Treasurys Turn Higher… And Novo Sinks After Trial Failure 7/31/26

20:16And, you know, but I think if we solve the Middle East in a way which brings oil prices down below$80 a barrel, I think international can if we can get back to a kind of either post-war normalized environment on energy and commodity prices, international, I think, will outperform for the reasons also that are not, you know, valuation, it's always cheap. I think there are dynamics on some of these big thematic global trades that are working very well also around the world. I guess I just would get back to EPS growth. I mean, all this half empty EPS growth has never been better. And say what you want about the hyperscalers and even meta.

20:53But we haven't heard anything from any of them that has you question EPS growth. And in fact, if you want markets to go higher, I think you need participation by these companies. And I think I think we heard enough from the earnings releases from these companies, even Apple's. That tells you north of 20 percent iPhone sales. And you can expect that, I think, as we get into the fall. And obviously we have a release coming out. I think the EPS story is why you're supposed to buy this market here.

21:23Tim Seymour:Coming up, software and cloud nine, a look inside the sector's big week of gains. And what comes next as Palantir kicks off another big week of earnings? plus the dispatch from the oil patch, what Exxon and Chevron had to say about the state of energy markets and where oil prices go from here. Don't go anywhere. Fast Money's back in two. This is Fast Money with Melissa Lee, right here on CNBC.

21:49I'm honored to make history and to make my community proud. Oh, what a brilliant tackle from Naomi Kerma. What would you like the power to do? Bank of America, proud to be the official bank of U.S. soccer. Bank of America NA member, FDSE. Everyone's talking about protein lately, but how do you actually get enough of it? Muscle milk. Muscle milk has a great tasting new formula with no artificial sweeteners, flavors, or added colors. It's high quality, complete protein designed to support healthy muscles with fewer ingredients than the previous formula and 26 to 42 grams of protein. For when you're stuck in meetings or need a post-workout recovery.

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23:01New episodes every Tuesday, wherever you get your podcasts.

23:05Tim Seymour:Welcome back to Fast Money. A strong run for software stocks. The IGV up six days in a row, closing out its best week in two months. Microsoft leading the charge up since Monday, up 22 percent, and adding$560 billion in market value. It was a stock's best week since 1999. $199 ,000. Workday, Oracle, Salesforce also rising double digits. But one notable stock setting out the rally, Palantir. The company reports on Monday, shares have lost roughly a third of their value this year. What do you make of Palantir? So it's always been a valuation game of Palantir. And when you look at it, 42 percent of their revenues comes from the U.S.

23:41government. But all the other numbers seem great. Revenue is up 85 percent last quarter. Net dollar retention means their existing clients is at 150 percent, meaning their existing clients keep giving them more money and commercial is up. The problem is truly just the valuation on the stock. But when you look at the chart, I think that you could probably buy it here, but I'm afraid that it got ahead of itself into the print.

24:05Tim Seymour:Well, the 4PE is what 77 says there, or you can have a Microsoft, which had a strong quarter. I mean, I don't know if you thought that was the all clear kind of quarter for Microsoft court. Well, I think what you're seeing the markets are telling you is they're now looking at the companies who can distinctively monetize their AI spending. And I think that's what you're going to see on all of these earnings reports. And I think that's even going to follow through to a Palantir this week. And they are a really large part of this overall index. So I think seeing how they report and how the index moves, it's going to translate very directly.

24:32And it's something to keep an eye on.

24:34Tim Seymour:Yeah, and that inverse relationship between software and semis, that happened this week also. I mean, software's up like 7 % this week, Bono, and semis were down almost four. Yes. So, I mean, we all are very well aware of some of the challenges that some of the memory names, you know, you've had a hedge fund essentially have to unwind because of some of the long and short positions across that software sphere. I think the volatility, and then if you look at some of the names, in addition to Microsoft, you have Palo Alto, you have Crowd, and then you also mentioned Salesforce. So you've had a massive drawdown and some of those names.

25:12And then you've had some of these LLM essentially going rogue, which to me has only brought more focus onto some of the software security and cybersecurity type of names. So I think within that complex, there's quite a bit of moving parts. And that's what's led to some of that divergence.

25:28Tim Seymour:Yeah. I mean, on top of the breaches that we already knew in just the last hour or so, we're learning about more from OpenAI, Tim, which really does, I would think, help bolster the case for cyber stocks. Dr. Frankenstein's monster. You know, I look, all software has not done poorly, even in the down draft in software. As we said, security's done really well. Infrastructure's done really well. Data's done really well. I mean, software hasn't been a one way trade lower. Let's be clear. I think the turn of Microsoft is part of the turn in the IGB. Make no mistake about that. And now up against the 200 days.

26:04So if you're looking at the chart, the fact of the matter is it like semis did yesterday, but it held the 100-day moving average, which I think has been the more important dynamic from going back over the last year and a half kind of for the tech markets overall. So it's now really at its first test to break through the 200. The chart looks kind of interesting to me. And I think you have to be very careful. But I do think that the market probably wants to buy the underperforming software names relative to the outperforming software I just kind of mentioned, whether that's CrowdStrike or other folks that are really positioned on the security side.

26:41I think it's an interesting time to own software. I think you can. All right.

26:45Tim Seymour:There's a lot more fast money to come. Here's what's coming up next. Profits surging for both Chevron and Exxon. We'll dig into the moves in the oil major stocks and find out if the energy trade has more fuel in the tank. Plus, heartbreak in big pharma as Novo Nordisk's cardiovascular drug fails in trial. Inside the stock's latest setback and whether it can catch up to rival Eli Lilly. You're watching Fast Money, live from the NASDAQ market side in Times Square. We're back right after this.

27:23My community gives me the confidence to ask myself, what would you like the power to do? So every time I'm on the pitch, I play for more than myself. Oh, what a tackle from Naomi Gurma. Absolutely brilliant. Bank of America champions U.S. Women's National Team member Naomi Gurma and everyone who dares to ask, what would you like the power to do? Bank of America, proud to be the official Bank of U.S. Soccer. Bank of America and a member FDSE. Everyone's talking about protein lately, but how do you actually get enough of it? Muscle milk. Muscle Milk has a great tasting new formula with no artificial sweeteners, flavors, or added colors.

28:02It's high quality, complete protein designed to support healthy muscles with fewer ingredients than the previous formula and 26 to 42 grams of protein. For when you're stuck in meetings or need a post-workout recovery. Available in chocolate, vanilla cream, cookies and cream, and strawberries and cream. Try the new great tasting Muscle Milk today. Available in stores nationwide. Muscle Milk. Protein for all. What made you confident that you could do something that hadn't been done before? I have no fear of failure. Trailblazing women changing the game. One of my favorite pieces of advice, think about what your boss's boss needs.

28:36Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just got to think big to accomplish big things. Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday, wherever you get your podcasts.

28:54Tim Seymour:Welcome back to Fast Money. Chevron and ExxonMobil moving in opposite directions, even as both saw profits surge in the latest quarter. While Chevron beat both top and bottom line estimates, Exxon fell short on earnings. CEO Darren Woods joined Squawk Box this morning to discuss the quarterly results. In times like the second quarter, we had so much disruption. It was particularly difficult, particularly for our refining business. We are the largest refiner in the world outside of China. And with the high, high margins and all the changes that we're making across our slate with the crude disruption, the ability to predict what prices we're going to do on that business was difficult.

29:31That's where the miss came from. Frankly, it doesn't represent anything in the operation or the underlying business, which was an extremely strong quarter.

29:39Tim Seymour:Should note Exxon shares still up nearly 30 percent this year. Tim, what do you make of these oil earnings? I thought they were fantastic, especially for someone that's looking for free cash flow or cash flow from operations. And Exxon beat on their free cash. I think it was 19.2 billion. I mean, they beat by north of 20 percent what the expectation was on free cash flow. So why do people own some of these big integrated oil companies? Some of it is is for div and confidence and at least some sense that these are all weather plays. And therefore, I think they both proved that the Exxon disappointment and it underperformed Chevron.

30:14by almost three and a half percent today was because their refining numbers weren't like Valero's. It's not a pure play. Valero's a pure play. Valero's is essentially been outperforming the relative space. And I think the Exxon disappointment is something you should get over and go buy it. If you squint and look at both of those charts, Exxon and Chevron, they look identical. They're both up 29 percent year to date. And you heard it from the CEO. They had a weak refining segment, and that's where Chevron beat them. But when you look at the Middle East, Exxon is more exposed to the disruptions in the Middle East than Chevron is.

30:52But both of them, to Tim's point, you're going to get a yield in both. They both have the same year-to-date performance, and the charts look identical. So it's about picking a horse on that day. Yeah, and I think some of this, too. I mean, Exxon has done really well this year. It is at a higher valuation. But I agree with you. I think it actually has a lot more exposure in the Middle East, which if that does, in fact, get resolved at some point in time, I think is actually a better benefit for your Exxon than your Chevron. And I really like those free cash flow numbers. I think that got buried in the numbers that came out today.

31:20Tim Seymour:Coming up, a no-go for Novo, the trial setback that routed shares today. And the prognosis for PharmaSox Now, Mizzou host Jared Holes will join us next to dig in. Fast Money is back right after this.

31:37Tim Seymour:Welcome back to Fast Money. Stocks in positive territory in July's final trading day, the Dow rising 280 points, pulling out a gain for the month. The S &P up seven-tenths of a percent, the Nasdaq adding one percent. Meantime, Roblox sinking 27 percent after bookings and daily active users missed estimates in the latest quarter. And Reddit shares tumbled 21 percent after giving a Google search traffic warning, both stocks seeing their worst days on record. ApneMed rising over 50 percent in its trading debut after pricing at$16. The FDA is currently reviewing the company's pill, treating obstructive sleep apnea.

32:11Tim Seymour:It would be the first drug designed specifically for the condition to hit the market. And shares of HVAC and plumbing supply company Ferguson Enterprises jumping on news. It will enter the S &P 500 at the start of trading on Wednesday. It is replacing Electronic Arts, which is being taken private. Meantime, a setback for Novo Nordisk, shares plunging almost 9 % after its heart medicine failed a late-stage trial. The experimental treatment did not show a meaningful reduction in major adverse cardiovascular events compared to a placebo. A Novo going back into negative territory for the year today.

32:42Tim Seymour:Let's bring in Jared Holes, healthcare sector specialist at Mizuho. Jared, great to see you. You too, thank you. Was the move lower commensurate with the expected sales that you would remove from the pipeline with this failure? Yeah, roughly. This was, I think, modeled out to be anywhere between a$5 and$10 billion opportunity for Novo. It just it depends on sort of what year you were looking at. So it's stock down 8 percent kind of makes sense. It's just a little bit of a blow to a company that needed a pipeline success. But I think the move is probably right. I would imagine this puts more pressure on them to acquire other companies, acquire other drug candidates.

33:21Tim Seymour:Although this, we should note, was acquired through an acquisition. That's right. Yeah. I mean, these things are obviously hit or miss. The company has been pretty adamant that deal making is going to be a big part of its strategy going forward. I think they mentioned it on pretty much all the conference calls as of late and an investor meeting. So it probably just continues to put emphasis on the fact that they need to build out a pipeline to show investors that there are some interesting assets here other than obesity. Should we write off completely this drug? I mean, there are a couple of other studies underway involving the drug.

33:57I wouldn't write it off completely. I mean, these studies are very tricky. You know, you're looking for these outcome studies have to prove to be statistically significant to a placebo. Sometimes you just don't get the, you know, the right patient population and the event rate does not go in your favor. So I wouldn't write it off completely, but the odds are obviously very low.

34:20Tim Seymour:Wednesday should be interesting, Jared. I mean, we're getting both Novo as well as Eli Lilly. Are we going to see anything that will change the trajectories of these stocks, you think? I'm not really sure. I'm pretty confident that Novo is going to have a good quarter, whether it's enough to sort of appease investors medium to longer term, I'm not sure about. But the Wegovi pill has been a monster launch, one of the best we've ever seen. Numbers should be good. I think the street expects maybe a small guidance bump on the back of earnings. Lilly's been tougher to call, honestly, because Fandeo has been, I think, relatively disappointing as an oral GLP drug.

35:03But the thesis has, I believe, shifted almost entirely to the pipeline, including retitrutide. So we'll see. I'm not really sure that either thesis changes much. It's just I've been very surprised that investors have basically gravitated away from Fandeo this quickly and towards Reditrutide.

35:24Tim Seymour:How, you know, I read your notes, Jared, and I remember in one note where you did address Reditrutide, you sort of it sounded like you're scratching your head. Like, what kind of market does this have? Do we really need to have a more effective weight loss drug at this point when all of these drugs are very effective? Yeah, I've been very, very surprised that the street, I think retail investors may be more so than healthcare dedicated investors on this one because of just the optics of a drug that gives near 30 % weight loss with low doses. You can get there with the higher doses that the existing drugs give or take.

36:02So to me, this is very incremental, but the street's been very positive on it. I just feel like at the end of the day, one of two things are going to happen. Either Reddit True Tide winds up serving the very, very high obese population, 35, 40 BMI, maybe even higher than that. Or it cannibalizes the existing sales and winds up not being as big of a blockbuster. I think the way that a lot of investors are looking at it now is that this is going to basically take all of the share and become Lily's bestselling drug. I'm just not really sure we need it.

36:38Tim Seymour:Jared, thanks for joining us. Good to see you. Thank you. Jared Holtz of Mizuho. Bonwin, what do you make of the space? You know, Novo, I wonder if I'm being stubborn. I just feel like there's been so much news, bad news baked in. I can understand the move today, but at some point, I think it's compelling based on valuation. And if you do really get a drawdown in the broader market, I expect people to run and hide within health care and staples and things of that nature. With that said, I have to acknowledge that I've been long and wrong, and perhaps I'm just catching a falling knife when I know that I shouldn't.

37:15But I think that if I hold this and look up a year or two from now, I will not regret that decision. But there is no arguing against the fact that there's no momentum in the short term in this name.

37:25Tim Seymour:Yeah. I mean, I think, Tim, you're in the same camp as Bono and at this point, it's like it gets no credit whatsoever for one of the most successful drug launches in history. Yeah, I mean, we'll go. It's almost why that that option show that used to be on Fridays that should still be there because it was such a great show. You kind of have this this strangle dynamic with those earnings. I mean, I think the numbers are going to be good. But if they're not, I think this stock is going to get punished. I think it has been de-risked. And I understand that the cardiovascular pipeline was potentially a multi-billion dollar sales opportunity, but a 15 billion dollar reduction in market cap.

38:06Again, I'll leave that to Jared. Sounded like he thought it was commensurate. I think the sentiment around this company is so low that it won't take a lot to continue to turn it. I think you can be long here.

38:20Tim Seymour:Coming up, the SpaceX slide gaining steam ahead of the company's first earnings report on Tuesday. The big bets options Traders are placing it to the print when Fast Money returns.

38:31As America celebrates its 250th anniversary, CNBC spotlights the companies that rose with the nation and continue to shape its future. It's incredible to think about the fact that we've operated across four centuries of American history and through all of the innovations that have occurred during that time, both for the nation, but also for the financial system. I'm Robin Vince. I'm the CEO of BNY. In 1789, President Washington was inaugurated. Alexander Hamilton was the first secretary of the treasury just installed in his post. Hamilton believed in establishing the credit of the nation and ensuring that the United States would be able to come together as one country.

39:18And he turned to the Bank of New York at the time and BNY lent the money to the nation,$200 ,000, the first ever loan to the United States as a new nation to be able to go about the business of building a country. If you think about the same principles that he brought to the Bank of New York, it was to be resilient, to be an innovator, to be able to participate in that fledgling country of the time and to be able to power it forward. And then as the merchants gathered under the buttonwood tree a few years later in 1792, the Bank of New York was actually the first stock traded on the exchange. And it was really a moment of crystallizing that beginning of the capital markets of that new nation.

40:04We were part of supporting the build-out of the Erie Canal. We supported the build-out of the subway system. we launched US Treasury clearing through computers here in the United States. It's that story of innovation, the reality that when you bring a group of people together with common purpose and setting a mission wrapped in freedom and the opportunity to innovate, you can do amazing things. That is the story of the United States of America, and in a way, it's the story of the Bank of New York, too.

40:45Tim Seymour:Welcome back to Fast Money. Big weekend ahead of the box office. A Spider-Man brand new day swings into the silver screen. Preview ticket sales setting a domestic film record at$72 million. The movie expected to gross nearly$270 million in its debut weekend. All this as IMAX extended screenings of The Odyssey into September as it's still selling out weeks in advance. Steve, I don't know if you've seen any of these things. I've seen it, but I hear that if you're going to see Odyssey, you have to see it on an IMAX screen. You see the stock is reflecting that. It's up 30 % year to date. Movies are back.

41:20People are going to movies. COVID knocked them on their butt, but they are coming back. I think it's experiences in general, right? So I think this is translating to you've seen this with concert tickets. You saw this with the World Cup. You're seeing this with movies. People are wanting out and doing things. And I think it's really interesting to see how these numbers translate, where there's a lot of concern with the consumer and where they're going with inflation. but we'll talk to clients and they're complaining about everything costs so much. Oh, but I also just spent$7 ,000 on the World Cup.

41:46And I think you're seeing that with things like this too. You know, people are willing to spend their money on experiences right now. That's happening.

41:51Tim Seymour:And on good content, Tim. And, you know, speaking of content, Disney earnings out next week. Yeah. And so I could probably speak more on Disney earnings than as it relates to their slate than I could talk about the Odyssey. I took too much Latin in school. I think Josh Amaro really. Fair enough. I think you have a dynamic here where we really do need to see a catalyst in Disney. It's not been a story where we've been. There hasn't been follow through in terms of that flywheel and what's been coming out of the studio. I think the park cyclicality is what it is. The DTC growth has been strong, but the margins haven't been great.

42:34This is a stock that's been dead money for six or seven years. I think there's a strategic change with the new CEO. And I certainly think that there's reason to be confident that there's better news ahead. I think the stock's de-risked. I don't think it's that expensive.

42:51Tim Seymour:Bono, what are your thoughts? I mean, do you think this falls in the category of a Novo Nordisk? You own this and you look up in a year and you'll be glad you own it? At 13 times I'm with Tim. I think it's de-risked. Sure. I mean, but again, as Carter would say, it's somewhat of a pair of twos. But yes, to answer your question succinctly, I do think that it is the risk and the odds are in your favor over a two-year time horizon. All right. Tommy, SpaceX shares hitting a new low ahead of earnings next week. We'll dive into the options pits to find out what to expect. More Fast Money in two.

43:35Tim Seymour:Welcome back to Fast Money. SpaceX closing below the$110 mark for the first time today. Shares have now fallen in 17 out of the 22 trading days this month. The company's first earnings report is Tuesday after the bell. The results turned things around. There's also a lockup expiration to throw into the mix. Mike Coe, what are the options markets saying? Yeah, so there's a lot of options activity in SpaceX. It traded almost 1.2 million contracts today. That's about 67 % above its average since they started trading. The implied move right now on earnings between now and the end of next week is$18 higher or lower.

44:09That's 16.5 % of the current stock price, or a range between$90 to the low end and$126 a share on the high end. The call volume was high today, but a lot of the institutional prints were sellers. But an example of an institutional buyer was someone who paid$2 a contract for$510 of the weekly 90 strike puts. So that trader is obviously betting that the move could be to the downside.

44:30Tim Seymour:Yeah, it may be part of that. is that lockup expiration that I mentioned, Bono. And what are your thoughts on this action? You can be short volatility, given the nature of this particular name. But I think, like you said, this is the lockup. And then if you look at short interest, it's tremendous. I believe it's somewhere between 25 and 30 percent. So you have the makings of a volatile move, possibly in that direction. What do you think about this? So I'm still long the stock. So I traded a little bit. Have you added any? I'm sorry? Have you added any? Yes, but I sold some above$200, but then I added it at around$180.

45:06So it's not like I'm adding it here. I haven't been adding it here. But when you look at the free float, we're only going from about 5 % free float to about 12 % free float. The real unlock comes in October, which gets you about 30 % of the free float. So I could see this, as Mike said, getting pushed below$100. drip. But I think you also have to remember that the larger the float goes, the more passive buying because the index weighting becomes more. So I think you're going to see a little bit offsets, but nobody's coming in to buy it when they know they have an unlock coming up. Yeah. And I mean, you have two things coming.

45:40You have the unlock, which is one of several coming up. I think it's interesting to point out that this will be a good indicator of how that may trade for future lockup periods and the earnings report. I mean, I think this is going to be really crucial that investors need to see where they are going forward. So I think this will be a very telling week. It's clearly the volatility is getting priced in there.

45:57Tim Seymour:All right. Thank you, Mike Coe. Up next, final trades.

46:06Tim Seymour:News alert on FIFA, the soccer governing body reportedly scrapping its controversial plans to sell off the World Cup to private equity after backlash, the deal which involved the firm run by Joshua Kushner would have valued the arm at$20 billion. No more, though. Time for the final trade. Let's go around the horn. Bono and Eisen. Vertiv Holdings, BRT Timbo Bi-Weekness and Citibank Courtney Exxon, I think on the sell-off you want to take a look at it Stephen Large Pharma is going to be buying a lot of small biotech companies XBI Thanks for watching Fast Money Have a fantastic weekend Mad Money with Jim Cramer starts right now

46:54You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Fast Money participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Fast Money disclaimer, please visit cnbc.com forward slash Fast Money disclaimer. Everyone's talking about protein lately, but how do you actually get enough of it? muscle milk.

47:20Muscle milk has a great tasting new formula with no artificial sweeteners, flavors, or added colors. It's high quality, complete protein designed to support healthy muscles with fewer ingredients than the previous formula and 26 to 42 grams of protein. For when you're stuck in meetings or need a post-workout recovery, available in chocolate, vanilla cream, cookies and cream, and strawberries and cream. Try the new great tasting muscle milk today. Available in stores nationwide. Muscle milk, protein for all.