In short
The episode of Fast Money centers on a broad market selloff driven by surging energy prices and rising interest-rate expectations, plus sector-specific trading calls. Topic: Dow and S&P drop (Dow down >1,000 intraday, ~800 at close) as WTI crude tops ~$82 (up ~20% for the week) and gas prices rise; 10-year yields hit highest levels in ~3 weeks.
Key claims
investors are “pricing out” Fed cuts (about 35 bps vs 65 bps a week earlier), inflation is “here to stay,” and sentiment is fearful (AI disruption, geopolitical risk).
Notable examples
consumer staples (e.g., Walmart) and “safest” sectors fall; defense contractors drop; software/AI fears appear to be easing (IGV up; Klaviyo, Atlassian, Intuit, ServiceNow).
Guests
Eric Hirsch, co-CEO of Hamilton Lane (private credit). He argues UBS’s ~15% default concern is overblown, citing sector diversification, no capital shortage, and continued fundraising/inflows; dispersion of returns will be wide. Also: Zillow chief economist Misha Fisher (housing affordability improving; ~30k extra buying power; modest ~4% improvement forecast).
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Chapters
Tap a time to open that second in VOMarket Reaction to Oil Prices and Geopolitical Events
1:39 to 3:40
Discussing the impact of rising oil prices and geopolitical tensions on Wall Street.
“We start off with the washout on Wall Street.”
Investor Sentiment and Market Dynamics
3:40 to 6:02
Analyzing investor behavior amidst market volatility and uncertainty.
“I mean, you know, the market does not like this.”
Inflation Concerns and Economic Impact
6:02 to 7:21
Exploring the implications of rising transportation costs on inflation.
“So if the equity market is unchanged, that's the odd part, right?”
Market Trends and Sector Performance
7:21 to 9:30
Examining the performance of various market sectors amid current challenges.
“I mean, obviously, higher transport costs get directly passed down to the consumer.”
China's Economic Outlook and Energy Concerns
9:30 to 14:01
Discussing China's GDP growth forecast and potential energy impacts.
“And so a lot of this stuff has already priced in.”
China's Economic Challenges
14:01 to 16:14
Discussion on the structural issues facing China's economy and implications for global markets.
“And that's saying something because I feel like that's all we ever talked about for a long time.”
Crypto Regulatory Updates
16:15 to 17:42
Overview of the SEC's closure of a civil fraud case against Justin Sun and its implications.
“Ambassador, what do you think about China's forecast?”
Software Sector Resilience
17:43 to 19:52
Analysis of the software sector's performance amidst market fluctuations, focusing on key players.
“Meanwhile, software companies rising above the sea of red today.”
Healthcare Sector Performance
26:05 to 28:00
Discussion on the performance of healthcare stocks amid market sell-offs and potential recovery.
“See terms at discover.com slash credit card.”
Market Reactions and Personal Insights
28:00 to 29:02
Discussion on current market conditions and personal insights among hosts.
“So for us, we're just focusing on quality because that's all we really know anyway.”
Show all 23 chapters
Stock Market Overview and Guest Introduction
29:17 to 30:22
Overview of stock market performance and introduction of Hamilton Lane's Eric Hirsch.
“Stocks dropping today, but finishing off the lows of the session, the Dow falling more than 1 ,000 points early in the day, but pairing those losses to end about 800 points lower.”
Private Credit Market Insights
30:22 to 31:58
Eric Hirsch discusses the private credit market and misconceptions about default rates.
“And so saying there's a private credit issue is like saying there's a stock market issue.”
Investor Concerns and Market Movements
31:58 to 33:33
Analysis of investor concerns regarding private equity companies and market reactions.
“I had a question about as we see credit maturities occur in a lot of these sponsor-backed private equity companies, what are going to be their options to refinance going forward?”
Market Trends and Economic Indicators
33:33 to 36:18
Discussion on market trends and the impact of earnings on investor sentiment.
“Because in saying that, what we're really saying is they're just going to go back and put all their money in the public equity markets.”
Structural Issues in Housing Market
36:18 to 36:44
Exploring structural issues affecting the housing market and possible improvements.
“It does tell you mark-to-markets can change.”
Housing Affordability and Market Forecast
36:54 to 40:30
Zillow economist discusses housing affordability trends and market forecasts.
“Rate-sensitive housing stocks under pressure today.”
Energy Market Analysis and Stock Performance
40:30 to 41:48
Analysis of the energy market and performance of energy stocks amid rising oil prices.
“but that implies that it's sort of a slow thaw.”
Chart Analysis and Future Predictions
41:48 to 42:00
Discussion on chart analysis of energy stocks and predictions on market moves.
“And here's a sneak peek at the Kramer camp.”
Analyzing Energy Stocks and Market Trends
42:04 to 43:38
Discussion on energy stock performance and market analysis with insights from charting.
“The surge in oil boosting energy stocks over the past few months.”
Contrasting Views on Energy Stocks
43:38 to 45:45
Panelists share differing opinions on the future of energy stocks and oil prices.
“Carter's going to come back over to the desk.”
Final Trade Insights
45:45 to 46:15
Participants share their final trades and insights on specific stocks.
Final Trade Insights
46:54 to 47:10
Participants share their final trades and insights on specific stocks.
Final Trade Insights
47:15 to 48:44
Participants share their final trades and insights on specific stocks.
“ZetBound is approved as a 2.5, 5, 7.5, 10, 12.5, or 15 milligram injection.”
Transcript
Automatic transcript. May contain errors.0:00Tim 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. Are you as confident as you should be when it comes to growing your business? Is your strategy ready to execute today? If cash flows aren't where they need to be, growth could be at risk, especially in the eyes of your investors, board members, and the business press.
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1:28Tim Seymour:What is weighing on home builders and home buyers and health care stocks under the weather? The moves in big pharma names and how to trade the space right now. I'm Melissa Lee coming to you live from Studio B at the NASDAQ. On the desk tonight, Tim Seymour, Carter Braxton Worth, Guy Adami and Julie Beal. We start off with the washout on Wall Street. Stocks more than wiping out yesterday's gains, though did closing well off the lows of the day. The Dow shedding over a thousand points earlier in the session. The surge in energy prices playing a major role. WTI crude topping$82 for the first time since July 2024, now up nearly 20 percent this week.
2:02Tim Seymour:And gas buddy data showing the average price of a gallon in the United States has risen more than 12 percent over the last month. Rising fuel costs slamming parts of the market with heavy energy exposure. The NYC airline index down more than 6 percent today, while the industrials and metals each lost more than 2 percent. Meanwhile, interest rates back in the spotlight, the 10-year yield hitting its highest levels in three weeks. So it's today's action a sign that investors are waking up to just how much disruption the war in Iran could cause. What do you think, Tim? I think that's right. I mean, we talked about geopolitics for a year and a half, but we didn't really talk about what it meant.
2:39And I know that seems crazy, but the fact that energy is at the center and, you know, you talk about also aluminum prices are soaring because 15 to 20 percent of the world smelting capacities in the Middle East. You have coal prices rising because there's other forms of energy that are needed. You have a dynamic where there are so many different pieces that follow through on what this is. And I think, you know, talking about the bond market is really important. Look at European bond yields. In Germany, where we know when Russia invades Ukraine, what that meant, higher energy prices meant to Germany, the largest economy in Europe, what it meant for Europe.
3:12What we know today is, you know, we talked about this a couple days ago. We had a very kind of, you know, call it benign at least response from the market on the first couple of days. But we all, I think, said it's just a matter of time before that headline. The VIX continues to make lower, excuse me, higher lows. And this is an uptrend that started well before Iran. Guys talked about this. So to me, the duration of this, especially when we start hearing about other parts of the world that we're licking our chops on. I mean, you know, the market does not like this. And the longer energy is in a prolonged uptrend.
3:46I will say this. Crude was at 85 bucks a barrel for two years. It meant nothing. It was actually good news. It was a great level for markets. So if oil prices can stay in this range, we're still at a range even after that 24 percent move in about five days.
4:00Tim Seymour:We are slowly pricing out Fed cuts. I mean, at this point, it's 35 basis points by the end of the year versus 65 a week earlier. I mean, so we're coming to this notion that inflation is here to stay and that we're not going to get any relief from the Fed. And some of the numbers that we got prior to this happening on Saturday suggested exactly that. And, you know, Tim talked about the price is paid component from Monday's number. I thought Friday's number last week was hot for sure, regardless what the bond market did. And he's right to point out that in Europe, yields are going higher. I mean, I've been a bond bear for a while.
4:34It's been right some days. It's been wrong some days. Today, it feels like it's right. We'll see how long that lasts. But the market, in my opinion, is not prepared for a bond market to wash out. And by the way, here we are in early March. Before you know it, Kevin Walsh is going to be in the seat. I believe it's going to be Kevin Walsh. And the market will challenge him. Why? Because that's what happens with every new Fed chair. Carter? I mean, it was a very – let's just talk about the tape today. It's a very mixed and unusual tape. The worst-performing sector is the safest of all. Consumer staples down 2 percent.
5:04Gold, no haven there. down and gold miners getting crushed. The only thing, and even this, oil surging and yet energy unchanged. Oil service is down. So, you know, relationships exist until they don't. I think the message overall is that is there a place to go? It's one thing if you have to be long, but that is a rare thing. You're mandated as an institutional investor with assets given to you and trusted you. You must be fully invested. Okay, you're de-risking here, but you put it somewhere else. But the individual doesn't have that conundrum. Money is actually coming out of the market. You can feel that, right?
5:42It's not saying it's always been a rotation game. But this kind of behavior, not going into gold, not going into staples, not even going into energy when oil is spiking, is a backing away from the equity market.
5:53Tim Seymour:Is this an observation on your part or is this what you tell investors? Like you take a look at the charts and you say, now's the time to go to cash. No, I'm saying that's what is happening. I think over the last two. And here's what we know. So if the equity market is unchanged, that's the odd part, right? The S &P is just hunched for four or five months as the parts go wildly. And think about what was the worst, IGV, and now it's the best. That's all a bit hysterical. And it's all a bit knee-jerk. It's all a bit impetuous. And it doesn't lend itself to making the decision on someone who's, let me put some more into that.
6:25It makes people say, let me just back away from that game.
6:28Tim Seymour:I mean, the swings and the pendulums, Julie, they've been ferocious. Yeah, it's been pretty wild. And I think it's very emotional is really the word that I think of it. And I think it's being driven by a lot of fear that many investors have that they're going to wake up one day and AI is going to be disrupting them, whatever sector that they own. And you also have this much geopolitical risk. I mean, to me, the thing that is making me nervous about this is that the last time we had inflation, when it really started to pick up in 2021, it was transports that was really leading the charge. And that's what's been happening recently.
7:04And there's more legislation in place now to remove drivers who are immigrants. So you could see even more price pressure in the transport sector, which I think could really drive inflation throughout the rest of the economy. So I think the entirety of these moves are really concerning. Because inflation going away is pretty central to any thesis around, you know, rates improving and growth improving.
7:27Tim Seymour:Yeah. I mean, obviously, higher transport costs get directly passed down to the consumer. I mean, that's what grocery stores typically do, for instance. Look, there's no question that the transports react in a certain way. By the way, this isn't bad for rails. This isn't bad for certain parts. We've talked about this, which sectors within transports. But you have to understand that transports were on fire going into this. You have to understand that staples were on fire going into Walmart specifically and Walmart specifically. So, you know, some of this to me is also just that part. We we've had I wouldn't call this dislocated bearishness.
8:02But even before Iran, we had a market that was the least liked bull market. I know that's probably the most overused term and but least liked bull market. And I think that's ultimately pretty bullish here. I mean, you know, you throw AI fears, you throw a credit bubble that comes out of AI fears, you throw a war, you throw inflation. And yet the market is within two percent of all time highs with this sentiment that's been so poor. Carter can probably speak to the fact that these charts are breaking down underneath the surface. And I don't like what's happening with the 50 day and the 200 day.
8:36Things are starting to converge and come down. That sideways isn't ultimately that constructive. But I have to point out that you've had a lot thrown at this market. It's hung in there very well. Earnings have been fantastic. Margin profiles have been excellent. A lot of parts of the U.S. economy are still very defensive against higher oil prices. So that's my glass out full.
8:57Tim Seymour:I mean, de-risking this time around looks very different because of what had run up so hard, to your point. I mean, consumer staples, you take a look at Walmart. We've said many times here, why does Walmart trade at a higher valuation than NVIDIA? You know, why is it being treated like a growth stock? And here we are, the de-risking happened in consumer staples, which Walmart is a huge part. I mean, the risk was perceived in other places, not the typical places, because of the run-up in those places. Or let's take defense contractors. Every single one of them is down today. The missiles are flying, right?
9:27Price action is always ahead of the facts. That's the point. It discounts, as we know. This is elemental. And so a lot of this stuff has already priced in. The missiles are going to fly. The oil is going to spike. And it's time to be safe. If staples went like two standard deviations above trend, it was all priced in. You look for reasons for things happening, and sometimes you just can't figure it out. But in terms of Walmart, I think there might be a straight line of the fact that they're not going to be able to push out whatever costs they're going to incur on the back of this. So their margins are going to deteriorate, and people are going to say, you know what, maybe the valuation that's been okay in my book has been in a benign environment is no longer.
10:02That's probably what's going on there. But there's also, to Tim's point, there's a rug pull coming at some point in crude oil because I'm sure the administration watches every single tick. And when you see an 80 handle in crude, that's going to set off some alarm bells. It happened today, by the way. So you know that's coming. And what I'll tell you is all the tourists in these energy stocks, and there are a lot of them over the last couple of weeks, will get out as quickly as they got in.
10:26Tim Seymour:Well, maybe that's one reason why the markets on an index level are remaining fairly level. I mean, because at any moment in time, the Trump administration, which whose mandate basically is lower rates, lower energy prices, et cetera. I mean, they can do anything they want. I mean, they can try and that'll be it might be enough. Maybe they're perceived as a backstop, Julie, to this whole thing. Yeah, I think that's the real tricky thing of where we're at right now. And I think that's why the market is moving as much as it is, is because we've moved beyond the traditional normal framework of asking Congress to have these war actions.
11:00And so knowing that the president can move this quickly, this unilaterally, it really destabilizes a lot of comfort that people have that there's going to have visibility on changes that can be this material. The price of oil moving this much, despite the pressure that the president is under to lower pricing, it's pretty remarkable, right? You have to think that that's kind of unique and spectacular. So I think that everyone needs to continue to pay attention to how this filters into pricing. To me, the place where it really matters is if we have any fragility in the labor markets to suddenly pick up an increase in inflation as well.
11:37That's a very big problem for our economy.
11:41Tim Seymour:While higher energy prices playing a role in China, cutting its GDP forecast, Beijing officials expect the economy to grow at its slowest pace. Since the early 1990s, that news comes as the country's National People's Congress kicks off. Let's bring in CNBC contributor Dewardrick McNeil of Longview Global. Dewardrick, always good to see you. Hi, Melissa. Great to see you. I mean, China has a lot of reserves. I mean, how do you think this impacts China ultimately? Yeah, look, I think it's fair, Melissa, to suggest that energy shocks may cause some caution in terms of China hitting its GDP growth target, that 4.5 to 5 percent.
12:21But I think where we are is more likely that target was set because China is serious about doing what I'm calling structural housekeeping in its economy. But with respect to energy, I think China will be fine in the short term and in the long term. What worries me, Melissa, is the medium term. We're talking about three to six months out from today. And as you hinted, China spent a lot of 2025 stockpiling. So when you look at the Strategic Petroleum Reserve and their commercial inventories, if you believe the numbers, we're talking about 1.2 billion barrels. That buys them about 100 days. Melissa, beyond that 100 days, all bets are off.
13:08The duration risk really spike. But I think, you know, this is a real issue that everyone is watching. I think in the near term, China can really guard against some of these shocks. They're better placed than most. But beyond three months, I think they are worried. Dwardrick, it's Tim. So what are you watching? Because, you know, you've highlighted, and I like the point you're making, which is that China is at least the good news in a downgraded growth forecast is that they've also kind of reset expectations. But also they're focusing on more stable long term growth. What is it you want to see out of China, out of the People's Congress?
13:48What would be bullish for their markets at a time when, you know, frankly, Chinese stocks, Chinese Internet stocks, from a trader's perspective, Alibaba's at the most oversold. It's been back four or five years. And that's saying something because I feel like that's all we ever talked about for a long time. China equities right now. No bueno. Yeah. Look, I think this is a great point. Tim, let's go back to this structural housekeeping that I talked about. You know, the biggest thing that I think people want to see is that China comes up with some type of answer for the rat race that we've seen in pricing.
14:25The involution, as they call it, it is killing a lot of Chinese companies. Some of the names that we talk about here, JD.com down. And so you have to really try and get a handle on pricing. I think this will be no surprise to you, Tim, in terms of the housekeeping, but local government's budgets are still in bad shape. And that's largely because of all of the overspending on zero COVID policies, but also the loss of the property sector as an economic driver for those budgets. And then overcapacity. So coming out of this MPC, we really need to see some solid answers and then some implementation to try and do that structural housekeeping that we've been talking about so much here on air.
15:09The word would connect some geopolitical dots. Trump's meeting with President Xi in April in China for now. We'll see how that plays out. But does what's happening first Venezuela and now what we're seeing in the Middle East is you think that that emboldened China in terms of what they're looking to do potentially with Taiwan? Yeah, you know, this is the question that we're getting a lot. And I will say that I don't believe that this, as an operational matter, changes China's calculation. What it does do, however, is it gives China a lot of rhetorical power under the might makes right doctrine.
15:47You know, we heard Carney talk a lot about this in Davos. It's the old Thucydides saying that the strong do what they can and the weak do what they must. And I think we are seeing that right now play out. I don't think it changes China's operational calibrations, but it certainly empowers them rhetorically with what they are hoping to do in Taiwan.
16:11Tim Seymour:Dwardrick, it's always great to speak with you. Thank you. Thank you, Melissa. Dwardrick McNeil, Longview Global. Ambassador, what do you think about China's forecast? Well, I think it's no surprise. I think ultimately we are, you know, we've put down a zero almost in terms of China giving global support to stimulus and some sense. And that's why I think there is a sense of surprise here. I worry more that U.S.-China relations, because of what's going on in the Middle East, because this is very difficult for China right now, aren't getting better. They're getting worse on top of the time, you know, excuse me, on top of the fact that we're continuing to get all kinds of data that says, you know, China and the U.S.
16:52on the tech front. Again, not really playing well.
16:55Tim Seymour:All right. We've got a news alert in the crypto space. Mackenzie Sagal has got the details. Mac. Hey, Mel, the SEC is closing its civil fraud case against crypto entrepreneur Justin Sun, one of the last such cases left over from when Gary Gensler was in charge of the agency. Now, under the agreement, one of Sun's companies will pay a 10 million dollar penalty. The SEC first sued Sun and several of his crypto entities in March of 2023, accusing them of unlawfully distributing tokens and failing to properly disclose payments tied to celebrity promotions. And Sun, you might remember, also emerged as a top buyer of the president's crypto token.
17:30On X, he posted that he was honored to attend President Trump's gala dinner after winning a contest tied to the Trump meme coin last spring. We're going out to the SEC and to Sun on this, but no word back just yet, Mel.
17:41Tim Seymour:All right, Mac, thank you. Mackenzie Sigalos. Meanwhile, software companies rising above the sea of red today. Again, the trade desk surging in reports we brought you last night about being in talks to supply chat GPT with ads. Klaviyo, Atlassian, Intuit and ServiceNow all seeing outsized gains. The IGV software ETF now up four days in a row and seven of the last eight. It is up over 7 % just this week. So are the AI fears fully washed out of this group. And we got to Go to Carter for this one. What do you think? Well, we've covered this quite a bit because it's the most sort of dynamic part of the market.
18:16The tech sector, which is the worst performer, could have such winners, semis, and such losers, software. And yet that divergence is now you've got convergence. The question is how much more to go. I think you fade the IG move here, go flat that, and I think you stay short semis.
18:35Tim Seymour:Oh, Julie Beal, have you been looking at the software sector thinking, oh, some are values now? Yeah, absolutely. Because I think a lot of these businesses, they can create real barriers around them if they have proprietary information, if they're embedded in transactions, or if there's any kind of regulatory. So I think that there really are some wonderful software names that it's just they've been indiscriminately sold off. The question is just being able to find which ones are the right ones, you know. And a lot of that happened and got shaken out, I think, during earnings. Companies that are just software that's used to optimize a process, I think they're much more at risk.
19:11And you can see that there's more hesitation in their bookings growth than companies that actually provide something really differentiated that would be hard to replicate with vibe coding. Historically, it's foolish to take the other side of anything Carter Braxton Wirth says. Oh, but you are?
19:26Tim Seymour:OK, so we have to mark the date. Mark the date. Because, OK, what are you going to do? It's kind of a lead-in. March 5th, 2026. Okay, label me foolish. I think IGV has some legs here. Now, I think at a certain point he's going to be right again because I don't think the fundamental problems have gone at all. But we actually talked about this last week. We said there was a day where it felt like it bottomed out, big volume days on a lot of these names. It felt like it could turn. 97, if you go back into January, that was the first leg down where we held, and that's where we sort of cascaded lower from in the IGV.
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19:59I think that's where we get to in the short term.
20:02Tim Seymour:Coming up, after hours action and shares of GAAP, Costco, and Marvell technology. The latest numbers and details from those quarters ahead. Plus, the healthcare sector not immune from today's market sell-off. The stock is getting hit the hardest. And whether there's more pain ahead, don't go anywhere. More Fast Money in two.
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21:47Tim Seymour:Welcome back to Fast Money. An earnings alert on Gap. Shares tumbling in extended hours after the retailer posted earnings that came in below expectations. CNBC's Gabrielle Fon Rouge has got the details. Gabby. Yeah, hey, Melissa, it's good to be here. So bad weather is often thrown around in retail as an excuse for poor results, but we are seeing a real impact this earnings season. So GAP partially blamed a miss at Old Navy and a miss on EPS on historic winter storms in January, which led to around 800 temporary store closures. That represents about 35 percent of the North American fleet. There's also questions about what's next for GAP now that it's returned to growth, improved profitability, and amassed a$3 billion cash pile.
22:26I talked to CEO Richard Dixon, and he said he's ready to move on to the next phase of his turnaround plan, which is building momentum. That means doubling down on better product, better marketing, and better execution. And then in the meantime, Gap is also starting to focus on bigger and higher margin growth opportunities in both beauty and accessories. Dixon said those ventures will begin to scale next year.
22:48Tim Seymour:Gabby, thanks. Gabrielle Fon Rouge. What do you make of shares of Gap? Had a huge run-up in the earnings. If Carter goes back to his charts and, look, this is where we stopped in the spring of 2024, this 29.5, 30-ish level. So it makes sense. I mean, it wasn't a horrible quarter, but, you know, given the run the stock's had over the last six months, I think people are looking for more. And I think taking profits at this level actually makes sense in retrospect. Yeah, it's sort of a dullard here. I mean, Gap, when it came out of the gate, it was a great winner, right? All the way on a split-adjusted basis, it went from 1980, four cents, to 40 bucks in 99.
23:23And it's been flat since. It's been flat for 25 years. Not interesting. You catch a trade here, catch a trade there. But, you know, talk about it. It's not even a mature business, mature growth. It's just a – it's nothing. It's an operator that closes a few stores, gets some new ones, changes the color of T-shirts. So what? Who cares?
23:39Tim Seymour:Well, I mean – Quite an indictment. I don't even – I know what you're going to say. So just forget the joke now. He wears Levi's. Because you screwed it up already. And you are Louis's. Yeah, so that's fine. The guy's feeling a little self-conscious because, again, the weather thing that has people not out chopping, I don't know, guys have been stormy in your neighborhood for 16 years? Because, I mean, that's the same outfit you showed up on this show. I knew it was coming. I'm just sorry. Does anybody have anything intelligent here to say? I actually do, Mel. Listen,$10 billion, I'll say this, the flip side of the coin, they split us up.
24:11Yeah, that was nice. It was nice. Should have been jousting a little. Billion-dollar buyback from Gap is not insignificant. $10 billion company. So that should put a little bit of a floor. I don't think, look, I think the sell-off probably continues down to 26, and then we'll have another conversation.
24:24Tim Seymour:All right, coming up, hopefully an intelligent one. Coming up, the hard-hit stocks in health care, the group seeing outsized losses in today's market drop. Can we expect recovery, or is there more downside ahead? We'll debate that. You're watching Fast Money Less on the Nasdaq Market Site in Times Square. Back right after this.
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26:09Tim Seymour:Welcome back to Fast Money. Health care stocks getting hit today with the S &P health care ETF dropping 2 percent for its worst day since July. Biopharma stocks taking it especially hard. Biggest laggards include Moderna sinking almost 7 percent. Amgen, Merck, Lilly, Vertex, among the other names down sharply. You had flagged this on our call earlier. Because this this falls under the category of price action that you really wouldn't have expected. I mean, a lot of this stuff should be defensive in the taper in. And it was coming from some of the leaders and from the stalwarts and some of the the I would just say the lower vol names, Like a J &J, you're not expecting to give you that kind of a move on the way down, although some of these names have outperformed in the case of J &J.
26:47I just think this is a case, and this speaks to what Carter was saying about there is some sense of taking the gross down, simplifying. And I think even with some of these big pharma names, there are some moving pieces that have been troubling. It's not like it's been an easy trade for a year and a half. But nonetheless, I think your opportunities here are strong. I continue to like J &J. I continue to like pharma. and I think there are opportunities to play any of this weakness here.
27:11Tim Seymour:And continuing with the theme of what has gone up has been taken down, look at Novo, for instance, it's up 4 % this week. So, I mean, the things that were sort of left for dead that have really struggled are finding some bids in this strange tape, Julie. I think part of it is if you recognize that interest rates are going up, there is an opportunity to buy things that are beaten down on the theory that, you know, you are going to be really paid off if you're focusing on valuation. And we hadn't been talking about valuation really very much. at all last year. And so suddenly, maybe if interest rates, again, trend higher, does that be the case for maybe you need to have more quality and maybe you need to have a sharper pencil when it comes to valuation?
27:48I don't know. It's weird. I think as someone who, you know, as Carter started, an institutional investor that has to stay invested, this has been a really unusual trading pattern. And it's very hard to have any sense of where the leadership is. So for us, we're just focusing on quality because that's all we really know anyway. Seems somewhat indiscriminate to me. Across the board, just selling pharma hand over fist today. So maybe that lasts a couple more days, but the fundamental story has not gone away. But before we go to break, and we've done this show together a long time, but we're constantly learning about one another.
28:20I've learned things about Tim, you and Barger. It's special. It brings us all closer together. He said that in a very unbelievable way. I think the audience feels that way, too. I want to know this. This is exciting. For me, it's very exciting. Well, we learned about music tape. Music's very important to us, and we learned something. Guy, get there. Well, Julie Bill is a huge fan of Stevie Ray Vaughan, which I knew, but Tim did not.
28:43Tim Seymour:It is something we learned about Julie today, and we are better for it as a Fast Money family. I just love the fashion sense. Start there, you know, and then the music's great, too. All right. Fair enough. Coming up, Witch Hunt and Private Credit, where our next guest says the credit concerns are overblown, and where he sees the space heading next. Fast Money is 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.
29:16Tim Seymour:Welcome back to Fast Money. Stocks dropping today, but finishing off the lows of the session, the Dow falling more than 1 ,000 points early in the day, but pairing those losses to end about 800 points lower. The S &P shedding more than half a percent, the Nasdaq down a quarter of a percent Some tech stocks caught a bid. Airline stocks lower today as the conflict in the Middle East continues and field prices surge. American Southwest JetBlue leading the group lower. And some more after hours action. Marvell Technology topping earnings and revenue expectations, posting better than expected Q1 guidance.
29:45Tim Seymour:That stock is up 13 percent. Meantime, alternative asset managers mostly in the green today after a rocky week. Our next guest says investor concern in the wake of Blue Owl is massively overblown. that institutional investors will not be leaving the space anytime soon. Hamilton Lane co-CEO Eric Hirsch joins us now. Eric, great to have you with us. Melissa, nice to be back. So UBS had a pretty eye-popping forecast, I think, in the past week or so, saying that they see 15 percent defaults. Where do you stand on that? Is that very wrong? Is that close to right? What do you think? Just don't see it.
30:21And I think part of the issue here is the private credit market is big, really big. And so saying there's a private credit issue is like saying there's a stock market issue. We're going to have to get a little bit more granular on what managers have been doing and recognize that huge sector diversification and big size diversification. And so I think we got to get a little bit deeper to figure out what's actually happening. But I'm not seeing default rates getting anywhere near that level.
30:46Tim Seymour:Software had become, though, a favorite sector amongst private credit managers just because of the recurring revenues. The business model of software was very reliable in the private credit sort of model. And so a lot of sectors sort of went a little bit heavier than they would have. So we're talking about at what level concerns you, Eric. Do you take a look at portfolios? I mean, do you agree that there should be a markdown to software credit based on what we're seeing elsewhere in the sales that we're seeing in private credit of software assets? I do agree with that, but I think it's important to recognize that the number of private credit managers that were actually deploying dollars into software and lending to that is a tiny, tiny fraction of the number of private credit managers.
31:29So again, it's back to a universe of hundreds of private credit managers, most of them very small. The ones that get all the airtime are the ones that are very, very big, and they were deploying capital into a very different part of the market than the rest of the private credit managers. And so I think what you're going to continue to see is dispersion of returns be wide. That's what we saw through the GFC. That's what we're going to see here because, again, the books look really different. And from our vantage point, we can see them all and they don't look the same. Hi, Eric. This is Julie. I had a question about as we see credit maturities occur in a lot of these sponsor-backed private equity companies, what are going to be their options to refinance going forward?
32:12So one, there's a huge amount of dry powder out there in the private credit space. And so there's going to be no shortage of lenders if it's a good credit. So we're not seeing any capital shortage. And the fundraising actually continues. Yes, you've seen a small number of managers actually have some outflows, but you also see a lot of us with continued very strong positive inflows. And so money continues to come into the sector, both institutional as well as in the broader wealth channel. Hey, Eric, Tim, great vantage point you do have. And so if you look at a Blackstone and a KKR, and I'm not asking you to play financial analyst here, but these are stocks that are down 40%, 50%.
32:55And some of this is related to the stuff we're talking about. Some of this is just related to market exposures right now. And, again, people concerned about taking the gross down and whatnot. Just any thoughts on really these types of moves? Because I would agree with you. These are the smartest guys in the room. I'm not necessarily worried that those portfolios are going to zero. In fact, not even close to that. But the stocks have taken a big hit. Stocks have taken a big hit across the sector, including ours. I would step back and look at this through a very simple lens. Where is the customer going?
33:25Because what the stock market is saying to us with this pricing is that they believe that people are rotating out of the private sector, both institutional as well as wealth. I do not see that. Because in saying that, what we're really saying is they're just going to go back and put all their money in the public equity markets. That's not happening. Public equity markets, also expensive, although coming down near term, hugely concentrated, all the things that we talk about. And so the investor rotation has been much more fundamental. They want diversification. They want a broader swath of the economy.
33:58And they want access to a much bigger variety of sized businesses. The customer is not going to rotate out and put everything back in the S &P 500. Eric, a company like Blackstone, I'm not picking on Blackstone, I'm just using this anecdotally. If this was just a recent phenomenon, to Tim's point, the stocks would be trading. But Blackstone made its all-time high in the fall of 2024. And obviously now we're here in March of 26. So there's been something going on along the way that have concerned traders, investors, the retail set. Can you speak to that? Well, I think if you go back and look at earnings, whether it's Blackstone or us or Apollo or whoever you want to look at, most of us have been putting up record earnings quarter after quarter after quarter.
34:42So if we look at the fundamentals of our business, whether it's revenue growth, earnings growth, margin expansion, AUM growth, all of that has continued to be up and to the right. And yet the market reaction is sort of forecasting, I believe, looking forward and saying, yes, but. Yes, I see the record earnings. Yes, I see the record inflows and the record AUM. But something's going to happen in the future and the clients are going to rotate out. And again, that's where I go back to, I don't see it.
35:13Tim Seymour:Eric, thank you so much. Great to get your perspective on this. Pleasure. Thank you. Eric Hirsch of Hamilton Lane. What do you think of the washouts, Carter? Well, I think this is refreshing. Unless I'm wrong, hasn't a couple heads of these things come out? Recently said there's trouble brewing and things are not so good. Like a Jamie Dimon in the cockroach. In general. The horse's way. Is that a horse leaving the barn? That's after the fact. These stocks are all down 50%. They all peaked more than a year ago. Worrying about it or talking about it now, this is right. What Eric's saying is right.
35:45That's passed. I'd play these for bounces across the board. Horses out of the barn. Yeah. It's old school. Is it? Oh, well. It's not something to say. First of all, I thought Eric's comments were very succinct, And I think he captured someone that's certainly got some visibility here. And there is a lot of sensationalism. And you can read, I think it was the FT today, maybe it was the journal, I don't know. But they talk about how BlackRock had a credit for$25 million that was 103 days ago and got marked down to zero. Now, this does happen, but it was a$25 million loan. It doesn't necessarily impede and certainly start to bleed into the rest of that portfolio.
36:20It does tell you mark-to-markets can change. One of the things that I know Eric and his team are seeing is a look into infrastructure and energy in the private credit markets and in the private equity. I mean, those are areas that I think have come a long way from 2015, 16, when that whole sector got blown up. In fact, that's a place I like putting clients. It's a place where I think you get excellent returns, and I think these companies are run differently.
36:44Tim Seymour:Coming up, buying power on the rise. The latest data from Zillow pointing to a rise in housing affordability. and why our next guest says a spring rebound is on the horizon. Don't go anywhere. Fast Money is back in two.
37:03Tim Seymour:Welcome back to Fast Money. Rate-sensitive housing stocks under pressure today. The ITV home construction ETF down 2.5%, closing near session lows. Meanwhile, the 30-year fixed rate mortgage ticking back above 6 % after dipping below that level last week. But the latest data from Zillow suggesting that the housing market could perk up this spring as household buying power increases. For more, let's bring in Zillow chief economist Misha Fisher. Misha, great to have you with us. Great to be with you. Thanks for having me. The data that shows that affordability is climbing, is that dated? And I'm just trying to figure out if that incorporates what has gone on recently, what has gone on in terms of the tick higher in housing in mortgage rates.
37:42It's largely a long-term trend over the last year. So I think you're alluding to what's happened with the overall bond markets over the last three, four days. What we're reflecting on is over the last year. And that's a 70, 80 basis point reduction in overall rates, which is meaningful. And I think it's important to keep that in mind, how much buying power that has unlocked for people. So the recent numbers that we have are 30K in additional buying power for the typical home buyer. And obviously, the market's given up a little bit of that over the last couple of days. But we haven't revised our forecasts.
38:15Tim Seymour:How do you overlay, though, what is going on, the conflict in Iraq with, excuse me, Iran, with what's going on in the housing market in terms of people's willingness to make a large purchase when there's sort of uncertainty in the world? Well, you know, we've seen uncertainty have an impact in the past in terms of what people are willing to rush out and buy. But, you know, right now, I think it's still pretty early. I think, like everybody, we're monitoring what's happening with energy futures and seeing what downstream impacts are possible there. But like I said, we're not revising anything yet.
38:45And I think there's a big difference for the consumer in the bond markets, whether or not this goes on for weeks or if it goes on for months. Right. It's sort of up in the air at the moment. We're taking a wait and see approach. Misha, if we take away some structural dynamics that the affordability factor and interest rates, what else is going to change this? I feel like this is the housing conversation we've had and you're providing great insight tonight. But it's the conversation we've had for probably two or three years, which is that it's really been a sideways trade. They've been disappointing numbers.
39:16Buyers and sellers, first of all, obviously not enough inventory. Some two or three of the obvious structural stuff. What could unlock this? Or is it simply rate sensitivity? I mean, rate sensitivity is probably the biggest component. I think if you see the labor market continue to improve, we'll get a new print on that tomorrow and see what's trending there. The January number was a nice surprise for labor markets. And I think there has been a lot of concern in the market based off of the January existing home sales print. Our numbers had January down 7.5%. I think NARS were down about 8.4%. But our February numbers, which is what we just released earlier this week, show a 1.8 % rise.
39:54So we'll see if other indicators trend along with that. Certainly, I think everybody was a little disappointed by the home season last year. We had two years of bouncing along the bottom, and it turned into three years of bouncing along the bottom. But, you know, our overall forecast is for a modest improvement this year, certainly not a gangbuster market. But we're expecting, you know, roughly a 4 percent lift this year. So, you know, I won't pontificate on what that might do to equities. But in terms of the market, it does seem like it's a very gradual uncooling of the overall trend.
40:25Tim Seymour:All right. Great. Misha, thank you so much for joining us. Appreciate it. Thanks for having me. Misha Fisher. Uncooling is a very nice term. but that implies that it's sort of a slow thaw. Well, it took me some time, you know, to uncool. To uncool. Yeah. Last night in the course of about a five-minute span, right? Okay. Remember Sarah Eisen had an interview last night? Yeah, Mark Benioff. And Mark talked about he wasn't seeing white-collar, like everything was fine. And then four minutes later, Gene Munster, and Morgan Stanley made that announcement, Gene Munster at a conference saying that AI could disrupt 30%, 40 % of white-collar jobs.
41:01So the truth is somewhere in the middle, clearly, but that is not being priced in the housing market at all.
41:07Tim Seymour:What do you see? I think you play home builders for a bounce. I like ITB here. Julie, how are you feeling about home builders, the housing sector in general? Yeah, I mean, I think there's something very structural in place in terms of the houses that we need to build. The problem is we don't have very good policy around that to actually address the supply side issue. I think that generally speaking, I'm always a little bit squeamish about buying individual home builders because you're really reliant on their getting the geographic exposure. So if I were looking for exposure, for sure, I'd do it through the ETF.
41:38Tim Seymour:Coming up, the surge in crude oil prices making headlines this week, but it's the energy action in stocks that's pouring, peaking, excuse me, the chart master's interest where he sees these names heading next. And here's a sneak peek at the Kramer camp. Jim is chatting exclusively with the CEO of Tapestry. Catch a full interview, top of the hour on Mad Money. More Fast Money in two.
42:03Tim Seymour:Welcome back to Fast Money. The surge in oil boosting energy stocks over the past few months. The XLE jumping more than 25 percent this year while the S &P is negative. But the chartmaster says it might be time to fade the high energy move. Carter, what do you see in the chart? Yeah, prices are always ahead of facts, and we see that once again. On a six-month basis, of course, energy is killing the market itself. But, you know, OIH is about 40 percent, and those were the first to move about seven months ago, the most beta within energy. So the question is, is this discounting already what's happening?
42:34I think it is. I think you fade the move. So let's look at the XLE itself. Remember, the S &P 500 energy sector, you'll see in the next chart, it represents only 3.5 % of the S &P, but the sector accounts for about 5.5 % of S &P profits. But what you've got here, and it's pretty straightforward, is we are as far above the 150-day. Let's actually get rid of that and go with an arrow. So if you were to see every other instance when we've been this far above the 150-day, we have corrected. Now, I think we're in that position right here again. That one needs to come back. And anyway, so let's go to the next chart, and we'll clear all these.
43:10And what you'll see also is the breakout. It's definitive. That's the exact same chart. We know the breakout occurred, right, well-defined tops at a common level, and then the breakout. But it's already happened. And I think you take a contrarian view. People are rushing into something that is discounting a lot. Again, it's notable XLE on change day, OIH down. I think that says a lot, even as oil surge, fade the move in energy stocks.
43:37Tim Seymour:All right. Carter's going to come back over to the desk. And Molly does. Excuse me. Would you fade? So this is this maybe mark your calendar here. This might be the second, you know, pushback a little bit on the world famous. Well, here are the fundamentals around it. And I'm not going to tell you that oil, integrated oils, are like gold miners. But what I will say is for every$10 higher in the price of oil, especially the European integrators like Shell, this is a tease from my final trade, they actually grow EPS by 20 percent. They grow their free cash flow by 200 basis points for every$10 in oil.
44:12They will re-rate with higher oil. The question is, can oil stay higher? Two years ago, again, with no wars, no nothing, we had 85 rent. I think oil prices are trending higher because they should be higher. And I think they're going to stay higher even if we get a relief. And we will get a relief out of Iran hopefully soon. So I kind of like the integrated, the breakout that Carter said has already happened. I kind of feel like we've got some more room to run because the stocks are going to get re-rated.
44:36Tim Seymour:Is this going to be the second time in one evening? In one hour, you disagree with Carter Braxton? I hate to do this because it makes me wishy-washy, which my grandmother said, used to say, little guy, you don't want to be wishy-washy. Were you a little guy because you were diminutive? No, my father was a junior. I'm not a junior, though. I'm a little guy. And my family still. Anyway. Nobody cares. It's good to know. I agree with everything Tim said. Okay. So I'm on Tim Seymour's side. But as I said earlier, you could absolutely see the rug pull coming, and it'll get all these energy tourists out, which suggests an XLE move maybe back to 49.5 or 50.
45:11But I am not suggesting the energy move is over by any stretch of the imagination. Okay, little guy. No, okay. See, I knew you were going to say it. It's also knowing who you are in the market, what your time frames are, right? If you're a short-term trader, you know, this is so extended, you make a bet. One could say, you made your own point. It's only 3.5 % of the S &P card. It's just going to go to 6%. It's going to double from here, meaning it's what your time frames are, who you are. But this part's incontestable. On a day-to-day basis, it is quite extended, and it is notable that these stocks were down when oil was flipping out to the upside.
45:44Tim Seymour:All right. Up next, Final Trade.
46:15Tim Seymour:Jackson Ward. Vertex, large-camp pharma that's poised to break out. Guy? We didn't comment on Carter's walk to and from the smart board. It was mass swagger. It was more like a swagger. And he was a maestro. And it should have been, by the way. He deserves the right. He's using arrows and circles. The czar of the telestrator, Mike Fratello, but he's. Wow, Mike Fratello has not been mentioned ever on Fast Money. IGV. Thank you for watching Fast Money, Mad Money. 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.
46:53Tim Seymour: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. To view the full Fast Money Disclaimer, please visit cnbc.com forward slash Fast Money Disclaimer.
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From the publisher
Stocks selling off on Wall Street as crude oil continues to climb, and interest rates tick higher as investors digested the ongoing conflict in the Middle East. How the traders are navigating the whipsaw moves in stocks this week, and where they’re finding opportunity in the drop. Plus concerns still lingering over the private credit crunch, but could the fears be overblown? Why the CEO of an investment management firm says there’s a “witch hunt” happening in the space.
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