Stocks Close Out The First Half At Record Highs… And China’s Declining Data 6/30/25

0:01Live in 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. Q2 in the books and what a quarter it has been. But with markets at record highs, can the gains keep coming in the second half of the year? We'll get your playbook for the third quarter and beyond. And Oracle Rising shares with the software company hitting another all-time high on the back of a massive cloud deal. One top analyst says the run may have come too far. We'll find out why. Plus, Home Depot wins a building product bidding war. Robinhood hits a record on the Riviera.

0:30And the WNBA is coming to three new cities. The details on the expansion and what it means for the league. I'm Melissa Lee, coming to you live from Studio B at the NASDAQ. On the desk tonight, Tim Seymour, Karen Feinerman, Dan Nathan, and Lori Calvacina, head of U.S. Equity Strategy at RBC. Welcome, Lori. We start off with a record end to a very volatile quarter on Wall Street after dropping almost 15 % in the first five trading days of Q2. The NASDAQ closed today at its second record in a row. It ended the quarter with a nearly 18 % gain. That is its best since 2020. The S &P also setting a record today.

1:03It is up over 10 % in Q2, while the Dow closed just 2 % off its best ever levels. Maybe not surprisingly, tech and communication services were the biggest winners for the quarter. Coinbase is a single best performer, more than doubling since April. Energy, health care, real estate, the only sectors in the red. So as we close the books in the first half and look ahead to Q3, how should investors be positioned? And Karen, we are just welcome back, first of all. Thank you. We are discussing how extraordinary this quarter has been. Mind boggling. I mean, so many just, you know, for obviously the April low was in itself extraordinary.

1:38So to bounce from that, but just, you know, the NVIDIA, for example, from 108 to 157 in the quarter. Yes, they had good earnings, but that can't be all of what happened there. So, I mean, the sentiment change, Meta up almost, you know, 130 percent, JP Morgan up almost 20 percent. It's really kind of insane. And if you think about what's happened, a lot of the stuff you could imagine this was going to happen, where there was going to be a big bill, right? There were going to look to extend the tax plan. And you thought, OK, they'll come to some deal on tariffs. But yet the intra-quarter swings are just absolutely extraordinary.

2:19So I don't know what to do about next quarter. I hope we don't have anything like this. The idea that we ended this quarter with a VIX of 16 and change is really kind of amazing. Yeah. I mean, does this tell you that the markets rally is able to withstand all of this? And you hear we still are, Tim. So does that give you more confidence in where we are? Well, sentiment is very different than fundamentals. Lowry's got some views on this, I know. And it's also very different than where the economy is. And I think we all have reason to be a little bit cautious on the second half. I will say this about the first half is that this was one of the worst first halves for the dollar.

2:54on record. It's certainly one of the first worst first half for the dollar since the 70s. And you talk about just that 2Q, it was almost a 7 percent move lower in Dixie or the dollar index. So some of that is very good for markets, frankly. Some of that is good for risk in the short to medium term. In the long term, it's raised a lot of structural questions about about trade, the economy, deficits, the confidence in the United States of America. But for the stock market, it's actually been positive. So I think about the second quarter and I think about the reemergence of that obvious trade, which is that the biggest tech companies in the world have reasserted themselves.

3:29And if you're a market player, this is exactly what you wanted to see. I mean, we closed the 2Q, and I've talked about how close we've been, and we haven't gotten there just yet. But the Nasdaq's really on the precipice of making a new relative high against the S &P. That's the most important thing for me. I think the semiconductor trade, it was dented, but not, you know, not knocked off its track. And I think that's another big part of this. Yeah, I'd just say the real risk right now is if you're looking at really the S &P, the NASDAQ, they've just made these brief new highs here. When I say brief, they've just gotten above the prior highs for just a very little bit.

4:02The fact that we closed the end of the quarter, the end of the first half, right there at all-time highs is pretty amazing. To Karen's point, you have a VIX below 17. You have crude oil, which basically is down on the quarter, which I don't think any of us would have expected, given some of the geopolitical headlines that we've had, that for some, you know, for all intents and purposes, maybe are not resolved there. The dollar, to Tim's point, great for multinationals, right? And it really does help that big tech trade. The one thing I would just say is, you know, if you think that tech's going to continue to kind of drag this market higher, well, you better be careful just a little bit because it might not take much for the dollar to move a little bit or the crude to move back higher.

4:36I just look at energy, materials, home builders, retail, and I'm missing one. Oh, pharma. These groups can't get out of their own way. So it's not that broad of a rally. And you could say, well, industrials are doing really well and there's some other areas. But if you just think about what the Fed just said to us a couple weeks ago, they took down their growth target for the U.S. for the back half of the year. Right. Interest rates. You think about where your yields are. I can't remember another time where market participants and even the Fed were so confused about why the next move might be lower.

5:06Just think about that. OK, because there's a scenario where they might be able to do it. Inflation gets towards their target. You know, growth kind of solidifies here. We don't have this stagflationary sort of environment. But then the flip side of it is if you want to focus more on where they're concerned, labor and growth, that sort of thing. Well, then is that old playbook where you have to lower interest rates or there's something geopolitical? So that's the one thing I look at low levels of like the VIX. And then I think about the dollar trade, why it's being sold, and then the lack of clarity, why they might lower Fed funds and what that does to the 10 years.

5:36So to me, I think that makes it a little bit more challenging in the back half of the year. So, look, it's been an incredible quarter. I mean, if you go back to April 8th, we had a classic growth scare bottom, right? We went down 18.9%. And if you look at the rebound since then, it's really mimicked in some ways, though it's been accelerated, the rebounds off the lows of things like 2010, 2011, 15, 16, 18, and even the lows that were made in 2022 and 2023. Now, if you look at the rebounds nine months out on all of those, it averages about 26%. And that would get you to 62.70. If I, you know, when I was talking about this stat like three weeks ago, 6270 seemed far off.

6:15And so what we were telling people was the market feels kind of fairly priced, a little bit over at skis in terms of fundamentals. But if you looked at it from a sentiment perspective, there was room to run. I'm going to have to amend the second half of that sentence right now, right, because we're starting to even look a bit full from a sentiment perspective. I think on the AI discussion, the tech discussion, one thing I noticed a couple weeks back, I was marketing outside of the U.S. I was hearing investors, you know, expressing some concerns about owning the U.S., but at the same time, they're like, look, with tech and A.I., productivity is better in the U.S.

6:47Anywhere else you're going to get. So that really, you know, kind of sucked international investors back into the U.S. That's helped as well. But I think we've had just sort of a classic sentiment rebound, and it's starting to get a little bit full in here. This is based on institutional investors that you talk to, hedge fund investors that you talk to. There has, I read, Jeffries had an interesting report about the composition of the volume of trading these days. 20 % is retail. So sentiment of retail may be very different or different from long-only institutions. And I feel like the sentiment of retail investors is more positive, more optimistic about where we are.

7:25Institutional investors are paid to be cynical and to be more active on some level. And that's what they do. and that was wrong. I mean, you know, I think a lot of institutions, it's not all of them. And I would just say if you were in the long, short hedge fund community outside of some global macro guys that were actually ahead of that curve, they really repositioned their books ahead of April. They were very quick to reverse field. And I think there's probably going to be some funds that when we look at 2Qs had a phenomenal year. But, you know, what's interesting, whether we talked to Caleb Silver, where we had these conversations, where we tap into the vein of what's going on with the retail investor, it's clear.

8:00It's by the dip and it's long and strong and it's been working and it's been working a long time. I think the things for this market, though, that are that are important is is the tech. And I realize you haven't had a lot of broadening, but I think the move in banks is very important. And I think it's it's very important both for the psychology of investors that for a long time have been waiting for banks. I mean, we'll talk more about this dynamic, but I think banks are very impressive, too. So we've been tracking on retail investors the ETF flows and the passive flows generally as tracked by EPFR.

8:31And you definitely saw a pop there, especially in May. It does look like that money is starting to slow. It hasn't turned negative yet, but it does look like maybe, you know, it's lost a little bit of its mojo. We're also watching the AAII survey, which is just shooting up straight like a rocket. And that has given you the tell on every 5 % to 10 % drawdown we've seen since 2022. We are not seeing it yet, but this is, you know, the chart every Thursday. I'm harassing my team to update as soon as the data hits because it's just shooting straight up. What's a level you're looking at that would be like, all right, this is really to super top?

9:03Euphoria. You actually don't have to get to plus two standard deviations. That's where you want to sell the market over the next 12 months. If you get to plus one standard deviation since 2022, that's been calling these 5 % to 10 % drawdowns. It gives you a little bit of a lead. It's not coincident. And we're sort of rapidly moving back. We're between that minus one standard deviation mark, but getting closer to the average. And basically, bulls and bears are getting close to parity again. So if there's a 10 percent drawdown standard, you know, garden variety, is it in tech? What feels the brunt of that 10 percent drawdown?

9:36Some of these these retail names, though, have made all the superlatives we talked about at the open look adorable relative to some of these moves. Right. If you look at things like Core Weave and Circle and, you know, Palantir up 50 percent. Oh, goodness. Right. If April 2nd didn't scare the hell out of them, what will? I mean, that was a pretty shocking event. I don't know. I feel like that retail would be there. Buy the dip has worked for so long that I think it will continue, even if it shouldn't. Would you say that the bull market is totally into it? Was it ever knocked off? Did we ever lose?

10:14I mean, is this a bull market trend that we have to say has been a bull market trend since the CPI of October of 22? I think we had a near-death experience, right? I don't think we quite crossed the Rubicon, and we did get a policy response. That's also how we basically put in the bottom back in 2018. So it was a scary event, but I do think generally, you know, we saw sentiment go down to two standard deviations below the long-term average, so the sentiment perhaps got a bit worse than the fundamentals, and that powered this snapback. But we came close. Near-death experience is how I'd phrase it.

10:46Let's get to Apple. You're rising 2 percent after Bloomberg reported the company is considering a partnership with Anthropic or OpenAI to power Siri, marking a reversal of its plan to develop AI in-house. CNBC's Steve Kovacs got all the details here. Steve. Yeah, Mel, and also, by the way, Apple was on its way to close below a$3 trillion market cap, and this boosted it right back over that mark. So up 2%, as you see. And this this is an interesting report because, yes, Apple is still, according to this report, working on its own artificial intelligence LLM. But it's kind of giving itself an insurance policy here saying, you know, talking to these companies that if they can't get their own product off the ground, they'll instead partner with Anthropic.

11:25That seems to be the leading one right now or OpenAI. And I'll just note, like, this is not a unique thing, by the way, because Perplexity is a really good example of companies that have built a layer on top of OpenAI Ananthropic and had a really successful product. And we know just what this has been doing to the stock all year. Forget about tariffs for a second. It's this perception that Apple is behind in artificial intelligence. It made all these promises that it couldn't deliver or execute on. And now it has this new target of 2026 to get this out the door. And this is just more insurance towards making that happen.

11:59So we'll have to see what ends up happening if Apple can do it in-house. We know Apple likes to do everything in-house. We also know Apple doesn't like to make big acquisitions. Last week, we were talking so much about Apple making a big acquisition in artificial intelligence. And that just hasn't been their MO for so long now, with the exception of the Beats acquisition, of course. So you see Meta today going out there and making these big, splashy hires, announcing a new super intelligence group right here. And Apple kind of taking a different, less capital intensive approach to artificial intelligence, partnering either if they can't build it within and not acquiring as well, Mel.

12:36I mean, Apple doesn't do search in-house. Yeah, that's another part of it. So is this a knock to Alphabet? It could be. On the alphabet front, though, what we're really watching for, Mel, is that DOJ antitrust case where that relationship between Apple and Google, where Google pays at least$20 billion a year to Apple, about a fifth of all services revenue. If that relationship gets blown up, yes, Apple will either have to find a new search partner. Perplexity was mentioned by name by Apple as a potential partner there, or they have to build it in-house. This would also help with search at the same time.

13:12But we're also seeing this already kind of in action right now, Mel. When you do a search query on Siri, if you have the Apple intelligence system enabled on a newer device, it goes to ChatGPT and it searches the web that way, too. So it's kind of hard to tell which way this is going to go. But search is one big part of it. But the promise that they made was beyond search. It was this personal assistant uses all the data within your phone, within your apps and so forth to work on your behalf. So it's kind of a mixed bag between the two. All right, Steve, thanks. Steve Kovach. For more on the story, let's bring in D.A.

13:45Davidson, head of technology research, Gil Lauria. Gil, great to see you. Good to see you. You know, this is obviously a report we don't really know anything definitively. At the same time, if you're an Apple investor who is losing faith in Apple's, you know, AI ability, should this give you comfort that they are looking and plotting a plan B, so to speak? Absolutely. They need to have a better model in order to facilitate Siri. Clearly, the efforts to do that in-house have gotten them nowhere. The technology is available. The models work great. They work great in the apps. If you use the ChatGPT app, you can have a conversation there.

14:25and so there's no reason for Apple not to integrate this. They still own the consumer. They still own the relationship. They're still going to get paid for it and this way they don't have to invest those tens of billions of dollars to develop a model in what's an increasingly complex and competitive space. Let's not forget there's four American companies racing for the best AI models and another four Chinese companies racing to have the best AI model. Why would Apple want to jump into that race when they own the consumer and they can just pick and choose the best model at any given point to provide the better AI product.

15:03Let's say they form some sort of partnership and they have a Siri AI agent that's amazing. Is that going to power the super cycle that so many people were hoping for? Does that sort of reignite hopes for that? It has to be one element. Consumers are starting to notice the AI capabilities in the iPhone, the notifications, this email summary. I don't know if you've noticed, but you can actually start recording your phone calls and getting a transcript now if you have a newer iPhone. These capabilities do matter to consumers, but instead of the big bang that we are expecting a year ago from a worldwide developer conference of all these capabilities coming in at once, they're coming in gradually.

15:49Consumers are appreciating them and they can only be used on the newer phones. So we're not going to get a super cycle, but we may still get an upgrade cycle with iPhone 17, maybe next year. And that's all that drives Apple stock really is if we get an iPhone upgrade cycle at any point. So these capabilities will help. They're just coming in a lot more gradually than we originally anticipated. Hey, Gil, Tim. Yeah, I think it's, you know, Apple's AI capability to inoctuate, there was none. And I think this is I think this is great news. What's interesting to me, though, this is coming on a day when Apple loses a chance to dismiss an antitrust case.

16:27So in Apple of yesteryear, today's news is like it's just like it's obvious. It's Apple's consumer to own and you're going to pay us to be part of this and we're going to dominate and we're going to kick you out. Today's news combined with the dismissal really means not that, you know, it's a done deal, but it means antitrust is a much bigger issue for Apple. And status quo of Apple controlling the consumer might be in question. So your thoughts on that? That actually, I would say that Google is the loser here, right? Remember, we just talked about the parallel between using Google and Safari as the default.

17:00And now we're going to have maybe OpenAI in Siri as a default. And we mentioned that Google wasn't even in the running. The reason they're not in the running is because of these antitrust concerns. The antitrust concerns were about the partnership between Apple and Google. And because Google has dragged its feet and hasn't resolved this, Apple can't go to Google for Siri because that would extend that non-competitive relationship. So they're really the loser here. Apple, by working with other partners, can then go to regulators and say, see how we play nice? We have a lot of different partners.

17:40We pick and choose. We move around between them. We let the consumer pick. that'll appease regulators while Google is still stuck trying to fight regulators. I want to talk to you about Oracle, which is the original reason why we invited you to the show. In an AK, they revealed some pretty eye-popping numbers when it comes to their multi-cloud database revenue. It'll grow more than 100 percent, according to the CEO, Gil. Stiefel upgraded the stock, highest price target on the street now. I'm just wondering where you stand here in terms of how it's valued right now, given what seems like prospects, forecasts that are ratcheted higher?

18:18Yeah, so there is a lot to get excited here. Let's not forget Oracle for many years was stuck in mid-single-digit growth. It was really legacy technology, but they invested. They really doubled down on the hyperscaler business and the GPU rental business, and that is absolutely taking off. What you do have to keep in mind, though, is that almost 60 % of Oracle's business is declining, and it's declining with 50 % incremental margins, 5-0, while the hyperscaler business, the GP rental business is barely profitable. So you have the situation where they may accelerate revenue growth into the teens this year, but earnings growth is gonna stay single digits.

19:00So to pay 32, 33 times for that, when you can pay that for Microsoft, who by the way, owns the customer and is offloading some demand into Oracle, which is why Oracle is growing, you're much better off doing it with Microsoft, double-digit revenue growth, margin expansion, even higher earnings growth. Microsoft is a much better bet at this point than Oracle. Gil, great to speak with you. Thank you. Gil Loria of DA Davidson. He, self-would-you-rathered, Oracle or Microsoft. He picked Microsoft, Dan. Well, I think you also make the same argument for CoreWeave, too, right? So you have Microsoft's racing to build out their own data center business.

19:40NVIDIA is doing the same thing. So these guys are sopping up this XSET demand right now. The thing that I would really keep a close eye on with Oracle, like he just mentioned, that they're seeing really just single-digit growth on the EPS front. And the revenue base that is actually the good revenue, the stuff in the high margin, I mean, that's the stuff that CapEx is likely to have to increase dramatically over the next couple of years to kind of really capture that workload that they're supposedly gotten. I don't know from who. Is this the Stargate thing? Is this probably a big part of that?

20:08They didn't say, but some analysts said it could be federal, it has to be open AI, something like that. And listen, the whole landscape could change a lot between now and then. So if Oracle were to overbuild right now, I mean, they're like the number four, maybe five player in the cloud space right now. I thought Guild framed it perfectly. I mean, they're trading a very high margin business for a very low margin business. And if you notice that the headline today was 50 billion in cloud, you know, essentially top line. Didn't talk about the bottom line. And then they also fit something in there about essentially, you know, chain finance business that allows banks to, you know, more easily either evaluate credit, et cetera.

20:46It's a story that I think Oracle does a great job of getting the news flow out there. I mean, this this this valuation is very expensive here, but I'll say it again. The market loves to reward Oracle every single time. And today, after a huge move, had another huge move. Just to round back to the AI discussion, one thing that's been coming out in my conversations again with international investors has been we've gone through a sloppy phase in AI evolution. Investors are coming to terms with that and actually are starting to view it as something that elongates the cycle. So I think there's also been an evolution in the patience with this trade.

21:19Coming up, a C-suite shuffle for Boeing, the changes the airspace company is making at the top and what it'll mean for the stock in the second half of the year. Plus, Home Depot's distribution deal had a retailer beat out another potential buyer and how they are hoping to build up sales. Don't go anywhere. Fast Money is back in two.

21:41Welcome back to Fast Money. Some news out of Boeing in just the last hour. The aerospace giant announcing CFO Brian West will transition out of his role and be replaced by former Lockheed Martin CFO Jay Malavi. West has served as Boeing CFO for the last four years. He will remain with the company as an advisor to CEO Kelly Ortberg. And, of course, this marks a period of it's amazing for Boeing. If you think about what's happened since the Air India crash, the decline and then the full recovery, basically, of the shares. Yeah. And I think if you if you think about the outgoing CFO, I mean, this is a CFO that was very in touch with the capital markets process that Boeing's.

22:18In other words, he was behind it. He was talking with the street. He was the guy. And it was really been about I know it's been about the planes, but it's been about the balance sheet. And so I think this transition is totally natural. I mean, you absolutely changed out the entire management team. And you've also at Boeing at times had these folks that were on the board switching to CEOs chairs. I mean, the fact is that it's all still part of the same nucleus of people, but that you've brought somebody in that I think people have a lot of confidence and that this should have been expected. All right.

22:48There's a lot more fast funding to come. Here's what's coming up next. Hammering out the distributor details. How Home Depot beat out another buyer in their latest acquisition. And how they're hoping to corner the home renovation business. Plus, mainland manufacturing. The latest read on China's economy and how the country is positioned ahead of the key tariff deadline. All the details on the China trade coming up. You're watching Fast Money, live from the NASDAQ market side in Times Square. We're back right after this.