Stocks break weekly win streak, and what bitcoin’s rally says for the crypto space 6/23/23

0:01Right now on Fast, all good things must come to an end. The Nasdaq snapping its longest weekly win streak since 2019 and closing out a down week with more losses today. The Dow and S &P following suit. So is this the end of the recent rebound rally or are markets just taking a breather? Plus, oops, he did it again. The latest black eye for Goldman Sachs, David Solomon. How his efforts to transform the investment giant into a consumer lender seem to hit one snag after another. And later, it's Friday and you know what that means. We've got a chart of the week, and this name is hitting highs not seen in over a year.

0:35We'll tell you what it is and how you should play it now. I am Courtney Reagan. In this evening, for Melissa Lee, this is Fast Money, live from the NASDAQ market site. On the desk tonight, we have Tim Seymour, Steve Grasso, Guy Adami, and Karen Feynerman will be joining us shortly. We start off with another set of losses to end the week on Wall Street. The Dow shedding 218 points, nearly dropping below its 50-day moving average for the first time in more than two weeks. The S &P down more than three quarters of a percent. The Nasdaq leading the losses with a drop of down over a percent. All three indexes lower on the week with the Nasdaq snapping an eight-week win streak.

1:10Its longest run since 2019. The tech-heavy index posting its lowest close since June 12th. Still with just one week to go in June, the major markets are still well in the green for the month, the quarter, and yes, the year. But does this week's action suggest the rally has lost its legs? Steve, what happened? Was it Powell's testimony? is a reversion? What are we looking at? Sure. All of those things. And I think you just said that the Nasdaq was up eight weeks in a row. It breaks that streak. Everyone was poised for reversion trade. Everyone didn't know when it was going to happen. And this was definitely long in the tooth.

1:43Powell put the nail in the coffin. One or two more rate hikes. So at least so if the glass half full is that at least we're coming to the end of those rate hikes, which is where we thought we were about a week ago. But the problem is we've been up in a straight line so aggressively, this had to happen. Tim, what do you make of this week's action? The VIX, though, still just above 13, feels fairly complacent generally. Well, some of the anecdotal data we get from the hedge fund community is that actually a lot of hedge funds are taking their gross down, which means that they're selling longs and they're actually covering shorts.

2:18I think that has something to do with also some of the compression we're actually seeing in the VIX at a time when indices are largely levitated. Steve's noting, you're noting, just the move we've had. Like, Apple closed effectively at all-time highs today. You know, I mean, just a whisper off of all-time highs. It was a week where you had central banks around the world, again, re-establish where they're either behind the curve. BOE feels they are. They hiked 50 basis points. There's some sense that Powell this week actually walked back a little bit of last week's, we are calling that, I guess, a dovish pause.

2:52Haucus. Haucus pause. I know it's confusing. It sure was. And I appreciate being there for me today. Right. So the Hawks pause was was something that I think, if anything, this week. But look, we dropped 100 handles on the S &P and it and it and it feels different, except for the fact that I would just characterize it as positioning, sentiment and momentum are different than they were a week ago, but not that different. We've come such a long way in terms of positioning, reconciling, where we've been on the show a long time. And I would say in my 16 years plus doing this, I've never seen a period of six months that have been as negative as this period.

3:28That explains to me a lot of the move. And we're talking through some really dark, dark periods. The recession that never seems to happen is one. Financial conditions are looser. I think this week you can't call it anything other than a pause after a tremendous run. You know, Karen, it doesn't look like Apple is taking a pause. Apple's still sitting at new highs here again today. I believe just yesterday you told us you took some profits on that name. Do you regret it? Do you wish you still held on today? Or do you think that was probably smart? And actually, Apple is also going to be part of this trade that moves lower coming here soon.

4:03Yeah, I mean, I think, you know, that run was just so extraordinary that I can promise you, promise you that I did not sell it at the top. So anyone should feel free to buy it. I did not sell it at the top. But I just, I don't know, I just feel like it's had such a huge run. And it's sort of a portfolio management thing. I've got a lot of exposure in Fang. I got Amazon. My biggest position is Meta. My second biggest position is Alphabet. They're all going to move together. And so I think I just had to take a little bit off the table. But I think if you look at the chart this year and just kind of squint this week, as bad as it felt, really was was nothing.

4:41So I wouldn't be surprised if we see further pressure. But I don't I agree with Tim. I don't think that changes the whole landscape of where we are. Guy, what do you think about what happened today, especially in the sort of the tech heavy Nasdaq, seeing this break of the trend here and going down one percent here? Yeah, you know, again, I'm with the group. I don't want to make a huge deal out of four or five days of market action. We have a month-end, quarter-end next week, which strange things have happened before. And my sense is we'll probably see them again in the form of some sort of markup.

5:11So this move in the S &P takes us back to, effectively, the level we topped out at last August. So I think to everybody's point, you don't want to make a huge deal of that. In terms of Apple, you know, again, I'm going to be labeled a hater and it's a Friday. I should be in a much better mood. But, you know, Apple is a beneficiary of a lot of things, not least of which being in, you know, dozens of ETFs and funds and all those things. So the passive investing, which is sort of de rigueur over the last five or six years, Apple benefits it probably more from any other company out there. And look, that's great on the way up.

5:43Passive investing is wonderful. The concern, of course, is when passive becomes active. So all the things that worked could work against them as well. And we've seen significant pullbacks in Apple over the last five or six years to the tune of, you know, 30 to 45 percent. So it's not like the stock goes up in just a straight line. Karen, consumer discretionary, she tried to say, was one of the laggard state when you're looking at the S &P groups. Is that any kind of an indication that the market is starting to worry about cracks in the consumer willingness and or ability to spend in a discretionary way going forward?

6:18Yeah, I think so. I mean, we saw it. We saw it in Target. We saw it not everywhere, though. Right. I mean, as you know, some some some had really good earnings. Alulu, for example, just outstanding. Target. But I think, though, that we're going to get to it later. I don't want to, I don't know, jump the gun. But as we see this student loan potentially likely, I guess, come back into being, that's only going to pressure them more. I was surprised during the pandemic when we thought when stimulus checks, which we knew everyone was getting, really did juice the market way more than I thought. And I'm wondering, we know we know the likelihood of student loans being cut off is high, but maybe it'll have more impact and sort of a front running of that.

7:00You know, this this market was range bound. We were in thirty eight hundred, as I said before, thirty hundred forty two. So now we're just in a higher, broader range bound market. Everyone's looking for the bottom to fall out. To Tim's point, I don't think necessarily it's going to fall out. You're going to see the money still flowing into these large cap tech names. They need to take a breather. Having said that, Apple hasn't even whispered about AI yet. Right. So we came out with a headset. We don't really know what that headset's going to be. It's going to be very expensive. So that was a little bit of a headwind to it.

7:29But Apple, it was that$3 trillion market cap number. So what was resistance becomes support. I think it moves higher. I think ultimately$200 is going to be the base for this stock. I had said that I think you can get to 200. We're well on our way to grind to that level. And I think when you look at that three trillion dollar mark or a market cap, that appears to be the base of this name. And it's totally outperformed. They're segwaying away from China, moving to India. It's going to be a slow grind for the supply chain. But at least they're doing everything that you would expect a company like Apple to do.

8:01Tim, Steve brings up AI and Apple. And just yesterday we had an interview with Deirdre Bosa talking about Amazon's push into AI, sort of generative AI offering its clients. This didn't really get a lot of details. But is that something that you think we should be paying attention to from a giant like Amazon that also could, of course, by the way, power a bunch of other stocks and indices and ETFs higher along with it? Yes and no. I mean, I look at the net retail dollar spent on their e-commerce business, and I don't think it really changes. Like, Amazon dominates significantly, doesn't make any money there, and I don't think it really is going to change that.

8:37You know, we talk about companies like Facebook, whose valuation is a lot more supportive to a company that I also think actually really does have some ability to change and grow their addressable market from what, you know, generative AI will do. I think earlier in the week we had Savita Sabermanian from Bank of America point out that AI is something that actually may be really more beneficial to older economy companies that are actually going to be much more efficient, going to be margin accretive, and that this is part of where a lot of people are looking at what this really means for multiples of the stock.

9:07Or on the other side, all we do is talk about higher interest rates, the cost of financing, the balance sheet, FRNs and things that when the Fed raises rates, 500 bif. So I see AI as obviously we've got your NVIDIAs and the folks that are running the show right now. Then you have all the speculative dynamics around what it means for some of the other mega cap big tech companies. Google, Microsoft, Facebook, they've been there. They've been there for a long time. I think, if anything, they've priced a lot of good news in. OK, well, turning to banks, Goldman Sachs likely facing a big write down for its 2021 acquisition of fintech lender Greensky, the latest sign of cracks in the bank's consumer business.

9:46We saw shares falling by about a percent and a half in today's session. CNBC's Hugh Sun first reported that story. He joins us now for more. Hi, Hugh. I mean, can you just sort of give us the gist about what happened here and what this potentially means going forward for Goldman Sachs? Hey, Courtney. Yeah. So Goldman Sachs, in the midst of the throes of its push into the retail banking realm, purchased something called Green Sky, announced the deal September 2021. They've held it for less than two years and have already talked about basically selling it and getting out of the business as CEO David Solomon has decided to basically reverse his push into the retail realm.

10:25And so, you know, you normally expect the savviest advisors on Wall Street to not basically purchase high and sell low. But that's essentially the conundrum they're in. The bids they're getting are approximately in the$300 to$500 million range just for the origination side of the business. That is far below what they paid for it just 18 months ago, Courtney. I know, Hugh, there were a lot of issues, of course, with this deal. Hindsight is 2020. But what do you think sort of the biggest missteps were looking back? Can they be avoided in the future if they look at any other acquisitions in retail or otherwise, as you've talked about, that Solomon is potentially sort of backpedaling on that initial strategy?

11:05Well, I mean, I think, you know, he and others internally went for this acquisition over and overruled some other folks internally who were against it, thought it was a bad fit. And now, you know, he's sort of forced to sort of embarrassingly kind of, you know, pull back on this. I think the lesson is, you know, he is essentially giving ammunition to, you know, we've talked about on air, the partners out there who are very sort of disgruntled and unhappy with Salman for a range of reasons. He's giving them ammunition essentially to be unhappy again, as in this quarter and the coming quarters, they're going to have to announce write downs tied to this.

11:44And so I think the lesson is, you know, stick to a plan and actually execute on that plan and don't sort of pull back immediately. Hugh, it's Tim. So that gets to, it sounds like this is really just a cultural divide inside of Goldman. And if you think about it, it's not a bank. It's got one of the greatest cultures on Wall Street, if not maybe the greatest culture, not one of consumer banking. Green Sky, there's an argument it's actually been doing what it was supposed to do, that this deal hasn't been an entire failure. It's really just the exits from this industry. Can you comment on that culture dynamic within Goldman Sachs?

12:16Well, I think there is the sense out there that Goldman, going back to being Goldman, is actually going to be a good thing for the stock and for the morale internally, and that getting this behind them, even if it is very costly, is still a good thing. And I think that's sort of the track that Psalm is on. I mean, I don't think there's any doubt that purchasing something in September 2021, which is sort of the peak for a lot of these fintech names, and trying to sell it in today's market was going to lead to a loss. I think that was sort of well-established. I think Goldman going back to Goldman is probably a good thing for this.

12:51Houston, thank you very much for joining us with this story. Let's trade this out. Guy, you were watching the banks today. What do you make of this report, what it might mean for Solomon's future at the bank and his strategy? A couple of things. So let's talk about Goldman Sachs first. The culture there is still extraordinarily strong. And the opposite of just sort of not cutting bait on things that didn't work is staying with something that is bad and knowing that it's continued to be bad. So you have to give them credit and understand, OK, maybe this one didn't work and we're going to cut our losses.

13:20I mean, that's as traders, that's the discipline thing to do, number one. I would submit, even though the stock has traded off over the last couple of months, the performance in Goldman Sachs under David Solomon's tenure has been rather good. 303 should be support. That's the level we saw in March. I know everybody's got to sort of put a bullseye on his back. I think he's done a great job. In terms of banks specifically, you have to be concerned how some of these banks have been trading. Bank of America has not traded well at all, multi-year lows. And J.P. Morgan, almost to the penny, trading up to 143, stopped where it should have.

13:52And there's still a chance for this head and shoulders formation over five years. So I'm still of the belief there's something that's going to happen specifically in regionals. And I don't think you can own banks here at all. Well, up next, buy now, pay later stocks. Those are on fire, but could they go up in smoke when student loans repayments resume? We will look for answers. And later on on Options Action, why it may be time to send your money on a Far East investment journey. The emerging markets opportunity abroad. That's coming up. More Fast Money is ahead.

14:27Welcome back to Fast Money. Fintech stocks having a good year so far. So far jumping 78 percent in a firm up 53 percent. But trouble may be lurking as an overleveraged consumer meets the resumption of student loan payments. CNBC's Christina Parsinevelis is here with more. Christina, what's the story on this one? Well, we have the Supreme Court that we thought would rule today on student loans, but they are still waiting. We're expecting it on Tuesday. Borrowers are preparing to resume their payments in September. And that means three years, the three-year pause on$185 billion worth of student loans needs to be paid back.

14:58The overleveraged consumer and student debt has helped lending firms and buy now, pay later. Firms like Affirm, Upstart, like you mentioned, SoFi, all up more than 53 % year-to-date, vastly outpacing the S &P 500. But a lot of Wall Street right now is actually a little cautious, saying much of that debt is already priced into the stock. Compass, for example, has a sell rating on SoFi, saying the student loan pause was already scheduled to end on June 30th. We knew this. It's not new. And then Affirm seeing total delinquencies actually increase in May after two months of decline. So Mizuho, though, they're still saying this is a strong name and they have a buy.

15:31PayPal, though. PayPal earlier this week announced a deal with private equity firm KKR to buy its European buy now, pay later debt. Good news to actually externalize the credit portfolio. Bad news that the company still hasn't named a CFO, a successor, still hasn't named a CEO successor, and is, of course, facing increased competition from the likes of, let's say, Apple, for example. And then lastly, you've got payments processor Block. It faces competition from Toast, Pfizer. Both of those point-of-sale processors. And you can see just the stock price comparison there. Truist just cut the price target for Block to$80 today from$105.

16:05And those are just a few names. I went through a lot. I threw in some fintechs and buy now, pay later. But the major overhangs right now is you've got competition in the space and the fact that maybe a lot of this debt is already priced into stock, hence why you saw that uphill climb. So where's there more room to go? So the student loan forgiveness program was a headwind to this section, to this sector, the fintech arm of it. And now it's now we're getting a headwind because we're worried about delinquencies. So it was supposed to be running off the table. And that was a positive for this group.

16:38And now we're already moved on to the negative, which is the delinquencies, which is. Yeah, we move quickly. We move quickly in the market world. But in terms of delinquencies, I do think it's a concern. We've talked about this and we're already seeing it rise. Bank of America put out a note today talking about 30 day debt for auto loans and credit cards. And we're many Americans are unfortunately falling behind. So we have to factor that in, even though we're spending more. Well, the debt service ratio for the consumer is at its highest in 17 years now. And this doesn't help. So I think this is kind of the burden that these companies face.

17:11I also think the demand for new products and the pent up demand that was having me buy, you know, 16 things. I won't say what things, by the way. We talked about a few before we came on. I think that's part of it. So far, it gets back to the conversation we were having last last block on Goldman and Green Sky. I mean, what is it worth? I think the biggest issue is not so far is fine. I think it's not even about that. It's about what are you willing to pay for this company? and what's the multiple on a lot of these high multiple fintech companies. And that's part of what I think is even going on with Goldman.

17:45I want to loop Karen back in here because she sort of brought this up earlier with the student loan payment program potentially changing or ending, meaning we have to resume these payments here pretty soon. Karen, what do you make of the space with the buy now, pay later? Are these fintech names that may have a ripple effect, any of them investable for you or tradable for you here? No, not really. I mean, I think, you know, I kind of agree with Tim here. They've had a really nice run up off of a low base, so good for them there. But I just think that, I don't know, anything financially related, if you want to have any credit exposure, which some of them do, some of them don't, but I really just want to be in the big banks.

18:23I know Guy will disagree with me, but that's where I think the safest, best risk reward is in the whole financial services space. All right, Christina, thank you for joining us. Thank you. Well, coming up, this crypto trade is having its best week since March. The traders tackle whether investors should take profits. And throughout June, CNBC is celebrating Pride Month. Here is the chief people officer of Equinox. Being gay is not a liability. It's the creativity, the resilience, the empathy that you bring to the table that is so valued in any team, any workplace. Don't settle for anything less.

18:58pick people to work with and places to work at. Not that they will just tolerate you, but celebrate for who you are and what you bring to the table.

19:16Welcome back to Fast Money. It's time for our chart of the week. It's Bitcoin surging 17 % for its best week since March. Prices breaking out well above 30 ,000 to touch levels not seen since early last June. Bitcoin now on pace for its best first half since 2019, when prices surged more than 200 % to start the year. So is it safe to say that the crypto winter has thawed out? Tim, what do you think? Well, one of the things that I think was hypothesized is crypto is going to rally the minute we know the Fed is done. And at least Bitcoin will. I'll talk about Bitcoin and possibly Ethereum here and leave all the others for all the hodlers out there.

19:55I just, you know, some of this is a dynamic of where we are in the interest rate cycle. what this move is absolutely about the filing of a Bitcoin ETF and the fact that the sense was that this was going to happen. I think there's a lot of people also that the day that that was announced by Blackstone, excuse me, by BlackRock, and then those others following suit, some of that news was already even kind of out there. So that to me is what's going on. We talked about earlier in the week where the discount of the Bitcoin trust was to the underlying and how that's closed and how we haven't seen that.

20:25The key to me is also maybe what you do with an Ethereum, which has underperformed Bitcoin during this last, say, three week run by almost 15 percent. I look at Ethereum relative to Bitcoin and I look at that ratio and it's now trading at a level that I think it's a buy. Guy, I know you've got some wisdom to share with us about Bitcoin. Listen, I don't know if it's winter. So, I mean, I can't speak to the Bitcoin seasons, but what I will tell you is I'm surprised how well it's traded in the wake of a hawkish Fed. But I think if you want to trade stocks on the back of it, the winner of this as a trade could be Robinhood.

20:58I said it a couple of days ago. I'll say it again. There was an analyst piece out the other day saying how Robinhood was effectively eating Coinbase's lunch. I probably agree. Better capitalized company. I think you trade Robinhood in this Bitcoin spring. Karen, last comment to you. I agree with the thought. I mean, if you think all the incredibly bad things that have happened and it's back to half of its all time high, which was crazy. That's not so terrible. All right. Well, it's time for the final trade already. So let's go around the horn. Guy, start us off. A lot of hullabaloo about the home builders.

21:34You know what? It's justified. Pulte Homes, Courtney. Karen. Yes, we don't talk much about it, maybe because it's traded so terribly. CVS Health, CVS Corp. They've done some great acquisitions. I think the stock is ridiculously cheap. Mr. Seymour. Starbucks giving ground, especially on the union headlines, I'd be a buyer below 95. And Steve. Apple, the grind is real, the grind is higher. Apple. Well, that does it for Fast Money, but don't go anywhere. Options Action is coming up next right here.

22:10All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC, NBC Universal, their 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. Such opinions are based upon information the Fast Money participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such.