Oil Drops As Iran Responds… Plus Novo Nordisk Cuts Ties With Hims & Hers 6/23/25

0:02Live from the Nasdaq Market Site in the heart of New York City's Times Square. This is Fast GobiMaker dropping on its latest trial results. And data on Amgen's weight loss candidate sending those shares lower too. The latest on the space and how to play the stocks right now. Plus, KB Home shares dropping after its latest earnings report. Tesla's long-awaited robo-taxi rollout sparks a rally. And Lululemon shares trading at five-plus-year lows. What is behind this move and can the company recover? I'm Melissa Lee. Come to you live from Studio B at the NASDAQ. On the desk tonight, Tim Seymour, Dan Nathan, Guy Adami, and Julie Beal.

0:47We start off with markets seeming to breathe a sigh of relief. even as the U.S. enters the war between Israel and Iran. While major averages dipped on news, Iran had targeted U.S. assets in Qatar. They reversed course as damage looked to be contained and ended the day near their highs of the session. Oil prices, meantime, dropping, with Brent crude settling down more than 7 percent. WTI crude also sharply lower as Iran avoided any action in the Strait of Hormuz. Volatility also down. The VIX briefly hitting its highest level in a month before retreating. But Treasuries did catch a bit with the yield in the 10-year, hitting its lowest since early May.

1:21For the latest on the U.S. involvement in the Middle East, let's get to Megan Casella in D.C. Megan. Melissa, this was Iran's official retaliation against the U.S.'s strikes over the weekend. The Iranians fired 14 short and long-range missiles at Al-Udid, the U.S.-run airbase in Qatar. All of those missiles were effectively countered, and there were no deaths or injuries reported as a result of the attacks. Two U.S. Defense Department officials also say there was no damage done to the base itself. Just in the last hour now, President Trump made his first remarks on the strikes. He called it a very weak response, which we expected and have very effectively countered.

1:57He went on to thank Iran for giving us early notice. And he ended with, quote, perhaps Iran can now proceed to peace and harmony in the region. And I will enthusiastically encourage Israel to do the same. So a couple of things there, the president confirming that the Iranians gave the U.S. a heads up in advance of the attacks, making that more of a strategic move that may have made these attacks more symbolic than anything else, a way for Iran to sort of retaliate without doing the type of damage that would have provoked the U.S. even further. The president also here urging an end now to the conflict, a return to peace and harmony.

2:31And the White House today has said that it is still committed to a diplomatic solution. So the question from here, Melissa, is whether Iran and Israel are committed to that solution as well. All right, Megan, thank you. Megan Casella in Washington for us for more on how markets reacted to hopes for de-escalation. Let's bring in Matt Gertkin, chief geopolitical strategist at BCA, an independent research firm. Matt, great to have you with us. Are markets underpricing what is going on in the Middle East, or have we seen the worst of this conflict for now? Well, thanks very much, Melissa. It's not clear that we've seen the worst.

3:05I would be quite skeptical. These are major events building up from structural tensions in the region and in Iran and between Iran and Israel. We've had generational change in the leadership across several of the Gulf Arab states, and we see that happening in some other Western countries. But there has not been a generational change in the Iranian regime or in Israel, for that matter. And so we're still seeing hardline and hawkish leaders. Israel now will be front and center. The U.S. president will have to put some pressure on them and really discipline Israel to ensure that this doesn't escalate any further.

3:40And I'm not convinced that will happen. I think, in fact, Israel will continue to fight the fight, and that could very well provoke Iran to take more actions. Hey, Matt, peace and harmony, that's not something that's existed in the Middle East probably in thousands of years. So when the president of the United States suggests this, what you just said about Israel, I don't know how Israel comes to term with a major tenant of the Iranian government's view about Israel, is the death to Israel. So we're probably a ways off from peace and harmony, wouldn't you suggest? Well, there's got to be a damage assessment, you know, of what's actually happened.

4:14If Israel is satisfied that Iran is permanently off the path of a nuclear weapon, then they could probably listen to the president and say, OK, it's time to shift to negotiations. But the truth is, the Iranians have taken the approach that they can weather the storm. They can sustain really severe attacks. They've moved around the enriched uranium. They've got the same regime in place that they think can survive and can suppress social unrest that will probably stem from these attacks ultimately. And so that means that we'll have a regime that's much more hardened in its conviction. It'll still have some of the intelligence and talent necessary, and it'll still be getting help over the years from Russia and China.

4:54So there will, from Israel's point of view, there's still a very good reason to continue to press against critical infrastructure, undermine this regime and keep the Americans entangled. Matt, the move in Kouradol suggests today's retaliation maybe takes closing the straits off the table. Do you believe that or is that sort of a little bit getting ahead of ourselves? It's getting ahead of ourselves. It's not entirely off the table. Closing the Strait of Hormuz was always something that would only happen if the Iranians were convinced that the regime was absolutely going down and they had no other choice.

5:28But that could still happen if we had a series of bad events and a downward spiral. What that requires is effectively the way that would play out. Either the Iranians were faking it today and they're about to retaliate in a bigger way, or Israel could strike some of their own capacities. For example, Israel could strike their ability to export oil abroad, and then they would start to retaliate against regional oil infrastructure, and the U.S. would get involved and things could escalate from there. Or just the lack of trust between the U.S. and Iran. If at any point the Iranians look like they might make a move to mine the strait or take out some ships, or if the Americans look like they might try to preempt Iran and remove their ability to do that, then it could cause those itchy trigger fingers to move and we could end up with a crisis that was a miscalculation.

6:15So there's several ways in which this could still be on the table. But it is admittedly a lower probability now than it was, you know, just a day ago. Hey, Matt, so, Tim, as therefore as a geopolitical strategist, what is either your highest probability negative major vol event out there? What aren't we thinking about? I understand that this is a complex geopolitical dynamic. But again, and and maybe maybe this is the wrong day to be looking at other parts of the world. But but where are you most concerned? Because right now this looks like it could have been a bad situation that that at least as of the end of the day, the VIX is down.

6:50Volatility is lower. Markets went higher. Yeah, it's extraordinary what's happened today. But we have to realize it's an issue of time. You know, what I've charted for three years is this destabilization of the Middle East. The Middle East was not able to produce its own balance of power. It really. And that's that's the norm. perennial, but the Americans need to get involved and be the actor that arbitrates and fixes a balance of power that usually is pretty precarious anyway. And when you're living through these kind of sequences, there's a fog of war, things change on a daily basis, the market mood shifts really rapidly.

7:27What we know is that Israel is determined to deal a really significant blow to this regime that could ultimately make it very hard for the regime to survive because of social unrest stemming from their sclerotic economy, which will now be weakened. And we also know the Iranians are intending to survive and build back better in a way that would perpetuate the conflict, and we know that the U.S. will intervene. So I think what that tells us is we're not having a deal in the Middle East that unleashes Iranian reserves and creates peace and stability and a balance of power. We're still in an unstable environment.

8:04And over a period of months, that could continue to influence the markets in a way that would that would cause a risk premium in the oil price and would help to foment some of the fears of stagflation. Matt, great having you on. Thank you for your insights today. Matt Gertkin. Thank you very much. of BCA. We want to have somebody like Matt on because you're trying to figure out what exactly are we not thinking of in terms of the market action. Why are we higher? Why is vol down? All these things that you wouldn't have thought we play that game. If I told you what had happened, would you be able to tell me what the reaction of the market is?

8:36100 percent, no. None of this today I would gamble. Maybe yields lower. It was the only one I potentially could have gotten right based on. But in terms of crude oil being down 6 percent, absolutely not. The S &P rallying the way it did, No, given what we heard on Friday into Saturday or into Sunday. No. So that's why it becomes such a difficult game to play. And what aren't we talking about? To me, listen, loss of life is a horrible thing. I think we're all very respectful of that. But the market moving event, in my opinion, is closing the straights. And if that were to happen, then we'll have a conversation about where does crude go, where does the S &P go.

9:08But short of that, in terms of the market, it's sort of business as usual. Yeah. Julie Beal, your thoughts? because most market strategists do say unless oil jumps, unless there is some sort of event that really causes a jump in Brent, a jump in WTI, et cetera, and hurts the pocketbooks of everyday Americans, we're not going to see a market impact. Yeah, I think that's probably right. I think everyone is very, very focused on where oil is moving because it's been such a good guy for inflation. It's been so helpful in order for us to kind of move forward to a regime where we can lower interest rates.

9:39And I think if that is taken off the table, that really jeopardizes is both what the path for the Fed is, but it also, I think, it's going to really take a bite out of consumer confidence. And that's what really a lot of our economy is hinging on right now. What I think is interesting is just, it really feels like in this market is like, oh, okay, this wasn't as bad as we were all worried about. We can manage through this level of uncertainty. It's fine. And I agree. I think we still haven't really cleared through enough to know how exactly it's going to impact us over the longer term. And we are so close to getting that first cut, right?

10:14I mean, we heard Bowman today following up on Waller on Friday. I think we learned today, and we didn't learn it. We were reminded today that the Fed is so much more important than any other factor out there. And that this is a Fed that I think, after Powell, one of the observations was this is a Fed that, huh, seems to be okay with PCE at 3.1%. And that said, actually, until the labor market falls apart, we're kind of comfortable here. But, you know, even without the labor market falling apart, you've had two important voices, including vice chair today Bowman, basically saying she saw July could be a possibility.

10:48Markets are looking through war right now. They are looking at the Fed. And if you look at some of the performance of the market today, you even had small caps outperforming. You had some equal weighted stuff outperforming. It wasn't just a runaway for the tech growth trade. It really was stuff that would benefit from the Fed stepping in and finally moving, which may or may not happen. But that's the more important headline out of today. Yeah, I go back six months, right? So we've had really two bouts of major volatility in the stock market. That was December 18th after the Fed, you know, I guess Fed Chair Powell came out a bit more hawkish than some folks felt going into 2025.

11:23And that was actually a really interesting day, if you think about it, because I don't think that caught anybody by a huge surprise. It just pushed out rate cuts, you know, maybe six to nine months or something like that. So here we are now. Nothing that the Fed said really moves the stock market. Just think about that over the next or the last few months or so. And obviously, Fed Chair Powell speaks tomorrow. Last week, he was concerned about a lot of the things we're talking about, the uncertainty around geopolitical, the uncertainty about inflation. And you look at a day like today and you say to yourself, there's no concern.

11:52I mean, like there's absolutely no concern. People are looking past geopolitics. They're looking past inflation. They're looking past a trade war. And that was the other bout of technology or about volatility, I was going to say, just two months ago. But I'm not clear. Are you saying that you think that the Fed's influence now on the market in terms of being a catalyst is not significant? I think it's less significant. I think to your point, once you start having this chorus of folks suggesting that rate cuts are going to come sooner than a lot of folks think, and then maybe there's more of them this year.

12:20I mean, I think it's amazing. We go back to September last year. They started with a 50 basis point cut because they were worried about the jobs market. Then they followed up with two more. Now, if you're telling me if PC comes in cooler, PC, if some of the stuff in and around geopolitics kind of settles down a little bit and inflation and growth and all this stuff, maybe they're too low on growth, too. I mean, the way they kind of locked it lower last week. So, again, I can see why folks are starting to think about cuts sooner than some might expect. In terms of yields, again, I get it. They're lower today.

12:50It makes sense. I'm still probably one of the few people out there that can think yields can go higher by the end of the year. When I say higher, I think we can approach 5%. And I don't think it's going to be because growth is so robust. I think it's all the concerns we've had. But, by the way, the market doesn't seem to care about at all. But if you do get a hiccup in the bond market, whether it's over the next couple of months or early next year, I mean, at some point the market absolutely has to care, at least. We've got a news alert on Starbucks. Kate Rogers has got the details. She joins us on the FastLine.

13:18Kate? Hey, Melissa. So we're getting some headlines from Chinese media Kate Shin that says Starbucks is considering a full sale of its China operations, and that's a significant shift in strategy for the company. The report cites some people familiar with the matter, saying that the company's held preliminary talks with more than a dozen potential acquirers, including private equity firms, Hill House Capital Groups, FountainVest Partners, and TrueStar Capital. Now, CEO Brian Nichol told the Financial Times in recent weeks of the Chinese brand here, Starbucks China, people see value in the Starbucks brand.

13:53They see the coffee category growing. And I think that they'd love to be partnering up with us and figuring out how we take this from 8 ,000 to 20 ,000 stores. And just a reminder on Starbucks China, it's second home market, Melissa. They're looking to have about 9 ,000 locations there by 2025. And that market has seen many challenges as of late due to a softer consumer environment and, of course, the expansion of lower-cost competitors like Luckin Coffee. Same store sales were flat in China last quarter, and they've been discounting drinks that are non-coffee-based because the consumer in China is more focused on those tea options.

14:27And they've talked about exploring these strategic options for the China business, but there have been very few details about the plan beyond that. So once again, we're getting these reports from Chinese media reporting the company considering that full sale of the business. We're out to Starbucks for comment and more to come when we get it. But you can see the stock is slightly higher on this news headline. Back over to you. Kate, thank you. Kate Rogers. Tim Seymour, is this short sighted or is this a good move? I think it's potentially thoughtful. I do think this is a company that if it was four years ago, we were seeing this headline, this stock would be down 20 percent.

15:02I think we've digested a lot of pain. And I think we you know, when we talk about a turnaround at Starbucks, we don't talk We're not talking about a company that's necessarily broken. We are talking about operational improvements, but we are talking about, again, Brian Nickel. He's a marketing guru. And part of what I think is the turnaround in Starbucks is getting the U.S. market back to where it was. So not a great headline, but the stock seems to not care. Yeah. Julie, you think it's a better Starbucks without the China operations? It's been really, really challenging for them to find the growth that they've been looking for and be competitive.

15:34You know, a lot of it is based on the premise that this economy is going to move from one that's about production to one that's about consumption. We haven't really seen that, but we have seen lower priced peers really, really make it difficult for Starbucks to be successful. And I think it ends up being a distraction because I think it's a very different business in China than it is in the U.S. And what really, really needs to be solved is the domestic business. That's really the problem right now. Yeah, there was a time, though, where a big part of Starbucks premium had to do with the expected growth in China.

16:05A lot of these brands premium had to do with China. But do you guys remember, like we were talking about this Luckin Coffee. This was the Chinese brand, and I think Kate just mentioned it. I'm starting to see stores popping up here in the United States again, which is really interesting to me. Now, obviously, that was a big financial fraud. If you go back, I want to say five or six years or so. But again, I mean, Starbucks seems like they have multiple flanks they have to defend right now. And whether this marketing guru can fix it or not is another story. But if you think about nationalistic tendencies, you know, going on amongst Chinese citizens, and it's probably only likely to accelerate, in my opinion, this could be a way to kind of get out of this business, take a little something, refocus on North America or the rest of the Western world.

16:45CMG fix was, I think, a little bit easier than the Starbucks fix. And one of the problems that I don't think anybody can fix is evaluation, which I think at 31 times is probably a little expensive, not historically expensive. But their growth trajectory in 2025 makes it expensive. No, I just I think that the multiple is probably the place where we should start. It's not cheap. And all the oat milk you drink in your coffees, guy, isn't going to change that. They really should charge extra. Well, they do charge me extra. And I'm more than happy to pay it. Oat milk's a very important staple of my diet, Melissa.

17:16And it does wonders for my constitution. Your system. Let's get to cybersecurity stocks jumping today amid the threat of potential cyber attacks from Iran. CrowdStrike hitting an all-time high, up more than 3 percent. Fortinet, Zscaler, Palo Alto Network is also climbing today. We are on high alert in terms of hits to the infrastructure, et cetera. After, if we think that the only retaliation Iran was going to wage were those missiles, we might want to rethink that because everything is on the table at this point. I think every period of weakness or idiosyncratic event that the sector is seeing, whether it's CrowdStrike, obviously, and their upgrade and their update, I should say, they created havoc and mayhem and fines and whatnot.

17:58It's been a time to buy cybersecurity and buy CrowdStrike, which is my favorite of the bunch. It's not cheap, but that is north of 30 percent growth that I'm paying for. Palo Alto is where I would go. Not cheap. Fifty-four times next year's numbers probably deserves it because I do think it's the best in class. But, you know, the secular shift into these names has been going on for more than five or six years now. Rightly so. This just adds to the reasons why you want to own them. Coming up, Lulu Lowe's shares the athletic wear maker hitting their worst level in more than five years. What this company needs to do to get shares back off the mat.

18:34But first, we're watching shares of KB Home after its latest earnings report. The details and numbers from the quarter. Next, do not go anywhere. Fast Wendy's back in two.

18:49Welcome back to Fast Money. We've got an earnings alert on KB Home, the stock dropping after hours despite the company beating both earnings and revenue estimates. CNBC's Diana Olek has got more. Diana. And Melissa, that weakness is likely because full year guidance was lighter than expected and homes delivered decreased 11 percent year over year. CEO Jeff Metzger said in the release, though market conditions have softened, we remain consistent in our focus on optimizing our assets to offer the most compelling value to our buyers, maintaining pricing transparency and enhancing margins and returns.

19:20Now, the company's housing gross profit margin was 19.7 % compared to 21.2 % the year before due to price reductions and other homebuyer concessions, higher relative land costs, geographic mix and reduced operating leverage, partly offset by lower construction costs. Now, that average selling price did increase slightly to$488 ,700, but But that's likely skewed due to more activity on the higher end as lower income buyers drop out. So they lower the prices a little, but higher end buyers. You get it, Melissa? Yeah. All right. Diana, thank you. Diana Olek. Another disappointment out of KP Home.

19:56It should be lower. I mean, and again, I think we've done a decent job with the home builders. But you look at the numbers. I mean, earnings were down 11 percent year over year. Deliveries were down 11 percent year over year. And new orders were down 13 percent year over year. And obviously they guided lower. And this is on top of other guides that have been lower. It comes down to affordability. And if you look, I mean, things are changing. And if you ever see an uptick in the unemployment rate, which, again, I think we will see. I'm surprised we haven't gotten there. The homebuilders, you don't go near them here.

20:24Let's even say that there is a cut in July, Julie, that I would imagine that's probably not enough to help these guys in terms of buying down those mortgages. I don't think so, right? And the big challenge to them too is that their inventories are up 11 % year over year. So now they have this inventory they can't sell. They have no pricing power. And even if we get a 25, even if we get a 50 basis point rate cut, right? Mortgage rates are still quite high. And there is a limit to how much they can buy down, right? Because I think people are starting to really recognize and internalize that we're probably never going to see 2.5%, 3 % mortgages again.

21:03And I think that that changes the dynamic where you're saying, OK, fine, you can buy down my interest rate for a year or two, but eventually everything is going to come back down. If it can't come back down, that changes the affordability question over the long term in a really meaningful way. But in terms of affordability of the stock, it's not expensive. And if I look at it relative to itself over a five year, it's about 5 % cheap over a 10 year. It's probably 20 % cheap to where it trades. And it's got almost a 10 % free cash flow yield. I don't like home builders. I haven't liked them for a while, but I do think sentiment isn't great, and I do think the stock's not expensive, and I think it's something you should be keeping an eye on.

21:40I mean, in theory, guys, shouldn't the stock turn before we see interest rates? And, you know, you've had Vinny and Porter and Danny Moses talks about the homebuilders, and they do turn six to nine months before. I just don't think we're there yet, and especially if you haven't seen the unemployment rate move to where I think it's going. I think this is more about the employment picture than it is about the interest rate picture. All right. There's a lot more Fast Money to come. Here's what's coming up next. Lululemon goes even deeper into downward dog, the stock hitting its lowest level since the pandemic.

22:14Will that slide continue or can shares bounce back? We'll debate. And it's not just retail. Novo Nordisk heading sharply lower as well. the latest data hitting that name, and why it's cutting ties with him and hers on their weight loss drug deal. You're watching Fast Money, live from the NASDAQ market side in Times Square. We're back right after this.