mean, I don't see that in the debt numbers as of yet, because a lot of this AI demand, data center demand is being driven by the hyperscalers who are funding a large percentage of it with cash flow, not simply with with big debt. like we would have seen in the past where you had like massive speculative debt to equity ratios of like 4 or 5x. There's nothing like that that I'm seeing at the moment. Now, in the private credit markets, who knows what's going on there? I can't say anything about that. I think there is some there may be some more speculative activity.
33:31But I think when we're talking about these core, healthy mega cap tech stocks that are driving a lot of this, That seems very much intact, and that's driving a lot of the demand. Right. Melissa, thanks so much for stopping by. Such great energy, right? Unbelievable. Yeah. Melissa Otto. Easily entertained. I mean, was that a whole, like, dissing me on the In Excess comment? Well, no. This was in a commercial break. That happened in a commercial break. The audience has no idea what we're talking about. But I will share. She said that In Excess was the last great rock and roll band. So the question we were asking to Melissa when she got on set, which is what we do to all guests is classic rock and roll.
34:09And who she thought the last great classic rock band was, she threw in excess. I gave you a pat on the back, but it's a stretch. It's an interesting way to go. Melissa, thank you. Our thanks to you for playing our reindeer games. Reindeer games. That's a good point in terms of the AI, CapEx expansion. It's all being funded by cash and high-grade investment quality bonds. So far. Yeah, I'm not so sure about that. I'd probably, if Melissa was able to stay on a little longer, challenge her a little bit on that. I think we're seeing it in the private credit space, clearly, particularly amongst software, which is different.
34:40But even with regards to the hyperscalers, you're seeing a lot of debt issuance. And the reason is because they can't finance their CapEx through cash flow. They were doing that when rates were zero. And now when rates are not zero, 4 plus percent, they're going to the debt markets. Why? Because they have so much CapEx, they can't do it through cash flow. So, yes, they're still investment-grade companies. I'm worried about Amazon or Oracle's, although the CDS market's a little worried about Oracle's debt. But if you're not worried about Oracle's and Amazon's and Meta's debt to the point where they're going to default.
35:12But in terms of is there some excess there, I think without a doubt there is. Well, you should be worried about when OpenAI has to start raising debt. I mean, if they can't go public, they just raised$110 billion. They're not going to have it on their balance sheet right away. And so, you know, this is one of those stories where it goes back to the companies that have a lot of concentration with OpenAI. And this is, you know, one that I don't think it's so clear that you can say, even if they get to the public markets, that this is a slam dunk. So, again, I'd be worried about the concentration with OpenAI.
35:42The minute we, I'm not saying this anytime soon, the minute we hear about Micron actually, you know, running, going to the debt market just to raise CapEx, I mean, forget it. I mean, this is a story. Think about where the valuations and the premium that those five other companies that Michael just referenced in terms of hyperscalers, they're not the same multiples anymore for that reason. It's a new sensation, Mel, that continues to mystify. Coming up, retail. Even I hear this lyrics. Retail on the rise. Macy's and Williams-Sonoma both seeing shares rise of the top earnings expectations this morning.
36:14We'll dig into the numbers when Fast Money returns.
36:24Welcome back to Fast One. A few retail movers catching your eyes today. Macy is beating top and bottom line estimates for their Q4 before the bell. That stock ending the day up nearly 5 percent. And Williams-Sonoma rising as much as 7 percent after an earnings beat. The company also raised its dividend. Both, though, warned of rising fuel prices and tariffs impacting their outlooks for the rest of the year. Look at the chart in Williams-Sonoma. Had a huge down draft. You got to basically almost to the November low, which is where we bounced from. So maybe it's enough to get a short covering rally here.
36:56But my opinion, I don't think the worst is over in WSM, regardless of how many what they sell, Tim? Dutch ovens. I thought we had matured past. No, we have not. Why would we have matured? I mean, and I don't even know what you're talking about, by the way. What's so funny about a Dutch oven, Mel? I use it all the time. That's unfortunate. I'm sorry to hear that. I mean, my wife and I were talking about Crane Barrel, you know, West Elm, William Snowman. I don't know which one's the higher end, which one's the lower end. She's trying to explain it all to me. But to our point earlier about the consumer, I mean, this suggests the consumer is okay.
37:28Right. But add these little things in and maybe it's a headwind. You see the dollar store. What was that one? DG or DLTR last week. It was a bit of a disaster. Back to the K-shaped economy. Well, I think there's an argument to be made that in terms of a Williams-Sanova, there is a little bit more of a niche consumer. There's a little bit more of a moat around their business. They have a brand that people believe buys them some prestige without having to go all the way up. And I would just say on Macy's, this was a really strong quarter. I think it's questionable really what the catalysts are for this one.
38:03And this is why the stock reflects it. At one point, this was just a balance sheet recovery story. It was a real estate play. It was some of the parts. At this point, let's really ask what Macy's core business is. They made a nice move to digital. Are they really going to be a strong playthrough here, especially with a consumer that's under pressure? I don't think so. Coming up, retail stocks may have been higher today, but there's another part of the market that may be showing some cracks in the consumer. How recent lows in the private credit market are weighing in on fintech names like Affirm and Block.
38:30We're Fast Money in two.
38:37Welcome back to Fast Money. Fintech names taking a big hit today as investors worry that the private credit turmoil is spreading to the consumer loan space. The Wall Street Journal reporting Stone Ridge's Lendex Fund, which holds consumer and small business loans made by companies like Affirm and Block, told clients last week it could only honor 11 percent of redemption requests due to high demand. And it is the latest sign that all is not well in the private credit space after issues hit institutional names like Blue Owl, J.P. Morgan, Morgan Stanley, Cliffwater, and that the consumer end of the space might be cracking.
39:07Muzuhos Dan Dulliv joins us now for a closer look at these fintech fears. Dan, great to have you with us. Thanks, please. I mean, I guess what underpins the fear here is that these names, these fintech names that you cover, they have to get rid of these loans. They can't carry them on the balance sheet. Somebody has to buy them. Right. And if these funds that are buying them are facing redemption requests, they're not going to be buying them anymore. So who's at risk? Is anybody at risk? Is there a risk? If things are as bad as the Wall Street Journal portrayed, then these companies are at risk.
39:38But if you think about a firm, for example, they just upsized an ABS deal last week from$500 to$750 million. So do you think all these pension funds that are buying it are risk-averse or risk-liking? I mean, it sounds like they're sort of putting their money where their mouth is in terms of wanting more of these Affirm loans. So I don't think it's an anomaly. I think what really is going on, you have to bifurcate between commercial private credit and consumer private credit. And I think they're getting kind of washed out together. But the consumer is actually quite strong, at least for the names that I cover.
40:11All right. So, Dan, I'm not asking you to comment on these stocks. But Capital One, COF, and American Express since January have not performed well. To me, that's a tell on consumer credit. in your history or your work, any chance that these are leading indicators for what your space looks like? So it's a great comment. I would say that the way companies like Affirm or Upstart underwrite, they have an edge over the traditional lenders because they really, and I know it's a cliche, but they really use AI, right? So what people like Max Levchin can do is, I think, a step above the average lender.
40:46So you will get a little bit of a buffer even when things go bad. you will get a better performance out of the affirms and the upstarts of the world. Have these stocks been through a consumer spending downturn or a consumer downturn? Have we witnessed that? No. Okay, so how do we know that these AI models work and can actually protect them from underwriting bad people? That's why they're trading down. I think I agree with you. That's why they're trading down. What have you seen? I mean, I'm assuming that you asked for proof, like, well, how do we know that you are going to weather these downturns if we haven't been through one before?
41:17We've been through a rate hike that was unprecedented in magnitude. That was in 22. And Affirm only had two quarters of rising delinquencies, and they only missed the GMV guide by 5%. What was the job market doing at that time? The job market was good. That's what's different, right? Yeah, I agree. So this gives you a chance to kind of expound more on what you were just saying. But I think part of the reason a firm, people sometimes get lost in the fact that this is a company that is taking market share. This is a company that is growing. So when you look at the strength of the business in terms of growth and the competitive landscape, that's great until the consumer falls apart.
41:58So it does get back to good for them. Agentic AI, good for them. Very good. Great for their story until there's a credit cycle. So, again, back to the credit cycle that I know we don't have enough insight into. Do you think there is something that you can be modeling from the 30-day delinquencies that tell us something in the medium term? Right now, things are actually good. From those delinquencies that I'm seeing on Affirm and even on Upstart, things are actually much stronger than the market is portraying right now. So either the market is wrong or, you know, like there's always corrections.
42:36but then, you know, how many times have we had a firm trading down like 10%, 20 % because Apple is getting into buy now, pay later? And then Apple is now partnering with the firm. So I think we've been through these fears, and they come out with the, you know, on the upper end of this. Dan, good to see you. Thank you. Thanks, Moza. Dan Dell of Mizuho. All right. Well, some people might say where there's smoke, there's fire. Is there smoke here? Well, I mean, we had, remember we had Jason Wilkes of Dave on a couple weeks ago, and they've been using AI. I thought his name was Dave. No, it's Jason.
43:08We told you that in the break, so you'd call him Dave. Oh, right. Okay. No, but, you know, he said that they're using AI for underwriting. They have a 1 % delinquency rate. I mean, so to your point, though, who knows what it looks like. But those companies make small loans, right? So if you think about it, and they actually have some good data about how those people are going to pay back$200 on Paycheck Advance, that sort of thing. But, you know, Carvana would be the one where we start seeing delinquencies on a larger scale. I would think that that would be one. A hundred percent of their loans get sold.
43:40I mean, they need to get rid of these loans off the balance sheet. And there's so many things going on with private credit. It is a catch all phrase, right? It's like when someone talks about alts, like all alts are the same. They're not. But at the end of the day, you know, you're supposed to have, you know, low delinquencies, low default rates when the economy is doing pretty well, when the yield curve is steep, when, like, you know, earnings growth is strong and unemployment is low. And to Melissa's point, you know, that's the environment we've been in. And I don't think many of these names have been tested.
44:10I don't think the private credit space, both on the commercial and the consumer side, has been tested. And so I worry very, very much about the liquidity consequences if that were to happen. Coming out, gold losing its luster. The safe haven trade hitting six-week lows today. The next move in metals. And if the traders see a bounce back coming, more Fast Money in two.
44:31Welcome back to Fast Money. Gold under continued pressure, hitting its lowest level in over a month, settling below$4 ,900 an ounce, with little change in prices after the Fed decision. The precious metal now more than 8 % off the all-time high. It hit on January 29th. Gold miners also under pressure. The GDX dropping 6 % to not just fifth, down day in six. What do you make this move, Guy? That's what's concerning, the move in the GDX, because I thought it was holding in there obviously wrong. I think the stronger dollar has created a huge headwind in terms of what's going on in gold. But I will say again, I don't think the gold move is over.
45:03I think the strength of the dollar will be short-lived. I think the GDX certainly has to be sniffing out the issues that gold miners had when there was inflation. I mean, they did not perform well at all, even for a decent gold market at a time when there was inflation, because gold is your inflation hedge. So let's be clear. The market has lost a lot of the speculative edge. What was going on in the gold price? I mean, gold prices have still doubled over the last couple of years. So taking out some of that froth doesn't really bother me at all. The underlying central bank demand, the underlying dislocation, chaos, global geopolitics, I mean, it's never been more strong.
45:40So don't run too far from this trade. Yeah, gold is a function of the dollar and real rates as well as uncertainty. Uncertainty is not going down. I think the dollar is likely to weaken longer term and inflation is here to stay. So, yeah, I agree with Guy on gold. Gold rally is probably not done over a longer-term horizon. Up next, final trades.
46:07Final trade time. Timbo. The Mets are here in the NASDAQ, by the way. Exciting day. Exciting. Altria, the opposite of exciting, which is why you want to own it here. Altria. Michael Cantopoulos. Uncertainty and inflation are here to stay. Gold's a great hedge for that. Have that extra spare tire in the trunk. Great to have you on with us tonight. Thanks for having me. Micron, amazing quarter, amazing guidance. You're going to get a chance to buy it lower, and I think it is a buy lower. Oddly enough, the more people here will be at Shea in opening day. LNG, Mel. Thanks for watching Fast Mad Money starts right now.
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From the publisher
Micron shares on the move after earnings, and we break down what the results and guidance mean for the AI memory trade with S&P Global’s Melissa Otto. Plus, market reaction to the latest Fed rate decision, private-credit stress spills into consumer loans, and a spotlight on Josh D’Amaro’s first day as Disney CEO.
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