Stocks Wrap Up A Positive Week.. And How Pharma Will Fare Under Tariffs 4/25/25

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. Tech on the rebound. The Nasdaq popping over 6 percent this week. The S &P climbing more than four. But with Apple, Amazon, Microsoft, Meta and more reporting next week. And the good vibes last. We'll debate that. Plus, self-driving surge shares of Tesla popping. As the Trump administration says, it will loosen rules to help automakers take on China in the race for a driverless future. And later, is Apple's expansion to India going to happen? One street bear isn't buying it.

0:30A big week for Bitcoin. What's behind this comeback? And how are the president's tariffs impacting one of TV's biggest advertisers? We'll go inside the numbers. I'm Melissa Lee coming to you live from Studio B at the NASDAQ. On the desk tonight, Tim Seymour, Karen Fireman, Courtney Garcia, and Steve Grasso. We're all wearing it tonight. So amazingly color-coordinated tonight. This is not coordinated. This wasn't done on purpose. Happenstance. We start off with a tech-led rally on Wall Street. The NASDAQ jumping another percent today, bringing its gains for the week to nearly 7%. And get this, the index is now positive in April, putting it on pace to break a two-month losing streak.

1:04It has now rebounded more than 17 % off its 52-week low hit three weeks ago. The S &P and Dow also finishing in the green, clawing their way back from early in the session losses as tariff negotiations seem to be quieting some investor concerns. But the next big test for markets is just around the corner. Some$10 trillion worth of companies are reporting next week, headlined by Apple, Microsoft, Amazon and Meta. So will next week's reports keep the momentum going, or are we in for a rude awakening? Well, if there were any concerns, Google certainly, for at least now, said everything's going to be all right, at least when it comes to the AI trade.

1:38Yeah, I mean, I thought I listened to the call this morning, and I thought it was pretty good. I think Dieter talked last night about for the cloud part is being, you know, supply constrained, not demand constrained. So that was good. But we have this huge question mark about, you know, what's going to happen with the breakup or not or any of that. And then also, this was the first quarter. And so we don't have any sense of what this next quarter brings. So we'll have some information for sure, but it is possible that we have sort of, you know, conservative outlooks or no guidance or things like that.

2:11Or maybe the, you know, the dual guidance, tariff this, if not that. So, I mean, it's we're coming off a better place, but things have rallied so much that I'm a little bit concerned the bar is high now. I think in Meta and Amazon, to some extent, we have companies that, look, Amazon can tell you a lot about what they might be seeing in terms of the consumer and possibly some tariff dynamics. But I think Apple's really that tell. And I think we're at least going to hear from Apple. But going into those numbers, this is the market that's now rallied 14.5 % off the intraday lows on April 7th. Although, you know, we're only about one and a quarter percent higher than where we closed on the day of, oh, We've got a 90-day reprieve on April 9th.

2:57So the market's done a lot in between. And if you think about it, I just what's I think very encouraging for the market is that over the last couple of days, that downtrend, that downtrend in the S &P, in the NASDAQ and in the semiconductors has been broken today and even yesterday. And if you look at semis, I would argue that the NASDAQ Wednesday, Thursday, Friday is through that downtrend. So some of this price action, I'm sure chart folks out there will tell you, you've actually started to create some real positive momentum to the upside. Back to the earnings, I do think Meta was the stock that couldn't do anything wrong until suddenly they got kind of caught up in the middle of this.

3:33And really the questions about what CapEx spent meant. We can't wait to hear more about that. But everything we've heard so far, no delay in CapEx. Demand is fine. If you look at all the charts, they all fell off a cliff right around deep seek. That was the initial sell-off in the whole space. I think even though they bounced, to everyone's point, they bounced off the recent lows, they're still off that high from when that DeepSeek headline really hit the tape so substantially that these stocks really have room to move forward. We've seen not a substantive bottom because we don't know yet, but you trade below 5 ,000.

4:10I don't think we're going to revisit that anytime soon. and the 10-year, I think, has more control over the overall markets than anything else. And we've seen the Trump administration be really sensitive when that yield spikes. I think they're going to come out of the woodwork. They're going to do anything that they can to make sure that yields stay low. They like low rates. It's no secret. And I think the pivotal point of this week was when Governor Waller came out and said on another news station, came out and said that if the jobs market starts to fall off a cliff, there'll be more cuts and there'll be quicker than people think there's going to be.

4:49So I think it put back on that Fed put where that Fed put was probably not in existence until this week again in earnest. So a couple of things, a couple of puts are back in play then. There's a Trump put, which everybody thought was going to be low, low, low. But then he comes out with very market friendly tones when it comes to describing talks with China specifically. And then there's a Fed put that's also back on the table this week. These are two monumental developments for investors. Yeah, and I think that's where you're starting to see the shock of the tariffs. People are really starting to move past that, and they're really starting to see, can the markets really get past the facts of the tariffs, the facts of the uncertainty, and really look into what's moving forward?

5:27Because before the tariffs, there was a lot of optimism with less regulation, tax-friendliness, just in general, a pro-business-friendly environment. I think at some point, you're going to start to get back there, and that's where people are starting to look at the AI story and saying, we can't forget about this, and there likely is going to be a place where this makes sense again. So I think the fact that the markets got so low, the volatility hitting those levels, the consumer selling the way that they were, I think we're starting to see past that. And I think weeks like this are a very optimistic sign.

5:53I think you could probably make the case, too, that we have hit peak uncertainty when it comes to tariffs and that anything that develops now is only going to be a positive. It's got to be a positive. I think that's a good way. It's certainly the way they want to portray it. And I believe that's the way it is. Right. They they're desperate to and working, you know, 24 seven probably to get some deals. That would be good. I think that, yeah, the sort of abyss of the Liberation Day tariff regime, you know, schedule. I think that they've really pulled back very far from that as they needed to. But maybe I mean, I guess I can agree with the uncertainty, maybe peak on tariffs because we've we've looked into the abyss.

6:36But we certainly have peak, I think, uncertainty in terms of market multiple. Where are we supposed to trade? Lack of visibility for companies into their core business. Scenario analysis upon earnings releases. This is not what you want as an investor. I don't need three scenarios for a CFO to tell me what their business could do. I want them to tell me what they think their business is going to do and make a call. I know Karen doesn't believe in guidance anymore. I never believed in guidance, but I really don't believe in it now. Right. So but I think the uncertainty for the markets is truly the uncertainty that's out there for the economy and where these stocks should trade.

7:08And if you think of a world post covid, I won't go all the way back to the financial crisis where we had tons of accommodation, but we threw 25 percent of GDP at the problem. It was a war economy. It was all kinds of things. It was fiscal nausea. It was central bank nausea. I think a lot of us would agree. It's great that we're tightening the belt and have been. But what does it mean for equities? I'm not sure 21, 22, 23 times forward on the S &P is where we're supposed to be. By the way, I kind of like the two scenarios. I didn't at first. And now I'm sort of leaning towards that. If a CEO gives you this is worst case scenario, this is best case scenario.

7:42I mean, look at analysts, right? You have your base case. You have your bull case. You have your bear case. So there is something to a CEO saying, here's my bear case. Here's my base case. This is what I'm looking at now if nothing changes. And here's the worst case scenario to invest around. I always thought analysts who gave three scenarios was like CYA case. You got every scenario. Well, that may be as well. You can understand it, though. But I mean, I agree. I mean, let's say, oh, well, if my cost of goods is actually 40 percent higher than I thought, well, then this, you know. But one of the things, the VIX, though, has come down a lot.

8:19It's not quite where it was just before Liberation Day, but at 20, just under 25, it's starting to come down to like, all right, this crisis passed. But I think it's sort of getting time to look at protection that was way too expensive with the VIX. But as an investor, are you going to invest behind a CEO that gives you three scenarios? Are you going to invest behind a CEO that gives you a scenario and says, this is where my business is good or bad? So it just gets back to the markets. And we can assess really where the selling has come from. I said yesterday, I think a lot of the selling really has been hedge funds, then de-risking, followed by CTAs.

8:55I don't think retail has done a whole lot here. And I don't think foreigners have done a whole lot here. But ultimately, it gets to a place where where is new money going to be allocated? If you look at the biggest investors in the world, pension funds, endowments, I'm not sure they feel comfortable to be allocating new money here. And my guess is they can wait, and they can wait another earnings season if they have to. Well, one of the biggies reporting next week is Apple, and it is reportedly planning to move manufacturing of U.S.-sold iPhones to India as soon as next year to avoid tariffs on China.

9:22But the street's biggest Apple bear suggests the goal is unrealistic. Moffitt Nathanson writing in a note to clients today that a global trade war is a two-front battle, impacting costs and sales. Moving assembly to India might, emphasis on might, help the former. The latter may ultimately be the bigger issue. Craig Moffitt, who's got a sell rating on Apple, is behind the note. He is the firm's partner and senior managing director. Craig, always great to see you. You've had a great call on Apple. That sell rating was put on a stock back in January. You leaned in again when you lowered the price target and lowered estimates as well.

9:54So at this point, what is the bigot? There's a myriad of issues. It could be tariff uncertainty. It could be brand or American brand damage, Apple brand damage. What is the biggest issue here for the stock? Hi, Melissa. First, I don't think of myself as the biggest Apple bear. I actually think quite highly of Apple. My concern about Apple has been the valuation more than the company. But I would say to your question, the answer is sort of all of the above, right? You have a tremendous sort of menu of problems created by tariffs, and moving to India doesn't solve all the problems. Now, granted, it helps to some degree.

10:38By the way, I would sort of question how that's going to work if the glass and the

10:52fill of materials for the entire phone is manufactured in China, and yet it's assembled in India. It's not entirely clear how that, to the extent to which that will avoid Chinese tariffs. So there's still some questions about that. But even if you do that, what you were raising is a series of questions about the demand side that is created by a tariff war. And in a trade war, it's not just the cost of goods. It's also the demand that suffers. Right. Also, you know, the companies actually that would manufacture the phones in India, one of them is still Foxconn. So they could still have pressure from the Chinese government, even if producing in China.

11:37I'm wondering, though, you know, when it comes to this sort of demand issue, you know, in China, one could argue that Apple was already starting to lose that battle in terms of losing market share to local brands. And this sort of trade war could actually accelerate sort of the backlash against Apple. And then you add to that all of those people out there who in China who are upgrading to AI enabled phones there who are out of the Apple ecosystem potentially permanently. How do you view that market share loss? Because it's not just the numbers here and now, but there seems that there would be a knock on effect going into the future of those lost customers.

12:15You're right, Melissa. It's a very real problem, right? During the first quarter, we've seen declines or we expect we'll see declines of something like 8 % in China. But that's against a backdrop of some pretty significant handset subsidies. And the volumes are really going to the Huawei's and the Vivo's and the local competitors in China rather than to Apple. Some of that is because of the price point. The subsidies were aimed at lower price phones. But some of it is that kind of nationalism that is viewed as patriotic in China to buy a Chinese-made phone and a Chinese-branded phone. And that exactly, as you say, means those people won't be inside the Apple ecosystem and won't be generating revenues two, three, four, five years from now.

13:08Hey, Craig, it's Tim. I guess I'd like to talk a little bit also about post-DeepSeek. This was seen as kind of a net positive for, you know, for Apple, because maybe there's a lot. There certainly could be a movement to handsets a lot faster. There's the universal conviction or view that the Apple intelligence has been a big nothing, but it wasn't priced into the stock. So I'm just trying to understand how you view. I still ultimately believe Apple's power is that installed base and that it will be the way AI is served up to many people. And they will need to refresh at some point. Can you kind of lay this out?

13:41Yeah, thanks, Tim. You know, you can see it either way, right? I mean, on the one hand, when DeepSeat came along, it did endorse the model of, if you'll forgive the pun, of smaller models on handsets. On the other hand, remember that the enthusiasm for Apple is primarily based on the idea that an AI solution on the handset is going to require substantially more memory and a more powerful processor. DeepSeek raised some questions about whether that's going to be the case. And remember, we've said all along that if you're going to underwrite an upgrade cycle in your multiple for Apple, it can't be a one-time upgrade cycle.

14:28It has to be a permanent acceleration in the rate at which people upgrade their phones. DeepSeek, I think, raises some real questions about how much that's going to be required and how much can be done with small language models instead of large language models. It's Karen. Thanks for being on, Craig. Let me just ask you, so you have this$141 price target. What are the pieces that got you to that$141 valuation? Well, so it's a couple of things. First, I think you have to, we wrote about in our report, you first have to acknowledge that with interest rates higher and with a higher equity risk premium, a slightly lower multiple for the whole market, by the way, is warranted.

15:12I heard Tim talking about that before I came on. I think that's exactly right. You have to question the multiple. So we've trimmed our multiple a little bit, but we've also trimmed our estimates. So, you know, you have about a$300 billion product business at Apple, aside from services. Let's say there's a$60 billion or so cost of goods sold there. Depending on what the tariff level of that, you have$20 billion. Now, that might be an increase in cost that's absorbed to some extent by the suppliers, to some extent by Apple itself, or to some extent by consumers. But you also have the demand destruction that's created by potentially higher prices.

16:00Remember, you had AT &T, Verizon, and T-Mobile all this week come out and say, we're not going to underwrite the additional cost of tariff handsets. The consumer's going to have to pay for that. So you're going to have some demand destruction that's going to show up in even longer holding periods and slower upgrade rates, all of which probably trends estimates. Next year consensus for the full year is about$7 or about$8, I mean. We cut that down in our model to about seven. And with a small cut to the multiple, you're talking about a warranted value that's probably in the 140 range. And again, none of this is because Apple is a bad company.

16:48They still have a great balance sheet, a great consumer franchise. It's just the reality of there are no good answers when you are a product company and your products are going to be significantly tariffed and you're heading into a market that is likely to have at least some deceleration in consumer demand because of the macro economy. Great. Great to speak with you. Thanks for joining us. My pleasure. Good to see you. Craig Moffitt with Accelerating on Apple. We've got a news alert. Former Fed Governor Kevin Warsh making comments about the relationship between the central bank and the Treasury.

17:21Eamon Javers has got the details on this one. Eamon. Hey there, Melissa. This coming from Reuters reporting of a Kevin Warsh speech at a conference here in D.C. earlier today. This is interesting because of the timing of all this in the context of President Trump's criticism of Jay Powell and these questions of will he or won't he in terms of attempting to fire Jay Powell. Kevin Warsh at this conference, very critical of the Fed, saying that he believes in the operational independence of the Fed. According to Reuters, Warsh told a conference today that the Fed has gone beyond its remit and undermined its own claims to independence.

17:58He urged the Fed to stop relying on data dependence to guide its decisions. And he blamed the central bank for aiding the expansion of the U.S. national debt and for allowing inflation to surge after the pandemic. So this is similar in tone, Melissa, to some of the criticisms that Warsh has made before. But the whole context here is that Warsh is seen by a lot of folks as the potential Trump nominee for Fed chair at some point after Jay Powell's term is over next year, or if something happens between now and then, more immediately than that. And so the question here is, is Kevin Warsh making these comments because these are his standard criticisms of the Fed, or is he making these comments now because he's sort of lobbying for the job?

18:42One big asterisk to all this, although there has been a lot of discussion about whether Trump will or will not try to fire Jay Powell before his term is up next year. I asked the president in the Oval Office earlier this week if he believes he has the power to fire Jay Powell. And the president said, I don't want to even get into that because I have no intention of firing Jay Powell. So the current line from the White House is the president doesn't intend to fire Powell. But clearly, Warsh is the man in the wings. And so a lot of attention being paid to what he has to say. I mean, it does sound like an audition for a job, Eamon.

19:17In terms of not relying on data dependence, has he said either in these comments or in past comments what then the Fed should rely on? Because if it's not data. Boy, I wish we had Steve Leisman here for this because he has an encyclopedia of all the Fed speakers and we're a little bit out of my area of expertise. But yeah, I mean, he has been critical of the Fed before on these issues of U.S. debt and the policy post-pandemic. And then the question is, is he doing this just because, look, there's a lot of finance ministers in Washington this week. The IMF is here. There are a lot of folks making speeches at a lot of conferences in financial Washington this week.

20:01or is this timed to sort of dovetail with the president's criticisms of J-PAL? And so that political timing, I think, is the thing that's going to raise a lot of eyebrows. I'm just too used to you having all the answers, Eamon. I didn't mean to put you on the spot. Eamon, thank you as always. Get Steve on the line. He's the expert. All right. Eamon Javers reporting from Washington. What would we make of a Fed chair, Kevin Warsh? Yeah, I think he's for lower rates. And I think what Warsh had said was not solely on data, not solely on the data points that the Fed is worried about market valuations, worried about asset prices, include those all in, not just data dependency.

20:46So I think, you know, to be to be not fair to him, but I think that's what his view is. And obviously he would toe the line for the administration. And you said this sounds like an audition. We already know who's going to be the next. He'll be the next Fed chair when it happens. So, I mean, I think he would be, you know, he's a very good choice, I think. He's a very smart guy. I think what happened, though, the last time that the Fed ignored data and thought things were transitory, right, instead of ignoring that data and saying, well, it's not going to be like that. Right. That ended up being an enormous mistake.

21:21And so you can understand why they would be hesitant to do that again. Right. And I think, too, when it comes to the Fed, we saw this back in the fall where they started lowering rates, but the bond market just did the opposite. And I think to a certain extent, we can see those policy changes, but the markets are also going to do something different. I think that is something we want to continue to watch is what are the bond markets telling us? Because that's been much more indicative, especially over the last six months of where things are going. And so that's what I would continue to watch, especially with all this arguing on Capitol Hill right now.

21:48But what was interesting about just what we went through here with Eamon is that these headlines seem to be coming out in the context also of the Treasury. I didn't really understand what those headlines were saying, because, again, the independents, obviously, the Treasury and the Federal Reserve, very, very different functions. But obviously, the Treasury certainly has there's there's a lot of interplay ultimately what the Treasury is doing based upon what the Fed does. The other confusion really could be with headlines to talk about data dependence. And all we've been doing is talking about an independent Fed.

22:17and ultimately what is the Fed going to make their decisions based upon. And there's been some concern that some of the folks that are compiling a lot of the data and some of these independent sources that actually are this is what they do are no longer doing what they do because they've actually been cut loose. So, I mean, there's different dynamics here. I agree with what everybody here is saying is Kevin Warsh, I think, brings a lot of continuity. And I think most people are not concerned about that. But that these headlines are such that I do think it's easy to make some headlines here. Coming up, Tesla shares revving to their best week since November as federal regulators loosen self-driving rules.

22:54The deregulation details next. Plus, we're searching for gains in Google where the stock may find its next leg higher after last night's earnings right after this. Welcome back to Fast Money. Tesla shares surging nearly 10 percent today, locking in their best week since the election. The latest pop coming on hopes of deregulation of full self-driving technology that will prompt faster rollout of its robo-taxis. Meantime, Alphabet managing to close a percent and a half higher on the back of yesterday's results. Alphabet saying Waymo, its self-driving taxi company, may offer cars for personal ownership in the future.

23:27They also reported an astronomical rise in the number of rides that they are offering over a year ago, which should—I mean, you discussed this last night, Tim. It should impute some value to Google. I don't think I mean, again, I'm not a Google analyst and I don't have my sum of the parts in front of me. But but I can tell you that it's not getting 30 to 50 billion in valuation or maybe, you know, maybe that's where it is. But again, think about where RoboTaxi is for Tesla. So I just I get back to those numbers on Google. I think it was an exhale. I think it was a relief. And I think the more important parts of the business were fine.

24:00And I'm not ready to say goodbye to their core search business. And I think when it comes to Tesla, they were down over 50 percent off of their highs before this week. And now you're seeing that Elon is maybe stepping back into the Tesla role, which people are happy about. But this news with less regulation, that's the reason the stock popped so much post-election. It's still down more than 40 percent from its highs. So I think it still has some ways to go there. But I think this is a bigger picture for the overall markets, where if we are going to start to actually see this less regulation and get past these tariffs, you can see how much the markets want to see that.