Stocks Close Off Lows As Iran War Continues… And A Consumer Spending Warning 3/3/26

21:21Melissa Lee:Yeah, well, you can ask him the same question because he's had the same view. And I'll say it again. It's not necessarily. Listen, I get the tailwind that the price of oil creates. But this evaluation story, this balance sheet story, this is companies just operating better over the last five or ten years. and the market's finally starting to reward them because they haven't had to over the last few years because they've been focused on other things in the AI and semi-world. Now people looking for valuation say, wait a second, who are these energy stocks? I mean, pull up a chart of Valero, Marathon Petroleum, all these things that we've talked about ad nauseum.

21:53Melissa Lee:They're still not ridiculously expensive despite the moves they've had. Yeah, I would just say that this has been going into this. It was about rotation. It was about defensive positioning. It was about re-rating in a sector that I think was very unloved. So the integrators have outperformed not by a little, but by a lot. So up 25 percent going into this. I think you're actually careful about chasing. I know we talk about this potential spike in, you know, anything could lead to a$10 move in the price of oil. Generally, oil companies don't rally when there's perceived to be some kind of a stress in the oil price.

22:26We want consistency. That's actually the reason why they were outperforming going into this. So I'm not chasing energy. I was overweight energy coming into this. I think people need to be careful about that. All right. We've got a lot more to do, guys. Great conversation to open up the show. European stuff. We've got to talk a lot more about Europe because they plunged after the Iran war threatens markets more than the United States. Look at that Europe stock 600 chart. It's uglier than ours. The main indexes in England, France, Germany, all falling about 3 % today. See if they rebound a little bit tomorrow.

22:57The euro down against the U.S. dollar this week. Tim, OK, we just talked a little bit about it, but more from a stock perspective. How bad could things get for European investors? Let's not forget that the things that had Europe rallying are still very much intact. And I think because of war, more so. Like what? I'm going to tell you, deficit spending, actually spending on defense specifically, industrial growth. The problem is that Europe really was starting to see real GDP growth for the first time in a long time because of lower energy prices. So Germany was worse off. Remember after Russia, Ukraine, I mean, Germany was a mess.

23:35Germany most reliant. So I do worry about this. I also worry about the banking sector because the banking sector was getting hit on all sides. European money center banks I've talked about in the show for a long time, really had outperformed, really loved them. I would be cautious here. There's no question. Dan said it. Steve said it. Europe relative to U.S. right now. You don't reverse that trade. And again, this was an allocation. That's a trade. I would just say, though, based upon the headlines we had today, the prolonged dynamic of where this could go, it favors U.S. allocations over European.

24:06But if you reverse field here on European allocations you made, I think you're making a short-term error. Yeah. And if people out there think they're upset here that our electric bills have gone up, try being in Europe. They've probably doubled in about three years. All right. Well, Well, Tim talking about banks, perfect segue. Coming up here on Fast Money, we'll talk about another hit for private credit as Blackstone's flagship fund sees record redemptions. The company's president came on CNBC today. We'll hear what he had to say about the turmoil. Plus, some big movers outside of oil and energy in today's market action.

24:41We'll show you some stocks bucking the trend and a spending warning from a former retail CEO how Bill Simon thinks the Iran oil shock could impact you, the consumer. Fast Money, back in two.

25:18operations, and get finances in order. Let us help you reimagine your enterprise. EY Parthenon, solutions that work in practice, not just on paper.

25:29Melissa Lee:OnDeck is built to back small businesses like yours. Whether you're buying equipment, expanding your team, or bridging cash flow gaps, OnDeck's loans up to$400 ,000 make it happen fast. Rated A-plus by the Better Business Bureau, and earning thousands of five-star Trustpilot reviews, OnDeck delivers funding you can count on. Apply in minutes at ondeck.com. Depending on certain loan attributes, your business loan may be issued by OnDeck or Celtic Bank. OnDeck does not lend in North Dakota all loans and amounts subject to lender approval. I'm Cindy Lauper with fellow Cosentix advocate, Chef Michelle Bernstein.

26:02We'll share our experiences with plaque psoriasis, with psoriatic arthritis, and Dr. Panico will talk about the possible connection. Cosentix Secukinumab is prescribed for adults with moderate to severe plaque psoriasis 300 milligram dose and adults with active psoriatic arthritis 150 milligram dose. Don't use if you're allergic to Cosentix. Before starting, get checked for tuberculosis. An increased risk of infections and lowered ability to fight them may occur, like tuberculosis or other serious bacterial, fungal, or viral infections. Some are fatal. Tell your doctor if you have an infection or symptoms like fevers, sweats, chills, muscle aches, or cough, had a vaccine or planned to, or if inflammatory bowel disease symptoms develop or worsen.

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26:57All right, welcome back to Fast Money. Blackstone down as much as 9 % today, saying in a filing that it saw a surge in withdrawals from its flagship private credit fund. Let's get more details in this big story with Leslie Pickard. Leslie. Hey, Brian, as you mentioned, Blackstone closing well off the lows of the session, but still down nearly 4 % today. This is yet again another private credit redemption story adding to the turmoil in the industry. Most of the stocks in the alt manager complex losing about a third of their value year to date. Blackstone announcing that in the first quarter, redemptions for their semi-liquid fund known as B-Cred were nearly 8 % of the outstanding shares, up from 4.5 % in the fourth quarter.

27:40The firm said it did fulfill all of these requests. Be Fred with about$82 billion in assets is an important sentiment check on how retail investors are reacting to just the slew of negative headlines in the space. Blackstone President John Gray said earlier with David Faber that there's a difference between what is in the media versus the health of their portfolio. I think the key is there's this disjointed environment now between what's happening on the ground with underlying portfolios and what's happening in the news cycle. And ultimately, these things will resolve themselves. It doesn't mean there won't be individual credits that get in trouble.

28:18It's not investment grade credit. It doesn't mean that there's not disruption, which you guys have been talking about. But the underlying low leverage loans here and the performance of those loans, that's what's going to stand the test of time. Now, Brian, while both Gray and the executives of Blue Owl have largely blamed negative press for redemptions and outflows, Apollo CEO Mark Rowan saying at a conference today that he's expecting a shakeout for private credit, noting he doesn't think it will be short term. Brian. Leslie Picker. Leslie, big story there. Leslie, thank you very much. Tim, your take.

28:53The problem with liquidity is you don't know you don't have it until you want it. you can't take profits on something you can't sell, all of these nice, tidy little phrases. The reality is that private credit has been a one-way. What we've been hearing over the last week, we've been talking about on the show, a credit cycle. So many investors don't even know what it is. The dynamic around what's going on here, at least in private credit, as driven by concerns around AI and software investments, is that at this point, investors would rather ask questions later. A lot of these funds, there's a liquidity mismatch.

29:25It's interesting, too. I think it was Goldman's private credit, one of the chiefs of one of their funds, pointed out that actually gates on a fund are a feature, not necessarily a bug. What's a gate? So a gate on a fund basically limits the amount of money that can be taken out on redemptions. And the argument by the fund manager or by the investment manager will be we are protecting you from ourselves. We are protecting all investors based upon the volatility of fund flows. Now, that sounds great. And it's true. Look, as a guy that ran a hedge fund for a long time, we probably had some gates on there that we never used.

30:00But the reality is that you don't want a disorderly liquidation of a portfolio that doesn't have real liquidity. And that's where you get to. It doesn't make them bad guys. It just is the dynamics with liquidity right now that is front and center and probably doesn't let up for a while. So they're all not the same. You have to see where the leverage is and you have to see which one is more diversified on their leverage bets. But if you look at Apollo, you look at KKR, it's a little bit more of a diversified bench. When you look at the charts, they look similar, not the same, but a lot of them are going back two to three years on support here.

30:32But that could easily crash through that. So if you're looking to take a stab at them, use a stop and keep them on a short leash.

30:39Melissa Lee:Yeah, it's interesting to go back to 2022. It's the last time we were talking about Blackstone and Gates was B-Reit. Remember that? And, you know, it's interesting. I'll bet you John Gray was saying a lot of the same stuff. And that was November of 2022. to, and it was one of those things, like Tim just said, a lot of us really weren't paying attention. It wasn't in our vernacular, some of this sort of stuff. That was, like, close to the bottom. I mean, the stock had been cut in half. If you look at it right now, you know, we had a huge ramp in this thing over the last year, year and a half or so.

31:03Melissa Lee:In the last six months, it's just, again, nearly been cut in half. So, you know, the sentiment probably overrides a little bit of what's going on under the surface. And I think when you hear someone like John Gray say that to David Faber, who is actually very schooled in this sort of situation here, you're probably getting a situation where David's like, yeah, you're probably right. Is this at all in any way systemic to a contagion risk to the broader economy, the broader market? It has not been yet. Well, we've been talking about this. I mean, the banks, a lot of the big money centers, right, that lend to these companies, they started to act very poorly a couple of weeks ago.

31:37Melissa Lee:So investors are kind of putting some sort of, you know, dots. They're connecting some dots a little bit, but doesn't mean that there's some crisis brewing. It's a hard story, right, Guy? Because Because to all your points, it's kind of individual. Each fund is different. Each credit is different. A couple of things if you want to look. HYG had a day to the downside today. It bounced. But that was something I think you absolutely have to watch. Number one. Junk bond ETF. Number two, American Express had a day last week, seemingly out of nowhere, on top of a sell-off that it's been having over the last month or so.

32:06Melissa Lee:Single one-day move, probably based on credit. And then you mentioned Blackstone real quick. I mean, this stock, the DancePoint, has been cut in half. The all-time high in Blackstone, I think, was in November of 2024. I think there are 23 analysts who cover the stock. The average price target is 168. It's trading 110. So the analysts are behind the curve here. There's clearly something. I don't want to say systemic because that's not fair. Something's going on. Are the analysts ahead of the curve? Will the stock go back to 168? Or are they going to cut their price targets? Credit is always ahead of equities.

32:33Okay? Credit is so much smarter than equities and will lead equities. I don't know. I'm not telling you where it's going. I'm telling you that you follow credit. All right. Not everything fell today. Coming up, we're going to show you some names that actually rose as the markets fell. Talk more about the real impact of crude surge on your wallet. You're watching Fast Money. We're at the NASDAQ. We're back right after this.

33:01Melissa Lee:OnDeck is built to back small businesses like yours. Whether you're buying equipment, expanding your team, or bridging cash flow gaps, OnDeck's loans up to$400 ,000 make it happen fast. Rated A-plus by the Better Business Bureau. and earning thousands of five-star trust pilot reviews, OnDeck delivers funding you can count on. Apply in minutes at OnDeck.com. Depending on certain loan attributes, your business loan may be issued by OnDeck or Celtic Bank. OnDeck does not lend in North Dakota all loans and amounts subject to lender approval. I'm Cindy Lauper with fellow Cosentix advocate, Chef Michelle Bernstein.

33:35We'll share our experiences with plaque psoriasis, with psoriatic arthritis, and Dr. Panico will talk about the possible connection. Cosentix Secukinumab is prescribed for adults with moderate to severe plaque psoriasis 300 milligram dose and adults with active psoriatic arthritis 150 milligram dose. Don't use if you're allergic to Cosentix. Before starting, get checked for tuberculosis. An increased risk of infections and lowered ability to fight them may occur, like tuberculosis or other serious bacterial, fungal or viral infections. Some are fatal. Tell your doctor if you have an infection or symptoms like fevers, sweats, chills, muscle aches or cough.

34:10had a vaccine or planned to, or if inflammatory bowel disease symptoms develop or worsen, serious allergic reactions and severe eczema-like skin reactions may occur. Learn more at 1-844-COSENTICS or cosentics.com slash Cindy. The GLP-1 pill you've been waiting for is now on row. Yep, it's finally here with the same clinically proven ingredient, now in a pill and now on row. It's the first FDA-approved GLP-1 pill for weight loss. At the lowest price available, that's one daily GLP-1 pill for big results. Now on Rowe. Go to Rowe.co slash listen to see if you qualify. Rx only. Go to Rowe.co slash safety for serious side effects and boxed warning associated with GLP-1s.

34:59All right, markets down across the board. If you're trying to find an upside, the markets closed well off their lows of the session. The Dow ended down 400 points. S &P and NASDAQ dropping about 1%, but all the major indexes down more than 2 % in the early trade. The Dow down 1 ,200 at one point. Best Buy jumping more than 7%. They posted better than expected earnings. Swiss sneaker maker on holdings falling after giving disappointing guidance despite record sales and improved profitability for the year. And here's Dan Nathan's favorite story. Pinterest jumping more than 9 % today. Elliott Management investing a billion dollars in Pinterest.

35:39Companies saying it plans to use the money to buy back stock. Now, after hours right now, some things that are on the move. CrowdStrike, Raw Stores, Box, all topping earnings, all topping revenue estimates. All right, coming up here on Fast Money, Target hitting the mark today, even as the markets fell. Talking about retail and the consumer with Bill Simon. Back.

36:10Welcome back. Walmart's former U.S. CEO warning a prolonged oil shock tied to Iran would be a bigger threat to consumer spending than tariffs. Bill Simon, who is now on the Darden Restaurants board, joining us now to talk about that and more. I'm assuming it's the gasoline price impact, Bill. But go a little deeper into that. how sensitive is the overall, and I know this varies by income, but the overall American consumer to swings in the price of gas? Yeah, thanks for having me. You try to correlate all the variables that drive actual retail spending. Fuel prices, gas prices are the biggest, highest correlation, negative correlation to consumer spending.

36:55Everything that we touch, Everything that we buy, that we eat, there's a fuel component to it, either in transportation or in the production of it. So that drives prices up for sure. And then, you know, every time we drive down the road or we walk out of our homes, we see these big signs where the gas prices tell us how expensive things are. It has a really, really chilling effect on consumer behavior as well. So, you know, prolonged high fuel prices, oil prices will drive gas prices high. And, you know, you'll start to see the consumer who's been buoyant through quite a bit start to fade.

37:36All right. Welcome back to Fast Money. Bill Simon, former U.S. CEO of Walmart, still with us. Bill, we took a little bit of a technical hit there. So glad to have you back with us. Thanks for sticking around. Let's go back into that. So if prices for oil and gasoline kind of stay where they are now, if they don't move markedly higher, Will the consumer, and you saw Best Buy earnings today, things like that, Target, new 52-week high, will that be okay? Is this level okay for the consumer? Yeah, I think we're fine right where we are. You can see the consumer is still spending, sales are up, and retailers have mitigated virtually all the tariffs.

38:12You see no tariff warning. You see gross profit rising. You see sales rising and no real tariff warning. So I think if we stay where we are, everything's okay. A prolonged shutdown in the Gulf over there could have a really chilling effect. And I know you're on the board of Darden, so you're not going to talk about Darden. There were specific results, Olive Garden and everything else, Seasons 52, I get it. But overall, I would imagine that food, discretionary to a point, right, you can eat in or you can eat out, that dining out would be something, maybe the first thing that consumers will cut if they have to?

38:52Yeah, I mean, no, not necessarily. You know, right now, everything, like I said, is really stable, other than some beef prices, which are high. The high end of the consumer is still very buoyant. The high end in difficult times trades down to the middle. The middle trades down to the bottom. It's the bottom that gets pushed out. Yeah, and then, you know, it's interesting you bring up the price of beef because a lot of people, I'm sure they realize they go to the store, like what the heck has happened to the price of hamburger and steak because prices are up. Is that just as inflationary as the spike, recent spike in certain places that we've seen in the price of gasoline?

39:29I mean, beef charts are literally to a point where you look at it and you go, honestly, I'm moving down. I'm going to chicken. Yeah, people make the tradeoff from the cut of the beef to other proteins. But, you know, it's not really inflation. It's driven by the herd. It's a price increase. And there's a difference between inflation, which is systemic and, you know, a causal effect. This is just herd driven at the time. And as the herd catches up, beef prices will come back down. It's a commodity driven issue. Hey, Bill, it's Tim. Thanks for joining us. By the way, I think Brian already moved to chicken.

40:04We have a case here where I almost would ask the question to you, is it ever going to be as good as it was yesterday? So in other words, we had gas prices very low, energy prices very low. We've had consumption growth. And back to your former employer, which, you know, I'm sure you laid a lot of the foundation for a multiple on this stock. That is extraordinary. Should Walmart be trading at this level? I don't want you to be a trader, but I'm just saying, were the conditions to get that stock to trading where it is as good as they're going to be for a long time? Walmart's had a heck of a run. And, you know, they've had a lot of tailwinds, right?

40:39They get a huge share of every government transfer payment. Like a third of Snap or something like that goes to Walmart. The immigration issue, whatever your political position on it is, has been strong for Walmart because those consumers come in and they're Walmart shoppers. So Walmart's had a tailwind. Gas prices have been reasonably low. They've taken that opportunity and that tailwind to really transform the country into, frankly, something that I didn't think was possible. They're getting valued more as a digital company by the brick and mortar company. And if they can hold on to that through this transition, yeah, I think they're I think they got a still a long runway.

41:26Bill, I know you're not obviously the U.S. CEO any longer, but go into that a little bit more because people I don't think fully on market understands it. But talk to our viewers about how strong Walmart's digital ad business is. It's a multibillion dollar business. And in some ways, it's really starting to look like, I don't want to say a mini Amazon, but Amazon-ish. Yeah, no, they've really been able to transform it. If you think about it, all the negatives that people have about those big box stores don't exist online, right? You just get Walmart. And Walmart's pricing is phenomenal. It always has been.

42:04And their ability to take kind of a pause in delivering operating income growth, which they did for several years, and invest in the development of a digital platform has really, really positioned them well. And I think that lasts. I think that sticks. Bill Simon, former U.S. CEO of Walmart and board member of Darden, really appreciate you sticking around, Bill. Thank you very much. Steve Grasso, you a buyer of Walmart at basically 128? Yeah, but, you know, the screen that was up there at Target outperforming Walmart, I think that's the biggest shot. In, like, the last couple weeks. Right, but it is what it is, right?

42:39Year-to-date, it's up 23 % against 15%. Groceries coming down. Eggs are down 80 % on a wholesale level, 30 % on the retail level. We have the immediate expensing, 100 % immediate expensing. We have the tax cuts made permanent. I think the consumer's okay, and I think you could still be buying. That's a fair – listen, I've got to apologize. I've got to apologize. I didn't say we were moving down. I didn't want to run afoul of the chicken farmers out there. We love all of our proteins equally. I bet you do. Do we, though?

43:11Melissa Lee:You're giving me the luck. Target, you know, Tim has been talking about it. Target's up probably. It's the T in Timbo. I mean, it's the T in Timbo. It's the T in Timbo. And it's up 50 % probably since the October lows. But I'll say this. If you go to a four-year chart when Target made its all-time high, I think it was the fall of 2021, that downtrend is intact. As a matter of fact, I think we made the third point of a downtrend today. All right. Good stuff there. Good retail conversation coming up after a truly volatile couple of days on Wall Street. Our traders are going to lay out how they are setting themselves up ahead of the bell tomorrow.

43:48The names, some of the levels they're watching. More Fast Money back in two.

43:59Welcome back. After today's volatile trade markets tried to erase more than 2 % of their losses. We wondered how the desk is looking to set up for tomorrow. But I will say, Tim, I would imagine we go to bed tonight. We have no idea what's going to happen overnight. So how do you set up for that? Well, and that's it. And I've field a bunch of calls from clients over the last couple of days. I'm not sure you're doing a whole lot here. And you're not supposed to be repositioning wildly right now with a lot of uncertainty. I think there were themes and trends in terms of rotation. I would just say, we've talked a lot about international tonight.

44:28I don't think that the dollar is going to 110. I do think it's actually probably at 90 before it's at 105. In other words, I actually think you're going to normalize back to where we were going with the dollar. I'm not saying it's going to 95 in the medium term. I'm saying, ultimately, I think global allocation is something investors have been doing, and I wouldn't put the brakes on in reverse. I'm clearly of the view, and I run an international ETF, so I have a view. I think when you look at the market, I'll look at it from a standpoint of technicals. Look at the last two days. Look at the high.

45:02If you want to get, if you are trading the market, if you are a trader that's trading the market, then look at the high, look at the low, and look at the percentages and retracements that you've seen there. And keep your positions on a short leash if you are trading around these big swings. Because as you said it, you don't know what you're waking up to and you don't want what the close is going to look like. So just be calm, be safe, you stops.

45:24Melissa Lee:Yeah. You know, if you're looking at tech, you're looking for opportunities, you're looking at software and just thinking, OK, maybe it's put in a little bit of a near term bottom. And you're trying to see I just saying something totally different than we wrote down by there. But I just want you to like better. I don't know. I can't ask them. Yeah. Well, I think those are interesting, too, Tim. But I would say it's like those traditional relationships where you expect most of tech to go up together. You see that divergence between software and semis. I think you can actually just play it with the cues.

45:49Melissa Lee:You know, you don't have to actually pick a name or that sort of thing. And you probably get a little bit of both on the way down. You kind of dollar cost. Well, you did say mini crisis brewing. But with a question mark, do you want to buy a little protection here? No, no. We hit that earlier. I mean, I think the sentiment is really, really bad. And sooner or later, you're going to get a big bounce. and it's going to cause people who've been laying into the short trade to kind of rethink that a little bit. As we mentioned at the top of the show, 28 has been sort of capitulation level in the VIX.

46:15Melissa Lee:We got there today. If the VIX starts to give it up tomorrow, that's going to be a huge tell. So I'm watching that. And the bond market, Tim talked about it earlier in the show, the sell-off in the bond market, albeit not all that robust, is something to watch because if the bond market continues to sell off, we've got a bit of a problem. All right, we've got a lot more to do. Actually, we don't. But we have the final trades, which is a lot. There's a lot in there. in just a short amount of time. Don't sell yourself short, guys. I believe in y 'all. And we're back right after this.

46:53All right, Tim, kick off the final trade. Brian, thanks for joining us. Tremendous insight into poultry substitution. Target, I think you have a case here where this investor day wasn't just they released numbers. You've got a decent outlook. They've got an ad business. Wildly cheap to peers, and a turnaround's coming. Oh, usually Melissa says the name. So Royal Caribbean. Steve, now I'm ready. Royal Caribbean, they have zero exposure to the Middle East, and they're 60 % hedged in fuel costs. Royal Caribbean.

47:19Melissa Lee:Daniel? Yes, sir. The IGV, the software, I think you can stick with it. Guy? I'm glad you didn't wing it. Augustus? Palo Alto Network. P-A-N-W. And by the way, I've got to correct you. I didn't substitute chicken. I went and substituted two chicken. Thanks for watching Fast Money. Mad Money starts right now.

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