Stocks Snap Losing Streak… And Tesla Earnings On Deck 4/22/24

0:00Live 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. Big tech on deck. Meta, Microsoft, Alphabet, Tesla all set to report this week. But after the stock's recent sell-off, will the results give them a boost or more cause for concern? We're going to talk it out. Plus, a Bitcoin bounce. The halving has happened and prices are back on the rise. So can gains keep coming? And what's next for the crypto space? Our Bitcoin baller BK is here to break it down. And a deal under fire of the FTC moving to block Tapestry's acquisition of Michael Kors' parent Capri.

0:37Why the move? And what does it mean for the two companies' futures? I'm Courtney Reagan in this evening for Melissa Lee coming to you live from the studio. Be here at the Nasdaq Market Site. On the desk tonight, we have Carter Worth, Courtney Garcia, Dan Nathan, and Guy Adami. We're going to start with the sigh of relief for stocks. after last week's tech-led sell-off, the S &P 500 surging nearly 1 % to snap a six-day losing streak. The Dow gaining 250 points, the Nasdaq leading the charge up 1.1%. Markets did close off their highs of the session, though, and are still well below their recent records.

1:11The S &P down over 4 % in the past month, and the Nasdaq down nearly 6 % in that same period of time. All 11 S &P 500 sectors were in the green today, with tech the notable standout, Nvidia leading that group higher up more than 4 % for its best day in over a month. But of course, this comes after Friday's 10 % sell-off. In fact, all of the so-called Magnificent Seven stocks, with the exception of Tesla, finishing the day higher. This all happening as we get ready for big tech earnings kickoff. Meta reporting Wednesday after the close. Microsoft and Alphabet following suit on Thursday. Amazon and Apple on the docket for next week.

1:46So, how should investors interpret market moves ahead of these prints? Guy, I'm going to start with you. Welcome back. I know you're off for a little bit. Was today just sort of more of a reprieve? Is this a FOMO trade? You've got to be in before you hear the reports. What do you think? Yes, probably a little bit of all of those. It's great to have you on board. I think, look, the market's six straight days lower. Technically, I think the S &P traded down to and held the 100-day moving average. Carter can wax poetic about that. And the fact that nothing happened over the weekend, thank God, geopolitically, I think that was a bit of a reprieve as well.

2:20But I don't think we're out of the woods by any stretch. and earnings are going to go a long way in trying to figure that out. I'll say this quickly. Amazon next week, if you put up a chart and go back to November of 2021, you will see a textbook potential double top. So they better blow it out. And Microsoft this week at 31 times earnings, down maybe 7 % from its all-time high, that stock really has to prove itself as well. So I'm clearly not as enthusiastic going into earnings as other people might be. Yeah, I'd say proving it is really going to be really important over the next week or so. Because, again, I look at Netflix and how it responded to the quarter that they reported, which was great on the subscriber number.

2:58And really, you know, like down 9 % or so on Friday and a follow through today. And I say to myself, that is a matter of expectations, right? And so a lot of investors were like pricing this in, like looking a quarter out, two quarters out. Is this as good as it gets? And I look around today and I see the reaction. You know, the NASDAQ was up a little more than 1%. The S &P was up a little less than 1%. I see Apple basically flattish on the day. I see Google, which was up 1.5%. I see Amazon up 1.5%, but I saw Meta down on the day or flatish or something like that. I just don't see a lot of performance.

3:31Microsoft was up 0.5 % or something like that. So if the biggest names in the market that let us up for the better part of this year are the ones that are going to actually have the biggest S &P earnings contribution, right? I think that at some point in the not-so-distant future, I think investors are like, This might be as good as it gets in this cycle as we get through like Q1 and Q2 earnings. We have a strong dollar. We have, you know, higher rates. We have commodity input prices much higher. And I just kind of say to myself, you know what? Great performance this year. Maybe you take a little bit of a breather.

4:02Last year from the July highs, the October lows, we had 11 percent peak to drop decline. And we're only what, five percent or so? It's nothing. I mean, the give back is very minor in terms of duration and magnitude. We know that from the October low, a six-month move of almost 32 % for the NASDAQ 100, so we're down 7, 8. One way to say the headlines is it was up big today, right? But the real headline is from its peak as of Friday's close, the NDX was down 8%, and now it's down 7, meaning, OK, we bounce 1%. It's meaningless. The presumption is that this correction has more room to run. even though we're expecting first quarter earnings growth, Courtney, for the Magnificent Seven in aggregate to be 40 percent compared to the rest of the S &P 500 to be down 3 percent.

4:46Yeah, and I think what you're seeing right now is this rotation has really started. I already talked about this earlier in the year, but then they thought, oh, no, rates are coming down. Everybody continue to go into your growth sectors. But now with rates being higher, everything that's going on geopolitically, you're seeing how quickly things change and suddenly your value is actually outperforming your growth. You're seeing things like energy, things like gold are outperforming as people are going to those defensive sectors. This week is going to be that show me week. We're actually seeing all of the big tech sectors are going to be reporting this week.

5:12We're getting PC numbers out Friday. So everything I think people have been waiting for this week, if that value continues to outperform growth, I think that's likely going to continue. Or if we just see earning this week and people are right back in, that could just be the end of it. But this is the week that I think is going to really tell you. Dan, you also said it's a show me story for some of these stocks. So what do you want to hear about? More AI? Any partnerships with NVIDIA? I mean, what's the magic sauce that's going to turn you a little bit more bullish than what I was hearing you say?

5:36Yeah, I mean, NVIDIA is really interesting. They don't report until the end of May. If you think about the customer concentration that they have right there, it's Amazon, it's Meta, it's Google, and it's Microsoft. They're about 40 % of their revenues, right? And so this is going to be actually really important. I look at, again, I'm going back to what I saw today. I saw NVIDIA down 10 % on Friday but up 4.5%. Today is a$2.2 trillion market cap company. if Microsoft doesn't speak to higher enterprise spend or higher R &D spend, right? If we don't hear that across the board from some of these big customers, the semi-trade then is over.

6:07And it's over already because if you look away from NVIDIA, Intel has not really been participating. AMD is down 35 % from its March 8th highs, right? We're starting to see some massive bifurcation. So this semi-trade is just stuck in NVIDIA. So if some of their customers this week or over the next week and a half or so don't confirm the 80 % expected EPS growth this year, the 80 % expected sales growth this year, then NVIDIA is coming down too. And that's, to me, the last thing that's holding together the NASDAQ, at least at this stage of the game. Now, that being said, it's not too frequent.

6:39We look up and look at the S &P outperforming the NASDAQ, not at least that I can remember it in the last few years. That's going on right now. So it tells you the importance of these really, you know, top heavy names. But AMD had a good performance today. Who cares? It's done. It's over. I mean, the stock's broken. I mean, it literally is. It went up for no good reason, and now it's going down for a lot of good reasons. Also, it was up the most, right? It was up about 150 % from its October low. So there's proportionality to the giveback. The 37 % is having to do with how much it outperformed on the way up.

7:09When you look at the patterns of some of these names, the Magnificent Seven in particular, and I guess the ones that are reporting this week, Carter, what are your expectations? Any clues? Well, I mean, one thing to point out is that there's been no outperformance on the part of the Qs for more than three years. You might have some charts to annotate that. But if you were to go to the prior high, that's for January 2022, and watch the performance, you have the Nasdaq draws down 37 percent, the S &P 27, and they're even money over three years. So on a risk-adjusted basis, the queues have been a disaster.

7:37You see it on the screen there. That is a relative performance chart. All we've done is recouped all of the relative losses over the past three years. And if they don't deliver, which is, I think, Dan's implication, and they pull the ASML type move, we will have a lower market. What would you advise, Courtney, if folks want to get in on this Magnificent Seven trade, they haven't gotten there yet. Is it smart to do it ahead of some of these earnings reports? I mean, we absolutely still have exposure there. I don't think it's something you want to be out of by any means, but it's something I'm not chasing right now.

8:07That's not where I'm actively adding money. I'm definitely still adding money to things like banks have actually been outperforming your value companies, your energy. Like, that is where we've been adding all year. I'm still continuing to do that with new money. But I wouldn't get out of it. I would still make sure you have the exposure. I mean, if you don't have any, I mean, it's never too late to get in. I just wouldn't be chasing it either. And when we're talking about the patterns, obviously today felt a little bit better than Friday, of course, if you're bullish. But how much really stock can you put in the moves that we saw here today?

8:37I mean, just think about FOMO, guys, so much. No, I think you're right to think about that. And I think some of it's a relief. Again, technically, we traded down to levels where we should have bounced. It makes a lot of sense. Again, the fact that the weekend was relatively quiet makes sense. But for me, Court, I think the die was cast. And we talked about this that day on March 8th when you saw a huge reversal, specifically in NVIDIA and a couple of other names. Since that day, although the broader market went higher, NVIDIA has never reclaimed in those levels, obviously. You mentioned AMD. I mean, quickly about AMD.

9:09That stock reported, I think, was January 30th. I think that day it closed in the 180s. It traded lower on the back of earnings and then was off to the races. We're now significantly lower than we were their last earnings release. So some of these things are seemingly breaking down, not because they're bad companies, but because the valuations just got too excessive, in my opinion. Interesting stuff. I mean, meantime, the FTC, though, also blocking, moving to block, I should say, Tapestry's$8.5 billion acquisition of Cup Reholdings. This news just out here, a deal that is looking to combine three close competitors.

9:41Tapestry's Coach and Kate Spade brands and Capri's Michael Kors brand. Of course, there are others, but those are the biggest three. Tapestry responding to the agency's move, saying, quote, There is no question that this is a pro-competitive, pro-consumer deal and the FTC fundamentally misunderstands both the marketplace and the way in which consumers shop. CNBC.com reporter Gabrielle Von Roos joins us now for more. It's great to see you, Gabby. I know, obviously, this has been rumored for some time. Now we have confirmation officially from the FTC that they are suing to block this deal. What's your initial reaction?

10:16Great to see you, Courtney. And my initial reaction is this is putting cold water on big mega mergers that banks might be trying to get through. I mean, this is not the first time that the FTC under President Biden has blocked a merger of this size, blocked some other ones. And what does this mean for dealmaking moving forward? I mean, when this deal was first announced, all of the bankers that I spoke to, all of my sources in the industry, no one expected this to be one that the FTC would want to make an example out of. And when we started to see some inklings come out about this over the last week that they were considering bringing a lawsuit, I mean, there was a lot of shock in the industry, you know.

10:51So what does this mean for deals moving forward? And also just a lot of surprise that this is what this FTC is up to. Yeah, I think I was I was pretty surprised as well that this was one that they went after. But then it seems like the market warmed up to the idea because stocks, both these stocks in reaction are sort of hardly moving. So I think many people knew that this was coming down the pike. I find it very interesting when you would look at some of their partners. So some of the wholesale relationships they have with some of these bigger department stores that from my reporting and probably yours as well, we're looking forward to this deal.

11:22It sort of makes things a little bit more simple for them when they're dealing with the vendor relationships. and they still saw them as very independent brands because many consumers, I don't believe, really understand what parent company owns each of these brands. Yeah, that's exactly right. Consumers aren't thinking about Capri owning Jimmy Choo or Versace. And when you think that they also own Michael Kors, you would actually probably be surprised that they own all of those brands. And, you know, you mentioned the wholesalers, and that's kind of a big part of this, right? Because you have Capri's, Michael Kors, mid-tier luxury.

11:56You have Tapestry's Coach and Kate Spade, mid-tier luxury. All three of these brands are heavily present in mid-tier department stores like Macy's, but then they also have a huge presence in TJ Maxx and TJX companies. And in that case, that's what the FTC is saying, that it's going to kind of take away some of the competition. Obviously, Capri and Tapestry, before they decided to join up, they were watching very closely each other's prices, what kind of products they were pointing out. And that's that competition that the FTC wants to see. But their concern is, especially in the mid to lower tier where some of these brands end up when they get oversold and overly discounted, there's going to be less competition.

12:35And that could also be a concern for TJX as well, because you want to be able to offer these items at the right type of price for the type of customer that goes to these places. Because they would have a monopoly on these three brands, not to use that language, but that's the FTC's language. You know, would they still be able to offer that competitive pricing? Would the TJX customer, would the Macy's customer still want to buy these brands from those locations? I mean, here's the thing. This is tax dollars not at work. I mean, honestly, if you were the head of the commission, your team came to you with, this is what we're going to work on?

13:07I mean, they regulate milk for a reason and lights for a reason. Handbags and shoes, nobody cares. The whole thing is, what's the market cap of the two companies? 15 billion? I mean, Tesla traded 15 billion today. This is absurd. Yeah, it does really surprise me again, because when we look at these companies, to me, the brands sort of can stand on their own in the consumer's mind. They're so independent. And so putting together the two parent companies, to me, does not, you know, lower the competition. But, you know, I guess I'm not the FTC. Gabrielle, thank you so much for joining us here last minute on this breaking news.

13:41Appreciate it very much. Gabrielle Fonroux from CNBC.com. Guy, make you interested at all? And those two stocks, and you've talked about this, the market is trading as if they've been expecting this. It's doing nothing. And if you look at if you look at Tapestry real quick, we're up against levels. We last traded, I think, in the fall of 2021. The one that sticks out and we've talked about on this show, TJX just defies. I want to say logic. It actually, though, defies some of the other retailers. This is TJX's world. And it's 20 times earnings, probably twice the valuation of those other two companies we just talked about.

14:13You can actually still make a compelling case. They don't report until, I think, middle of May, May 22nd. Here's a name you want to stay with until earnings on May 22nd. One of the most fascinating names in retail to me, TJX. It's a fascinating company. Well, coming up, gold loses its shine. We are charging into the Tesla trade ahead of results and Bitcoin post-halving. How the cryptocurrency is faring and where it could be heading next. But first, TikTok nearing midnight as lawmakers prepare to vote on a divest or ban bill. What will it mean for the app's future and how much could it cost to use economy?

14:46More on that when Fast Money returns. You're watching Fast Money here on CNBC. We'll be right back.

15:01Welcome back to Fast Money. Time may be running out for TikTok. The Senate set to vote on a bill tomorrow that would force the app's owner, ByteDance, to sell the social media platform or face a ban in the U.S. That bill, part of a package that would also provide aid to Ukraine, Israel and Taiwan, was approved by the House over the weekend. For more on what's next for TikTok, let's go to Julia Borson. Hi, Julia. Good to see you. Hey, Courtney. That's right. TikTok is fighting this legislation. And if the bill is signed as expected, TikTok is expected to fight it in court. The company is saying that a ban would, quote, trample the free speech rights of 170 million Americans, devastate 7 million businesses and shutter a platform that contributes 24 billion dollars to the U.S.

15:44economy annually. Bernstein saying that if a TikTok ban does happen, then a potential 16 billion dollars in 2025 ad revenue could be up for grabs. and that Meta would be a big winner from a potential TikTok ban as it has the highest overlap in TikTok creators and Instagram and Facebook are most similar to TikTok in terms of product features. And with Americans spending more time on TikTok than any other social platform, in addition to the benefit to Meta, YouTube and also Snap could also see a boost in terms of user engagement as well as ad revenue. Bernstein projecting that if TikTok is banned, And Snap's revenue would grow 37 % next year versus 14 % with no ban.

16:29YouTube's would grow 23%, 10 percentage points higher than without a ban. While Meta's ad revenue would grow 18 % rather than 13%. So, Courtney, some really strong projections here about how all these other players would benefit. But this is still quite a ways off. Yeah, absolutely. I understand this could actually take years before it really went into place, even if things go the way we think it might tomorrow. Julia, thank you so much for the update on that. I mean, Dan, that's pretty interesting. $16 billion in ad revenue potentially up for grabs. Well, here's the flip side of that. All right.

17:01And I know this is something you track pretty closely. So Temu and Xi 'an. Oh, yeah, yeah. What if they stop advertising here, right? And so, like, it could be like that. I've been trying to figure out what this means for them. It could net out a bunch of it. I think, you know, Snap would probably be the biggest beneficiary in the near term just because of their revenue base. It would just be, like, that much more impactful. But, you know, again, this is not going to happen until after the election anyway. And so I just don't think it's something that a lot of investors in Meta, Google or Snap are going to be pricing in anytime soon.

17:28What do you think? I mean, Courtney, does this up the ante for any company that is operating with a connection to China here in the United States, even if it's an Alibaba, it's a e-commerce? So they're talking about privacy. But I mean, you're giving them information when you're ordering from Alibaba, right, to your personal details. I mean, does this put other companies potentially at risk? I mean, it absolutely does, right? I mean, the question is, is this actually going to go through legislation? And then, yeah, where does the buck stop from there? So I think you bring up a really good point.

17:56You know, it's interesting it comes in this year, which is going to be such a political football. I mean, if you're trying to get the Gen Z vote and you take away TikTok, I mean, I don't know. I don't know if that's really what they're trying to do with that, which is interesting. I honestly, I don't know if that'll go through. If they're really going to see a ban of TikTok, I think it would kind of be one of those, like, political Seawood side things that's happened. But that is the argument of who is it going to benefit. So I know we're talking about, OK, it could benefit Snapchat because they have the younger demographic just like TikTok does.

18:22I would argue actually Google will benefit because they have YouTube, which is definitely going to benefit them, probably more so even than a meta. But honestly, I think this is all just like a little too soon to talk about. I don't know if this is actually going to go through. I think it would be you're giving up votes to do this. I mean, realistically. Fair enough. Guy, what do you think? Too early to talk about the beneficiaries? No, I don't think so at all. But, you know, I think former President Trump will absolutely use this as a campaign. One of the things to campaign on. President Biden is taking away your TikTok.

18:51You know, look at me. I'm all for Facebook is getting more powerful. They're trying to help. You know those tweets are coming or whatever platform they use. Those are coming to a theater near you, but not the ones that win. Apple's in the crosshairs here, without question. I mean, we're thumbing our nose clearly at the Chinese, justified or not. They will retaliate in some way. And I've said this for a while. Apple finds themselves with a bullseye on their back. And the last couple of months, it's been trading that way. Yeah, that is a really interesting point. Of course, I've been thinking about Taimou and Sheehan, but Apple's a good point, too.

19:22Well, coming up, not all that glitters. Gold notching its worst day since February of 2023. So over a year. But after such a run-up this year, where could the yellow metal be heading? We're going to debate that next. Plus, shares of Tesla rolling downhill this year. Can anything from tomorrow's conference call cause the stock to do a U-turn? You never know with Mr. Musk. We are plugging in and checking the charge in the options pits ahead. You're watching Fast Money live from the Nasdaq Market Site in Times Square. We're back right after this.

19:58Welcome back to Fast Money. Gold dropping almost 3 % today. It's worst day since February of 2023. Over a year. The safe haven trade losing steam as worries ease over the conflict between Israel and Iran. The precious metal now negative over the past two weeks. Nikki Shields thinks the weakness is temporary, however. She's the head of metal strategy at MKS PAMP. Nikki, thanks so much for joining us here today. So this big drop today, you think it's just temporary? Look, I think you've got to put things in perspective, right? And since the October 7th Hamas attack, we've been up in a straight line,$600.

20:33So, yes, it's been a pretty, you know, deep one-day retraction. And I do think geopolitics did sort of kick things off into frothy territory. But this is so much more than geopolitics. What's happening in the gold move, it's happened against the backdrop where we've gone from seven Fed cuts to three to two. We've had a very strong dollar. And you've had geopolitics just simmering, but real interest rates are sitting at plus 2%. So this is a regime shift that I think gold is internalizing over the last few months. And geopolitics is just that sort of takes it into sort of over-frothy territory.

21:10So what's the next catalyst then if you've got so many potentially at play? I mean, I do think we go higher, but ultimately, you know, 2 ,500. But it's not going to be a straight line like it was the past six months. I do think a healthy correction is in play because I think you're going to get a lot more people involved who have missed this move. A lot of people, ETFs, have not really subscribed. We talk about strong physical demand, but it's not firing on all four out of five cylinders. So I do think some sort of correction, 23, 2200, and it just will re-rate to a less bullish trajectory going forward.