In short
Fast Money covers a late-day market rally after Trump said he reached a Greenland/NATO framework deal and called off Europe tariffs due Feb 1; discusses Fed-chair speculation; and pivots to stock-specific themes: software vs semis (pair trade), Netflix’s earnings reaction and Warner Bros overhang, homebuilders after pending-home-sales drop and a Wall Street single-family home-buying restriction, plus Target protests and quantum/Ozempic-related moves.
Guests (backgrounds)
Carter Braxton Worth (chart/pairs trader; previously called IGV sell, now argues for a software-vs-semis convergence trade). Tony Wong (T. Rowe Price Science and Technology Fund manager; top holdings include NVIDIA, Microsoft, Broadcom, Alphabet, Apple; nearly 25% annualized return in 2025). Tom Rogers (Versant Media senior advisor; long-time Netflix media analyst).
Key claims
Markets rallied on “no force”/tariff relief headlines despite unclear deal details. Software is structurally lagging semis since Oct; Worth argues for a convergence pair trade (long semis, short software/IGV) despite his view software can still fall. Wong says AI’s “agentic” adoption, not just valuation, drives 2026; prefers platforms over “features.” Rogers: Netflix’s core long-form story remains intact; Warner deal is an overhang; threats are short-form, free streaming, and AI-generated content lowering production costs.
Notable examples
IGV down for six straight sessions; Microsoft -2% and Oracle -3% while SMH +3%. Russell 2000 at record highs. Homebuilders (D.R. Horton, NVR, Toll Brothers, Lennar) rose after Trump restricted institutional single-family home buying. Netflix fell despite better-than-expected Q4; Squid Games and K-pop cited. Target dropped amid ICE protest spillover in Minneapolis. Quantum stocks pulled back after big runs; Dr. Reddy’s plans Ozempic generic in March. Fed-chair odds: Kevin Hassett reportedly removed; Rick Waller/Waller and Warsh discussed.
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Chapters
Tap a time to open that second in VOTrump's Deal with NATO
0:00 to 0:22
Discussion on President Trump's announcement regarding Greenland and tariffs.
“Mazda has been named Consumer Reports' safest new car brand.”
Trump's Deal with NATO
1:37 to 1:50
Discussion on President Trump's announcement regarding Greenland and tariffs.
“On the desk tonight, Steve Brasso, Karen Feinerman, Dan Nathan, and Guy Adami.”
Market Reaction to Trump's Announcement
1:50 to 2:19
Analysis of market movements following Trump's statements.
“Major averages higher across the board, the S &P, Dow, and Nasdaq, each gaining more than a percent.”
Eamon Javers Reports from Washington
2:19 to 2:36
Details from Eamon Javers about Trump's statements and market implications.
“It closed half a percent lower, a six straight session in the red.”
Credit Card Interest Rate Proposal
2:36 to 4:44
Discussion on Trump's criticism of credit card companies and proposed interest caps.
“Eamon Javers is in Washington with the details on that.”
Market Analysis and Predictions
4:44 to 6:05
Hosts analyze the implications of Trump's statements on the stock market.
“He said credit card companies have been asking him to back off of this proposal.”
Earnings Expectations and Market Trends
6:05 to 7:30
Discussion on earnings expectations for mega-cap tech stocks amid market volatility.
“I mean, seemingly there was a framework in place from 1951.”
Semiconductors vs. Software Stocks
7:30 to 10:00
Analyzing the performance disparities between semiconductors and software stocks.
“So I think the setup going into the MAG7 earnings is, I think, the flip side of what it was into banks.”
Carter Worth's Insights on Market Trends
10:00 to 13:20
Carter Worth discusses the current market trends and comparative charts.
“Russell 2000 having a lot of unprofitable, you know, crap, as some people might say.”
Outlook for Microsoft and Earnings Impact
13:20 to 14:01
Discussion on Microsoft’s upcoming earnings and market expectations.
“But regardless, independently, semi-stocks is going lower no matter what, even if not paired with the other side of this trade, correct?”
Show all 26 chapters
Market Analysis: Microsoft and Semiconductor Trends
14:01 to 21:30
Discussion about Microsoft earnings and the semiconductor market's performance and outlook.
“Carter Braxton Worth, would you agree with the...”
Home Builders and Market Dynamics
21:36 to 26:26
Analysis of homebuilder stocks in relation to new housing data and market conditions.
“Don't go anywhere fast when he's back in two.”
Home Builders and Market Dynamics
26:27 to 27:13
Analysis of homebuilder stocks in relation to new housing data and market conditions.
“A system error for computing stocks as the quantum leap gets tripped up.”
Market Reactions to Trump's Tariff News
28:27 to 29:24
Discussion on stock market movements following Trump's tariff announcements.
“Shares of Kraft Heinz dropping nearly 6 percent as Berkshire Hathaway prepares to exit its 28 percent stake in the company.”
Analysis of Quantum Stocks and Novo Nordisk
29:24 to 30:28
Insights on quantum stocks' performance and Novo Nordisk's market impact.
“Where are you at this point with the trade?”
Tease for Upcoming Fed Chair Discussion
30:28 to 30:42
Preview of the upcoming discussion on potential replacements for Jerome Powell.
“to be the next Fed chair, and the current odds for who could take the helm.”
Trump's Fed Chair Nomination Insights
30:42 to 32:09
Analysis of Trump's remarks on potential nominees for the next Fed chair.
“President Trump speaking to our Joe Karnan in Davos about who he could nominate to be the next Federal Reserve chairman.”
Wall Street's Reaction to Fed Chair Candidates
32:09 to 33:59
Discussion on Wall Street's preferences for Fed chair candidates and their implications.
“And I think where we are is the president is trying, I think, to balance both what he wants, what he thinks he's going to get when he makes that pick, and then some of the politicking that's going on around him.”
Supreme Court's Influence on Fed Governance
33:59 to 35:21
Exploration of how Supreme Court decisions may affect Federal Reserve governance.
“There was concern, you know, from Supreme Court Justice Roberts about the idea of, well, what if this was an inadvertent mistake?”
Netflix's Financial Outlook Post-Earnings
35:21 to 36:13
Examination of Netflix's financial performance and market position after recent earnings.
“What is your standpoint on who you want, and does that matter to your market outlook?”
Tom Rogers on Netflix's Content Strategy
36:13 to 39:54
Tom Rogers shares insights on Netflix's content strategy amidst market challenges.
“Tom Rogers joins us next to dig into the numbers when Fast Money returns.”
Market Predictions for Netflix Stock
39:54 to 42:06
Discussion on predictions for Netflix's stock performance and market strategies.
“Problem with Warner is it pulls them in the direction of legacy long form, legacy distribution like movie theaters, and away from focusing on those things that may be the bigger threat.”
Market Insights on Stock Valuation
42:06 to 43:09
Discussion on the future potential of a unique media property and stock trading levels.
“I wish I could have bought the stock at 85 bucks because it's going to be one of the most unique media properties that we've probably seen, you know, ever.”
Target's Political Challenges
43:09 to 43:58
Analysis of Target's ongoing political controversies affecting its stock performance.
“Another dent in the momentum the stock had seen since hitting more than five-year lows in November.”
CEO Positioning in Political Discussions
43:58 to 45:27
Exploration of how CEOs are navigating political statements and public perception.
“You know, we can have the conversation about that.”
Final Trades and Market Predictions
45:27 to 45:54
Final thoughts and stock picks from the hosts as the show approaches its end.
“I think you have to stay out of the commenting world.”
Transcript
Automatic transcript. May contain errors.0:02Mazda has been named Consumer Reports' safest new car brand. It starts with our approach. Every Mazda comes standard with proactive safety features. So you're more aware of what's around you, more focused on the road ahead, and ready before problems ever start. Mazda. More of what matters most to you. Go to mazdausa.com to learn more. Consumer Reports does not endorse or promote any product.
0:30Tim Seymour:At Edward Jones, we believe rich isn't about having life all figured out. It's opening yourself to all the possibilities. That's why your dedicated financial advisor provides long-term planning built around you, meeting you where you are, and helping you get closer to where you want to be. So no matter where you're starting from, you can move forward with confidence. The key to being rich is knowing what counts. Let's find your rich. Edward Jones, member SIPC. Live from the Nasdaq market site in the heart of New York City's Times Square, this is Fast Money. Here's what's on tap tonight. A late day pop.
1:08Tim Seymour:All the headlines from Joe Kernan's interview with the president that sent markets sharply higher this afternoon. What Trump had to say about Greenland, tariffs, the Fed and more. And the tech disconnect. Software stocks have been vastly underperforming semis over the last few months. But the chart master says that's about to change. He lays out his case. Plus, Netflix shares hitting their lowest levels in more than the year, why investors were not impressed with last night's earnings report and what it says about the state of the streaming space. I'm Melissa Lee. Come to you live from Studio B at the Nasdaq.
1:37Tim Seymour:On the desk tonight, Steve Brasso, Karen Feinerman, Dan Nathan, and Guy Adami. We start off with the late day bounce coming after President Trump said he reached a framework of a deal with NATO over control of Greenland and called off European tariffs that would have taken effect on February 1st. Major averages higher across the board, the S &P, Dow, and Nasdaq, each gaining more than a percent. All 11 S &P sectors ending the day in positive territory. And the small cap Russell 2000 close at records. And some more big moves in market bellwethers. The 10-year Treasury yield retreating below four and a quarter percent.
2:08Tim Seymour:The dollar index ticking higher. Gold settling up a percent and a half at fresh records. And chipmakers, as measured by the SMH, gaining three percent. Still, the rising tide did not lift all boats. IGV, the iShare software ETF. It closed half a percent lower, a six straight session in the red. Notably, Microsoft fell over two percent, while Oracle was off by more than three. President Trump joined CNBC's Joe Kernan in Davos just moments after announcing his Greenland framework deal. Eamon Javers is in Washington with the details on that. Eamon.
2:39Melissa Lee:Yeah, Melissa, the president made that announcement on social media, and then just moments later, he talked to our Joe Kernan and explained his thinking as to why he was pulling back on that tariff threat. Here's what he said. We took that off because it looks like we have pretty much a concept of a deal. A deal of ownership, a deal? Well, it's a little bit complex, but we'll explain it down the line. But the secretary general of NATO and I and some other people were talking, and it's the kind of a deal that I wanted to be able to make. So the president there saying it's a little bit complex. You heard Joe pushing for some more clarity, some information about what's in this deal.
3:19Melissa Lee:The president said it's complex. He said he looks like we have pretty much the concept of a deal, Melissa, but not offering any specifics about what's in the deal. He did say to Joe Kernan that the deal will last forever. That's the president's word on on the deal with NATO over Greenland. Not clear what the specifics are. We'll hopefully get some more from the White House overnight as they travel back to the U.S. at some point. The other thing I think that's worth flagging here, Melissa, is the comments that the president made about credit card companies. He's really sharply critical of credit card companies, suggesting that they're making too much money, suggesting that they've come to him and asked him to back off of his idea of capping credit card interest rates.
4:00Melissa Lee:He said he's not going to do that. Here's what he said. Credit card companies are getting 28 percent, 30 percent. These people don't know they're paying that. Right. And I said one year cap of 10 percent. And I love it. I know it's sort of like it sounds like the mayor of New York. maybe came up with that. But people are paying. They can't make it. They can't pay 28. So, Melissa, the president there sort of acknowledging the political U-shape here. He's endorsed a proposal here on credit cards that's also endorsed by Elizabeth Warren up on Capitol Hill. He said it sounds like it comes from Zoran Mandami, the Democratic Socialist mayor of New York.
4:42Melissa Lee:Still, he said people can't make it. He said credit card companies have been asking him to back off of this proposal. and he said he's not going to back off because people need relief. So this is a president, you know, in full populist mode here on this proposal, even though he understands that he's going to get criticism as a conservative for doing something that is siding with the left.
5:04Tim Seymour:Eamon, thank you. Eamon Javers in Washington Forest. Credit card stuff is very interesting, especially with Visa reporting after the bell tomorrow. But back to today's market and the reaction here, Eamon said it is a concept of a deal that he says will last forever. It is too complex to explain right now. We have not heard from Denmark. We have not heard who exactly agreed to this framework of the deal. And yet the markets rallied, Guy.
5:28Melissa Lee:Because that's what the markets do. I mean, you know, the markets are triggered to move on back of statements, on the back of headlines, and that's exactly what happened. Karen said this yesterday, and it resonated with me. She said the fact that the VIX really didn't move all that much on a pretty significant down day yesterday was maybe indication that things weren't as bad as they appeared. And obviously today you had that sort of refresh. But the gold market is telling a bit of a different story here. If this was as important as announcements, it may prove to be. I would have thought you would have seen a considerable sell off in the gold market.
5:58Melissa Lee:And you saw it initially, but it came back. And some of the banks sort of sold off a little bit as well. So as always, the devil's in the details. I mean, seemingly there was a framework in place from 1951. I don't know how you can do that complex a deal in the course of was probably eight or nine hours from the time that he got on the plane last night till sometime this morning or afternoon. Yeah, and I wouldn't discount yesterday's price action too much, the fact that we kind of got a bit of it back. If you think of some of the weakness yesterday, it was the prior leadership that we've had. We've been talking about that prior leadership, some of the mega cap tech, and they just can't get out of their own way.
6:31Melissa Lee:You know, most of those names, other than Google, are down at least 10 % from their recent highs. And Microsoft's down 20%. Meta, about the same. Palantir, a darling of the last few years, is down about 20%. So, you know, you think about the banks cooling out the way they have. And, you know, we just talked about one of the reasons for the money centers. You look at large tech, you look at some of these other areas, you know, that have been leaders for the last few years. I think you have to pay attention. The other thing is Carter Braxton Wirth, our good friend, he had a note out the other day.
6:59Melissa Lee:We're charting showing a long term S &P chart. It just broke below a long term uptrend for the first time in a very long time. So those are sorts of technical indicators. I think you want to keep a close eye on.
7:11Tim Seymour:Yeah, we didn't get back everything at a dance point. We saw underperformance still in the biggest parts of the market. We saw that broadening continue. Yes. Well, one other thing, though, just about the market rally, I sort of thought there were two parts of it. The we're not going to use force. Yes. That was important. And then the second step of we have a framework for a deal. So I think the setup going into the MAG7 earnings is, I think, the flip side of what it was into banks. Banks rally huge. Here we have Microsoft, for example, I mean, just trading awfully. So I feel like the bar is just getting lower and lower for there to be some upside surprises from the Mag7.
7:49They really haven't behaved very well. And, you know, we've seen, you know, just the IWM reaching a new all-time high. We haven't seen the IWM anything close to this kind of performance relative to the S &P in a really long time. And the bank thing, I did that, Wade, certainly on the end. And I don't know. I don't I think the banks will have to just agree to it as opposed to going through some legislative process that probably couldn't happen fast enough. Now, maybe he's just doing the art of the deal where he's like, I'm going to lean on you just for a year, just till Election Day, just till then.
8:22And then if we win, maybe I'll see if we keep it in place or not. I don't know. That's the strategy here, though. Right. So. And that might be offsets. He might offer offsets. The art of the deal might be, I'm going to take this away, but I'm going to give you this. And you don't see that coming. And that's what always throws the market off. So that was sort of interesting for the banks, not in a good way. I think it has somewhat less impact for a Visa and a MasterCard that don't have the credit risk. Oh, I agree. That don't make the look right.
8:52Tim Seymour:But the decline in those stocks have been almost just as bad as some of the banks. If you think credit's going to be cut off and you won't be purchasing, there won't be that. As many transactions. As many transactions. There's got to be a flow through through the banks that are offering the visa and the MasterCard. So it hurts them in a peripheral way. So I do I do agree with Karen. I think saying you're not going to use force. That was the main reason why the markets rally saying there's no tariffs. That was the reason why the markets rally. And when you look at the IWM outperformance, this is the longest we've had of IWM outperformance.
9:24If you look at the valuation trades at 16 times. S &P trades at 23. S &P without MAG7 trades exactly the same as the Russell trades. So people are looking during this earnings season as what has run already? Where's the bang for my buck? Where can I invest in a cheaper valuation? And they're finding a lot of stocks that haven't run, and that's what they're looking for. So as long as they could find something to replace what they've been with, the market can stay on track.
9:52Tim Seymour:Yeah, Mike made an excellent point, as he always does, regarding the Russell 2000 versus the small cap 600 in terms of the small cap 600 being the profitable small caps. Russell 2000 having a lot of unprofitable, you know, crap, as some people might say. Oh, my gosh. Is that somebody's acronym? It should be, right? Wouldn't that be great? It wasn't what I started with. Not too late. So there is that divergence there. But, you know, small caps still have done SML. Yeah.
10:19Melissa Lee:And listen, part of it, I think, is the hope for a lot of the Russell, the IWM, is composed of a lot of these small mid-cap banks, which I think a lot of people are under the hope that you can see a lot of eminent space. And some of the, not restructuring, but basically the rollback of a lot of regulation is going to help. We'll see, but I think that's been predicated. The move is predicated on that, I believe.
10:41Tim Seymour:Yeah, software, though, really sick. Sick today, even in an uptake.
10:45Melissa Lee:Yeah, it's really hard that IGV is a difficultly, difficultly, difficult constructed ETF. Poorly constructed.
10:52Tim Seymour:Poorly constructed. Very good guy.
10:54Melissa Lee:Thank you. So a poorly constructed, let's just recut it right there. It's a poorly constructed ETF. You think of the largest components is Microsoft, it's Oracle, it's Palantir. And then you get into the crap, Mel. You get into Oracle, you get into Adobe, that sort of stuff. And so if you think about the underperformance of those biggest names and then a whole host of those SaaS names, I'm hard pressed to see how it gets much better. But to your point, Karen, about maybe this weakness setting up for some outperformance after better than expected quarters, I think you've got to pay attention for if you do get a bounce in those sorts of things and they can't hold them, then we're in real trouble in mega cap tech win.
11:29Tim Seymour:All right. Well, we mentioned the underperformance in software in general. They've also been underperforming the semis by far since October. The chart master says things are about to change, at least in the short term. Carter Worth joins us now. Carter, not too long ago you said sell IGV. Now it's the reverse. Why the change? Yeah, well, remember, each trade is on its own. We don't like IGV. We think IGV is going lower. It's the same judgment from Jan 5 to be underweight tech in this area in particular. Stick with it. Each trade stands on its own. However, the relationship between IGV and socks and semis now is very extreme.
12:02One is so loved. Look at MU up again today and the others being abandoned. So let's look at some comparative charts. This is a one-year comparative chart. It's the principle. The parts compose the whole. The whole comprises the parts. That middle line, orange line, is the tech sector. That's the whole. Two of the parts, one going one way, semis up the other going the other way, software down. So look at that spread, and let's go to the next time frame. Look at the two-year. This is the same thing, just three lines. It's a comparative chart, right? On this time frame, semis are up 73%, and software is up 14%.
12:38The middle is the whole, the tech sector itself. Third chart, three years. Let's do it again. And so what do we have here? It's the same circumstance, but getting even more extenuated. The semis of 170 % doubling the performance of software with the middle being the whole. So what if we hold the whole as a constant, final chart? What this does is exposes the two parts for what they are, right? And you have a spread now, the whole being the flat line, one going so far to one extent, the other going so far the other way that we think for traders, this is a pair trade to put on here and now, independent of the fact that software, in our opinion, is going lower.
13:19Tim Seymour:Software is going lower. But regardless, independently, semi-stocks is going lower no matter what, even if not paired with the other side of this trade, correct? No, this is a pair trade. Simple as that, right? So semi, the chart woman would say, why fade this very strongly? Look, market's weak in MU. Pair trade is an independent, separate idea. One can be long one currency versus another, and that very same currency short that currency that you're long against another one, meaning these two instruments, Coke and Pepsi, McDonald's and Burger King, Hertz and Avis, these two securities, these two instruments, we think are too far.
13:58We're playing for convergence.
14:00Tim Seymour:Okay. Carter, thanks. Carter Braxton Worth, would you agree with the... I like what he's doing there,
14:07Melissa Lee:and I will say, so Mr. Softee, which is an unfortunate nickname for anything, but they report on January 28th. And, you know, the setup for Microsoft is probably as good as it's been in quite some time, just in terms of the sell-off we've seen since October. Now, there's still room to the downside. There's a huge gap in the chart that remains to be filled. But if you see this continued sell-off in Microsoft into earnings, that's when Carter's pair trade, I think, kicks in.
14:31Tim Seymour:Yeah, and the other side of the trade-off, you know, the semiconductors in terms of the extenuated performance there, you've got to think of, I mean, look at Intel just this year. Look at any of the memory stocks. Intel is up 160 or so percent from when the government took a stake in Intel. That one, they're going to be the recipient of mega deals from the government. Micron, HBM. Dan was talking about it on your other show. You're working overtime now. So when you think about they're sold out until late 2026 or early 2027. And the margins on the HBM chips are 70 % gross margins. And they're 80 % DRAM weighted, which the HBM is the subsector of that.
15:12That you could still be a buyer of.
15:13Tim Seymour:All right. Our next guest runs the T. Rowe Price Science and Technology Fund, whose top five holdings are NVIDIA, Microsoft, Broadcom, Alphabet, and Apple, all but Google. The Google parent are down so far this year. The fund had a nearly 25 % annualized return in 2025. Tony Wong runs a fund, joins us now. Tony, great to have you with us. Great, thanks. There seems to be a shakeout in how people are thinking about the AI trade. Do you think that this persists into 2026? We mentioned that some of your top holdings are underperformers. Are you worried that that underperformance will continue? So I think that what really matters in AI is the continuation of adoption and specifically agentic AI.
15:55So I think that's what I'm really excited about in terms of having the ability to have all this digital labor that can automate a lot of things. And so that will ultimately benefit a lot of these skilled companies. You know, some of those are a lot that we own right now. But in terms of like, I think there could be new leaders, earlier stage companies that adopt technologies faster. And especially in the semi-supply chain, you're seeing different areas where they're the bottleneck and are going to capture, I think, value as AI increases its adoption.
16:28Melissa Lee:Hey, Tony, so NVIDIA, this has obviously been the eye of the whatever you want to call it as far as the AI trade has been concerned going back like three and a half years now. When you think about the valuation here, trading about 24 times this calendar, actually fiscal year, expected to be 50 % growth in earnings and sales with margins expected to tick up a few percent. Why do you think the stock can't get out of its own way right here? Yeah, well, I think that, you know, it has it's been trading in a in a pretty tight range, but the earnings have actually grown a lot. So in terms of valuation, it is actually a relatively inexpensive year.
17:05You know, I think there's a lot of concern about, like, can they hold the gross margins that they have? Like, you know, how to think about, you know, custom ASIC competition. And then also, I think just that the market is right now rotating capital to relative earnings. within semis, like you're seeing other areas that are becoming more of the bottleneck where you're seeing like more growth. And so I think that the market is just recalibrating, but there's a point where the stock is gonna get really interesting from valuation. And that's where I think you've seen times when it's taken off as a result.
17:40So I still like the company long-term and they continue to deliver excellent performance, especially in the new generation that's coming up. Tony, it's Karen. Thanks so much for being on. Do you think 2026 will be the year where we get some more clarity on return on invested capital? Because last year, there was hope that, OK, it'll happen. And then Meta, for example, some concern. Yeah, definitely. So I think that return on capital won't be evenly distributed. But I think you're seeing broadly, you know, clock code is pretty amazing when you look at what they can do. I mean, English is kind of the new coding language.
18:16And so I think that is going to really change how people think about work, think about building applications, productivity. And so I think it's going to uncap labor. And then even if you look at the usage of Chachapiti for everyday use, it's really raising the bar on intelligence and democratizing technology in an amazing way. So to me, that's what's really exciting. And you see GDP actually upticking. And I think a lot of that is due to AI productivity.
Read the full transcript
18:44Tim Seymour:So the declines in software they're seeing around this AI, this narrative that AI will replace a clawed code, things like that will replace a lot of what software companies do or what they sell. Is that valid? We just showed a graphic showing that your portfolio is 25 percent software names. How do you think about the value and where to be in software? I think it's increasingly more important that you are the ultimate platform for a genetic AI. And so I like to tilt towards companies that are a true platform versus not just a feature. Because I think if you're a feature, it's super easy for you to be disrupted by the platform, existing platform, or by new incumbents that can build software super easily.
19:26I think the biggest change in terms of generative AI and like chat media and these coding agents is that it's super easy. The cost of developing software has gone down tremendously. And so I think you have to be really entrenched. You have to be in the enterprise. You have to be a trusted source. And I think those companies can still do well, but there's going to be a lot of disruption, I think, in the space as a result of LLMs.
19:48Tim Seymour:All right. Tony, great to speak with you. Thank you. Thanks. Tony Wong of T. Rowe Price Science and Tech Fund.
19:54Melissa Lee:Apple on the 29th is, to me, is going to be fascinating to hear what they have to say. It bounced today, but it came off late in the day. So, obviously, since it's all-time high, it hasn't traded particularly well. You wonder if their margin is going to get squeezed on the back of all the things we talked about with Micron and SanDisk and all the suppliers that they have. This is a really important quarter, I think, for Apple. Obviously, the setup for Apple is probably similar to what you just said about Microsoft.
20:18Tim Seymour:Yeah, and are they going to unveil anything new in terms of AI, right, and Siri, a revamp of some sort? Can't do any worse. I mean, Siri is the worst product. It really is extraordinary. We were just talking yesterday.
20:30Melissa Lee:Bloomberg's out with a story, though, today that they will be doing it. I think that's the expectation. They're going to be using Gemini. And to me, I think that's really interesting for the entire ecosystem. Here's a company that's going to leverage their nearly 2 billion installed base to put a product out there. And people keep talking about open AI that's growing pretty fast. Maybe they're going to get to a billion monthly actives in the not-so-distant future. But this is a company expected to do$20 billion in sales, maybe 40 this coming year. So, you know, Apple will be a sleeper play. We've been talking about it since WWDC in 2024 when they launched Apple Intelligence.
21:02Melissa Lee:There's no there there. This second half of the year, this is the time, I think, for Apple to really outperform. Yeah, I agree. And they're going to be rewarded. To everything that Dan just said, they're going to be rewarded for the lack of AI spend. And that's going to be a bullish win coming at them. Everyone else has spent a huge amount of money in CapEx, projected to spend a huge amount to follow. And at this point, Apple can only go up from here with that install base.
21:26Tim Seymour:Coming up, President Trump weighing in on the next Fed chair. what he told our own Joe Kernan about his choice to take the wheel at the central bank ahead. But first, builders getting a bump today. Why the stock moves have our traders scratching their heads next. Don't go anywhere fast when he's back in two.
21:49This is Fast Money with Melissa Lee right here on CNBC.
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23:24Tim Seymour:Welcome back to Fast Money. New housing data released this morning showing pending home sales fell 9 % in December from the prior month, even as mortgage rates fell. But home builder stocks rose today. This after President Trump signed an order restricting Wall Street firms from buying single family homes. De 'er Horton, NVR, Toll Brothers, and Lennar all ending the day in the green. He did make that speech at the World Economic Forum in Davos. He didn't mention targeting homebuilders as well. And so that was also good news because that was always looked at as the speech where he would detail some of the more efforts behind restricting institutional investing in homebuilders.
23:56Tim Seymour:So here we are with a rally. Yeah, I think because existing home sales are so terrible that new home sales are the only thing in town right now. And they could still buy down your mortgage. They could still offer incentives. They could still cut pricing. They said that homebuilders are cutting prices by some of them. 40 percent of homebuilders are still cutting prices. So I think until mortgage rates come down, they're not going to have the competition with existing home sales. So it still makes them the only game in town where you could still buy these as, you know, maybe moving forward for the next six months.
24:29Tim Seymour:Yeah. All of the factors that benefit home builders also benefits the name like Home Depot and Lowe's, where you are. Those really did nicely. I think maybe even more optimistic than I am not sure how this underlying will play out. We know that that was a huge business in the pandemic, right? Interest rates were zero-ish. And if you were a Blackstone or whomever, you could borrow it near zero-ish. So the game has changed now. So I'm not sure. Directionally, I totally get it. But I'm not sure day-to-day prices, were they a giant buyer now? Was that happening now? I don't think so. I don't think so either.
25:11Maybe it's smaller. I don't know. So I'm wondering. I think the market's not moving, right? It's locked for all of the existing home sales are locked right now. Fifty percent of people have a mortgage rate below four percent, 25 percent between four and six and 25 above six percent. So the mortgage rate has to drop to at least five, five and a half to get people off the fence to actually lift a leg and say, OK, I'm going to sell my home, try to buy something else. That's my opinion.
25:38Tim Seymour:Karen, you have an excellent point, though, too, in terms of the institutional buyers that you can't you cannot buy homes. But can you sell in mass? Can you sell a huge tranche of homes? Maybe not to a single buyer because that's no longer allowed, but put them all on the market all at once. And maybe that's the chicken that they play with President Trump and the administration.
25:55Melissa Lee:I think the point, though, that the crosshairs were not on the back of the home builders, the Pulte's tolls. I think that's one of the reasons. But you look at these names, the four that we talk about, they all topped out in the fall of 2024. We're now in July, January of 26. So they've been a vast underperformer. Yes, they have bounced. However, I'm not in the camp that interest rates are going to move in their direction. Today, notwithstanding, yields are still stubbornly high here.
26:20Tim Seymour:And with JGB yields where they are, are they going to come down? Big question. There's a lot more Fast Money to come. Here's what's coming up next. A system error for computing stocks as the quantum leap gets tripped up. The names seeing the largest losses and where the trades head from here. Plus, the all-cash offer dragging on Netflix shares. analysts seen the streamer's new bid for Warner Brothers as a headwind. What it means for the stock and the state of the streaming wars. You're watching Fast Money, live from the NASDAQ market side in Times Square. We're back right after this.
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28:26Tim Seymour:Welcome back to Fast Money Stocks, rallying late in the day after President Trump called off additional tariffs on Europe, saying a deal framework has been reached over Greenland, the Dow jumping nearly 600 points, and as that climbing about 1.2 percent, and the S &P also up more than 1 percent, notching its best stay since late November. Shares of Kraft Heinz dropping nearly 6 percent as Berkshire Hathaway prepares to exit its 28 percent stake in the company. The staple stock down nearly 75 percent since Warren Buffett helped orchestrate the 2015 merger that created the company. And another big surge in that gas price is a commodity jumping another 25 percent after yesterday's 26 percent climb as freezing temperatures lead to a spike in heating demand.
29:06Tim Seymour:Quantum stocks in the red today. Rigetti, INQ, D-Wave all dropping as a group cools off after big run-ups over the past year. And Novo Nordisk falling more than 2 percent. Indian drug maker Dr. Reddy's Labs announcing plans to launch a generic version of Ozempic this March when the drug's patent expires. there. Even with today's pullback, Novo shares are up nearly 17 percent this year. I've got to go to you on quantum. Where are you at this point with the trade? Yeah, so I have a couple of different quantum stocks that I own. I own inflection. That's a that's a SPAC. It's CCCCX. And then I own IonQ.
29:38That's part of my enigma. I know you remember that one. Of course. If you if you look at the quantum names, it was risk off everything leading into Davos with President Trump. Risk off trade. They took them off the off the balance sheets. I think they all come back. This is going to be what AI was three years ago. We all thought that there was no revenue streams there. This is going to turn around and turn profitable a lot quicker than most people think.
30:02Tim Seymour:This novo decline seems odd. I mean, it's not like the patent expiration is a surprise in any way. Yeah, I guess also there was some data that maybe some of the decrease in the injectables was bigger, a reasonable amount than the oral. But I feel like the oral is so new that we've got to see, and I think the uptake will be very quick. Coming up, Powell's replacement, what the president had to say about who could replace Jerome Powell to be the next Fed chair, and the current odds for who could take the helm. More on that when Fast Money returns. Missed a moment of Fast? Catch us anytime on the go.
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30:47Tim Seymour:Welcome back to Fast Money. President Trump speaking to our Joe Karnan in Davos about who he could nominate to be the next Federal Reserve chairman. The president is suggesting one-time frontrunner Kevin Hassett may be out of the running. Take a listen. It's fantastic. I like actually keeping him where he is to one another, too. I don't want to listen. He's so good on television. It seems to be a great time to give us more. He's so good on television. Are we down to two now? Are we down to—I heard Rick Reeder had a strong— I'd say we're down to three, but we're down to two, and I probably can tell you we're down to maybe one.
31:19Tim Seymour:President Trump also reiterating Scott Besson's desire to stay in his current position as Treasury Secretary. For more on how all this could shake out, let's read in CBC senior economics reporter Steve Leisman. I don't know, one, two, then it goes to four, now it's down to one. I mean, I don't know where we stand, Steve. Where do we stand? We stand waiting for the president to make a decision, I think. I'm trying to figure out how we've advanced the ball here. Joe made a galleon effort to get a name. I'm not sure he got that name. I'm looking at the odds here. We have Warshit51. Reader's up a little bit today at 29%.
31:57Waller down at 11. So those are the three. Hassett is not among the even have any odds at all. Oh, there he is, down at 6%. He's not on my chart here. But he's down at 6 % now. And I think where we are is the president is trying, I think, to balance both what he wants, what he thinks he's going to get when he makes that pick, and then some of the politicking that's going on around him. You know, when Warsh came up to be the frontrunner, well, a whole bunch of criticism came his way. Maybe he's too hawkish for what the president wants. Maybe the reader would be a better choice, according to some people I'm talking to, on Wall Street, who thinks he has more of an open mind, whereas Warsh is seen as more, say, doctrinaire or even dogmatic about reducing the balance sheet.
32:48Tim Seymour:All right, Steve. Thank you. Steve Leisman. Who does Wall Street want?
32:53Melissa Lee:I don't think they want Kevin Warsh, but I think he'd be an inspired pick for the reasons that Steve just said. You're saying the administration or Wall Street? I don't think Wall Street would be happy with Kevin Warsh because I think Kevin's not going to bend to the whims of the white. That's just my thoughts. So I think the bond market might enjoy that because the independence of the Fed won't be challenged. However, I don't think Wall Street would be as enthusiastic about Kevin Warsh in my opinion. How about the dark horse reader? I think you were going to go this way.
33:20Tim Seymour:I don't know if he's a dark horse anymore. I mean, he's still sub 10 percent. I didn't look. 29. Oh, it's 29 now. Yeah, I think that that one, everyone else you look at, to Guy's point, would have to be changing their ideology somewhat. I think Rick Reader is a market participant. He wants lower rates. And I think it's in his DNA to want lower rates. He doesn't have to be convinced of it. You know, Steve's still around. Oh. Yeah. I thought we could buy the guest. I thought we could buy him. No, but I mean, I'm going to ask him what's going on with Lisa Cook, because maybe this is all in flux depending on the composition of the Fed.
33:53Tim Seymour:And part of that is what the Supreme Court is going to say about Lisa Cook. Yeah, I think the takeaway from Lisa Cook today is that she's going to remain in her position that the Supreme Court, especially including the conservative justice majority, majorities, is very reluctant to give the president the ability to fire any Fed governor without really clear cause. There was concern, you know, from Supreme Court Justice Roberts about the idea of, well, what if this was an inadvertent mistake? There was concern about whether or not she was given due process and should be given due process. A lot of questions, a lot of skepticism to the Solicitor General on the government's case.
34:42To the Cook side, more of the questions were like, help us solve this problem and do this in the narrowest possible way. Remember, the Supreme Court wants to give the president independence to basically fire people who are doing executive branch jobs, but doesn't want to undermine the independence of the Fed. It's clear they're mindful of that. And I think the market can be at least becalmed for now over that issue.
35:09Tim Seymour:All right. Steve, thank you. This time for real.
35:12Melissa Lee:Historic that we brought him back. Not historic.
35:15Tim Seymour:I mean, it happened. It just happened. The boss brought him back. We didn't bring it back, just for the record. What is your standpoint on who you want, and does that matter to your market outlook? No, it doesn't. I mean, I actually think the market might like Kevin Warsh. We've seen days where the Fed independence seems to be under threat, and the market trades off. But I get what you're saying. There's the bond market, and there's the stock market, and those don't necessarily move the same way. But I think Rick Reader also would be great. I think it doesn't matter that much. You can move the front end of the curve.
35:49I don't know that you can move the back. And if inflation doesn't come down, they're going to be a little bit hamstrung.
35:54Melissa Lee:Yeah, the stock market's been doing just fine with Fed Chair Powell there and being very deliberate, being very data dependent. So I think the idea that you'd have someone like Kevin Warsh come in, I think that would be kind of staying the course there.
36:04Tim Seymour:Coming up, shares of Netflix hitting a milestone in not a good way. While the reaction to last night's earnings was so negative, we're one longtime media exec sees shares going now. Tom Rogers joins us next to dig into the numbers when Fast Money returns.
36:22Tim Seymour:Welcome back to Fast Money. Netflix streaming lower for a second day in a row, despite reporting better than expected fourth quarter results. Our next guest says if it weren't for the Warner Brothers bid, the stock would be higher. CNBC contributor Tom Rogers joins us now. He's a senior advisor at our parent company, Versant Media. Tom, great to see you. Great to see you, Melissa. So WBD, it's all WBD's fault. But would you want Netflix to own WBD in the end? Look, I think Netflix wins when it comes to long form entertainment, whether it does the Warner deal or not. The story is fully intact, as is often the case with Netflix earnings.
37:00Market overreacts. Strong revenue growth, margin expansion. There was some analyst disappointment with the extent of the margin expansion, but there are 30 percent margins. Disney, the number two player out there. Netflix has seven times the EBITDA of Disney streaming at this point. And more importantly, they're continuing to grow margins. I've pointed to that. I think there's a clear path in the next few years to 40 % margins. And you're beginning to get into the kind of territory of cable program networks in the heyday when everybody pointed to that as the best media model known to man. So I think the core story is still very much intact.
37:44But, of course, the Warner deal is an overhang.
37:46Melissa Lee:All right, I'm going to blow a little smoke, Tom, which is my wants to do. You were a bull in Netflix forever until June of last year. They reported earnings. You came on this show and you said there were a couple of things in the earnings release that you didn't like and you thought the stock could act in kind. Fifty dollars later, here we are in the mid 80s. So is it enough off the top to say, you know what, it looks interesting again to a Tom Rogers? Well, what bothered me most then was engagement, and it had trailed off some. They came back this quarter. The good thing about that is they had a strong slate, which shows that the strength of their content budget, their program spending does pay off.
38:27And when they put a strong slate together, engagement moves. And you can't take anything away from the fact they had the number one TV series, original TV series of streaming of the year with Squid Games. And they had the number one original movies with K-pop. So that was the thing that most bothered me. They've recovered some. I think what is a threat here. So I'm still a bull, but I am a tempered bull still. And that is the things I don't think the market is that focused on. As I said, they're going to win long-term engagement, long-form programming engagement, one way or the other, deal or no deal.
39:04But the threats that they face are short-form engagement, short-form television is growing more rapidly, that user-generated AI is coming on board, fast channels, free streaming services are growing really nicely. And maybe the biggest threat, professionally generated AI content, which can take what are today huge$100 million and bigger movies and maybe reduce their cost in the next three or four years down to$10 million. That really works against the hugest competitive advantage that Netflix has, which is an enormous content budget. If you can begin to make great looking stuff at a fraction of the cost, that's going to be a competitive threat that I think they have to worry about.
39:54Problem with Warner is it pulls them in the direction of legacy long form, legacy distribution like movie theaters, and away from focusing on those things that may be the bigger threat. Hey, Tom, it's Karen. Thanks for coming on. So to your point about content creation costs going down, clearly as a giant content creator like they are, you would think they would be the beneficiary of that as well. Do you just think the competition being able to do, you know, create great product overwhelms the benefit that they would have and their ability to create a lot more content for a lot less money? Yeah, that's true.
40:30But it democratizes the ability to create great content and takes it well beyond those who have these enormous program budgets. And I think that that is a bigger competitive threat than I think it is a benefit for them. Yes, absolutely. Having said that, I think it's one of the key reasons that regulators ought to look at this. And if Netflix is the winning bidder here, approve them. Not only today do they have only 9 % of television share and HBO Max adds all of 1.4 % to that. But these other brewing issues from user-generated content to professional AI-generated content are things that I think are going to create a much more competitive environment for them over time.
41:21The near term and intermediate term, they win long-form entertainment, and that's where the game is.
41:27Tim Seymour:Tom, great to see you. Thank you. Thank you very much. Tom Rogers, senior advisor to our parent company, Versant Media. As always, Tom makes a very good point in terms of Netflix spending big time money in an area where it doesn't need to it doesn't face as much competitive threat. Right. Short form. YouTube specifically is a huge threat. And that's not what they're spending the money on.
41:50Melissa Lee:Right. And again, I just think they're going to be two very different platforms. And I think you could think about it from an attention standpoint. I mean, I think that's what you're kind of getting at. But at the end of the day, if they are able to combine what they already have, you know, I just think it's going to be lights out. It's going to be like, you know, five years from now, you're going to be like, holy, you know, whatever. I wish I could have bought the stock at 85 bucks because it's going to be one of the most unique media properties that we've probably seen, you know, ever.
42:18Tim Seymour:Agree? I agree with what Dan said. I don't think they need to do this deal because that's why the stock is under pressure. It changes buy versus create. If you want to get greedy in the stock, look back to November 2024 levels. $10 lower from here. If not, dabble at these levels right now because this is where it should bounce from technically. I did dabble a little. You did? At 84 today. Usually, you know, it was down like$4 or so. Didn't trade that well. But, you know, it's getting mid-20s multiple. And, you know, as Rich was saying, Rich Greenfield, if they don't do Warner, the stock will pop.
42:53And maybe if they do, they might. A win-win.
42:56Tim Seymour:Coming up, Target back in focus as anti-ice protesters in Minnesota spill into the retailer's hometown store. How the company is once again mixed up in the political divide and the impact it's having on the stock. More Fast Money in two.
43:13Tim Seymour:Welcome back to Fast Money. Target tumbling today. Another dent in the momentum the stock had seen since hitting more than five-year lows in November. The company finding itself in the political spotlight once again as widespread protests against ICE in its home state of Minnesota spilled into one of its Minneapolis stores. Protesters demanding the company stop allowing federal agents to use its parking lots and bathrooms. CNBC reached out to Target. The company says it has no specific comment or statement at this time. They made this similar no comment to other news outlets like The Wall Street Journal as well as The New York Times.
43:43Tim Seymour:And maybe that is it's sort of like in a no win situation here. before it was in the mix, making statements that people did not like. It pissed them off, excuse my language. And now they're saying no comment, and it's doing the same.
43:56Melissa Lee:They're in the crosshairs yet again for whatever. You know, we can have the conversation about that. It's not about that. It's about the company at large and the missteps they've taken for the last four years. And this is a company that topped out in the summer of 2021. I want to say north of$260. And look at where we are now. And that downtrend that we've been in for the last five years has not gone away. You have seen bounces of this magnitude at least seven or eight times over that time frame. Each one has been an opportunity to sell. You didn't used to be that as a CEO of a company that you had to make any kind of statement or any kind of political thing.
44:30And Steve and I were talking about this before the show. I don't know when that changed. I do remember the Colin Kaepernick Nike thing. Yes, I feel like that's when it's going to change. That was a watershed moment where you had to say something. I actually have, you know, feel bad for CEOs. They're damned if they do, they're damned if they don't, and they're damned if, you know, no matter what, it's difficult.
44:50Melissa Lee:They're fine. They all make like a thousand times out with their average employees. So this is what they get paid the big bucks for.
44:56Tim Seymour:But in terms of this turnaround story, this was supposed to be a turnaround story. Yeah, but think about this.
44:59Melissa Lee:This behavior is not helping customers go into these stores. It's not helping workers. I mean, there's a whole host of things. And to your point, I mean, this is a messy situation on a whole host of different businesses. So I think that, you know, these these CEOs should stand up, speak their mind because they got a lot of stakeholders. And at the end of the day, I think the first and foremost are their customer or their employees and their customers and shareholders probably come last. Well, I always go back to Michael Jordan. Remember that statement? Republicans buy sneakers, too. So I agree with Karen.
45:28I think you have to stay out of the commenting world. This bit on target both ways. But I think no statement is better than a statement. Country is fractured 50-50. You're going to offend half of your clientele. Keep your mouth shut. Worry about investor relations. That's it.
45:45Tim Seymour:All right. Up next, final trades.
45:54Time for the final trade that's going on the horn, Steve. It's the G in my enigma, Gen Digital. I don't know why that's funny. I really don't. I'm going into earnings. I kind of like the MAG7 setup. Amazon. Dan.
46:08Melissa Lee:Yeah, I really like Carter's pairs trade. I like the way he laid it out. And I do think you'll see some sort of convergence. If the bear that knocked down my bird feeder is watching.
46:17Tim Seymour:I'm sure he's a big fan of the show.
46:19Melissa Lee:Coming after you. I'm just saying. His market's been going against us. No, it's so uncool. Bristol Myers.
46:25Tim Seymour:What kind of birds do you like to watch? No, I love the Cardinals.
46:28Melissa Lee:I mean, it's a seasonal. You have Blue Jays this time.
46:30Tim Seymour:Thank you for watching Fast 1. You'll see you tomorrow on Overtime. Mad Money with Jim Cramer starts right now. 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. 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.
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