President Trump Unveils UK Trade Deal Framework… And The Next Move In Pharma 5/8/25

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. One deal done. The U.S. and U.K. reaching a trade agreement that helps stocks push higher Thursday. What we know and what we don't know about the deal and how it sets the stage for more negotiations. And what rebound? Alphabet higher today, but far from erasing yesterday's losses. Where does the company really stand in the land of search and will it ever reclaim the poll position? Plus, Pharma's rough week rolls on. How much of a toll tariffs could take on the industry?

0:28Airline stocks higher as the DOT announces plans to overhaul air traffic control. and another big night of earnings. We'll be joined by Pinterest CEO Bill Reddy for all the details on the results. I'm Melissa Lee. Coming to you live from Studio B at the NASDAQ. On the desk tonight, Tim Seymour, Dan Nathan and Julie Beal. We start off with the market rally losing a bit of steam at the end of the day. The S &P pairing gains in the last hour of trade closing about half a percent higher. It was up as much as 1.6 percent earlier in the session. The NASDAQ, meanwhile, managed more than one percent gain at the close.

0:58The Dow added 250 points, pulling it into the green for the week. Meanwhile, the 10-year Treasury yield neared 4.4 percent, its highest level this month. The early strength coming after President Trump announced the framework of a trade deal with the UK had been reached. Let's get to Megan Casella in Washington with all the details and what we know about the deal. Megan. Hey, Melissa, both sides emphasizing that details still need to be worked out before this is a fully-fledged enforceable trade agreement. But we are starting to get some details as to what exactly we do expect will be included here.

1:29A couple of things. The first is that the U.S. 10 percent baseline tariff will remain in place for nearly all U.K. imports. Very few exceptions besides that 10 percent tariff. Also, some increased market access for U.S. beef and some agricultural products, ethanol industrial products as well. The U.K. also agrees or will agree to buy$10 billion worth of Boeing products. We saw the stock jump on that earlier today. And 100 ,000 UK autos in exchange will be able to come into the US facing just a 10 % tariff rather than the 25 % auto tariff that had been in place. And Melissa, one key with this deal and one reason that both sides say it was a little bit easier to negotiate is because the US runs a rare trade surplus with the UK.

2:11You can see it here. That's imports in blue, exports in orange. We're buying a little bit more from them. Excuse me. They're buying a little bit more from us than we're buying from them. And we don't have that with most countries. Officials say that's the reason that the baseline tariff is only at 10 percent and not higher. Just in the last hour, we heard Commerce Secretary Howard Lutnick talking about this and what it signals for other countries that do run deficits with the U.S. Take a listen here. So the 10 percent baseline is for those countries that have balanced budget with us that are the best.

2:44And then those who had trade deficits are going to have a higher tariff. Now, if they really open their market and they really go to town and say, look, we really want to get to fair and balanced trade with America, then the best they can do is 10 percent. Most likely they'll be higher, but the best they can be is 10 percent. The best they can do is a 10 percent tariff, Melissa. So that's really the biggest takeaway from today. When we think about all the future deals with larger trading partners that are still to come. The tariffs should stay at least at 10 percent, officials are signaling now, and in some cases could be much higher than where they are now as those tariffs for the moment are on pause.

3:23Melissa? Megan, thank you. Megan Casella, Secretary Lutnik also saying basically to expect dozens of deals in the next month or so. So there's high expectations being set by the administration for some more breakthroughs, as they call it, in terms of trade negotiations various countries? Well, if this is a framework deal, this is a deal structure we can apply to other deals. And it sounds to me like we're going to find the three countries where we how many countries are there in the world? 180. OK, we'll find three of them that possibly actually have a trade surplus on the other side. Look, the bottom line is I will get back to my markets view on this because I don't understand why we need to have a balanced trade with every country in the world.

4:02It seems ludicrous and something that makes zero economic sense. But I do think that the worst of the trade rhetoric for the market is over. And in fact, I think if you look at the market is done at some point intraday, I think even on the Nasdaq, we are, I think, at a bull market off that intraday low. In other words, we actually gone up over 20 percent from those intraday lows on April 7th. So I think it's it's it's great that people are talking. I think the 90 days will go by quickly. I think the bottom line is I think the sense we have is wherever that Trump put is, it's a function of a lot of different ingredients.

4:37But that, yeah, getting out there with the U.K., possibly Japan, possibly India, this is what we're looking at. But there was nothing about what we heard today that gives you confidence that this plan is one that really is going to be a panacea for a deficit. Yeah. I mean, it goes back to, you know, March 2018, first Trump administration. administration they threw some tariffs on nothing like this by the way it took them nearly two years right to get a phase one deal listen it's constructive but this is something that actually was didn't need to happen I mean like you know if you're worried about these sorts of trade deficits which they obviously are you know you can go about it and just kind of get your allies first in line and then really kind of focus on your major adversary which is China when you think about the surplus that we had Tim just mentioned that and you think about really the total amount to trade$150 billion with the U.K.

5:26We're obviously one of their biggest trading partners. They're number nine on our point. Put Canada and Mexico together, and it's 10%. This is the U.K., you know what I mean, this kind of total trade, 10 % of that, and we obviously have a big deficit with those two countries. Yeah, and, I mean, like, you just got to figure out how to, like, what's the baseline for this sort of thing? If we have 10 % across the board for the whole globe, that's going to weigh on global growth, something that didn't exist when we're coming into 2025. It will weigh, but at least that would be certainty, right? I mean, if it were resolved and somebody announced tomorrow, it's 10 percent across the board.

5:58I think the markets will be relieved. And at least you have a framework, a basis to work off of. Julie Beal, but of course, all eyes are going to be this weekend. The USTR, as well as Secretary Besson, are going to head over to Switzerland and meet with the counterparts there to initiate conversation with China. President Trump said that he's expecting some some big things out of there. Other people are saying it's just going to be an icebreaker. Yeah, it sounds like it's talks about talks about talking maybe later at some point we might work something out. It's still really, really preliminary.

6:28And I think that's the most important point about this is that if I look at the deal with the UK, this is like our bestie. And still we're talking about 10 % on our bestie. And I agree that most businesses can really figure stuff out once they have the clarity. but 10 % on some companies that have very, very thin margins is going to be pretty tough to actually digest. And I think that's going to be a realization that people are going to have to really incorporate into their estimates and their earnings, right? A lot of guidance that we've gotten so far through the earnings season has been really vague and it's just because there's nothing they can really latch onto.

7:05I think the most important thing coming out of this weekend is some kind of understanding of a framework. And I think what people are really looking for is scale, right? It's some kind of anchor number that they can put their, you know, arms around in terms of not being at 145%. If it's, you know, half that, that's great. At least people can factor that into their models. Yeah. And the other thing is, it's like, we keep hearing that the trade war is not in the data, right? And we've seen a bunch of data over the last couple of months, or a couple of weeks, excuse me. And if you hear what's going on in the ports, and I know Brian Sullivan was there, and I think the network is doing like kind of amazing work on this.

7:39It's like, you know, There is this whole ecosystem that exists around whatever boats are not coming in with the containers, that sort of thing. Ultimately, I read this today. There's 500 ,000 workers in logistics just in Southern California alone. There's 9 million across the country here. So when you have this sort of disruption and you have this uncertainty, most specifically with China, which is 30 percent of the manufacturing for the globe, there's going to be ripple effects. no matter what happens this weekend in Switzerland, it's going to take like months to kind of iron this sort of thing out.

8:12And so if the data is not depicting what's going on right now relative to the tariffs, it's going to. And I don't think anybody is rooting for that. I think we want to be in a situation where, OK, let's take the 145 percent tariff down to something reasonable. But there's nothing reasonable. It's not going to 10 percent. You heard Paul Tudor Jones on the network just a couple days ago saying even if we go to 50 percent on China, it's a real, real problem for the country and for the economy. And that's not going anywhere. If they get to 50, that's not going anywhere anytime soon. Where is the silver lining guy?

8:45Because he's not here tonight. Can I silver line? Please. No, no. I was going to silver line because the silver lining, Tim, is what you said, is what you said, is that the stock market is only down 3 percent. So I don't care how much it's up off the lows or down from the highs. It's only down 3 percent. That's the silver lining. We have seen the worst in theory of what the tariffs could be. Yeah. 145 percent. It cannot go higher. I think so. And I also think that there are goodies to come in terms of other policy initiatives that the markets are going to like. I like also what Dan was talking about in terms of the data points.

9:16So what we know from last Friday's jobs number and what we also kind of know at this point is that markets are not responding to weak soft data. They're responding to hard data prints. And ultimately, right now, until the hard data prints go bad, I think the soft data prints are less meaningful. That's great for risk assets. It could mean risk assets are a little overpositioned. And again, I don't know how you spell V. Like, are you good at cursive? How do you spell V? Sorry. What are you talking about? Let's try this again. How you would be spelling, writing out a V. Sorry. But if you were cursive writing, like my kids still have to do.

9:51I think you just do a V. I think that's what you do. But my V kind of trails off to the side, which is kind of what this feels like. In other words, it's not like this. So, Tim, what's it discounting, though? That's the one thing. You said they can't go higher, but we're just talking about when the soft data starts coming in. The hard data comes in. I think I can't worry about hard data. That could be May. May CPI is when a lot of economists are saying that is when the inflationary impacts of the tariffs will first be seen in the data. May, that's around the corner. I think it's very possible.

10:16I'm just telling you that there's a couple things that are relatively bullish. The fact is that the tariff dynamic is already out there. And as we all said, we've seen the worst of the detox period. We've got policy at our tail. We also have some dynamics where I actually think you've got initiatives here that could at least adjust the temperament here. But risk assets have come storming back. And so now the question really is, is what's the market position? I totally disagree that we know what the worst is, because the cumulative nature of this as we get further into the year is just something that I don't think we can quantify.

10:53I think we're both. We don't know. Why did the 10 year yield rally today? Why afford expectations of inflation, both for consumers and for small businesses going higher? Small businesses are going to have a really hard time. We're going to see that. I think that the point, though, is that we've seen the peak of uncertainty concerning. A pessimism. We have not seen the peak in terms of how much it will hit the economy. I just don't agree with that, Mel. I just don't agree that we're past. We don't know how it's going to impact the economy. You do agree with it. We don't know. You're saying the economy could go bad.

11:24I don't agree with it just because we know the ceiling on the tariffs that the worst is behind us. Like, I don't agree. No, we said the worst of the tariffs. No, you said the worst of the uncertainty. On tariffs. Well, I'm not trying to. She said the uncertainty on the economy, and I think you mean the same thing. I disagree with both of you guys. All right. And Julie, throw her in there. I disagree with both of you. Dan's clearly not silver lining today. No. Anyway, let's move on. Alphabet up almost 2 % today, but still far short of recouping yesterday's losses. The Google parent came under pressure after Apple's services chief reportedly testified that he thinks AI will eventually replace the leading search engine.

11:57Google responding to the comments in a blog post saying, we continue to see overall query growth in search. That includes an increase in total queries coming from Apple's devices and platforms. Alphabet is still down nearly 6 % this week, the worst performing stock in the so-called MAG7. So what did you make of this bounce, Julie, which is not much of a bounce? Yeah, compared to what happened yesterday, it's a little bit cold comfort for shareholders of Google. I think it's a little bit of a sibling rivalry. He said, she said, I did go down. No, you did not, it went up. And I think that kind of tells you just a little bit how opaque some of this data is going to be and how often they really don't want to share that data with each other and with us, the public.

12:45But I do think that there is something pretty existential to Google in terms of the ability to use other services for search. I know that there are so many tech companies that are just not even using Google at all. They're using things like perplexity to do all of their search. And, you know, I think that that really behooves Google to figure out how they can incorporate most of their, you know, AI products into other avenues. And I think what's ironic about it is that Google was really kind of the leader and the pioneer of a lot of this generative AI, right? Most of the great thinkers from the leading labs came from Google.

13:23And so to see them quite so flat-footed is, I think, a little bit concerning. All right. Well, our next guest sees a tough road ahead for Alphabet. Let's bring in Gene Munster, Managing Partner at Deepwater Asset Management, Fast Money Friend. Gene, it's always great to get your take. I mean, I don't know. Do you believe Google in its blog post? I mean, when you hear OpenAI say that around 400 million users use ChatGPT on a weekly basis, those users must not be searching on something else. That's correct. They're using less Google. I want to just frame in some of those numbers, is that 400 million number.

13:58It's actually the story is even worse for Google, is that it basically took 10 months to go from 1 to 200 million users. It took six months from 2 to 400 million. So you're seeing compressing off of bigger numbers. And it's probably going to hit 800 million at the end of June, which would be about four months between that. So that's going to put it at about a quarter of the Google daily population. It's also going to be using GPT. And that's obviously just one of a few generative products. And so the central question that I think that Google investors should ask is ask themselves if they fall into the camp of using generative AI daily or ask anybody who does, how has your search behavior changed?

14:39And I think the answer is overwhelmingly, it is a significant, a seismic change. And on top of that is that this effectively puts Google in a very difficult place into a corner. And that corner is that to monetize what the reason why people love this. Is this a simple, straightforward answer? It might hallucinate, but they love the simple answer. And that's something by definition that blue links can't give them. So very complex, very complex set of challenges that's ahead of Google. And this golden goose that they have is showing its age. Yeah, but so I guess let's think about this week's events, though, really as they unfolded, which is that this is a, you know, Apple's not a defendant here yet.

15:22They're on the stand. Apple wanted to almost be a co-defendant here. Apple's defending a stream of$20 billion. I mean, you think they're going to say there's no one else other than Google out there? I mean, they're saying everything they're supposed to if they want to keep this revenue stream alive. Plus, I mean, how do we not think that Gemini isn't going to be as good as what's out there by the time this really needs to be transformed? I hear you on all the data points we're all getting and the slippage and whatnot. But let's understand this week as it went down and let's understand Google, the company that is going to be as well positioned with the product to do AI search for Apple on the world's most important platform.

16:01I mean, if you play the tape, what we've talked about in the past two years is I think Google is I thought they were in a great position for all those reasons. And I want to just zero in on the comments from Eddie Q because he is there is a motivation for him to downplay what's going on here. but he's also under oath. And my belief is that his comment about search being down within Safari is accurate. And that is in fact, it's down for the first time. That's about half of the usage of browsers on iPhone is through Safari. And so that's something that you have to, it catches my attention. And I've been in the belief, I've seen what happened with Redbox and how long that took.

16:42I thought that was going to be over before it started. It took 10 years for that to wind down. So there's going to be a tail on this with Google. But what we are seeing is that it's happening a little bit faster than what I would have expected. And at the end of the day, it just comes down to that simple question. How do they create a product that people are going to want that still allows them to monetize? Gene, we're bros, right? You and me? Right on. You guys look alike. No, we're bros. Okay. So last night we had an analyst on, very good analyst. He was saying a lot of the same things you were saying about Google.

17:14And he said they're facing, you know, classic innovators dilemma. And so, you know, I came in just like this and me and the guy are not bros. I don't know. I've never met him. But I said, isn't Apple facing a very similar innovative dilemma here, if you think about it that way? Because, you know, at the end of the day, the fact that they didn't even mention Gemini as one of the alternatives, right, to their search on their platform, I think I'm agreeing with all you guys. I think they got a problem. iOS this year was meant to be all about Apple intelligence, right? And we keep hearing about this upgrade cycle.

17:44That's not really going to come. And the best for Apple, as far as units are concerned, might have been in this past quarter. So curious how you're thinking about this relative to Apple, because to me, I think they have a problem. Two consecutive years of flat units is not a great, it doesn't portend great for their, like, you know, the next couple of devices. So again, a year ago, I expected a super cycle this year and the numbers they put on it was 8 to 10 % iPhone growth in fiscal 25. We basically know, or through the June quarter, we basically know what it's gonna be because we have the guidance.

18:15It's gonna be plus 3%, so no super cycle, I was wrong. And I think that where I made the mistake was related to these features and are they out, and we can debate whether or not those features are gonna provide the catalyst for people to upgrade. I fundamentally believe that we're still very early in AI and believe that the iPhone can get much better in terms of doing simple things that can be powered by AI. And so when I think about all the complexities, I mean, Apple's got just a laundry list of challenges. This has been a rough year for Tim Cook, no doubt, but he's done a great job. And ultimately, I think that their customers aren't going anywhere.

18:54No one's going to get rid of their phone because Samsung got, and I think that's what matters the most, is that the hope of the upgrade cycle, that hope being out there is all the stock needs to keep moving higher. Gene, great to see you. Thank you so much. Gene Munster, Deepwater Asset Management. I had to look up Redbox, by the way, and I'm sure other people out there wondered. I vaguely recalled it. It's literally like the box, Redbox. They still have them, actually. They are. I know. There's like one on Broadway here. We should go visit it. We might as well go to Blockbuster while we're at it.

19:26So Gene also thinks that my Apple take is a folly. Maybe it's a folly. Well, I was going to say, I don't think he thinks you're bros. No. Okay. Here's the question. Alphabet is the only mega tech stock to trade at a discount to the S &P 500 on a forward basis. Julie Beal, is it trading that way for a reason or is it a buy? Yeah, I think everyone recognizes this innovator's dilemma that they're in right now. But there is a part of me that agrees that, you know, the unwinding of search is going to probably be a pretty slow process. We all kind of talk about, you know, wow, there's been so much adoption of ChatGPT and all of these solutions.

20:03But if you look at the intensity of usage, the vast majority of people who are counted in this group of users are using it pretty sporadically. It's not really integrated. And so changing people's behavior and changing people's process takes a long time. I actually think that because Apple hasn't been very good in terms of launching a lot of their AI features, most people don't like the tech summaries. Most people don't like how they've reorganized the mailbox. I actually think it will, in a way, impede AI's adoption because people are kind of like, I don't really get what this is for. I think that at the margin, you're going to have the super users that we all hear about.

20:41And I'm sure we'll see some applications in corporate America as the year goes on. But I do think that broader adoption may be a little bit slower than people are guessing. You know, OpenAI is going to come out with a browser. Chrome, which is by Google, says 65 % market share there. I think that's kind of the thing that kind of flips the switch for a lot of users who haven't gotten used to it. And the other thing is Google has to cannibalize themselves to kind of gain some of that share back from open AI. So I think it remains a problem for Google. Coming up, a lot of earnings action to bring you shares of Lyft, Coinbase, DraftKings, and more on the move after their reports of details and the numbers from the quarters next.

21:16Plus, the tariff impact on pharma, biotech, and health care as President Trump promises new tariffs on the industry and an overhaul to Medicare pricing. what it means for all the stocks next. Don't go anywhere. Fast Money is back in two. Welcome back to Fast Money. We've got an earnings alert on Lyft. Shares jumping after hours despite a miss on revenue estimates. The call kicked off at the top of the hour. Pippa Stevens has all the details from the quarter. Hey, Pippa. Hey, Melissa. Well, the stock response seems to be all about the buyback, which Lyft upsized to$750 million after announcing back in February its inaugural buyback program of$500 million.

21:49The company's market cap is just shy of$5.5 billion as of the close. So a pretty large return of capital and the upsides does come amid pressure from activist investor Engine Capital. Now, the call did just kick off with the company saying the lower prices they started to see at the end of Q4 persisted into Q1, which saw lower average prices quarter over quarter. The company, though, did say that in the last week of March, rides reached the highest weekly level in the company's history. In terms of guidance, Q2 gross bookings and adjusted EBITDA were largely in line with analysts' expectations.

22:19and for more on the quarter. Be sure to catch Lyft CEO David Risher tomorrow on Squawk Box at 840 a.m. Eastern. Melissa. Pippa, thanks. Pippa Stevens. So is it going to be bland now? I think it has to be. I mean, first of all, BAND was kind of a bland acronym. I think we've now spiced it up. So you see what I did there. I just, you know, there was nothing extraordinary about these numbers, but it was an EBITDA and a booking speed. And those are really important things. So profitability. Yeah, I get that the number's down. They're still up 14 percent and it was still a record revenue quarter, but it was a slight miss of the street.

22:54And so that's on top of buying back 14 percent of market cap by adding this extra 750 million. That tells you also where the company really believes their best dollar spent is. And right now that also implies. So some some cost efficiency, some buyback. And if you're a shareholder and there is activist pressure, go at it. Have at it, Tim. Have at it. You know, it's interesting. You just mentioned the profitability. Why is that important? Well, they have nearly$2 billion in cash. They have about a billion one in debt. And now they can do these sorts of things. It's a five and a half billion dollar market cap company.