Software Sinks After IBM Losses… And a June CPI Reversal 7/14/26

22:55Eastern, CENTCOM confirming that the U.S. blockade of Iran's ports is officially back in effect. CENTCOM saying in the post that more than 20 U.S. Navy warships and hundreds of military aircraft are now operating across the Middle East and remain, quote, vigilant, lethal and ready. Now, these latest attacks coming after the president backed off his proposal from just yesterday that ships transiting the strait should pay a 20 percent toll to the United States for protection. He wrote on Truth Social that he'd spoken with Middle East leadership and decided to replace the fee with trade and investment deals.

23:25He later told reporters that he liked this arrangement better because he doesn't think anybody should be able to charge a fee. And the president, Melissa, framed this as new money being invested above anything that had previously been pledged. But I will note we have not yet heard confirmation from any Gulf countries on this, and none of the countries that the president said he spoke with have announced any new investments this week. Melissa. Megan, thank you. Megan Casella. So what do we do with the oil? So this is why there's going to be a bid in energy, right? On again, off again. The circumstances change.

23:58So there'll always be a bid. There'll always be some sort of a risk premium. But when you think about we came into this war oversupplied. Now we have Iraq flirting with or tempting OPEC, saying they want to pull out of OPEC so that they could pump more. They squashed that, but that was their threat. Then you have Saudis pumping more. Then you have China importing the least amount of oil in the last decade. All these things are a host of reasons why oil should be lower. But the hostility, the volatility, that could keep a bid in it. I'd still rather play it with Valero up 85 percent or Marathon PSX up 85 percent or 56 percent versus CVX or Exxon Mobil up 10 or 15 percent.

24:48You're going to get the refiner bid because as oil comes in, that's their input costs. And the large integrated names don't react the same way to the barrel.

24:55Dan Nathan:Yeah, I agree. And Exxon, I do think you can own. I mean, July 31st, they report. I think the current quarter is going to be good. If you look, we're about, I think, to break in the downtrend that's been in place since the all time high. I think we made in late early March or so. So listen, we've been consistent on the name Steve mentioned. I think you can buy the integrates, too. Yeah. So I agree. I think there's a bid for energy and related stocks and oil. But I think you guys have been on the refinery trade, which has been really excellent place to be. Yeah. Cracks reds at records still. Yeah.

25:29And I think, therefore, Conoco looks very interesting. Chevron, certainly. And I think OIH, though, getting into at least drilling for new stuff. I'm of the view that oil demand is never going to go down. I'm of the view that the more people on the planet, the more demand we're going to have for oil. The power demand dynamics that are in the world today have never been higher. And right now, fossil fuels are still a major part of it. I don't hear anybody downgrading global oil demand forecasts. I think that if you look at, you know, we've been growing about a million barrels a year over the last five years.

26:01And as much as we want to be less carbon footprint dependent, I don't think it's happening. All right. There's a lot more fast money to come. Here's what's coming up next. Bitcoin coming off the bench as the token closes in on 65K. Inside today's rebound and what's ahead for the struggling crypto complex. Plus, CPI beats the summer heat. The June inflation report offering some relief for consumers. But could it complicate the Fed's next move? A former central bank official weighs in. You're watching Fast Money, live from the NASDAQ market site in Times Square. We're back right after this.

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28:03That means beautiful, energy-efficient windows and doors while the payments wait. Visit RenewalByAndersonHome.com today and see how easy it is to buy now and pay later. Welcome back to Fast Money. Bitcoin bouncing 4 % after this morning's softer-than-expected inflation data. CPI seeing its biggest month-over-month decline since April 2020. Other token crypto-related stocks and crypto miners also seeing gains today, though Bitcoin's still down 26 % this year. Is this the beginning of a permanent bounce? What do you think? I don't think we could talk about a permanent balance in Bitcoin ever, probably.

28:40But in this in this environment, I think you have to wait until it clears 75 ,000 before we even start to cross our fingers. And obviously, ultimately, 100 ,000. But we're a long way from Kansas. So I don't even know that lower inflation is necessarily pro-Bitcoin. You could make the case higher inflation is pro-Bitcoin. But I don't think that's what it was. I think that it's about the Clarity Act and whether it's moving along. And I think Trump is trying to push it along and even sort of talked about maybe a Lindsey Graham dedication or something like that is what I don't know if it was Claude or Gemini, which told me that because I was sort of wondering why it was moving.

29:19And that's what I got back. So a Clarity Act, you know, if they were to pass that, that would be a big catalyst. I don't think it's really about. Well, to me, it's about thinking about the trades that were a big part of the Bitcoin trade. And Robinhood is a name that I'm long and has traded very well. And after giving a lot back has been, I think, building on days even when Bitcoin has had down days. This is a story of more products. This is a story of a different demographic. This is a story of the same people that loved Bitcoin yesterday, may not love it tomorrow, but they do love Robinhood.

29:50And I think you can stay long this one.

29:52Dan Nathan:Rate hike came off the table today, according to CME Fed Fundstool. But the bond market really didn't, I mean, maybe in the front end a little bit. But 10-year yields moved slightly today, which I think if you were looking for yields to go lower, today was your day. It did not happen. So I actually think Bitcoin probably fails at these levels. Coming up, the flight path for the Fed. Former Dallas Fed President Richard Fisher will join us with his take on Chairman Warsh's Capitol Hill testimony today and where he sees rates heading in the second half. Fast Money is back right after this. Missed a moment of fast?

30:25Catch us anytime on the go. Follow the Fast Money podcast. We're back right after this.

30:42Welcome back to Fast Money Stocks. Broadly higher Tuesday trade. NASDAQ up nearly a percent. S &P closing within a percent of a record. The Dow eking out a gain of just 10 points. Uber falling 3 % as the company looks to bolster its international presence. Germany's delivery hero confirming today that it is in advanced talks to be bought by Uber, though the exact terms of potential deal are not yet public. Biogen dropping 8 % on a mid-stage Alzheimer's trial miss. The company's experimental treatment failing to meet a key disease metric when compared to drugs already on the market. Boeing, meanwhile, rising almost a percent after reporting 64 jetliner deliveries in June.

31:17That brings its total deliveries in the first half to 314 aircraft. That is the most going back to 2018. And SpaceX down another 2 % for its third straight losing day. It's now trading just$1 above its initial offering price of$135 a share. And this just crossing after hours, Lionsgate shares are jumping. Reuters is reporting the company has attracted takeover interest and is working with an advisor to evaluate potential deals. The stock is now up 10 % on this news. I mean, that makes a lot of sense in a way.

31:48Dan Nathan:Content is in the middle of that Paramount Warner Brothers Netflix thing. I know collectively we said if you want to look someplace that nobody's looking at, look at Lionsgate. And these are the reasons why. So where there's smoke, there's fire. And I think this probably does happen. Yeah. Michael Burns, friend of the show. They've been a content machine and that's what people are looking to buy. It's not a big acquisition in some sense on a relative basis. Meantime, consumer prices seeing their biggest monthly drop since April 2020. CPI fell 0.4 percent in June as oil prices fell last month. The data coming hours before Fed Chairman Kevin Warsh got grilled on inflation by lawmakers on Capitol Hill.

32:24Let's bring in former Dallas Fed President Richard Fisher. He's now senior advisor at Jeffries and is on the Warner Brothers Discovery and tenant health care boards. Richard, good to see you. You got a big resume. What can I say? What did you learn from Kevin Warsh's testimony or in his answers? I mean, did we it seemed like we didn't get any clues on where he stands on the economy, on where he stands about, you know, what the data point to any sort of indication of what the reaction function is for the Fed. Well, you remember he started out by giving praise to Alan Greenspan, and he's talked about that quite a bit.

33:00Actually, he was a much more direct in his answers than Alan ever was, who we called the great mumbler. He Alan would dodge every question he was asked. I think Kevin did a good job. And I think it's important to remember he's only 56 years old. That's the same age I was when I took over the Dallas Fed or when I was given the Dallas Fed. And he has to think about what presence he's going to serve. And I think he made it very clear, obviously, the one commitment that is ironbound is not to let inflation raise its ugly head and to bring it down. And I think that was what the takeaway was. and making clear one month's CPI does not decision-making do.

33:43He really made that very clear. I was impressed. I mean, I think he's got great interpersonal skills. He's smart, but he also has to realize, like Michese Martin, he could serve five different presidents at this age. And I think that came through very clear. And Richard, it's Tim. Thanks for joining us. he can't control fiscal policy either, which is a lot to do with inflation. But what I thought was fascinating about today is he's kind of carved out the five pillars in which he's going to do things differently. And he talked about how he's going to communicate. He talked about the data that the Fed will actually look at.

34:19I mean, there's some people that would argue some of the core measurements, of course, of core inflation are not really accurate reads. What do you think is the change that he's at least referenced that will be most meaningful for how the market has to interpret the Fed? You know, I really don't know. The five task forces are staffed with people that have been advising J-PAL and the Federal Reserve going back to Alan Greenspan. The one I get a kick out of, by the way, is a central banker from Brazil and then Mervyn King from England are going to do the communications. Maybe we'll change it to Portuguese.

34:57I have no idea. But I think it's important to have these task forces. Kevin's talked a great deal about the Dallas trim mean, which I puffed my chest out a little bit. We perfected that when I was there. And yet the trim mean in March was 2.9%. In April, 2.4%. In May, 2.4%. It seems to be stuck. And you look at that data, which he's talked a great deal about, it doesn't come out the next one for June until July 31st. So it's not really contemporaneous, which he's also talked about getting good measurement.

35:32Dan Nathan:If they go the Portuguese route, they can call me. And as you know, because you watch the show, I speak affluent Portuguese, but we're not here to talk about that. But take us inside the room. What do you cats talk about? Like, you guys sit around when you were there and say, Japan is a problem. We are watching this very closely. They're the largest foreign owners of our debt in the world. They are blowing up before our eyes. Are those conversations that are going on? Well, they have$1. trillion with us in treasuries. And of course, everybody's worried they're going to begin to sell them as they keep talking about now investing more and more in their own securities.

36:11But yes, that's part of the conversation. But the real conversation is the health of the credit markets and really the inflation, deflation, employment, unemployment, what's going on with the economy overall. And that's really what you're focused on and focused like a laser. And he made that clear, I think, in his testimony today. Inflation will always be a preoccupation of the Fed, inflation, deflation. Employment is always a preoccupation of the politicians because that's what they run on. That's how they get elected, as long as inflation doesn't get out of control. Richard, when the chair talks about the economy, he always takes out the housing market.

36:51Is there any way, and he almost alludes to the fact that he wants to do something or collectively with the Fed do something for mortgage rates. I don't know what he would do except for using the balance sheet. What's the answer to that? Have you thought about that, getting that mortgage rate lower? I've thought about it a lot because I was against the acquisition of mortgage-backed securities. And actually, the head of the Richmond Fed at the time argued the most articulate argument, Khan. And now they're stuck with over$2 trillion. I haven't looked at the H41 report. I thought it was up to$2.7 trillion in mortgage-backed securities.

37:28Now, how would you bring down rates? You'd have to buy more. And if anything, that's one thing that he and Besson have talked about stripping out of the portfolio somehow. So I don't see how you would help housing by expanding a portfolio without jeopardizing the size of the portfolio, which they want to make smaller. It just doesn't compute. Richard, always great to see you. Thank you. Okay, I'll practice my Portuguese. Obrigado. You don't have to do something? Obrigado. Richard Fisher. All right, so what do we make of... We play this game a lot. You know, if you saw, if I told you what the reaction of the market would be...

38:14Headline. Yeah, yeah, yeah. What would the market be? The two-year yield chart. Did that make sense to you?

38:19Dan Nathan:Today it did. Yeah. Ten-year yield, as I said earlier, did not make sense to me. It backed off slightly, and I think there are a lot of reasons why inflation, notwithstanding, why I still think yields are going higher. I do think the—are you talking about his testimony or the print? Because it's the— The testimony. Right. CPI, right. Testimony and the chart. So— The print, the reaction to the print made complete sense. Yes. Although I think the print is so fleeting. I mean, we had a big oil move down and we had a big oil move up before that. And now it's back higher. So I don't know. I was I don't know.

38:56I do think he's sort of being he's very clear that he wants to address inflation. He's very clear on that. And he seemed to be pretty clear on. I will not answer to the president clear on that. Other than that, I'm not sure. So I think that's what he wants to do, though. Yeah. As a gold bull, what Warsh says is not gold positive. I just want to be clear about this. This is a guy who's going to root out inflation. The market in the past has said the Fed's not really focused on inflation by gold. This is not good for gold. Coming up high times for SK Hynix, Nasdaq listed shares catching a bid in their third trading day inside the memory melt up and how options traders are approaching the move when fast money returns.

39:41Welcome back to Fast Money. U.S. listed shares of South Korean chip giant SK Hynek soaring today back into positive territory since Friday's Nasdaq debut. Options on the stock launched this morning to a surprisingly chilly reception among traders. Our Oliver Rennick is live from the SIBO in Chicago with the action. Hey, Oliver. Hey, Melissa. SK Hynek's options had a solid first showing by the close, with just shy of 220 ,000 contracts traded. That's more than the 190 ,000 contracts traded in SMH, but about half the options volume of DRAM, the ETF, or Micron. Flows were almost perfectly divided between puts and calls by volume, but the top 10 trades by dollar amount were either neutral or bearish.

40:25That said, a few big call sellers we noted early in the day actually got run over as the stock ramped 27 % by the closing bell. It's possible that the dozen leveraged ETFs that also launched on the stock today competed away some of the options volume. But there's also the possibility that options traders may be rotating away from the memory trade a bit and into the SMH sector generally, or NVIDIA, both of which saw more notable bullish call skew today and in the case of NVIDIA the past week, Melissa. Oliver, thanks. Oliver Rennick. Really interesting action. I mean, on an evaluation basis, that makes sense.

41:06A little bit of sense, yeah.

41:07Dan Nathan:Listen, the volatility, I'll continue to say, the volatility in these names, you throw SK Hynex in the mix over the last month-ish in Micron, Sandisk, up 8%, down 8%, not on a daily basis, but a few times a week for sure. To me, it's a little bit concerning. You typically see action like that on the lows, which we're not at, or at the highs, which I think we might be at. Yeah, the premium that the USADR trades to the underlying in Korea is extraordinary. And it tells you that I think there are a lot of technical things going on because this is a great case of share class arb. You know, you can't necessarily own the technical in Korea.

41:44Yes. Yeah. And I think it's it's something you have to be very cautious about here. I think some of that that premium has got to come out. Well, in Korea, there's all sorts. I mean, there's a lot of leveraged ETFs already, margin calls, et cetera. Yeah. So it's like a spiral. Zero room for error on these names. So all these other things we're talking about, mechanical, structured selling, structured buying. But the underlying, these are priced truly for perfection. But this is a name that holds 60 percent of the high bandwidth memory. That's a huge share for them. I don't know. They're not going to grow from 60 percent, but they cannot afford to stumble whatsoever with all those levered bets behind it, because an 8 percent miss reacts with a 30 percent stockfall.

42:31Yeah, it is the biggest pure play memory name out there. And a beneficiary of the IBM news. Yeah. Yeah. I mean, doesn't that sort of underscore the notion that there is a longevity to this notion that the spend will continue in memory? And it just seemed to gain momentum. I mean, we're three days into a really volatile history, I guess. But I mean, it's been public for a long time elsewhere. But that arbitrage, there's no way I would ever set that up. No way. Yeah. Send me equipment names. Start to report to. I mean, you got to ask them tomorrow. And I think it's it's a really big print for sentiment, which has been fragile, especially in other parts of the world.

43:09Coming up, a hospital hang-up as HCA gets slammed on lower guidance. The health insurance headwinds the company faces and what it could mean for others this earnings season. More Fast Money in two.

43:24Welcome back to Fast Money. HCA shares sliding 7 % after the hospital operator lowered earnings guidance for the full year. The company is citing a rise in uninsured patients and a drop in the number of surgeries. The stock now down five days in a row. Other health care stocks falling in sympathy, Tenet Health down nearly 6%. What do you mean? I mean, inpatient and outpatient surgeries were down significantly, and then also uncompensated care was up significantly. Well, the first thing I thought of was health insurers and medical loss ratios and that being the benefit going to them. So that's where I would go, although UNH ended up down a little bit.

44:02But I don't know. Guy's been a hospital space guy.

44:06Dan Nathan:I mean, remember the old days of tenant health care? I'll say this quickly. There's an uptrend that's been in place in HCR crack staff from in Englewood Cliffs from 2022. We closed basically right on it today. Valuation, you can't play the valuation game with these names, but it did trade almost four times normal volume. So I actually think it might be worth a look here. I mean, health care overall today was sort of weak. I mean, we mentioned the Biogen news in terms of disappointing Alzheimer's drug trial. This had been a safety area. I would have thought so. Lily was down. I don't know if Lilly was embedded up on that Biogen news because of their Alzheimer's.

44:40But then they had that Teva thing, Teva bringing back a lawsuit, or I guess it was allowed to bring back a lawsuit about improper behavior from Lilly. I thought that's why it was down, but it's had a huge run. Huge. UNH is the one to own. To me, this is a stock that's still cheap relative to its recent history. I understand there have been some concerns about their earnings power, but they've answered a lot of that uncertainty. So I think you stay along this one. You know, when you led this segment off, you said the comments were more underinsured people and more procedures that weren't covered.

45:17You can't have, so the HCA or the ACA, whatever that was called, affordable health care. ACA subsidies, yeah, subsidies. So people are rolling off the ranks. They're not covered anymore. Who's left? The person that's writing the check, paying the bill. So there's a lot of these names that I wouldn't touch. although Humana's chart looks actually pretty extraordinary for the space right now. And I don't think fundamentally it's a great name to buy, but the technicals tell me it moves higher. What did you make of the Biogen move? We didn't get the trade. Biotech. B and Timbo, by the way. Is it the B and Timbo?

45:50Yeah. I have like a block on your acronym. Just letting you know. Just the B and Timbo. Anyway, keep going. No, it's IBM. What's that? Is I. No, I. I. Devo. I'm breathing a sigh of relief. I know where this is going. It's not going anywhere. We assume that the letters in Tim's acronym aren't doing so well. Guess what? Jim is asking. But the O is horrible. No one's assuming, Tim. But the O and Timbo not doing so well. Up next Final Trades. All right. It's the O no.

46:27Final Trade time, Timbo. I think the trade world is turning. I think FedEx is cheap, and I think you stay in this one. Karen. Yes. Citigroup. Bought some today. Overdone. Steve. Fireman Street. Everyone's running out. I'm running in an IBM. Guy. You know, I forgot. Exxon. Yes. XOM, Mel. All right. Oh, Lord. Frame resource now. Good man. All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by them on television, radio, internet, or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion.

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