Stocks React To Iran Developments… And A Potentially “Big Shock” In Inflation Data 4/6/26

22:41Dan, coming over to you. Yeah, I mean, this is a tough one to chase here, right? This is something that was not on too many investors' radars about a year ago. If you think about Seagate in particular, it was probably trading about$60. Here we are right now at$453. I think we traded as high this morning as$470. And you say to yourself, OK, well, I think the story is pretty well known at this point. I was looking at the Morgan Stanley note. It did not appear that he raised numbers. He just put a nice little title on the thing saying it was a top pick. And, you know, if this is the last bastion of great performance in the AI trade, at least over the last year or so, you have to say to yourself, well, look at what's happened before this.

23:16Look at what's happened to the chip stocks. Look at what's happened to the hyperscalers, then the rack makers and, you know, the neoclouds and the list goes on and on. I'm not sure why you want to be chasing this. And, you know, Micron is a great example after that quarter in guidance that they gave a few weeks ago. I mean, that was a monster. It was like one of the best upsides I've ever seen on anything. And the stock went down, you know, 25 percent over the next couple of weeks. So, again, I think that if you own these things, fantastic. If you are thinking about owning them, I think you probably want to wait a little bit.

23:44Karen? I got to agree. I mean, yes, I think, you know, earnings will be gigantic, but this used to be a really cyclical business as recently as three months ago or six months ago. And so, you know, you can see a supply response and then you get a tiny bit of demand destruction. But your point on our noon call today about, well, if they're all feeding AI and AI is doing so great, why isn't AI trading better? And it just seems sort of somewhat of a cautionary tale for how these will ultimately end up trading. A lot of cautionary tales in this market these days. A lot of things to watch. Tim, I want to come over to you.

24:17What about valuation? That was one thing that the analysts point out. I'm looking at our metrics here on valuation. I'm not 100 % sure they're right. It might be off a bit, but Sandisk at nine times forward PE, Micron at four. I don't think that's quite right, but either way, below the market. Well, you know, NVIDIA at 18 times forward. I mean, you know, you say what you – I mean, I think I'm with this group here, which is that Sandisk is a 10-bagger. Seagate's a 10-bagger. And you couldn't give memory away. I think there'll be a point where we may not get back there, but I think we'll get back to a lot of memory out there.

24:50And I think we're describing essentially the sequencing of what's going on. If you own the semiconductors as a sector, you've watched different pieces outperform all the way through and you've watched the group continue to do very well, which is why I continue to watch the entire semi space, because it's it really is important to see relative new highs. I am not chasing a Seagate. I'm not chasing a SanDisk or a Micron. Those are really interesting forward multiples. But again, I would just go back to the mothership and look at NVIDIA right now. People don't know what multiple to put on it. I feel a lot more comfortable buying NVIDIA well below or at least below a market multiple here than I would some of these names that are below.

25:28But they're up eight times. All right. Big run up today for some of those names, though. We're going to turn our attention now to a news alert. A new addition to the S &P, convenience store operator Casey's General Stores is going to be added to the benchmark S &P 500 at the start of trading on Thursday. Tim, give it out. They must have something that you like. Cowboy hats, boots. What goes on in the general store? It's replacing MedTech Company Hologic, which is being bought by TPG Global. No, it's just like a convenience store. And gas station. General store guy. You have a general store in your town growing up?

25:58Who likes Staples? Hold on, Hunt. Put the one-year chart up of Casey's. Are you sure this is not like a memory story here? Straight up. Please give us a second. The S &P is so good at doing this, is putting in stocks after they've basically doubled in the last year. That's how they get in, though, right? I guess. They get big enough to. But it's not the best way to get in. That's where the phone was in town as well. Yeah. That's where you guys went in. They had to kind of crank it up for you. Yeah, I know you're making fun of me. I mean, it was hard, especially when you had to call an ambulance.

26:26I mean, a lot of sick people. Did they have running water there, too? Didn't make it through. At Casey's, we had running water. In my mind, this is turning to Casey's is like Potsy's there, the Fonz is there, and everybody's just kind of hanging out. Bag. Owls. On a more serious note, there's a lot more fast to come, and here is what's coming up next. Rising altitude and rising prices. Why your next trip to the airport could hit your wallet even harder as airlines look to offset the jump in jet fuel costs. Plus, Iran, oil, and the Fed. what our next guest is watching this week on the inflation front and the big shock he thinks could rattle the markets.

27:05You're watching Fast Money, live from the NASDAQ market side in Times Square. We're back right after this.

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28:06So while others are busy talking, we're busy building. That's Venture Global. That's unstoppable energy.

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28:54They've been under a lot of pressure since the start of the Iran war. Phil Abbeau joins us now with much more on the impact to the industry. Phil. And it's going to continue for some time, Frank. I think until you see steady flow of oil in the Strait of Hormuz and a decline, a steady decline that people can count on when it comes to oil prices and thus jet fuel prices, the airlines are going to be hurting. And as a result, take a look at what they're dealing with. Jet fuel prices, they have essentially doubled since the beginning of this year. The crack spread has just been killing the airlines.

29:26United and JetBlue last week raised bag fees. Don't be surprised if the others follow along and do the same thing. They've already put through two fair increases. I've heard talk of a third one possibly coming in soon. And they're also trimming capacity, mainly on your Tuesdays and Wednesdays, your red-eye flights, the least profitable flights. Those are the ones that the airlines are cutting. Keep in mind, capacity is still growing in the second quarter, though it continues to grow at a slower pace. Now it's expected to be up about 2 % year over year, though that could even be dropping down to maybe 1.7 or 1.5 % as the airlines continue to trim capacity.

30:03As for Delta, it is the first airline to report its Q1 results. That will be happening before the bell on Wednesday. It's interesting to listen to Delta and the CEO, Ed Bastian, not only talk about managing this, but also remember Delta has a refinery in Pennsylvania. So it is intimately familiar with the challenges of dealing with jet fuel and the prices that go along with that. Though, like everybody else, they may have their own refinery, but they're paying more for jet fuel like everyone else. We'll be talking with Ed Bastian. This is an exclusive you do not want to miss on Wednesday morning.

30:39The main question for Ed, how much is demand holding up? A couple of weeks ago, he said it was still strong, especially on the corporate side. Is that still the case, Frank? We'll find out on Wednesday morning on Squawk Box. Yeah, a lot to talk about there. I'm sure it's going to be a great interview. Our Phil LeBeau, thank you very much. Again, exclusive interview with the Delta CEO coming up on Wednesday morning. Tim, you're over there or not. I'm just going to turn over to you. How do you view the airline stocks right now? We were talking about these dips and maybe places to put money. Is this another place that maybe there's an opportunity for a big bounce?

31:08I think in the case of Delta, for sure. By the way, good for Ed Bastian. I mean, he's been one ahead of the curve and I think the peer group for some time now. The fact that they do have that refinery, it does seem to help. Delta, who filed an 8K, I don't know, two weeks ago, three weeks ago. We know these numbers are going to be solid. We know that they've upgraded EPS. We know it's going to be 7 % to 9%, and that actually, if you look at year over year, there's some really interesting margin gainers, including essentially their MRO business, which is maintenance and overhaul, and it's something that's a very high-margin business.

31:40I like Delta here. I've always liked Delta. Again, I've always said they were some of the greatest trading stocks, and I mean airlines. I think Delta is an investment, and I think it's cheap here, and I think you're going to get through this period, and you can own Delta now. All right, we're going to shift from travel back over to tech. We got a news alert on Broadcom. It's popping after hours. Our Julia Borstein has all the details. Julia. Broadcom, Google, and Anthropic expanding their collaboration as part of this deal. Anthropic will access 3.5 gigawatts TPU AI capacity starting in 2027. This all from an SEC filing revealing that Broadcom and Google have entered into a long-term agreement for Broadcom to develop and supply custom tensor processing units or TPUs for Google's future generations of TPUs.

32:26Also saying that there's a supply assurance agreement for Broadcom to supply networking and other components for Google's next generation AI racks up through 2031. Separately, Broadcom, Google and Anthropic have expanded their current strategic collaboration under which Anthropic, beginning in 2027, will access through Broadcom about 3.5 gigawatts as part of these next generation TPUs-based AI compute capacity committed by Anthropic. You see Broadcom shares now of about 3 percent. Back over to you. All right, I'll enjoy the foresting with the very latest on Broadcom. Coming up here on Fast, stocks in limbo with the conflict in Iran, weighs on markets and on oil prices.

33:11But our next guest thinks a bullish backdrop is starting to build, but also warning, one piece of data could deliver a big shock to the whole market. He lays out the full case coming up next. Fast Money back in two. Missed a moment of fast? Catch us anytime on the go. Follow the Fast Money podcast. We're back right after this.

33:39Welcome back to Fast Money. Stocks start in the week with a small gain as investors digest the latest developments out of the Middle East. The Dow jumping 165 points. The S &P and the Nasdaq both climbing right around a half a percent, both now riding four-day wind streaks. Crude oil also higher as well, with the president saying the Stradiv Hormuz deadline is now about 26 hours away. WTI settling above 112 a barrel. Meanwhile, new inflation data this week. It could rattle the markets as Iran war risk just continues. And let's bring in Ben Emmons, founder and chief investment officer at FedWatch Advisors.

34:12Ben, always good to see you. Good to see you, Frank. Sorry, I can be there, but it's great to see you. It's all right, man. We're going to work it out remotely. So, Ben, I want to go into your notes very quickly. You say coming up, the PCE report, it could be a shock for the markets. And you're looking at core PCE. You got to explain this one to me because core PCE is obviously without food and energy. What shock comes from core PCE? well frank i think we're looking at one of the inflation on friday will show a big jump now we saw the same thing play out in european numbers i've seen it's all driven by energy but as a result of headline jumping you do get an effect on four as well because it spills over into services in particular and i think we're in for a little harder number there actually headline being significantly higher.

34:58The key there is that if this sets the stage for several of these numbers to follow, because the shock is that substantial, that's, I think, a bearish signal to the markets. At least the narrative may shift from this de-escalation story around Iran to what will the Fed do in reaction to this inflation number. I think that's why it's important. All right, Ben, you do a lot of great writing about the Fed and your expectations for the Fed. How does this play out with the FOMC? I mean, could this potentially be seen as transitory? Could we see a resurgence of that thought that this is a temporary shock that's going to go away and things are going to normalize?

35:36I don't think so, Frank. I think they're very cautious about it this time because it's a similar kind of shock, if not bigger shock, to what we saw in Ukraine, where at that time it was viewed as like the economy reopens and there's this conflict, but it eases up quickly and it won't really matter to the prices too much. And that was a miscalculation. This time around, though, as Rebecca, the earlier guest, was describing, you do deal here with a significant disruption of flow of oil across the globe. So we're not just talking U.S. inflation. We're talking inflation everywhere, and it affects everything.

36:10So I think this Fed will be cautious. It will be watching this playing out in terms of the next two months. If these inflation numbers, as I say, show acceleration, I don't see this Fed sitting on its hands. It will start signaling that it wants to raise rates at some point. It's not an active inflation. Hey, Ben, it's Tim. No one cares my view on this. I'm sure they care more yours. But I feel we've had inflation for a long time. And I understand CORE has not shown it. But I look at CRB Rind. I look at input price costs that for months have gone higher. And we've seen it also in the ISM manufacturing, which is nice, because even though we're not a manufacturing economy, it's been nice to see that uptick.

36:50But talk to me about what's baked in and what just might not have fed through to the consumer yet. Do you have a call on that? And again, I'm not just talking about what's happened post-Duron. I'm talking about what's gone on for the last nine months. I think, Tim, that if you think of inflation, that, yeah, we had some moderation over the last sort of year up until, I guess, now, right, where we're going to see this data change. But within that, the expectations of inflation have never normalized the way the actual inflation did. And that's really key because people continue to think that inflation is going to be at least 3%, 4%, 5 % in the future as opposed to where headline inflation was ending around 2.5%.

37:34So that's clearly a difference. And if you take this energy shock and people read about it, then because I think about seeing higher gasoline prices, It's only going to go higher from here, not lower. And I think this is the real challenge, I think, for inflation going forward. In addition, that you have services that stay sticky, rents that haven't really come off too much. And that's why I think not all together, I think you're keeping a high elevated inflation rate. Hey, Ben, it's Karen. Thanks for being on. So what do you think that means then for the market? I think, Aaron, that one, if you think of the treasury market currently, we had a flattening of the yield curve throughout this conflict, mostly because we have been kind of playing with the thought that may have to move to a hike.

38:21It was even at some point we priced in about 50 % of the odds of a hike about a week and a half ago, sort of taken out. But the curve getting flatter is obviously not a good sign in terms of, like, one, it doesn't give much opportunity in fixed income. Two, it's maybe not as beneficial to banks. But three, for the macroeconomy, the flat yield curve is uncertainty. So I think that's what that says, I think. If you have inflation going accelerated higher and you're getting a flatter, further curve to ultimately potentially inversion, that's when the negative economic story comes about. All right.

38:56Ben Emmons from FedWatch Advisors. Ben, it is always a pleasure to see you. Thank you very much. Guy, I want to come over to you. You didn't really chime in, man. You didn't have a lot to say there. I got a lot to say. But, you know, we are a lot of people on the show. We have a 10-year auction on Wednesday with a 30-year auction on Wednesday. We got inflation data this week. This is the week where I think the bond vigilantes, if they want to play, they're going to do it. And I still remain yields are going higher for the wrong reasons. So we'll see how the rest of the week plays out. By the way, he gave us his, what he calls the war portfolio.

39:24I guess it's not his. It's what the market is doing. Overweight energy. Karen, you were just talking about this. Some cash and some gold. What do you think about that? Dan, Guy? Guy. Guy's been on the gold thing since like 1929. Yeah, since they found it for the first time. The gold standard. It's pulled back. It held a 200-day moving average. I don't think the gold story is over by any stretch of imagination. I think there's concern that some of these Middle Eastern countries may be selling gold. I have no indication that's been going on, but I think that's the overhang. I think when things get sorted out, the gold story is still intact.

39:56Remember that trip to Arizona for the Brady Bunch where the gold rush, Jim Bacchus locked him up in jail? That was who played, by the way. Mr. Howell. Mr. Howell. But it was all about gold. He still thought he was nervous they were going to get his claim, right? So So this is just interesting stuff when we talk about it. That's a deep pull right there, Tim. It left him in the lurch in the middle of the desert. Coming up, delivering a bounce with the Chartmaster Season Store for DoorDash. As the stock tries to climb back from being cut nearly in half, we got the technical take when Fast Money returns.

40:34And welcome back to Fast Money. Not the best start to the year for DoorDash. Those shares are down 31.5 % since January and off 46 % from their all-time high. But the chart master believes this food delivery stock, it actually could start delivering some gains. Carter Worth, you're here. What do the charts say? Let's get right to it, Frank. Yeah, what a disaster. And in general, buying stocks and downtrends is bad technique, but let's do a little bit of that. So first chart, they're all the same charts, a 49.81 % decline. That makes it over the past six months. There are 490 stocks in the S &P that are better.

41:10It's one of the worst in the entire index. Next iteration. What we find here, of course, is that the sell-off leaves it to the penny at this well-defined multi-year uptrend line. Third chart, same chart again, just with some arrows. It has literally responded to this line over and over and over to the penny, and it bounced last week at said line. Let's keep going. So last two charts. What we had, of course, was an epic bull trap of people playing for a breakout. In October, it was a trap, meaning bulls come in, money's drawn, and then it only disappoints. Now, we have the opposite. Final chart, a simple buy time.

41:51So again, a 50 % sell-off down to a well-defined trend line, doing something that's generally wrong as a matter of technique, but we're doing it, buying a stock in an aggressive downtrend for a prospective bounce. There we go. Carter Wirth laying out the case for DoorDash. Dan, I want to come over to you. Charlie laid out the technical case. How do you view his thesis and just the company in general? Yeah. If you have a favorable fundamental view that this company has nearly 70 percent market share in the delivery market that in what's called margins, gross margins expect to get better. They have this advertising business growing.

42:24We've seen this across a number of other digital businesses that should help margins, too. And so I look at the story and I say, you know what, you got a little support as it relates to the technicals there. And if you go into earnings and you see sort of, you know, some sort of anticipation of better margins, I think this stock trading about, you know, a market multiple should do better with revenue expectations for growth like 30 percent this year. So I like the setup here, both technical and from a fundamental standpoint. All right. We're going to leave the conversation there. DoorDash shares pulling back, as you can see on the chart.

42:53All right. Coming up with the trouble coming up, we are looking at the trouble with Tesla. The EV maker trading near seven month lows. There may be a lot more downside to come. while one Wall Street firm says the stock's about to lose its charge in a very big way. Also, here's a sneak peek at the Kramer cam. Jim's chatting exclusively with the CEO of U.S. food giant Cisco. Catch the full interview at the top of the hour on Mad Money. More fast in just two.

43:24And welcome back to Fast Money. Tesla dropping over 2 % today and closing at its lowest level since last September. Analyst at J.P. Morgan warning that a move into higher volume segments with lower price points poses a risk to that company. The firm reiterating its underweight rating and 145 price target. That's nearly 60 percent lower than today's close. Tim. Well, I think the dynamic around Tesla is one we've we've debated a long time. This is not a car company. So therefore, I'm not sure what we got so worked up on those deliveries. If you look at the chart in this one, though, this does appear at least a stock that's looking to find a bottom.

44:00And it's going to need to find a bottom on the next catalyst. Obviously, robo self-driving. I mean, these are things we've been waiting on. There's certainly some headlines out there. Never been my cup of tea in terms of valuation and what I would actually be investing in. Therefore, I leave this one alone. Karen. Yeah, I agree. I mean, you know, so the car now we used to be that the street was sort of ignoring the car story. Now they really are ignoring the car story because Tim said it doesn't matter whatever they deliver. It doesn't matter. But the promise of what is to come for robo taxi, autonomous vehicles and robots is so far out there.

44:39I know it's coming sooner and sooner, but, you know, that's not my strong suit delivering sort of what he said. But I wouldn't be shocked, though, if one day SpaceX, Tesla was all one thing. Similar to XAI and SpaceX kind of a combination. Yes. Yes. All right. Dan, any thoughts on this? By the way, I don't know if you've seen this. The former president of Tesla is out doing a book tour and he said the same thing you guys were saying, that Elon Musk has given up on cars. He feels like the Chinese are going to win, but he's all in on robotics and all of his efforts are going towards robotics. Does that make a difference that he's not so split?

45:10Of course, he still has SpaceX, but he's very laser focused on robotics in your mind. Yeah, I think that's the point that you're talking about. The robotics probably finds its way into SpaceX and XAI, that sort of thing. You know, it is interesting in the quarter that just ended that, you know, Tesla's cars were down 14 percent year over year. And if you look at I think it was used EVs are up 12 percent year over year. So you got rid of that credit. So it made those cars less interesting. Right. The tax credit late last year. And then you have EVs that really have not held their value particularly well of late.

45:41They did do well at some point during the pandemic, that sort of thing. So now people want used EVs and they don't want the new EVs and they're not even focused on them. So you're not going to see any innovation and you're going to see China flood, I guess, the planet, maybe not here with really cheap EVs. All right. Tesla shares pulling back about two percent today. All right. Coming up on Fast Money, final trades. Don't go anywhere.

46:09Welcome back. Time for final trades. Tim. Frank, great to have you here. Also a good sport around the Brady Bunch hijinks. Taiwan Semi, no hijinks there. I think it's the cleanest story in big tech. Karen. Yes. So, UNH, the CMS news, this is very big. The day they announced that flat rate in January, the stock closed the next day at 3.05. I'm sorry, 3.51. Now it's 3.05. It's better on much better news. Damn. Yeah, I like Carter's DoorDash call for a bounce into earnings. Happy birthday, Michelle DiMartino on the set here. Happy birthday. Broadcom, ABGO. What was your pick? Broadcom. 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.

46:57You 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. To view the full Fast Money Disclaimer, please visit cnbc.com forward slash Fast Money Disclaimer.

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