The S&P’s March Towards A Fresh Record… And Nike Reports Results 6/26/25

0:02Live from the Nasdaq market site in the heart of New York City's Times Square. This is Fast after the latest earnings beat, what it has to say about the impact of tariffs, demand for the consumer, and more. Plus, Dr. Copper helps send miners sharply higher. Disney shares off a weak box office for its latest Pixar flick and sell TJX. Why, the chart master says this stock is about to head lower. I'm Melissa Lee. I'm the deal-locked from the studio of Vietta Nasdaq. On the desk tonight, Carter Braxtonworth, Tim Seymour, Guy Adami, and Stuart Kaiser, head of equity trading strategy at Citigroup. Welcome, Stuart.

0:45And we start off with the markets getting within a whisper of records. The S &P gaining eight-tenths of a percent today and closing just six points off its all-time high, hitting more than four months ago. The Nasdaq also just off its best level, up a percent today. And as we are getting ready to close out the month and the quarter, it's been tech and energy leading the charge. But recent moves in one other area really caught our eye today. Bank stocks have quietly been in rally mode since last week's Fed meeting. Goldman Sachs up nearly 10 percent, hitting a new record today. J.P. Morgan also at an all-time high.

1:17So with stress test results coming up tomorrow, earnings season around the corner, what do you make of these market moves, Guy? Well, I mean, in terms of the banks, kudos to Tim and Stewart's here, which is great. But, you know, they've been in very supportive, very, I think, enthusiastic about the banks. There's been one that I have been, and that is in the form of Citibank, which I think reports in the middle of July, July 15th or so. And you start doing back of the envelope math, and this is what we've been saying for a while. Citi, which closed at 84 and change today. Tangible book is 91, book value 103.

1:47To me, that's where it should be trading, somewhere between the two, compared to a J.P. Morgan, which if you look at it, tangible book there is$100. J.P. Morgan's trading close to$300. You can do that math. I know I can as well. So J.P. Morgan at three times book to me is probably pre-financial crisis levels. Doesn't make sense. Citi at a discount makes a lot of sense. What are banks not pricing at this point? And it feels like there's a lot that could be the reasons behind the drivers behind this recent rally, Stuart. So what else is there? Well, look, I think in terms of risks, it's the economy, you know, for banks.

2:21In terms of the positive side, look, you've got the Fed. You had decent earnings. You have CCAR at the end of this week. You have SLR relief. You know, there's just a lot of things sort of stacking up. And especially if you go a little bit down cap, that is a part of the market that folks are very underweight. And we've definitely seen flows through the desk the last week or two into regional banks and people kind of starting to engage on that level as well. Energy plus banks equals also good for small cap. So I think that's something to keep an eye on as well. Really fascinating. And you mentioned we're within a whisper of all-time highs.

2:49By the way, Careless Whisper, I think, is one of your favorites. Yeah, I love that song. Whisper or Whisker? No, Careless Whisper. Oh, okay. Tim actually covers it with his band. The whisper versus the whisper. Anyway. But I do think banks are part of taking us to the next level. I thought it was going to be today. It's going to be tomorrow, or it's going to be the next day. Markets are going higher. And banks are in a great environment for that because of the things Stuart said. I think the steepening yield curve is a really big part of that. I just think the fact that banks also, it's all clear in terms of capital markets dynamics.

3:23First of all, I think for people that are coming to market, I actually think there's a lot of momentum and there's a lot of pent-up demand there. I think the banks themselves are giving back more capital. I think a lot of the banks are relatively cheap at a time when people are a little worried about the move. We were doing this market broadening thing before we went into tariff mania. And now that we've come out of it, we brought tech stocks back to fresh all time highs. I think the market is looking for some rotation. I think it's a great place to be. I like European money center banks. I think they trade cheaper.

3:50They have bigger div yields. And I know people are always worried about the sovereign story in Europe. But the same story happened over there. Their private banks essentially moved all of their bad debt to the sovereigns a long, long time ago. So those are better balance sheets or at least as good as balance sheets as you have here. Carter, how do the charts look? Are they strong in the banks? Well, we have, you know, as is often the case in many areas, the market and not different in financials and banking. Particularly, we have a bifurcated market. We know that the BKX index measuring big banks is toying with the prospect of moving to an all-time high just inches away.

4:26Whereas, of course, small regional banks, as measured by the KRE ETF, are still some 25 % below their former all-time high, which goes back to 2021. So a different way to say those exact same things is this. The relative performance or relative strength chart of regional banks to the BKX index today made a 20-year low. So you would fade the smaller, the down market cap sort of banks. To your question about how do the banks look, right? There are ones that are, you mentioned Goldman Sachs making an all-time high, J.P. Morgan also doing that, whereas Wells has the prospect and soon to do that, or the BKX index itself just about to do it.

5:12But you're not seeing it, of course, in so many other areas, trust banks and, again, regionals and super regionals. Right, right. Stuart, you mentioned more people are going to sort of away from the bigger cap to the midsize, the smaller caps, that's sort of a bet on the economy being okay in the end, right? I mean, you have to be okay with where we are economically. Yeah, I think it's a bet on, you know, economy kind of staying strong, the deregulatory push, you know, kind of putting its way through. Maybe this administration's a little more open-minded about bank mergers than some others have been.

5:41We got some sort of rumors or headlines over the past weekend about potential mergers. So I think it's all those things plus the value story. I mean, this stuff has lagged. And when you get to all-time highs, people tend to look for laggards. Yeah. You know what I thought was interesting? J.P. Morgan, all time high today, all time high yesterday. I mean, a string of highs here. They could they say we could see a tariff induced stagflationary environment in the second half of the year, which would I would think be bad for a bank like a J.P. Morgan. I mean, it would. Yeah, I agree with that. But if they are right, then no.

6:13What does that say about that? I think they're right in terms of the industry. I don't know if they're right in terms of themselves, because if you listen to what Jamie Dimon said, I know you pay attention to this. He was speaking to, I think, Morgan, or maybe it was Leslie, one of the two, and he talked about how he thought interest rates could go higher. He thought there could be this sort of stagflationary environment. He also said that they were extraordinarily well-suited to handle it if it were to happen. So in that environment, you know, you're not shorting J.P. Morgan necessarily on the back of that.

6:41Yeah, it was Morgan, by the way. You just spoke to. Yeah, we had a lot of fun. Tim did it the other day, and I'm like, why does Tim get to do all the fun stuff? I'm sure you guys are basically fighting. We like being on the OT. Let's make it clear. It's a great show. And I think if you listen to J.P. Morgan, what's also interesting, I have a ton of respect for what they do in terms of their research. Bruce Kasman and their economics team, I think, are a little bit more cautious. I think they're less concerned than they were a month and a half ago or two months ago, really, when we were in the midst of the tariff dynamic.

7:09But I think the economists are very different from their strategists and their strategists just got overweight. And again, we had this conversation yesterday that can be confusing the economy versus the market. And they're two different things. And I'm not saying that the economy is a runaway train here. In fact, it's not. But I do think that the market dynamics here, especially because I also just think positioning. And I think a lot of the sentiment here is still pretty negative. And that's why I'm in favor of markets moving higher. I get the difference. But I mean, can you say J.P. Morgan deserves to be at an all time high today?

7:39If we know if we believe that there is a stagflationary environment, stagflationary sort of recession, you know, on the horizon? No, and I think the other thing we say all the time is that I don't think markets are priced for recession, but I don't think we're close. And I think we can be. And I think we do this whole thing with soft data versus hard data. But J.P. Morgan should trade at the premium it does. Quietly, J.P. Morgan is also positioned to certain parts of financial services in the economy and some of the trends even in digital that I think it seemed they were very against at one point.

8:10But if you look at the legislation and the regulatory framework around what's happened in digital, we know about the Genius Act. We know all the things we're talking about. I think J.P. Morgan is going to be right there. All right. For more on the strength in banks ahead of stress tests in the start of earnings season, let's bring in RBC Capital Markets co-head of global financials research, Gerard Cassidy. Gerard, great to see you. Are you expecting any surprises tomorrow? We're really not. I think tomorrow what we should all expect is that the banks will all pass in flying colors like they have for a number of years of going through the DFAS stress test.

8:44Where we could see some positive surprises is that there are some banks that may see their stress capital buffers shrink this year. One name that stands out here is M &T Bank. They have a higher level of commercial real estate loans than their peers, which gave them a higher stress capital buffer. But they have brought that number down a fair amount. So we anticipate that will be to their benefit. Plus, the stress test this year has lower credit losses in commercial real estate, which will be another benefit for them. So we think them and possibly even the big money centers in the sense of Goldman and Morgan Stanley may see some relief as well.

9:22it. In terms of what you're expecting and how the banks' businesses look, particularly the large-cap banks, we got a read from Jeffries today. And traditionally, we've looked at Jeffries as sort of an indicator as to what to expect when bank earnings do start. They said that they see resilience in investment banking and capital markets. They're optimistic about the second half of the year. Can we read through to the rest based on these results? Yeah, absolutely. They're all in the same ballpark. They're different-sized players, of course. And I think what you're going to hear from the big banks when they report numbers in July is that April was a very difficult month for investment banking because of the tariff news.

10:01But each subsequent month in the quarter, it became better and better. And so I think what we're going to see is that the guidance that has been given out for investment banking revenues to be down generally high single digits for most of the investment banks and then trading revenues driven by equities will be up mid to high single digits. I think those numbers could come in a little better in July because of the strength of June and is obviously ending very shortly here. Gerard, you're in the Hall of Fame. We say it all the time. But you mentioned the stress test. So let's just talk about it.

10:34Because if Silicon Valley Bank were under the auspices of said stress test, they would have passed with the flying colors that you just talked about. So my question to you is, if that is in fact the case, what good is the stress test? Yeah. Thank you for your comments, Guy. I would say that what's really good about the stress test, it tests for liquidity and it tests for credit quality. Now, where it didn't test for and does not test for is on this interest rate shock. And ironically, when they test for it now, what happens is in an economic downturn, rates generally go down. So you need to see an environment or a test totally separate than what they do on stressing for rates spiking up, which, of course, is what happened in 2023.

11:24So the stress test really is real focus is on credit. And that's what it was designed to do. And it's done, we think, a very effective job on credit. As you know, Silicon Valley did not fail because of credit. It failed because of the duration mismatch on their balance sheet. Stuart? Yeah, Jordan, my question would be about the banking pipeline. You know, obviously, the volatility in April kind of disrupted things. How full is that pipeline, and how do you expect the banks to message that pipeline in July? It often comes with a lot of bluster, and it's going to be great. The pipeline's a big. Rarely have we've heard, you know, investment banks, you know, point out the pipelines are poor.

12:08You just don't kind of hear that. That being said, though, there appears to be a real buildup of potential activity because of the uncertainty we saw in March and April. We anticipate that, yes, we will see more mergers and acquisitions. This administration, just from a M &A, not just in banks, but in the industry, all different industries, this administration is very supportive of that. We believe, you know, Besson, Treasury Secretary, I think is supportive of consolidation. We know deregulation not only is affecting the banking industry, but we're going to see it in energy. We're going to see it in other sectors.

12:46And that will, I think, bring on more consolidation in the other sectors as well. Gerard, thanks for your time. Appreciate it. You're very welcome. Thank you. Gerard Cassidy. Carter Braxton Worth, what is your favorite financial? Well, I would go two ways to find something that's leading the way but not extended. And so J.P. Morgan is a case in point. I mean, it has made no progress, right, in four months, five months. It's just now trying to break out. Or go the other way, something that is bombed out and is trying to make a turn. Lincoln National's insurer that I like, and that would qualify as the second circumstance, a bearish to bullish reversal buy.

13:28Which way would you go, Tim? Well, I like J.P. Morgan. I hear Carter in terms of if you look at where it's trying to break out from. But you can say the whole thing about the XLF. I mean, it's just kind of getting back, whereas I think it's lagged a little bit of what we've seen in the tech sector. You know, Guy's Hall of Fame reference to Girard is, first of all, appropriate. But also J.P. Morgan's in the Hall of Fame. Wells Fargo is not. And I think that's where I'd be looking. I'd be looking for the next kind of voting period by the market here. Because I actually think that a lot of the, you know, call it the ball and chain that was on Wells Fargo in terms of cap requirements, some of the perception issues.

14:03But again, some of the issues around what's been going on regionally in the consumer there. I actually think you want to get longer. You know, you have to go way down the quality list. I think you go to money center banks and you go to the cheaper ones. Regionals or large banks? You know, for us, we're still high quality beta at this point. So, you know, I think the regionals can work for a trade. But, you know, if we had to own beta here, I think it'd be the higher quality, bigger cap, safer stuff for now. If our crack staff in EC, and they are crack staff, can put up a city chart over the last year, you will see that we are at levels that we last saw in February, not unlike the S &P.

14:34But you get a close above sort of 86, 87 in city, which I think you will. I think it's going to take the next leg higher. I have Citibank long, and I actually sold some upside calls today. I was actually possibly some part of that position was getting called the way I rolled out and up. Because, again, I go to August, I go through these earnings period, and I actually think you're going to get a chance to see it pull back a little bit. But I don't want to lose it here. Turning now to Nike results. The stock off after hours lows after reporting a beating on the top and the bottom lines with expectations low heading into the print.

15:04The conference call just kicked off top of the hour. Let's get to Sarah Eisen for more. Hey, Sarah. Hi, Melissa. Yes, they were slight beat, but this is still representing a pretty weak quarter for Nike. Sales overall falling 12 percent. Sharper falls in places like China. CEO Elliott Hill in the release did say this could be the bottom. Quote, he says, we expect our business to improve as a result of the progress we are making through our win now actions. And actually, just on the conference call, Hill said it is time to turn the page. He also announced the next step in that strategy. They're calling it sport offense, which, as I understand it, will reorganize the company teams and units by sport, not by gender, which actually is a big shift.

15:47It won't be layoffs or re-organ that way, but will be a meaningful change in the way the company operates, innovates and markets to consumers. The goal here, of course, is to reinvigorate what Nike was known for, dominating sport, where it's lost some of its magic. We know it's been losing share, for instance, in running to Hoka and on. Hill just saying on the call, we are in a fight in every sport we are in. Now, the key to listen for in the next few moments here is guidance, which we expect quarterly now. They haven't really been issuing a full year outlook because of the progression of the turnaround.

16:21Also, what's key, what they say about tariffs. This past quarter that just ended, it ended in May. So small impact of tariffs. Are they going to pass it on to the consumer? Will they take the hit? Will it impact margins going forward? Remember, they sourced product from China and Vietnam and other places where they have to pay higher tariffs right now. But the overall question here is, what is the path to growth and when? I'm hearing that there is this new partnership, which they're going to be discussing here with Amazon. That could be a potential catalyst. We're going to be listening for anything on the order book for the holidays.

16:54Remember, last quarter, Hill said the order book for fall was still down, but the new product portfolio almost offset some of the headwinds in the key franchises that they needed to work off. And then China is still a big question mark here. It's weak. Sales fell 20 percent in this past quarter. How's the brand strength there? investors have been on the sidelines because of all these issues, waiting for more, Melissa, on the strategy and whether it's working. The company is saying this is the bottom, but the question is what the path ultimately looks like from here. Sarah, thank you. Sarah Eisen from the New York Stock Exchange.

17:29Was that the bottom, Tim? What do you think? I think the bottom is 26, fiscal 26, whether it was this quarter, next quarter. But let's be clear, we weren't expecting anything for another six to nine months. I think they've done a pretty solid job. If you want innovation, those Nike shoes, guy wears them every day in the park. I mean, he's whipping through there in his blameros. No, I mean, I think there is innovation. Nike is taking market share in the high-end innovative running department. People have given some heat to Nike for not making major changes with Elliott Hill. Elliott Hill has essentially moved out the entire old senior management team, has aggressively changed management teams.

18:06I think there's major change that's going on there. And I think people are overdoing it in terms of Nike being broken. I think the bigger issue is cyclicality in terms of athleisure and a lot of competition. I don't think you have to buy Nike tomorrow. I'm long the stock, but I think you probably can wait for it to really start to move higher. But, yeah, I think you buy it here, you're fine. Still a North America story. I think we all get that. But it's still a margin story, too. And, you know, as Sarah just said correctly, sales were down 12 % year over year. Inventories were basically flat year over year, which to me means margins are going to still be challenged.

18:38over the next couple quarters. And valuation is not cheap. I mean, maybe it's cheap historically, but it's certainly not cheap in comparison to the broader market. And if you look for the last four years, when it topped out, I think in 2021, it's been upper left, lower right, a series of lower highs and lower lows. And nothing in this quarter suggests it's going to change to me. It was sort of eye opening to hear that Nike had reorganized its business according to gender, as opposed to sport, which really seemed like a departure, as Sarah is saying, from the focus on sport. I mean, I don't really understand why you would focus on gender, except that the sizes are different.

19:13But otherwise, the performance qualities of, you know, materials, of shoes, they should be according to sport. But yeah, you're not necessarily just you. I think with Nike, I don't know the fundamentals as well as these guys, but I would say it's a stock that's kind of been caught between themes. You know, is this a tariff story? Is this a high income, low income story? Is this a fallen angel story that's that's hitting its bottom? And I think until investors figure out kind of which category it sits in, it's a little hard to know when to time it, essentially. All right. Well, more on Nike later on in the show.

19:42We're, of course, monitoring that conference call, which is ongoing. But meantime, coming up, copper crushing it. Shares of Freeport MacBrand surging on the back of some heavy metal trading. Can the stock keep mining those gains next? Oh, boy. Wow. That's a lot. I thought it was chock full of good ones. On Fox, we were watching the pharma space as a revamped vaccine panel begins its review of long-approved shots. The latest from that and the drug makers that could see an impact. Do not go anywhere. Fast Money is back in two.

20:12This is Fast Money with Melissa Lee right here on CNBC.

20:27We've got a news alert on the budget bill. Emily Wilkins got the details. Emily. Hey, Melissa. Well, we have been following very closely a provision that was really worrying a lot of multinational companies as well as banks and investors. It was called the revenge tax or the retaliatory tax. And we can now confirm that that is out of the bill. Secretary Scott Bessett earlier today saying that he had come to an agreement with other G7 countries when it came to the taxes. That was the basis of having this proposed tax in the first place. And he said that he asked Congress to remove it. We now know that the two top tax writers in the Senate and the House, Senators Mike Crapo and Congressman Jason Smith, have now put out a statement saying that they will remove that provision from the bill.

21:10Now, that provision was supposed to bring in$116 billion in revenue. So, of course, a huge question is now, are they going to find another way to make up that revenue to appease some of the fiscal hawks? Or did the cost of the Trump mega bill just go up and are members going to have to deal with that? Remember, Trump said he wants to get it done by July 4th. That is eight days away at this point. And we have a long way left to go before that gets to his desk. Melissa? Emily, thank you. Emily Wilkins in Washington. Meantime, shares of Freeport-McMoran jumping nearly 7 % today, now up almost 18 % this quarter.

21:46The move coming as Copper continues its run. The medal notching a four-day winning streak and is at more than 25 % this year. 25%. Wow, Guy. It's a big move. Well, Goldman Sachs just had a note out, and they're very bullish in copper. There's a squeeze. I don't want to get too in the weeds here, but huge squeeze going on in the London Metals Exchange. And I don't think it's going to end anytime soon, which is supportive of Freeport and Southern Copper. Tim can wax poetic just as easily. But FCX here, to me, is still too cheap. The levels that we saw in 2008, which is north of$60, is not unreasonable in this current environment.

22:20I also think Freeport hasn't gotten enough credit for the gold they have. They're probably about 16-ish percent of their mining is in gold. I think the copper story is a weak dollar story. I think it's a supply disruption story. I think China aggressively buying. I think some of the LME activity. And again, all the things around the weaker dollar are helping industrial and precious metals. And I think copper goes higher. Remember, we were at an all-time high, an all-time high in copper only about six months ago. And that didn't seem right, given the concerns we had. this feels better. Yeah, I agree.