Tech Helps Fuel Market Rally… And Sarepta Therapeutics’ Plummets 6/16/25

0:00You're listening to Fast Money in Progress.

0:31What do you say? Mr. President, Iran is actually saying Netanyahu of attacking them to deliberately derail your nuclear plan that you had. What do you say to that? Do you think that's true? No, no. Look, Iran should have signed the deal. If it would help bring Iran to the negotiating table, would you guarantee that the U.S. would not get involved militarily? Well, I think this. I think Iran basically is at the negotiating table. They want to make a deal. And as soon as I leave here, we're going to be doing something. But I have to leave here. I have this commitment. have a lot of commitments, have a commitment to a lot of countries, including the U.K., where we just signed our deal.

1:08Mr. President, when will we... The Press. The Press. We're going to let you have that information in a little while. The Press. When will they restart? The Press. They're starting already. Mr. President, do you want to wait to apply more sanctions on Russia? Well, Europe is saying that, but they haven't done it yet. Let's see them do it first. You told me earlier that you could sanction Russia. Why wait? Why wait to sanction them? Because I'm waiting to see whether or not a deal is signed. Can you guarantee the UK won't be subject to any people? And don't forget, you know, sanctions cost us a lot of money.

1:50When I sanction a country, that costs the US a lot of money, a tremendous amount of money. It's not just, let's sign a document. You're talking about billions and billions of dollars. The sanctions are not that easy. It's not just a one-way street. And just quickly, do you think that Israel can... Is that still proceeding? You think it's a sort of review of that? Yeah, we're proceeding with that. It's a really important deal to both of us. I think the president is doing a review. We did a review when we came into government, so that makes good sense to me, because it's a really important... We're very long-time partners and allies and friends, and we've become friends in a short period of time.

2:27He's slightly more liberal than I am, to put it my... I will stand slightly on the left. For some reason, we make it worse. Mr. President, did you just say you should be giving away the barming of Israel? There's quite a few British voters who worry who side more with the Russians over the Ukraine war. Can you reassure British people that have not been there? You know what I said? Saving lives. I only care about saving lives. We have nothing to do with it except that Biden stupidly let us get into that mess and gave them$350 billion. dollars, 350 billion. And yet, despite that, you saw how we did in the Middle East.

3:04We took in 5.1 trillion dollars. We have 15 trillion dollars almost looking around that number, going to be invested in the U.S. So the money is not the thing in this case. It's 5 ,000 young people are being killed every week in Russia, Ukraine. And if I can stop that, I'll be very happy. They're Ukrainian and they're Russian. So you could say, what am I doing? But I'd like to see if I could stop. You said that Israel can fully eliminate the threat that Iran poses, this nuclear threat that they pose without the United States military help. Who said that? No, I'm asking if you believe they can without that.

3:40It's irrelevant. Something's going to happen. Have you spoken to the ledgerals? Do you consider traveling to the Mideast as part of any talks if it would help broker a deal of law? Yeah, but I think we're doing pretty well. We're talking. We have a thing called the telephone, so we're talking. But it's always better to talk in person. Mr. President, do you want to see a crazy inch in Iran? I want to see no nuclear weapon in Iran, and we're well on our way to making sure that happens. We had a discussion about that this morning. There's a G7 absolute clarity in relation to the nuclear program. We do not want to see it.

4:12Mr. President, do you have a response just about... What? Can you guarantee the UK will be protected from any future tariffs? The UK is very well protected. You know why? Because I like them. That's why. That's their ultimate protection. Thank you very much. The Prime Minister's done a great job. I want to just tell that to the people of the United Kingdom. He's done a very, very good job. He's done what other people, they've been talking about this deal for six years, right? Six years. And he's done what they haven't been able to do. So he's done really a very good job. What if he responds to Tucker Carlson criticizing you, saying that you were complicit in the war?

4:50I don't know what Tucker Carlson is saying. Let him go get a television network and say it so that people listen. And quickly, have you spoken to Zelensky before your bilats? Yeah, a lot of them. Japan? A lot of them. That was UK Prime Minister Keir Starmer and President Trump speaking at the G7 meeting in Canada, talking trade, Iran and Israel, Russia and Ukraine, and much more. Let's get straight to Megan Casella, who's got all the headlines from Canada. Megan. Absolutely, Melissa. That's not the first time we've seen the president on camera today. I had quite a few chances to see him. But it is the first time in the last few hours that we heard him there making some news, as you mentioned, on Israel and Iran, saying Iran is foolish not to sign a deal.

5:29He also said, and I quote here, Iran is basically at the negotiating table where they want to make a deal. And as soon as I leave here, we'll be doing something. Notable there, especially as markets were up today on hopes that there might be some ongoing negotiations and the Iranians might be coming to the negotiating table to strike some sort of an agreement. He's keeping that hope alive there. He also wasn't committing to sanctions on Russia. That's something that came up earlier today. A reporter asked if he'd be willing to put sanctions on Russia. At the time, he said it could happen. Today, just now, he was again noncommittal, saying sanctions cost us a lot of money.

6:04He didn't seem yet ready to be making that step. Then, finally, he also was saying that they had signed a trade agreement with the U.K. He was saying at the end there, a deal, negotiations that they've been working on for the past six years or so. And, Melissa, you'll remember this framework of a trade agreement, not a fully-fledged deal yet, but this framework was first announced in the Oval Office just about a month ago. It gave up a little bit on both sides, some market access for U.S. products like beef and ethanol, while the U.S. was keeping its baseline 10 percent tariff in place. In exchange, the U.K.

6:34could send some cars to the U.S. without as high of a tariff and was committing to buy some products to Boeing as well. That's what we expect they signed today, sort of formalizing that, because, remember, Keir Starmer, the prime minister, was not in the Oval Office for that. So advancing the ball a little bit further. Trade, of course, Melissa, being the backdrop to so many of these conversations today. And I'll flag just one last piece of news. It's just before this meeting that we saw with Starmer, the president also sat down with the president of the European Commission, Ursula von der Leyen, the White House says, at the EU's request.

7:05So that's, of course, a major deal we've been waiting for. We don't have a readout of that meeting just yet, but we can confirm that the two leaders did meet. Melissa? Megan, thank you. Megan Casella. And you are watching Fast Money. I'm Melissa Lee coming to you live from Studio B at the NASDAQ Market site. On the desk tonight, Tim Seymour, Karen Feinerman, Dan Nathan, and Guy Adami. Let's get to today's market rally. Stocks shaking off, escalating conflict in the Middle East. Concerns about the oil market, the ongoing terror threat to inch back toward record highs. Every single MAG7 stock in the green to kick off the week, but a handful of legacy tech names really stood out in the session.

7:38IBM, Microsoft both hitting all-time highs, and even Oracle, which pulled back slightly today, is still pacing for its best month in nearly three years. The move comes across the tech sphere, pushing the XLK ETF to its own record. So will it be these stocks that keep the markets rising even higher? We might even also have some positive news out of the G7 meeting when it comes to EU and the U.S. in a trade deal. Yeah, well, the math suggests it has to be. I would say 250, 300 S &P points a month ago. Tim said that the pain trade was higher and it's playing out in front of us. And in terms of these stocks, again, it sort of has to be these stocks that continue.

8:14It's just the names, which names sort of make sense. I think Oracle, which we've talked about for a while, I think right before our eyes, has gotten itself expensive. But IBM, if you look at the quarter they just put up and look at the valuation, look at the businesses they're getting into. Steve Grasso talks about quantum computing at 25 times next year's numbers, despite the move. I think IBM is the one that could catch people continually by surprise. So the Mag7, I think, you know, some of them I think of value stocks, even outside of the move they've had. I still think of them as somewhat in value territory.

8:43So I look at a name like Meta, the biggest position. I think it's protected from a lot of the issues that plague the rest of the market. And so I don't, you know, no tariffs. The balance sheet's in extraordinary shape. The margins are incredible. So I'm hanging with those. They're getting a little more expensive to me. The most expensive one is actually Netflix. That's the hardest one for me to hang on to. Yeah. I mean, we've sold upside calls. It hasn't worked. We've also been helped by this sort of re-ignition of the AI trade. Yeah, absolutely. NVIDIA CEO last week was all across Europe making partnership deals with a bunch of companies.

9:15I mean, there's a lot of buy-in that the AI trade is not over. I think that's right. I think we were reinvigorated by, you know, kind of the, call it the sovereign AI trade. We were reinvigorated by the reality that from NVIDIA's numbers, which came really well after the big move in the markets, We had a chance to really not only hear reaffirmation from NVIDIA, but we haven't heard anything different. In fact, the hyperscalers have kind of doubled down. We've had a couple of data center and kind of energy deals around AI energy demand. And we've heard from Constellation. We've heard from Microsoft.

9:46So, you know, I think that's all very important. And the market needs this leadership to go to all time highs. It doesn't mean you can't have a great market without the tech leadership. But I get back to and if you're doing relative kind of performance trades or doing those graphs at home, if you graph the the triple Q's by the SPY, you get to the high we were back in July, which is essentially point eight nine. We're right almost right there again, which would mean could you be getting relative leadership by the group that really takes you higher? The outperformance by semis from the low of markets from April 8th is about 23 percent to the S &P.

10:18That's all you need for markets to continue to move higher. doesn't mean that I think you don't think about all the things we think about every day in terms of where AI and deep seek and really post deep seek. The world's a different place. And yet it's not. It's notable, though, for the mag seven are still down in the year. Apple obviously trades very poorly. Google trades very poorly. Tesla trades very poorly on a relative basis. Right. And so they've come a long way. When Tim just mentions the ratio of the S &P relative to semis, you know, semis have doubled up the performance of the S &P 500 off the bottom.

10:47You know, the NASDAQ 100 is up about 32 percent. And I guess you've got to ask yourself, it's like, what's the ump? What's the thing? What is this not discounting, right? And so at this point, I mean, it's been a tremendous rally in such a short period of time. But, you know, if you look at a meta, here's a great example that everyone loves it. Karen loves it. And, you know, I look at this expectations, consensus expectations for earnings and sales growth are basically 13 percent. Right. And so I say to myself at 24, 25 times, it's really not that cheap. You said margins are beautiful. They are beautiful.

11:16They're 81 % or something like that. So I think that you have to make a bet that we're going to have earnings revisions higher for these groups. And you might. I mean, like, that's the thing. If you start to get these kind of return on investment and these use cases and all this stuff play out, I mean, I'm still a little skeptical that that's a 2025 thing. And maybe you see earnings revisions higher and maybe Meta does prove to be really cheap. Maybe Google gets by some of these headwinds and that is the cheapest one. I'm just not so certain right here. Well, for Meta, I think they are just spend, spend, spend right now.

11:47And this multiple is off of a run rate of spend, spend, spend. So if at some point they will slow down the relative spending, which I believe will happen, and the efficiency starts to come through, then I think that Meta will look very cheap here at some point in the future. Not that distant future. Yeah. Meta also had some news today that they're maybe finally monetizing WhatsApp somewhat more with it. You know, ads at least being displayed. I mean, there are so many different levers they seem to be able to pull, and they are definitely in the pull position in terms of the digital ad world. I think it's also notable that Google really quietly over the last month has maybe been the best performer of that group other than NVIDIA.

12:25And it gets back to, again, where I just think people got so negative on certain thematic elements of people have questioned the livelihood of some of the biggest companies in the world multiple times in the last three months. And I think that's proven to be wrong. We got to get to that. What is it, Karen? About 740 level in Facebook that we saw earlier this year, number one. Looks like it's going to get there. The efficiencies have been there, though. I'd say for the last four or five quarters from Facebook, you've heard how AI has helped them in terms of their margins. So they are getting the ROI in the back of it for sure.

12:56All right. Well, City's head of equity trading strategy recommends going long, high-quality stocks right now. Stuart Kaiser is behind the call. Stuart, great to have you with us. Nice to see you. Good to be here. We're talking about tech all-time highs once again, as if last week never happened, as if a trade war never happened, as if a conflict between Israel and Iran isn't happening right now. What do you make of this market move? I mean, I think the recovery today is just reassurance to the market that basically if oil doesn't dislocate to the upside, equity investors seem largely comfortable to kind of ignore some of the geopolitical risks.

13:28whether that's Russia and Ukraine, whether it's Israel and Iran. I mean, that was the case other than call it a couple weeks in March 2022 when he got oil up to like 120 bucks. Generally speaking, I think investors say that's the channel through which we're going to kind of handicap geopolitical risk. And since we didn't see that follow through today, markets kind of recovered. Vol came in and we're kind of back on the march higher. So how do you think about high quality stocks? What are those and what kind of environment are you bracing for? I think our view here is the setup for equity sounds a lot like it did at the beginning of the year, right?

13:59Which is earnings growth looks OK. Valuation is very high. Positioning looks quite long. You have attendant recession risks and a lot of headline risk as well. And in that environment, yeah, we want to be long U.S. equities, but we want to do it in a more conservative, high quality way. What's kind of changed for us is we like growth coming off the bottom. When you get those long end yields moving, the growth trade feels a little bit under threat. So we kind of rotated out of growth into quality as a result of what's going on in the interest rate market. Stuart, you mentioned positioning and length.

14:27I'm just trying to understand where your clients are. I mean, you're in the middle of the institutional world. You're talking to the biggest hedge funds in the world. You're talking to me. I get the sense that, if anything, they had really pulled back exposure. It wasn't the retail community that had changed a whole lot in terms of their MAGA view, but that there's no question that the directional, the longshore community. Any thoughts on that? Are they still, you know, underweight where they were six months ago? or do you think they actually have really turned it completely to for as long as they have been?

14:54Yeah, I think we'd probably put positioning 7 out of 10, probably a little less heavy than it was in late February, but significant, significant recovery in positioning. Long-short hedge funds, I think, got hurt a little bit in the initial 10 % drawdown, call it from mid-Feb to mid-March. They got their risk right, and I think we're actually able to play a little offense, you know, coming off the bottom. The second 10 % drawdown kind of got your macro-directional guys a little worse, so they've been kind of a little bit later to re-engage. So positioning is pretty full. It's probably not where we were in mid to late February, but it's not underweight.

15:25You're getting pretty close, getting pretty close. When you talk about real high quality companies and great balance sheets, where is energy? Where does that fit in? I thought that the move in energy down only a buck and change off the heels of what's been happening was pretty strong. Yeah, I mean, energy would not probably be right in the core of the quality stocks. There's probably a few that that would put you in there. I think what happened energy today is effectively. Yes, we didn't get the short term rip in oil, but it does seem like this risk is going to kind of be persistent and ongoing, and maybe the market's starting to assume maybe you'll get those longer-dated futures a little bit higher.

15:56Energy is definitely an under-owned part of the market, as you might imagine, structurally. So I think what you're also seeing there is a little bit of positioning kind of getting forced into the market, whether it's short covering or kind of right-sizing yourself, because, look, I mean, that's been a structural laggard for a while. So I think it's a little bit of positioning and a little bit of concern. This might kind of linger for a little bit in the market. The weaker dollar's been a tailwind. And at what point, though, has it become a concern? Because there's no bounce in the U.S. dollar.

16:20Yeah, I mean, it's concerning to the extent that it's volatile because it does kind of speak to this America U.S. exceptionalism is dead trade. Frankly, that trade was much more loud and vociferous until about March. And it's kind of calmed down. 1Q earnings, you know, really changed things for us. I think when hyperscalers, to your point, doubled down on this capex spend, it convinced institutions and I think foreign investors that they just they were underweight. The A.I. trade is as kind of comical as that sounds. And the bottom line is you can't have the AI trade on in the size and depth and liquidity you need without being in U.S.

16:52equities. Right. So I think that's kind of pushed people back in the market. So for now, with where the dollar is, I think you're OK. Investors, obviously foreign investors, it's a big impact for. And I think what you're seeing there is they're hedging a lot more of their dollar risk than they have in the past. So as long as we're under control, I think you're OK. But to your point, it is a headwind, particularly for foreign investment flows. Stuart, banks, BKX, has not really gotten as close to the highs as the S &P 500. KRE, regionals, don't act particularly well. And then if you look at all of these kind of whatever you want to call them, you know, Apollo, KKR, Blackstone, they actually do not trade well off the highs here and really off the lows, actually.

17:29What do you take from that price action in general? Look, I think banks were a little surprised at. You know, the deal calendar does actually look like it's picking up a little bit. You know, the circle IPO went pretty well. It looks like a little bit of regulatory relief. So banks trade is still something we like. On Friday, I think the stablecoin news coming out of the retailing side kind of put a little bit of pressure on fintech and some other parts of the market. So it could be that banks has been kind of a consensus long, so they're not getting sort of the incremental flows coming in. But, yeah, a little bit surprised, frankly, that that space hasn't performed better.

17:56We still do like the large-cap banks. Regional banks are a little tricky because that small-cap lower-quality trade is just really lacks sponsorship. So it's a little bit hard to like that. But larger-cap banks, it actually seems like a pretty good operating environment for them right now. Stuart, great to see you. Thank you. Thank you. Stuart Kaiser City. Do you feel better about the durability of these market levels here versus a week ago? No. I mean, I think the market's gotten more expensive, but it's been wrong to have that view. But in terms of valuation, not that that is a timing mechanism, but the market, once again, has gotten itself expensive.

18:27Just about any metric you want to look at, especially price-to-forward earnings in form of the S &P 500. Now, if earnings continue to surprise, which they have sort of, I guess, on the margins, then we had a different conversation. Maybe that multiple is warranted. I don't think so. All right. We've got a news alert with the details on the Senate tax bill. Emily Wilkins has got all the details here. Emily. Hey, Melissa. Yeah, the Senate just released their tax package. We can provide some updates on some of the things that we have been talking about here. Let's start with the clean energy tax credit.

18:58The Senate has extended a lot of the deadlines from what the House bill proposed, meaning that more projects, wind, solar, nuclear, are all going to be able to get those tax credits. Maybe not as many as in the original bill, but more than at least than was proposed in the House. We talked a little bit about the so-called revenge tax credit, or revenge tax rather, on foreign countries and foreign investors. The Senate has pared that one down a little bit, giving it a longer runway before it would go into effect. would only be 15 % rather than 20%. It does keep a lot of the proposals in the House bill that Trump has been pushing for, like no tax on tips, no tax on overtime.

19:40However, it does make those provisions a little more narrow, really focusing on those who are sort of low middle income and then capping the amount that can be deducted here. We are getting a lot more details on this bill. And of course, we'll be seeing how senators react when they come into town. One senator who might not be too happy is Rand Paul. He told us all that he just did not want to see that debt ceiling increase as a part of this bill. And a$5 trillion increase is included. Of course, Republicans wanting to get that done, make sure that they can do that without needing to negotiate with their Democratic counterparts.

20:13And then on SALT, which has really been a big sticking point today between the Senate and the House members. At this point, the Senate's just saying, hey, we're still negotiating on that. And so we'll see what they come up with in coming days. All right, Emily, keep us posted. Thank you, Emily Wilkins in Washington. Meantime today, we were watching shares of CoreWeave up more than 7 percent. This despite a downgrade from Bank of America. Adults putting a neutral rating on the stock due to valuation concerns. They did, though, raise the price target to 185 from 76, saying a new hyperscaler customer, an expanded contract with OpenAI, and a recent debt raise at a lower rate could keep the shares climbing.

20:47CoreWeave up nearly 300 percent since its IPO in March. Overall, though, the concern is that in order to fund this build out of data centers, It needs to keep borrowing. And those borrowing costs are getting higher and higher. They sold a bunch of debt in May at nine plus percent. And that's a lot. I just I don't know how you could think about fundamentals when there's something else structurally that's going on this that I think is the way bigger part, which is the short interest. Right. And that that manipulation, not calling it a manipulation in the SEC kind of sense, but that noise caused by that far outweighs anything, I think, on a valuation standpoint.

21:23Yeah, very clearly, this is a name that I've gotten wrong from the get-go, pre-IPO. It is one of those situations. It became a meme stock very quickly. I think a lot of that leverage that's on the balance sheet, some folks think it's something that they could take advantage of relative to the short interest, relative to the demand that they were supposedly sopping up. And they are sopping it up. And Microsoft obviously has been a huge customer at 70 % or so. I mean, at some point, NVIDIA is building data centers. Microsoft's going to get done building some data. They're all going to be competing with each other.