The Latest U.S.-China Tit-For-Tat… And Fast Money’s Obesity Week Continues 12/3/24

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. Time to buy China from tariff threats to trade restrictions. There seem to be plenty of reasons to tread lightly in the region, but the chartmaster says buy. He will lay out the case. Plus, betting on Bitcoin. MicroStrategy CEO is expanding his exposure to the crypto in a big way. What it says about where the coin is heading and how soon it could hit 100K. And Obesity Week continues with the CEO of Biotech Altimmune. How its experimental weight loss drug sacks up against the competition and where the stock goes from here.

0:33I'm Melissa Lee. Coming to you live from Studio B at the NASDAQ on the desk tonight, Tim Seymour, Dan Nathan, Guy Adami, and Danny Moses, the founder of Moses Ventures. We start off with the latest tit-for-tat in U.S.-China trade relations. Beijing retaliating against the latest chip export restrictions by announcing it will no longer send certain critical minerals to the U.S. CNBC's Megan Cassell has got the details on this. Megan. Hey, Melissa, that's right. A real ratcheting up of trade tensions with this move today from China to ban the sales of these rare minerals to the U.S. effective immediately.

1:04Now, this, of course, was a response to the Biden administration's move on Monday to restrict the export of some chips and chipmaking equipment and software to China in order to slow Beijing's development of advanced weaponry and AI systems being used by the military. Beijing today rejected the U.S. justification of that move, saying Washington has generalized the concept of national security in recent years and abused export control measures. Their response today represents a real significant stepping up of these tensions, not entirely unexpected as they did begin laying the groundwork to make this move possible over the past year.

1:37But it could only be a first step given, of course, the additional tariffs that Donald Trump is vowing to impose when he takes office. The critical minerals being targeted have broad military uses. They're used to make weapons, but they're also in a number of consumer goods, phones, computers, cars, all industries, Melissa, that could feel an impact as this trade and tech war between the U.S. and China starts to heat up. Melissa. All right, Megan, thank you. Megan Casella. It is of note that, you know, these metals have not been shipped to the United States for a couple of years now. So it either indicates that companies have moved away or they've drawn down stockpiles that were built up before.

2:13But not either way, tensions are getting worse. Well, we talked about this last night and we talked about, I think, for the most part for our investors right now, the question is, what's the impact for U.S. companies? So when you talk about U.S. miners. No, of course, they're not on the ground in China. And yes, there's no question that probably for the last 20 years, and we've done it here. Remember the Unical deal where the Chinese were coming in to buy? I mean, this goes all the way back in time. I wouldn't be that scared off by these headlines. I do think also the last couple administrations, including this one, going back to their first one, were thinking about how do we secure rare earth and some of these important minerals on these shores.

2:48So it will lead to some squeezes here. But I think the The more important dynamic is what Eunice Yun was saying on our set yesterday. Not an as live guy. No, she was actually here. She was here in person, and it was great. And she reinforced the story that the Chinese are less concerned about external interpretations, or at least really, more importantly, policy as it affects the economy, when in fact they care a lot more about policy, what that means for securing power, the Communist Party, for social control. And that's really potentially risky for U.S. companies. They're playing the long game, so they don't care what the near-term impacts are of that long game.

3:23And we also mentioned the yuan at the lowest level now in a year. And look at the move since October. It's actually pretty startling how quickly it's deteriorated. And, you know, you go back to August 11, 2015, when they actually announced the devaluation of the yuan. And by February of the next year, our equity markets felt it, to Tim's point. So nobody's paying attention to this now. I think they should. J.P. Morgan had a note on it, as we said last night. And I think to your point, Tim's point, it's not so much what this means because maybe it's not a big deal. It's the ratcheting up of the rhetoric that's important.

3:55So prior to the election, it even posts, there's been a lot of stimulus in China, right? They're trying to just spur up demand there. Obviously, we know there's going to be issues with tariffs with Trump next year. They're getting ahead of it. But I have a question for Guy. Guy, on the periodic table. Well, Danny, she asked the questions. On the periodic table, gallium and germanium, do you have any idea what the numbers are? I believe they're 128 and 131. No, but I'm saying it's not important right now, U.S., but it's just rhetoric. And I think it's just noise right now. And so I know we're going to talk about what you should do with the China trade in general.

4:23But I think it's just noise. I think a lot of U.S. investors, to Tim's point, have a hard time kind of like figuring out where this kind of lies. But when you think about like a whole host of other U.S. brands, this is what I want to focus on a little bit. You know, if you think about Chinese demand for U.S. brands, they're going down. I mean, make no mistake about it. iPhones only grew like by a half a percent in Q3 last year in China. Well, they're third place. They've lost five points in market. And you know what? IDC is tracking this. And, you know, like, you know, Android phones grew 6 % year over year.

4:53And so iPhones are not growing. So, like, if there's some nationalistic tendencies towards some of this stuff, I mean, I think that's a bigger problem for U.S. monthly nationals. I mean, we've talked about this before. Soft boycotts, you know, sort of the informal boycotts of people on Weibo, you know, voicing their unhappiness with U.S. brands. I mean, already U.S. brands are having difficulty. And then you want to layer this on top of it? I think it's a problem. But I got to be honest. I thought this was going to be a problem two years ago or so when the rhetoric around Taiwan started getting ratcheted up and nothing really has happened.

5:24But it hasn't gotten better. In some ways, it's gotten worse. Now, what's remarkable to me is our markets have not cared one iota. But there are things out there that I think we should be paying attention to. And you wonder what companies are in the crosshair. Apple is the biggest one without question. I mean, Nike has its own issues without question. But, you know, Nike is a stock that's more than half of what it was three years ago. And obviously, that's a big China play. Oh, there's Starbucks. There's McDonald's. There's Nike, as you mentioned. Yeah. Yeah. I mean, I think that that's a story.

5:55I think also investors are thinking about as we get to the end of the year, this is also that time you start planning for 2025. What's going to be different? We came into 24. And I bet we would have all said that we did all say. And I bet even Danny was here. And he said, we're worried about geopolitics. Well, geopolitics, I would say this is one of the most spectacular years and spectacular. I don't necessarily mean that in a positive way in 24. And yet geopolitics didn't do anything. Markets, we know what they've done. So it's a question of U.S. exceptionalism. Is this the place you're going to continue to see to invest?

6:25You know, right now you've got a no confidence vote in France. You've got problems around the world. You've got dynamics that I think are going to put even more pressure. But I get back to guys 2015 deval. What you're hearing from all these companies is we're not going to be afraid to let our currencies truly float. And the ultimate elixir for any economy that's struggling is let their currency go. And so that's going to be very good for Americans traveling around the world. It's going to be good for American buying power. But it's possibly going to be something that I think we have to worry about for multinationals.

6:52Yeah, and it's something that Donald Trump has spoken out against in the past in terms of the strong dollar. A weak dollar is very helpful for U.S. companies. U.S. multinationals play a key role in the economy in China, whether they like it or not. And they can ill afford, I think, to really go into this type of back-and-forth rhetoric without implications, because if they start kicking U.S. companies out of that, if that were to happen, that's only going to make it worse there. Yeah, you know, Tim just used the term American exceptionalism. I mean, you know, pull up a chart of Apple right here.

7:16It's rallied 10 percent from its lows in early November. And here we just said that iPhones aren't growing. This is a product that's more than 50 percent of their sales. So when you think about some of the money that's coming out of these other places, it's clearly coming here into the U.S. And, you know, Apple trades it 33 times this coming year's earnings. I don't know if it's ever traded like that at this sort of growth. I mean, it's really talking about single digit growth. And let's be clear. In June, when the stock was massively underperforming, OK, like the broad market, I think it was up less than 10 percent versus an S &P that was up like 15 or 16 percent or so.

7:50All the analysts could talk about is this massive upgrade cycle that was coming this fall. It's gone. It's not happening. Apple intelligence is a freaking zero. I mean, like seriously. I'll say this. I agree the refresh is slow to happen. It's going to happen. And it was going to happen anyway, largely. But what all the analysts are also saying is we're in the broadening of the AI trade. And the AI trade, which is now into software, and we're seeing that, I think Apple is perfectly positioned, whether it's Apple intelligence or not. I mean, they are truly the use case. There certainly will be that follow through.

8:19That's partly what the market is rewarding right now. And I don't think the market that move from 185 to break through that two year resistance. I don't think that was on a refresh. What if I said to you, though, that Apple would not have an AI product at all in China? Because all China has to do is say you will not have a partner for AI because Apple needs that local Chinese partner for AI. So if there is no AI there, what drives the upgrade cycle in China? Nothing. The whole story in China is Huawei and Xiaomi. And they're working on their own chip. They're working on their own AI capabilities that will be on the edge.

8:53And we have no reason to believe that their phones won't be much better than that of Apple's. I don't I'm not doubting that. But I'm just saying for bulls, if they're counting on some sort of upgrade cycle, help from China, it may not come if the Chinese government decides no AI partner. Haven't we stared China risks for Apple in the face for a year? I mean, I guess, you know, I don't want to belittle the impact there. And if there was a headline tomorrow, we know what Apple would do. I think we all recognize for China, there's an India where, you know, where smartphone penetration is 3.3 percent, where the market share is.

9:26I mean, there's there's a lot of other markets for them to grow. That three billion installed base right now, if you remove China, it would be it would be a big impact. But I don't think it stops. You know, we couldn't go 10 minutes without talking about gold in this conversation. And, you know, it was announced that China stopped purchasing gold in April of this year. And the market took that as OK, they're done. Maybe that's the end. And now Goldman Sachs just put out a note that, wait a second, maybe they've actually been buying gold in the over-the-counter market that really is sort of opaque.

9:51And they thought another 60 tons worth of gold might have been purchased. So you tie this all up in a bow. China, you know, yuan going low, all this rhetoric. All roads lead to gold, despite the fact that it had a rough couple weeks. It got back on its source over the last couple days. Yeah, gold is one of my favorite investments right now. It has held up in the face of the dollar strength. I know the dollar's come in the last few days, but it held up. And I think with all the geopolitical stuff going on around the world, it's a place to be. And it feels like it's about to take off from here for sure.

10:20All right. Meantime, the chart master put out a note this week saying it is time to buy China stocks. Back in October, he was a seller of China mega caps. Let's bring him in now for the latest technicals on this trade. Hey, Carter, what are you looking at? Sure. Before we look at the charts, you know, it's been a bit hysterical, right? In October, you had record inflows. And we're just having reports now that November has seen record outflows. Often it's right to take the road less travel. That was the thought in October. Fade the hysteria. And now I think we've got the equal and opposite circumstance of people abandoning it just as aggressively as they were embracing it.

10:54So let's look at the charts. My thinking here is to buy this sell-off. Here is a five-year weekly chart. No drawings, no annotations, no judgments. Next chart has some of those. And what we know is we have that very optically clear double bottom. You have the euphoria, that spurt there in September and October. At that point, trading farther above the 150-day moving average at any time on record. And now this big giveback. And I think that's the flag, if you will, the retracement to buy. Let's look at a stock or two. Obviously, the biggest or most important is Alibaba. And you have a great circumstance here, a sell-off to the penny to a rising 150-day moving average.

11:35Look at Tencent. You also have a similar circumstance, right, different shape, torque, character, but same circumstance, the big September-October move, and then this give back to the level from which it broke out, and again, to the penny, to the$100 and today moving average. I'm buyer of both of those, and I'm buyer of FXI. All right. Carter, thank you. Carter Braxton Worth of Worth Charting. As a trade, are you a buyer, too? Agreed. And I wasn't born with a crystal ball, but I'll say this. There's going to be, over the next couple weeks, David Tepper's going to be on the network. Joe Kernan or Becky's going to ask him about the China trade, and he's going to say, I'm still in it.

12:11I still believe in it, despite the fact that it has round-tripped the entire thing. And Tim Seymour sat here a month a half ago when Alibaba was 117. He said, you know, I'm long in stock, but I'm absolutely selling calls against it. That was prescient because it's round-tripped as well. But we have filled in all the gaps that are created to the upside. That trade is not over. I agree with Carter Worth. The things that worry me most about owning Alibaba are not related to the bottom-up story, and they're not really related to China macro. It's probably – so to the extent that China macro could be corporate governance dynamics, I don't know what they're going to do to Alibaba next, although I think they've already kissed the ring and been through that, you know, yeah, who's your daddy.

12:47And I think the story of a company with 45 percent of their market cap and cash, the story of a company that I think continues to at least talk about spinoff of assets, This is some of the parts. This is an earnings multiple. That K-Web, which is the collection of the largest Chinese Internet name. So if you don't want to play just one name and you want to diversify, that's still up 21 percent from the lows in September. So even after this move. So guys, right. And it's nice that he pats me on the back for selling some upside calls. I mean, bottom line is I'm still in Alibaba. And so collecting some premium is great.

13:18But I believe in the long term trade. And I will say there's a lot of people patting themselves on the back. And they're right, which is what Carter said. A lot of people said, fade this move. It's not big enough. It's not big enough. I think they're I think they're also waiting for Trump to take office, frankly, before they really unleash. Why would you do it now? Why would you bring out some of your biggest stimulus when you really don't know what's actually going to happen? Being zebra, the baba. Yeah, it is. It hasn't been a great trade to your point, Tim. But, you know, this goes back to what you were just saying about, like, the other parts of the world.

13:47The sentiment is so bad. The valuations are so low. Where are you going to get alpha in this market? Are you going to continue to buy into what might be perceived as a valuation bubble here in the U.S.? Are you going to look at the FXI? Are you going to look at EEM? I'm just looking at EEM, Taiwan Semi, Tencent, Samsung, Alibaba. That's some good exposure that some underperformers, some things that Taiwan Semi should be up the way it is. So EEM looks interesting to me, but I also like the K-WIP. It's not just Asia. It's Europe. I mean, a lot of these markets around the globe have been left for dead, so to speak.

14:16And the U.S. feels like it's a little bit overrun right now, and people aren't paying enough attention to the global markets in general. Let's talk Tesla now. The rally taking a breather today shares down a percent and a half after new data showed deliveries from its Shanghai factory fell for the second month in a row. Yet our guest trader tonight, Danny Moses, who's been short Tesla at various times in 2016, isn't betting against it right now. And for the viewer, you know, you're constantly trading. So keep us updated on where you are. Listen, I first got into the trade after the SolarCity deal was done in kind of late 2016 into 2017, thinking that, wow, that was an awful deal.

14:50I'm going to get into the stock now. Short, off and on for the last few years. The first quarter this year when they reported. Who was the CEO of SolarCity at the time? His cousin. Yeah. Exactly. He won that court case also. Okay. Right. So fast forward to the first quarter this year. It had just started to trade on fundamentals for the first time in a long time. It was hanging around$140,$150, right? So you felt like, okay, the quarter was bad, right? What happened? Promise of autonomous day in August, which ended up getting pushed out to October. Flies to China to get some regulatory relief on certain things.

15:18And lo and behold, attaches himself to Trump to make all the other stuff go away. When the story moves from non-fundamental to technical in those nature, that's when I leave a story. And we talk about it on the podcast a lot, giving updates there. But to people that are listening now, it's very difficult, certainly to short a name. He is not trading on fundamentals. It's also hard to go long a name when it's all on promises. And I'll say this about Musk. He's promised shareholders things in the past that never came to fruition, was given the benefit of the doubt. He's now talking about cutting$2 trillion, you know, from the U.S.

15:49budget, being able to basically improve the budget. And you're not going to be able to do that. So it's one thing to mess with shareholders. It's another, in my opinion, to mess with the American citizen. So we'll see. But it feels like it's moving from the corporate world, right, you know, into the U.S. Don't mess with America, man. Sorry, I had to go there a little bit to surround that out. Well, I mean, like the question is, does Elon Musk want to take away a lot of the safety net services of people who can't even afford Teslas? You know what I mean? Like, I just think this is an uncharted territory where we are right now.

16:16It's one thing to take Dick Cheney, who is the CEO of Halliburton, and put him in that sort of seat. And, you know, it's a very transparent sort of thing. What's going on with this doge is going to be the it's not going to be particularly transparent. This is interesting because it does go back to a trade because you you think about who this alienates in terms of Tesla buyers. Right. And so for everybody. who loves where Elon Musk stands, there's probably somebody else who doesn't. It's on the opposite side. That might be true for like a Coca-Cola where you talk about brands that have alienated.

16:45I'm not certain that holds water in terms of Tesla in their base. Maybe I'm 100 % wrong. And quite frankly, I don't even know if it's about auto sales anymore. Anyway, so I get what you're saying, but I don't think that moves the needle. Think about this. Other than this comp package thing that happened yesterday, the only court case that Musk really ever lost was that he was forced to buy Twitter, right? What happened when he bought Twitter? Only good things happened for him because he used it as a platform to spread whatever kind of information to get what he wanted. And every single investigation that might have been going on is now gone.

17:15But to Dan's point, you should be concerned as U.S. consumer. If you get approved for FSD when it's still supervisory, it's a danger. And that's not a Tesla comment. That's just in general. So that's the stuff I'm watching for now. It has nothing to do with the Tesla stock. Well, again, we know there are industries and the auto sector. The irony here is that actually the big three or maybe the big two now don't necessarily love what should be support of Detroit. And again, removing I know it sounds crazy, but removing EV subsidies and making it more expensive to build an EV car is not good news for GM, who's not given any credit for their ice business.

17:49So GM shareholder, I actually think some of this is sentiment that will just work its way through. But, you know, and look at the steel sector today. I mean, there's all these conversations about what, you know, keep it in America, build it in America, no foreign partners for America. Not great always. Hey, really quickly, I know Mel wants to move here. They also want to cut the CFPB. So we're talking about autos. We're talking about this sort of thing. There's a lot of implications if you cut that. That is meant to protect consumers from financial, you know, fraud or whatever. Exactly. Coming up, we are watching Salesforce after our shares on the move after the latest report.

18:23But the details in numbers from that quarter and what CEO Mark Benioff had to say about the results next. And from Salesforce to cellular, shares of AT &T getting a boost on the back of its investor day, how they're putting their cash to work and the earnings guidance sending the stock to multi-year highs. Don't go anywhere. Fast Money is back in two. This is Fast Money with Melissa Lee right here on CNBC.

18:54Jim, while Salesforce now is running its whole company on AgentForce, and all of our support is on AgentForce, and many other aspects of our business are now on AgentForce, I would really challenge you to go to Microsoft's website, talk to any of their employees, see how they're using it all. I don't even think they can use Copilot inside Microsoft. So this is an opportunity for all customers to go to another level using this incredible capability. That was Salesforce CEO Mark Benioff talking with Jim Cramer about his company's AI push. You can get to the full interview top of the hour. Shares of the cloud company jumping up almost 7 % despite a mixed quarter.

19:32The conference call is underway. Seema Modi's got the latest. Seema. Well, Melissa, enthusiasm around Salesforce's AI offerings seems to be paying off, with the company lifting its fourth quarter sales and earnings guidance. CEO Mark Benioff on the earnings call saying the real excitement is around the rise of digital labor. He said for many years the company helped customers manage data and analytics, but now the company has created a new market that is so much bigger than data management, the market for digital labor with the rise of AI agents to help customers compute complex data models to serve their end user.

20:05He also made the point that these AI agents will only enhance human capabilities. A strong street reaction to earnings and even before the results came out with Wedbush remaining overweight, a$3.75 rating. Piper Sandler upping its target to$3.95. But keep in mind, Salesforce is not the only software cloud company leaning into AI agents from ServiceNow, Asana, Oracle, among others. It is, in fact, though, fueling the software trade with software stocks, on average, outperforming chip stocks since the U.S. election. Melissa? Seema, thank you. Seema Modi with all the details on CRM. Is this the handoff that we've been looking for?

20:44And this sort of reminds me of Meta in that, you know, they're creating an AI. They've got an AI product, but they're also using it internally to improve their own metrics. Listen, the promise of AI is really to take out customer management, you know, sort of things. And this is what this company does. So we were just talking about the valuation in Apple relative to its growth. This company is expected to grow earnings and sales next year about 10 percent. trades at a very similar multiple to Apple at 30 times. And you could say, well, that's probably really conservative, those gross estimates, if they deliver on the things that Benioff was just talking about.