Stocks Stage A Reversal.. And The Latest Health Care M&A 11/14/25

0:01Live from the Nanzac market side in the heart of New York City Times Square this is fast money Here's what's on tap tonight. A massive market rebound after a rough start to the session. Major indices all closing well off their lows of the day. What's a reversal signaling as we head into the weekend? And drug maker deal making. Merck making some M &A moves to widen out its pipeline, what it means for the stock, and the next potential deal coming for the space. Plus, Walmart names its next CEO less than a week away from earnings. Baba breaks down after a scathing report from the White House. And we are counting down to the biggest earnings report of the season, and how markets are positioned ahead of NVIDIA's latest results.

0:36I'm Melissa Lee. Come to you live from Studio B at the NASDAQ. I'm the desk tonight. Tim Seymour, Bono and I, Steve Grasso and Julie Beal. We start off with a big intraday reversal in markets, a session starting off in dire straits. The NASDAQ down almost 2 % right out of the gate with the S &P and the Dow also deep in the red. Bitcoin falling below$95 ,000 and the big AI players all sinking. All of this week's concerns from sky-high valuations to fading hopes where a Fed rate cut seemed to be coming home to roost. But things seem to change rather quickly. Major indices are closing well off their lows, with the Nasdaq eking out a small gain.

1:08And even the biggest momentum trades got their mojo back, Supermicro, Robinhood, Micron, and more, seeing massive swings from their lows to the close. When all this was said and done, the market's end of the week, basically where they started. So what should be the takeaway from today's market action, from this week's market action? Tim? Well, I think the market feels more nervous than it did. I mean, I know we could go intraday, really. You know, that's that's the love the markets needed to rally off of. And they did it or not retest. And I think there's a lot of people out there that think that a test of that is a place to maybe take a little bit more cover.

1:41It was a week when Fed hawks reemerged. It was a week where some of the high momentum, certainly some of the frothy trades are places where I think there even was a lot of pain, even on a rebound day. And it was a day on a rebound day wasn't even that great of a rebound day because the rebound kind of failed by the end of the day. And so net-net to where we were, yes, absolutely. It almost felt like that turnaround Tuesday on a Friday. But we also closed 25 or 30 S &P handles off of the intraday highs after the intraday lows. So I don't think that the market feels that comfortable going into next week, even though, again, some technical levels were held.

2:20Those are nice bounces. But we do have a Fed that wants to communicate that December is not a fait accompli. We talked about this last night. I'm not sure the 25 bips in December means a lot. It means more about just the Fed's tone, which may be less accommodative. Yeah, I think tone and glide path are definitely at the forefront here. I mean, we're through 90, 95 percent of earnings. We do have NVIDIA. We do have some retail names coming on next week. But the bulk of earnings, that has kind of given you your data points going forward. I think, you know, a lot of the wind did come out of that AI trade.

2:51I think the open AI announcement kind of signaling perhaps a desire for Fed backing raised some eyebrows. I think you start to look into the financing and the circular type of dealing that's going on there. But with that said, I'm kind of in lockstep with Tim. I think my biggest takeaway is that one should expect some continued volatility. And we've had quite suppressed VIX for some time here. And so when you've had that move, particularly since the bottom of April that we've seen from now year to date, I just don't think you can expect there to be a straight line. With that said, I still do see this through somewhat of a positive lens because I do want some air to come out of the cells.

3:28What concerns one and kind of makes you a little bit hesitant to deploy capital into winners is when you continue to see earnings grow, but you continue to see price to earnings expansion. At some point, you do want to see some stability there so you can understand exactly what you're paying for for earnings and that you have confidence that what's driving that stock price forward is earning potential and not just people pumping money into that hysteria, if you will. I feel like if you want some of the wind to come out of the sails, you're sorely disappointed this week. I mean, what looked like it could have been the start of something bigger in terms of a downturn, basically end of the week flat.

4:05So where does that lead? I mean, I don't know, turnaround Tuesday on a Friday. You could make the case that a turnaround Tuesday on a Friday is even more bullish than a turnaround Tuesday on a Tuesday, because going into the weekend, why would you want to be long? Why would you want to even up on the week? Markets never, I shouldn't say that, markets more often than not don't bottom on a Friday. Right. It's a 10 percent chance in the history of the markets that they bottom on a Friday. They usually bottom on a Monday or Tuesday. So if that's the case, then you don't want to be into the weekend long.

4:35You know what didn't bounce today? Bitcoin didn't bounce. Ethereum didn't bounce today. And the glide path, I love that term. If it's off for December, if it's off for December, then it could be off for January. So that's what we're worried about. But you know what is off? Powell in May. So this is going to be. It's just a matter of time, you're saying. It's just a matter of time. The market's always priced in four to six months ahead. But I do believe that it is the glide path and it is rates that sold the market off this week. Right. But of course, Julie, it's Nvidia. I mean, if Nvidia had a wildly bullish outlook next week in terms of CapEx, et cetera, I mean, that could change things on a dime right there.

5:17Yeah, I think it's the most it's kind of the tentpole of all the tentpoles right now for this theme is people need to feel very good that not only are the CapEx plans still intact, but there's a certain amount of broadening, and there is visibility and backlog that's going to be there with or without federal backstops, which I think we can all agree don't sound great to us right now. Yeah, I mean, that comment was thrown out there, and really investors took a hold of that. We are looking out next week for a lot of retail earnings, and there has been concern about the consumer. Big box. A lot of big box retail.

5:49A lot of big boxes out there. Exactly. Exactly. In terms of the data points that get us concerned about the consumer, whether it be foreclosures in the housing market, delinquencies in auto, while they are ticking up, they're still historically low. But at the same time, if these big box retailers come out and sound cautious, is that going to be enough to give the market another reason to pause? Or do you think we're sort of we're over that? Well, I think the market is also, you know, there was a time when a lack of data was pretty good because the Fed was seemingly just going to do what they were going to do and remain dovish.

6:19In the absence of data, we now have a Fed that looks like they're trying to hold their ground. Steve's right. I mean, at some point you're going to have a change in the Fed next year and maybe it's a completely different game. I hope it's not a game and I hope it's not completely different. But I do think you are going to have a Fed that's going to be more accommodating as we get into next year. But for now, it does feel as if there's still some questions around the consumer. I'm not buying that the market is hung up on valuations. I understand that there are names in, call it quantum, and in digital land, and in places that just ran up to extraordinary levels.

6:55But I'm not worried about the valuations of the MAG-7 here. I'm just not. If anything, now I mean Meta's in value territory. And there's a handful of names here that actually look kind of interesting. I think there are a lot of investors that were hoping for more of a pullback. You're right, Mel. I think I think seeing, you know, seeing Meta kind of trade around 600 and break below that is a place where, yes, a scary level. But I think a lot of people said if I could buy Meta with a 500 handle on it, I'd be in buying it. And I think people want to own it there. I think the market will give it a pass.

7:25So if you see the department stores, you see retail sort of miss or miss, they're going to blame it on the government shutdown and the government shutdown has ended. So I think you're going to see them get a pass. They'll they'll wash away those numbers. data that we do get or don't get that we maybe will never get. I think they'll look past. So I think this is all sort of a give me for the next two weeks, which leads me to what does it give me that they're basically the glide path. And yes, a give me just means that they're not going to hold your feet to the flame. Right. So they're not going to worry about it.

7:59So I think if we can get past Thanksgiving, we have the hopes of having a great December. But I'm not sure we can get past Thanksgiving. Right. So I'm not. We will. Yes. One way. One way or another. We're going to get we're going to get past Thanksgiving. I just think if we could bide our time for another week, hopefully I'm looking for that bottom where we started on Monday or Tuesday. I'll feel much better if we get a rally in the first two days. But even the bottom that we saw Monday or Tuesday wasn't really a real pullback. I mean, what are we talking from all time highs that pullback from, you know, to Monday?

8:37We're not really. that pulled back from all time highs. It's not even a correction. And again, it's as if the market wants to get a 5 % or to call it a day. Yeah, exactly. I mean, I'm not here to make a mountain out of a molehill. I'm with you. It wasn't a tremendous pullback. I think the speed at which it happened and the swift change in sentiment is really what is called, you know, caused people to raise their eyebrows. As far as retail earnings are concerned, I'm not sure the numbers are as important. So I think I kind of hear what you're saying, Steve. I do think the guidance is going to be very important, though.

9:08You know, two-thirds, 70 % of GDP is retail spending. So I'm a little bit hesitant to just completely look past this. Right. And if you do see this K-shaped recovery continuing, but you see further deterioration in that bottom half, I do think that's somewhat concerning if it affects inventory levels, if it affects what you're going to have to do with promotionals. And if you don't see the Black Friday and holiday spending kind of starting to pull through, I think that's somewhat concerning. I think one last thing. Sorry. I think what people think of the sell-off, they might not have gotten the pullback this week, but I think everyone is looking at this year saying April was our sell-off.

9:45So that's why we've gotten greedy with the market performance now, where we've already had that drastic sell-off. And then the bulls will tell you it only lasted nine days, really. So we have that drastic whiplash. Is anyone on this desk, is anyone in the retail world going to be able to thread that needle with selling the high, buying the low in nine days, 12 days, or 15? All right. Meantime, as we mentioned, retail earnings do kick off next week. Home Depot reporting on Monday. We've got Lowe's and Target on Tuesday. Walmart to follow on Wednesday. That's a big one. Joe Feldman of Telsey Advisory Group joins us now to look ahead to what we can expect.

10:20Joe, great to have you with us. Certainly, it's interesting. You know, Walmart changing its CEO now with Doug McMillan stepping down. I feel like Walmart is the big one next week to watch in terms of what they're going to say and also given its valuation. I mean, Walmart is richly valued to itself historically, richly valued to the sector, richly valued to the S &P 500, richly valued to the Mag 7. So what do you feel about Walmart right now? Well, it does have a high valuation. We think it's warranted, just given the transformation the company's undergone over the past decade, really, under Doug McMillan.

10:54And I think they're going to carry that forward with new CEO John Furner. You know, they've had a digital transformation. They've really embraced technology. They modernize their supply chain. And by incorporating AI throughout their systems, they've really been able to operate more efficiently, target the customer more effectively. They're doing a better job now bringing in advertising revenue. They have a marketplace now. And so we think that they're doing a really good job and have an opportunity to perform well. I think the consumer, especially their consumer, we're probably going to hear is still a challenged area of the market.

11:30I think we're going to hear the paycheck cycle is still somewhat pronounced and becoming a little more pronounced even. But at the other end, they are capturing that more affluent consumer at the same time. So they're winning on all fronts. What does Target need to do? What do you need to see from Target in order for it to be a buy? I mean, it's got, what, an 11, 12 times forward P.E. or so, 5 percent dividend yield. We just talked to Jerry Storch, the former vice chairman of Target, And he basically said he got rid of all his shares and he would prefer Walmart over Target at this point, which is rare to hear a former executive actually vote for the competition in terms of where they would put their money.

12:09Yeah, listen, the setup here for Target is actually pretty good. You know, we're still neutral on it. But I do think that expectations are quite low. You know, no one's expecting a really strong quarter. We're starting to hear anecdotes that the stores are looking better. We've seen it ourselves. They're ready for the holiday season. And maybe if they're operating a little bit more efficiently and can talk about going forward, having a little bit better trend through the holiday season, that would get people a little more interested. It's still very much a show me story, though, I think at this point, you know, and the investor community is really split.

12:41Some people think, you know, this could go one of two ways. And there's a lot of people thinking it's not going to go the right way. We're optimistic that they can maybe turn things around. I think new CEO Mike Fidelke is going to bring not necessarily fresh eyes, but a fresh perspective. I think now as the boss, you've got to give him a chance. He made some aggressive moves already to cut some staff at corporate. And we'll see what he does in the stores, you know, if he can really jump up the operations there to improve the business. Joe, when you have such a CEO that Walmart had that was a performer, I always look at it as they have everything to lose.

13:15So I'll ask the question a different way. Instead of Target, who has everything to gain? who can capitalize on this shift the most? Well, I think the shift in the consumer right now is still in Walmart's favor. You know, if anything, the tariff-related price increases are starting to flow through a little bit more heavily than we saw in the past. Now that the inventory has come in at that cost, you're going to see that in the first half. Now, there are some tailwinds to offset some of that. Obviously, you know, I think tax withholdings have been a bit higher this year, So people will see some of that benefit in the spring.

13:47But you're going to see continued pressure on prices. And Walmart is still the best place to go right now to save money and to get the best value for your dollar. Joe, there are numerous reports that the Trump administration recognizes that the consumer is strapped, that there's a big swath of America that are having trouble making ends meet, as evidenced by what happened with the mayoral election here in New York City. And there's talk about things like a 50-year mortgage,$2 ,000 directly paid to the consumer. How do you view that in terms of the impact on retailers and who would benefit from such a, for instance, a direct payment to the consumer?

14:26We think that that middle income and lower income consumer is really where you'd see some of that benefit. it. Now, I've seen some work done, and so we haven't done it ourselves, admittedly, but where if you kind of combine the tariff-related price pressure with maybe some of the tax benefit, they kind of neutralize each other for that middle and lower income consumer. Now, if you gave everybody a$2 ,000 check or at least that sub$100 ,000 household income, that would be some pretty good juice that would just spark some spending. But it's like a candy rush. It would just be a short period of time.

14:59So I'm not sure that's the most effective way to kind of jumpstart things for that consumer. But, you know, that really bringing prices down, which, you know, the administration is trying to do right now. They are talking about trying to exempt certain goods like maybe coffee beans and bananas and avocados from some of the tariffs. That would help the consumer. Joe, great to speak with you. Thank you. Thank you. Joe Feldman. Julie Beal, Walmart or Target? Oh, Walmart, all day, all day. I think that they're really able to capture this higher income consumer in a way that's pretty unique. And I think that part of what is actually hurting all of the, anyone who's trying to appeal to the low income consumer is the recognition that we've lost so many immigrants that tend to be lower income.

15:48And so I think it's less a function of that customer is struggling. I think they are generally. But I just think there's fewer of them walking in the door. Yeah, I would echo that. I don't even think it's close. It's Walmart. With that said, if one is looking for a beta play and anecdotally we've said sometimes things are so bad that perhaps they're good, I think that that probably has the most short-term upside potential if they were to get it right. I expect Walmart to be much more of a grinder or somewhat range bound, particularly as people sit back and see how the new CEO performs. I think it's much more of a safe play.

16:26But if you're truly looking for juice in your portfolio and you're willing to do it, I would probably advise it via options. I think that that target offers you a little bit more beta at this point. The forward P of Walmart is 39. Right. And the forward P of Target is 12. Yeah. So, I mean, that's to me, that spread differential is a two and a half standard deviation event. And I realize different things have happened to these companies. It's not the same as just talking about an index and where it goes. But I'm sorry. Mean reversion says I own Target here. Actually, I own Walmart. But I do think you can own Target here.

17:03And actually, I own it for clients. I think it's a case where you are seeing now this perception of price and value at Target having returned after a couple of years of that being thrown out the window. I do think there's a dynamic here where you've started to also see some traffic recovery. And as I think we're all saying, you know, terrible to just bad is great news for Target. And I think you can own it. Meanwhile, we've got some news alert here. Some big tech buying by Warren Buffett's Berkshire Hathaway. Leslie Picker's got all the details. Leslie. Hey, Melissa. Yes, it is 13F Day. And we saw Berkshire Hathaway taking a new stake in Alphabet.

17:3617.9 million shares. They're worth about$4.3 billion at the end of the quarter. You can see shares of Alphabet up about 1.4 percent. Google's parent company now a top 10 Berkshire Hathaway holding and the firm's biggest new tech position since its original Apple investment. Speaking of Apple, the firm trimmed Apple in the quarter, selling 42 million shares worth 15 percent of its stake. But Apple remains, by a long shot, Berkshire Hathaway's largest position. Alphabet lacked consensus among the big managers we tracked. Co2 bolstered stake in Alphabet by 250 % during the quarter for a billion-dollar-plus stake.

18:14However, Baupost, Pershing Square, and Appaloosa each reduced Alphabet in their respective portfolios. Appaloosa trimming a slew of big tech holdings during the quarter, which also included Amazon, Meta, Microsoft, and NVIDIA. Viking also filed a short while ago when it dissolved an$850 million stake in Amazon, but took a new billion-dollar-plus stake in Microsoft and increased exposure to Meta by 250 percent. On financials, Berkshire Hathaway trimmed Bank of America by 6.1 percent to$29 billion. Vikings slashed B of A by 63 percent to hold roughly$600 million by quarter end. Now, just a reminder, these positions are as of the end of Q3.

18:55They may have changed in the six weeks since. Mel? Leslie, thank you. Leslie Picker. Interesting to hear the alphabet and Apple shift given Apple is pretty much at a record high at this point, Tim. Yeah, although some of this Apple move really has been since the end of that quarter. But as we have just heard, that Berkshire still is this is a dominant position for them. The move in Google, though, in the third quarter is unmistakable. So this does look like really great stock picking, especially if you think about where we we started the summer and the view on Google and Gemini and where they were in the A.I.

19:28race. and we didn't have the DOJ outcome. So this was a great time to get longer Google. Meantime, we just mentioned Apple. Well, looks like it's a port in the storm. The iPhone maker outperforming mega caps this week. The latest headlines driving shares to new highs. But first, Alibaba tumbling on a scathing memo out of the White House. The details and the implications right after this. This is Fast Money with Melissa Lee right here on CNBC.

20:01Welcome back to Fast Money. Alibaba shares dropping almost 4 % today. The drop coming after a report on a White House memo claiming the company is helping the Chinese military target the U.S. CNBC's Eamon Javers has got more on this. Eamon. Hey there, Melissa. Yeah, the Financial Times this afternoon reporting that Alibaba allegedly provides tech support for Chinese military operations against targets inside the United States. Now, the paper citing a national security memo circulating inside the White House for that claim. So far, there's been no comment from the White House yet on this report.

20:36The memo allegedly says the Chinese company supplies the People's Liberation Army with access to customer data that includes IP addresses, Wi-Fi information and payment records, as well as AI related services. and the FT reports that employees had transferred knowledge about zero-day cyber exploits to the Chinese army. Now, in a comment to CNBC on that FT report, an Alibaba spokesperson said, the assertions and innuendos in the article are completely false. We question the motivation behind the anonymous leak, which the FT admits they cannot verify. This malicious PR operation clearly came from a rogue voice looking to undermine President Trump's recent trade deal with China.

21:22Now, Melissa, by law, companies in China do have to share information with Beijing when that information is requested. That's one of the reasons why U.S. officials have been skeptical of Chinese-owned firms with access to vast swaths of American data. That law went into place, Melissa, back in 2017. So since then, this has been the case there. Did the White House have any response to this whole thing? Did they verify this memo? Did they acknowledge that it exists? No, no, no, no comment from the White House on it at all. We've been reaching out throughout the day. So no indication that this memo or no confirmation by us that this memo exists in the FT and their report acknowledges that they can't, of course, confirm the accuracy of a memo that was leaked to them.

22:09They just know that the memo existed. They can't confirm the underlying facts, which are intelligence information and largely classified. Eamon, thanks. Eamon Javers in Washington. Whether or not this is true, obviously we do not know if this is true or not. This just sort of underscores the nervousness around Chinese-related companies, the role of the Chinese government when it comes to these Chinese companies, and what the government, i.e. the Communist Party, has access to. Tim, you're an investor in Alibaba. Yeah, I am. And I don't like the headline, although I'd like the headline a lot less if this was a memo coming from Beijing about involvement with the U.S.

22:48government. In other words, I'm not surprised to hear that Chinese tech firms have opponents in the White House or around the White House. But the reality is there are requirements for Chinese companies with the Chinese government. In fact, Alibaba's compliance with that is something that I think is great as a shareholder because ultimately I don't want Alibaba competing. I don't want Alibaba on the other side of the Chinese government. So more importantly, back to the chart of this stock, One forty is kind of your March highs. Could you trade down there? There's definitely some there's some air here.

23:20I still think this is a deep value when you're looking at mega cap tech. Maybe this is why people say. But I stay long. Yeah, all I can say is this just frankly underscore some of the tension around, you know, U.S. negotiations. Again, this memo was or whatever you want to call it was very thin on detail. So it's hard to attach much confidence to it either way. You know what? We do want to go back to D.C. because the White House just issuing an update on tariff rates on a slew of items. Eamon Javers was that, too. Eamon. Yeah, Melissa, this just within the past hour here from the White House. This is a 98 page document.