In short
Fast Money episode covers markets and geopolitics. Topic 1: U.S. revokes Iran oil sales authorization after Strait of Hormuz tanker attacks; Treasury filed to revoke the general license tied to the U.S.-Iran MOU.
Key claims
the MOU is performance-based, Iran’s actions were “wholly unacceptable,” sanctions are back, and escalation risk could hit inflation/consumer and push 10-year yields toward ~4.6%.
Notable examples
three tankers attacked; oil spiked late; OIH/energy volatility discussed.
Topic 2
Financials rally into Q2 earnings.
Key claims
credit quality and investment-banking/trading should be strong; banks are a test for “broadening” beyond AI/tech.
Notable examples
XLF near record; banks named (JPM, BAC, Goldman, Citi); JP Morgan buyback; historical selloffs around earnings.
Topic 3
AI/biotech/media. Guests discuss AI capex funded by debt/SPVs, potential crowding unwind, and Chimera Therapeutics’ oral targeted protein degradation for eczema/asthma/food allergies; CEO Nelo Meinolfi cites ~150M global patients and KT621 fast-tracked trial. Also preview: CNBC “Blacklisted” on Hesai lidar security risks; Pentagon blacklist limits DoD contracts but raises data/malware concerns.
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Chapters
Tap a time to open that second in VOOil Prices and U.S.-Iran Relations
1:42 to 3:05
Discuss the impact of U.S. sanctions on Iranian oil sales and market implications.
“We'll get to the banks in just a minute, but first, oil prices spiking late in the session after the U.S.”
Energy Market Insights
3:05 to 7:19
Examine the current state of the energy market and its broader implications.
“And obviously, that's a huge concern for the markets.”
Banking Sector Outlook Ahead of Earnings
7:19 to 9:01
Analyze the upcoming earnings reports from major banks and market expectations.
“So, yes, we're going to see a spag on this headline.”
Financing and Market Dynamics
9:01 to 11:40
Explore the creative financing approaches of large banks and their market implications.
“Do we need to see this continued rotation out of, let's say, semiconductor stocks and specifically memory stocks?”
Investor Sentiment and AI Economy
11:40 to 14:01
Discuss the investor sentiment regarding the AI economy and its impact on the broader market.
“I just think that is so debatable, Karen.”
Market Analysis on AI and Financials
14:01 to 15:44
Learn about the impact of AI on the economy and financial markets.
“But, you know, at the end of the day, right, it's the technicals that matter.”
Discussion on Banks and Economic Concerns
15:44 to 16:44
Explore the current state of banks and potential risks in the economy.
“I asked him if he wanted like a coffee or something.”
Insights on AI Investments and Market Trends
16:44 to 19:20
Understand the dynamics of AI investments and market trends in tech.
“I mean, this year is a really good example of that.”
Insights on AI Investments and Market Trends
20:31 to 20:55
Understand the dynamics of AI investments and market trends in tech.
“If I'm grilling, chilling, and watching hoops, my outdoor patio setup better be ready to play.”
Geopolitical Impact on Markets
21:02 to 23:04
Analyze how geopolitical tensions affect market movements and investor sentiment.
“military has said it has begun launching a series of powerful strikes against Iran.”
Show all 21 chapters
Future of Media Rights and Bidding
23:04 to 25:51
Get insights into the upcoming changes in media rights bidding and implications.
“You were mentioning earlier that headlines don't seem to move the markets.”
The Importance of Live Sports
25:51 to 26:51
Discover why live sports remain crucial for media and advertising.
“The lads on the pitch, it's scintillating.”
Media Dealmaking at Sun Valley
28:20 to 30:22
Coverage of the media moguls gathering at the Allen & Company Conference and recent industry news.
“Such media dealmaking sure to be front and center at the Allen & Company Conference in Sun Valley, Idaho this week.”
Live Sports and Gaming Discussion
30:22 to 30:47
Discussion about the connection between live sports and gaming industries.
“Is that a painting she's in front of, or was that actual painting?”
The Changing Media Landscape
30:47 to 31:58
Insights into recent mergers and the shifting dynamics of the media sector.
“And these two worlds obviously not colliding, but we're having this conversation within five minutes of each other.”
Chimera Therapeutics Milestone
31:58 to 32:38
Introduction to Chimera Therapeutics and its promising new treatment trial.
“obviously if they're past, they're past.”
Interview with Nelo Meinolfi
32:38 to 39:50
Nelo Meinolfi discusses Chimera's technology and its potential to transform treatment.
“The Dow shedding 130 points after hitting intraday records.”
Concerns Over Chinese Technology
39:50 to 42:00
Discussion on the implications of Chinese technology in the U.S. market and national security risks.
“has become embedded in America's autonomous future and the concerns about the national security risks it's raising.”
Discussion on Hesai Technology and Data Storage
42:00 to 43:34
Learn about Hesai Technology's data handling capabilities and market position.
“David Lee is a founder and the CEO of Shanghai-based Hesai Technology.”
The Role of Low-Cost Sensors in AI and Autonomous Vehicles
43:34 to 45:34
Understand the impact of low-cost sensors on AI technology and the automotive industry.
“you're going to choose something that is low cost and good.”
Stock Market Insights on Coca-Cola and M&A Activities
45:34 to 47:50
Get insights on Coca-Cola's stock performance and M&A trends.
“And is there enough fizz for shares to keep climbing from here?”
Transcript
Automatic transcript. May contain errors.0:00At Edward Jones, we believe rich is more than caring about the latest and greatest. It's also taking care of what gives your life meaning. That's why your dedicated financial advisor meets you where you are with personalized financial strategies that help protect what matters. So you can preserve your progress while creating a path forward. The key to being rich is knowing what counts. Let's find your rich together. Edward Jones, member SIPC. Did you know that Neurosymbolic AI can help your business find new ways to make money? EY Parthenon is the only one offering this groundbreaking growth platform.
0:40Neurosymbolic AI analyzes hundreds of millions of data points to reveal new growth strategies. EY Parthenon teams deploy this innovation so you can uncover hidden value and scale beyond existing boundaries. Want to know what Neurosymbolic AI can do for your business? Contact EY Parthenon today. Solutions that work in practice, not just on paper.
1:02Tim Seymour:Live 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. Big banks about to kick off Q2 earnings season next week. Investment banks leading the way over the last three months. What will the reports mean for these names and for gains in the second half of the year? Plus, the next big test for chip stocks, a sky-high price target for SpaceX, Coca-Cola shares get caffeinated, and CNBC investigates concerns that censors from a blacklisted Chinese company could be hacked or used to send sensitive data to the Chinese government.
1:33Tim Seymour:We'll dive into that story later this hour. I'm Melissa Lee. Come to you live from Studio B at the NASDAQ. On the desk tonight, Courtney Garcia, Karen Feinerman, Dan Nathan, and Guy Adami. We'll get to the banks in just a minute, but first, oil prices spiking late in the session after the U.S. said it would revoke authorization of Iranian oil sales after a series of tanker attacks in the Strait of Hormuz. Megan Casella is in Washington with the very latest on this. Megan. Melissa, that's right. Treasury formally filed this afternoon to revoke the general license that had allowed Iran to sell its oil on the open market, essentially undoing here what had been one of the most tangible outcomes of the U.S.-Iran memorandum of understanding.
2:10Now, this move comes just over two weeks after the license was put in place, and it follows a series of attacks on ships in the Strait of Hormuz, including three tankers hit just earlier today. Both Qatar and Saudi Arabia blamed Iran for those most recent attacks. Now, a U.S. official tells me the decision to do this now is because the MOU is entirely performance-based. The official says Iran will only reap benefits if they exhibit good behavior and that its actions in the strait were wholly unacceptable to the U.S. and will be met with consequences. Now, the official also said U.S. negotiators continue to work in good faith towards a final deal.
2:42But, Melissa, this certainly throws a wrench in those talks. The U.S. lifting oil sanctions against Iran was offered, you'll remember, in the MOU as a reward for Iran reopening the Strait of Hormuz. So now we're seeing ships targeted in the strait. The sanctions are back on. And so just about three weeks after it was signed, the MOU now is on very shaky ground. And the question becomes whether we see further escalation from here. Melissa.
3:05Tim Seymour:Megan, thank you. Megan Casella. And obviously, that's a huge concern for the markets. You know, oil tankers, it was always viewed as sort of a shaky situation in terms of transiting through the Strait of Hormuz. But now so even more. So let's focus on the energy market because I do think it has broader market implications. But you look at the OIH, which is down 22 percent from the all time, not the excuse me, from the May high. I want to be clear from the May high of about 455, 460. Pretty significant move in a short period of time. Stopped right at the 200 day moving average and bounced today.
3:35So I think Karen would agree as well. Energy stocks are still in play. Yes, it's been difficult to own them. Ex refiners. There's a lot going on in terms of the broader market ramifications. A VIX at 16 or 16 and a half does not price in what we just talked about. Yeah.
3:49Melissa Lee:And there's a lot of ways to kind of consider this as it relates to risk assets in general. And I want to focus on inflation. Right. That has been the story over the last, you know, call it a couple of weeks since we've had this MOU in a way. And so the president's been talking about, you know, energy prices coming down, food prices coming down. And if you think about where the 10 year yield is at four point five five right now, I don't think anybody had that on their bingo card, especially if you're considering, you know, the price of oil down below 70 bucks. And if you think about where gas at the pump is per gallon, it really has come down a lot if you think about where we were just a month ago.
4:23Melissa Lee:But relative to where we were in February, it's still up a lot. So if inflation expectations are going to stay grounded, then the yield on the 10-year is probably not going to move a whole heck of a lot. Now, you can make the argument that stocks have not really been bothered by yields sticking around here, and that has been the case. But there's a whole host of other things that are coming into play here as it relates to inflation. I mean, you think about all the demand that we've seen for everything that goes into data centers and, you know, labor, too. We have labor shortages, that sort of thing.
4:49Melissa Lee:So there's a lot of reasons why you could expect inflation to stay bid, if you will. And therefore, you're going to see yields stay bid. And if, you know, the energy market continues to be really volatile, it's not going to kind of produce the sort of, I don't know, disinflation. Is that what we call it? Disinflation. Inflation going down. Yeah, right. That, too. And, you know, it's just not going to happen anytime soon. And I just think that, you know, you're likely to see us concede a bit more as it relates to ending this war, because it really does become a political thing as we get into the fall.
5:19Tim Seymour:It does seem like there's a high bar, though, for WTI to actually go a lot higher. I mean, at these levels with this spike, we're back to levels we saw a couple of weeks ago. We're well off of the Iran war highs here. And it seems like there's, you know, a lot has to happen in order to to even approach 80. Well, so I'm looking at Brent, not West Texas, and also looking at, you know, what's the curve telling you? And so we had an almost$4 spike, but, you know, going out the curve, maybe$2.5. So a more muted, as you would expect, a more muted response. And I've been surprised, actually, how much oil has come down in such a relatively quick amount of time.
6:03The OIH has hit the OIH squarely on the chin. And the Exile lead much less so. But when you look at the holdings, it's, you know, Exxon, Chevron, Conoco. So it's a different mix. But so I do think inflation can come down. So which would be good for the market. I'm not I'm not looking for a cut. I don't think they need to cut. I don't think it's even if it comes down. There's still way high above where they need to be. And Warsh has pretty much said that's the mandate of the dual one that they care about the most. So I do like, though, getting into earnings season where we actually see what companies are seeing in their own business and in the economy at large.
6:40And the banks, obviously, are a really good indicator of that. So I just don't like when they trade up into earnings. Yeah. Yeah, I think the fact that we see crude, I mean, it is now above 70, but it's still like basically where we were pre-Iran conflict here. And I think the fact that the markets are not reacting that heavily to these geopolitical headlines means they're moving past it. Like, yes, there's still conflict. Like, yes, they're going to see some intraday moves on that. But I think realistically, when you're looking six to 12 months out, markets are assuming this is no longer going to be the case.
7:08And that's what they're looking at. And if that is the case, that's essentially almost like a tax cut to consumers. Because if it's going to be lower oil prices, that's less gas prices. That's going to help the consumer. And that's a positive for the overall economy. So, yes, we're going to see a spag on this headline. I don't think it's a concern moving forward, though. All right.
7:23Tim Seymour:Meantime, let's move on to financials flying to new heights. The XLF ETF hitting a record early in the session. It is now up nearly 18 percent from its March lows. as a group far outperforming the broad market so far this month, up almost 5 % in July, where the S &P 500 is basically flat. The move coming ahead of big bank earnings, J.P. Morgan, Bank of America, Goldman Sachs, and Citi kick things off next Tuesday morning, not big morning. So will the reports fuel more gains? And this is exactly, Karen, the setup you're talking about just now. I should have waited until this segment to say that.
7:54Tim Seymour:That you don't like. But it applies, really, to financials. It does. I mean, I think what I care about is earnings. We always know that Jamie Dimon says, you've got to worry about this. You've got to worry about that. Here's what could go wrong. All of that. But I do think the earnings will be good. I think credit quality will be good. I think that will be important. The part about investment banking, trading, capital markets, I think will be really good. But we always say that is not a multiple. You don't put a high recurring multiple on that because it's a really lumpy business. So I think the run-up going in, as I often said, is not great.
8:31going forward. But I do like the banks. I'm not, I have some upside calls sold against JP Morgan, but Citibank and JP Morgan are where I want to be, plus some Morgan Stanley. And there's been this big discussion about this broadening happening. And is that actually going to be sustainable? And I think the banks are one of the big tests for that. Like, what are you showing with the consumer? What does credit really look like? What are we seeing with the M &A activity? Because I think that's going to be a test is, are the earnings justifying this rotation? And is it going to continue? And I'm hopeful that we are going to see that.
8:58But I think we have to see those numbers when they come out next week.
9:00Tim Seymour:I mean, for this rotation to happen, though, do we need to see tech be soft? Do we need to see this continued rotation out of, let's say, semiconductor stocks and specifically memory stocks? I don't necessarily think so. I think banks, listen, given the size of the banks vis-a-vis the broader market, I don't think it's vitally important that those stocks come off for banks to win. Banks have done okay in seemingly any environment. You look at Goldman Sachs, Morgan Stanley, even JP Morgan. And the fact that JP Morgan announced a stock buyback, despite what Jamie Dimon says about valuation, I think is somewhat telling.
9:34I mean, they realize that you sort of got to be in the game. I will say historically, when banks run into earnings like this, they typically sell off, especially Goldman Sachs. If you look over the last few years, the trend has been run up in earnings sell off that lasts about a week or so. I think that will continue.
9:50Melissa Lee:Yeah, I think that banks exposed to consumers are less important right now as you think about just the financial landscape in general. And, you know, we've been talking about this going back to early June, this Blackstone and Apollo deal. It was an SPV. It was private credit. It was raised basically to finance the purchase of Google TPUs and lease back to Anthropic. No one wants these things on their balance sheet. So, you know, some of these financial institutions continue to get more creative. And, you know, who's lending a great deal to those SPVs is some of the large banks, right? So when you think about the circular nature of it, forget the circular nature of actually the purchasing of these GPUs and whether it's DRAM or HBM and all that other stuff that goes into the servers.
10:31Melissa Lee:I mean, no one wants to own the hardware at this point. And they've already used a lot of their cash flow and they've used their balance sheets to do that. And now they continue to get more creative. So I guess the point I would make is that, you know, this doesn't look a whole heck of a lot like the late 90s when you saw this build out that was, you know, for all intents and purposes, funded by equity. This is getting funded by a lot of debt right here. And it's to a scale that we've never seen before. And now that is going to flow through the financial system. And if there's any pullback in CapEx demand, this is going to be something that's been very financialized.
11:03Melissa Lee:So I don't think there's been enough attention played to this aspect of this build. So I think you're right if the demand pulls back. But one thing I think has happened was several months ago, we're all really afraid of depreciation, how quickly these chips were losing value. And I think that's not the case anymore. I think that much shorter, the feared much shorter depreciation is lengthening, that they are getting use out of them longer. And if we talk about, you know, switching to, right, you don't need to be the first cutting edge to do several tasks. You could do something else. That just adds to that story.
11:37So that, I think, is interesting to the extent that that's collateral. I just think that is so debatable, Karen.
11:42Melissa Lee:I just think there's so many folks that are kind of digging into this and think that is exactly not the case. And the way some of these GPUs have been marked as far as depreciation, I mean, we're going to see, you know, I mean, that's going to happen. And when you think about the broadening out, I think it's interesting that you have this situation where they're buying TPUs from Google, but you also have this situation, and Dan Niles talked about it last night, we've been talking about this. I mean, why do you think Intel and AMD are trading where they are? They're not trading because they've kind of cracked the code as it relates to GPUs.
12:09Melissa Lee:They basically decided that they can put their CPUs or they basically convinced a lot of these buyers of this compute that you can do almost the same thing with clusters of CPUs. So at the end of the day, if there's any less demand for GPUs, then you're going to see these things get marked down dramatically and you're going to see a push towards other technology in general. So again, I get that narrative. I'm just not sure that's the correct way to think about this. And we won't see that until demand pulls back.
12:37Tim Seymour:But you're saying that this is a looming threat to the banks.
12:40Melissa Lee:Well, I think it's all a looming threat. I mean, the point is, is that this has basically been financed first from these companies, and now they don't want it on their balance sheet. And then they have to go out and have these, you know, and we saw this with Meadow, by the way. I mean, you remember that SBV, it was KKR, it was Blue Owl, that sort of thing. I just think at some point, people are going to start paying attention to that, how this stuff is being financed.
12:58Tim Seymour:All right. For more on what's next for the markets and how investors should position themselves, let's bring in a tick. This is Jack Janosiewicz. He is a lead portfolio strategist. Jack, great to see you here on set. Yeah, thanks Thanks for having me back. How are you feeling about the setup into earnings season? I mean, the revisions have been very strong. Upward revisions have been strong across the board. Yeah, I think that's a pretty good backdrop. But I think what we're going to hear from them is going to be very important, right? It's going to a lot of questions you guys have just been walking through.
13:22I want to hear about OPEX versus CAPEX. I want to get some greater clarity on that front. There's a lot of questions going forward here on this AI trade. And basically, the whole market seems to be held up by that AI trade. So getting any sort of direction going here in the future is going to be key. You talk about a ho-hum economy. I mean, I hear what you're saying. When is it not ho-hum through the lens of the bond market, which shows glimpses of sort of faltering over the last couple of weeks? Yeah, and, you know, the question you guys were just talking about, the financing side of the equation, there's certainly plenty of debt being issued right now.
13:51The market seems to be taking it down. Maybe the argument, I would say, you look at a lot of these hyperscalers and a lot of these guys that are issuing, you know, pretty good balance sheets for them to take it on at the margin. It's not really crimping them. But, you know, at the end of the day, right, it's the technicals that matter. And when you start to look at potentially AAA, AA-rated paper that's coming in with maybe a little bit of a pick to the overall market, I think there's a bid for that sort of paper. And so I think the market's willing to take it down because pretty good balance sheets, they're going to get paid back, and you're getting a little bit of a spread to the broader market.
14:19So they're willing to finance these sort of things.
14:21Tim Seymour:You say the non-AI-related economy is tepid at best. Is it being hurt by the AI economy? I think there's a pretty big sucking sound that we're hearing right now, right? It's all the capital is being dragged away from everybody else, and it's going right to that AI side of the equation. All right. So are you positive on that? Yes. I mean, there's a real debate over whether or not increased capex, which seems to be the case, especially because memory prices are going higher, will actually mean good returns for shareholders. Yeah. You know, I still think you don't have to stay with the trade. I think maybe near term we're going to get some chop on that.
14:52You know, when you look at things like the momentum factor, the beta factor, you know, a lot of the dispersion trade, the implied correlations, you're seeing plenty of signs of crowding that's in the marketplace right now. And so you get any sort of move, especially, you know, you guys are talking about the VIX earlier, you get a sort of backup in the VIX. You're going to start to see some of these trades unwind. And the level of crowding that we're seeing in there, you're going to see some selling. And that's sort of what you saw today. I think you saw a little bit of that last Thursday. So there could be a little bit more of a shakeout to go, but that probably just presents a buying opportunity, I think, once that shakeout's done.
15:22So I think the idea here is a little bit of a barbell, right? You want to own some of that AI, but you also want to look at trades that maybe are not as quite tied to the beta and the momentum trade right now. Things like maybe financials, health care, that sort of thing. So it gives you a little bit of a smoothing out effect from a portfolio perspective.
15:38Tim Seymour:Yeah. Do you like financials? So you like financials going into earnings here? Yeah, I think it makes sense. Yeah, okay. Jack, it's great to see you. Thank you. Jack Janosiewicz of Natuja. You know, Jack was outside. I asked him if he wanted like a coffee or something. He goes, actually, where's your stash? He wanted like a tequila, which I dig. Really? Maybe post-show. Are you making this? Are you bad-muffling, Jack? No, Jack, what did I get? Am I making it? Did I goodbye the guests? No. I knew he was going to stash somewhere. Yeah, of course. Well, it's hidden. Not anymore. I guess not. Do you agree that you have to have – I mean, that you need a position for both.
16:10Tim Seymour:That makes a lot of sense. I mean, I'd push back a little bit in terms of the banks. I think some of them have gotten ahead of themselves. I mean, even Jamie Dimon says his company is expensive. But you can understand why the landscape is favorable right now. What I will say, though, what I continue to be concerned about, although the unemployment rate is 4.2 percent, under the surface, the labor market looks precarious in a word. And I think the U.S. consumer is absolutely strapped, and that doesn't work well for banks in this environment. I think it's interesting. I think a lot of people come on this network and say you've got to be still exposed to the AI trade, but position for the rotation out.
16:43Tim Seymour:So you want to sort of keep your fingers in both trades. Is that how you're advising clients? Well, you do. I mean, this year is a really good example of that. If you look at the MAG-7, I think it is now, again, positive for the year, but like 1%. But then if you look at the other 495 stocks, they're up like 13%, 14 % for the year. This is a perfect example of that. Like we own AI and guess it's been one of the underperformers, but the whole rest of the economy has done really well. We have things like our pipelines doing well, commodities doing well, our financials are doing well. And I don't think anybody necessarily foresaw that in January.
17:11But I think this is something you want to do. And I do think that rotation probably is going to continue. But I don't think the AI story is over. I don't think I want to buy out of that either. So I think that's very sound advice there.
Read the full transcript
17:20Tim Seymour:Have you been paring back at all in your AI trades? Well, some of them have pared back for me. So with that self-hedging mechanism. But no, I haven't. But I haven't owned the Microns, that sort of name. So that's like NVIDIA. It's been kind of a wild ride, but I still think it's attractive. And Dell, those are my, and then Google, Amazon, Meta. We didn't even mention Samsung in the earnings overnight from South Korea, which really sparked this whole trade. SK Hynix coming to market on Friday with their listing of ADRs here in the United States. I mean, those are going to be key tests. It's not surprising.
18:00Melissa Lee:I mean, look at NVIDIA. It's a great example. They're growing earnings in sales this year 80 percent, 80 percent year over year. OK, and they're expected to decelerate to 45 percent next year. It trades at 15 times next year's earnings. So investors are placing huge discounts on the ability for these companies to still grow at that pace, to maintain these sorts of margins. And, you know, it's interesting to me that NVIDIA obviously is self-financing all of this stuff. They've made tens of billions of dollars invested in their ecosystem. But there's been one hundred and sixty billion dollars so far this year issued in the debt markets by the hyperscalers.
18:33Melissa Lee:And some of them are paying, you know, like rates that are actually really high. If you think of Oracle, you think of the neoclouds, they're near junk. And the union economics for those guys has not been proven out just yet. So I think there's probably going to be a couple of blow ups in that and in that area. And then you're going to continue to see these equity offerings, which have been big, if you think about the Google one and that sort of thing. So, again, I think if you think about the A.I. demand that is actually fueling a lot of the earnings growth year over year in the S &P 500. Well, it doesn't take too fine of kind of maybe you just kind of kind of squint at this and you think about what's going on with Samsung and the price action relative to what they're putting up.
19:11Melissa Lee:And you could say this is probably a quarter or two away. And I know that you could have said this or I have said this for a couple of years now, but it really feels like it's very close right now.
19:20Tim Seymour:Got to take a quick break. Fast Money's back into.
19:26This is Fast Money with Melissa Lee right here on CNBC.
19:36Never bet against American grit or American energy. Through innovation, Venture Global is not only building some of the largest energy facilities in the world right here in the United States, but delivering American energy at a fraction of the cost and a fraction of the time. So while others are busy talking, we're busy building. That's Venture Global. That's unstoppable energy.
20:05It's smart to always have a few financial goals. And a really smart one you can set? Earning cash back on what you buy every day. And with Discover, you can. Get this. Discover automatically matches all the cash back you've earned at the end of your first year. Seriously, all of it. And we trust you to make smart decisions. After all, you listen to this show. See terms at discover.com slash credit card. Game day at my place is kind of a big deal. If I'm grilling, chilling, and watching hoops, my outdoor patio setup better be ready to play. That's where Wayfair wins. From patio seating and umbrellas to grills and grilling accessories, Wayfair's got it all, and it shows up fast.
20:48I'm talking championship-level fast and easy delivery. So level up your grill game and your outdoor chill game and head to Wayfair.com now to get your outdoor space ready for the season.
21:01Tim Seymour:We've got some breaking news. The U.S. military has said it has begun launching a series of powerful strikes against Iran. In a tweet, CENTCOM saying forces have begun launching a series of strikes against Iran to impose heavy costs for targeting and attacking commercial shipping crewed by innocent civilians in an international waterway. The U.S. strikes are in response to Iranian attacks on three commercial vessels that were transiting the Strait of Hormuz. Iran's demonstrated aggression was unwarranted, dangerous and a clear violation of the ceasefire. You've got to go to crude for the immediate market reaction, also the reaction futures.
21:38Tim Seymour:We already had the U.S. revoking the ability of Iran to sell crude as part of the MOU. So it is intensifying in terms of an escalation here of where things are. All right, so you mentioned S &P futures and crude. Let's throw one more, the bond market. Now, one would think if things are escalating, a fight to quality in the form of the bond market. I'm not one of those people that think that. I think the bond market sells off on the back of this. And you see 10-year yields push back up to 4.6 percent because the overriding concern will be the rise in energy prices. And by the way, this is not at all bullish for what's going on in Japan.
22:13This will further weaken their currency and probably further weaken their bond market, which is also going to be problematic at some point.
22:20Melissa Lee:I think this also highlights the fact that you have two factions that are running around right now. You have the Republican Guard, which is the one carrying out these sorts of attacks in the Strait of Hormuz. and then you have whatever goes on in Tehran, right? And we know that those are two very different groups right now, which actually leads you to believe that this is not likely to achieve once we get to that 60-day marker. And then the likelihood that you see crude oil stay bid like this, and Karen's point earlier, maybe we don't see an aid handle, but I think somewhere between 70 and 80 is the sort of thing that's going to keep oil at the pump or gas at the pump well bid, probably closer to$4 than$3.
22:58Tim Seymour:This will be a true test for the markets in terms of how much it can look past the situation in Iran. You were mentioning earlier that headlines don't seem to move the markets. You have to wonder if what CENCOM is tweeting is a series of powerful strikes against Iran will meet that bar. I thought exactly, because we were just talking about this reaction where markets aren't reacting on it. So I think the question is, are they going to start pricing further and where they are looking out? Because at this point, with where energy prices are, I still don't think we see the jump yet. But if you see a large dump, they are expecting more geopolitical turmoil.
23:31That will affect inflation. That will affect the consumer. So it's something to watch here, absolutely. I also wonder about this very steep hike, you know, spike, rather, in the last, I don't know, hour of trading or so. How much of this potential news, either, that it was leaked? Was leaked. Which we've seen before. Many times, right. Yeah, in terms of the reaction. So is that already priced in?
23:54Tim Seymour:I don't know. Right. If we can pull up some of the after hours. Yeah, pull it up. Crack staff and you see. Because we did see that spike late in the session. There you see that spike late in the session on news that the U.S. is basically saying, you know what, Iran, you can't sell crude anymore. And we'll see what the reaction is here in terms of this news, that the U.S. has begun launching a series of powerful strikes against Iran. We'll keep you posted on that. In the meantime, we do have a news alert on future World Cup media rights. Alex Sherman is on the fast line with those details. Alex.
24:30Thanks, Melissa. Yeah, some news here. Disney, YouTube, and Netflix, I can report, are among companies that are interested in bidding for the World Cup for 2030 and 2034. Executives that I spoke to are estimating that the total amount of money may go as high as$2 billion for the World Cup package. And part of that is that I'm told FIFA has already alerted media companies that it plans to sell the Spanish language games with the English language games in one combined package. That is different from this current World Cup and Cups past, where the packages have been split between English language rights and Spanish language rights.
25:09Fox currently owns the English language package. Telemundo, owned by NBCUniversal, owns the Spanish language package. So you put those two together, you're going to get a much higher audience for these games, which is already massive in this World Cup. We're seeing record-setting numbers out of it. One quick note, though, that the 2030 Games World Cup is in Europe and Morocco, and then the 2034 World Cup is in Saudi Arabia. So the time difference for the U.S. obviously plays into the value of these packages. So perhaps the ratings won't be as high for both of those World Cups as what we've just seen.
25:44Melissa?
25:45Tim Seymour:All right, Alex, thank you. Alex Sherman, I don't know if you're watching. You're not watching it. No, I'm locked in. The lads on the pitch, it's scintillating. I am riveted by it. Did you see that Argentina match today? It was incredible. Actually, I did see the end of it. I saw it. That's over.
26:05Melissa Lee:Oh, I know. It's the highlights. I missed it. I was working earlier in the day.
26:11Tim Seymour:It speaks to the power of live sports. Live sports is so important. I mean, that is the savior for everybody. Yeah. There's a lot more fast money to come. Here's what's coming up next. Media mavens descending on Sun Valley. Why AI is top of mind at this year's summer camp for billionaires. And who might headline the next wave of media M &A. Plus, Chimera Therapeutics under the microscope. A closer look at the stock's stellar run. and whether the biotech can rewrite the playbook for hard-to-treat diseases. You're watching Fast Money, live from the NASDAQ MarketSide in Times Square. We're back right after this.
26:58It's smart to always have a few financial goals. And a really smart one you can set? Earning cash back on what you buy every day. And with Discover, you can. Get this. Discover automatically matches all the cash back you've earned at the end of your first year. Seriously, all of it. And we trust you to make smart decisions. After all, you listen to this show. See terms at discover.com slash credit card. It's Charles Barkley here with Wayfair. And let me tell you, game day is serious business at my house. If I'm grilling, chilling, and watching hoops, my outdoor setup better be ready to play. That's what Wayfair wins.
27:35From patio seating and umbrellas to grills and grill accessories, Wayfair's got it all, and it shows up fast. I'm talking fast and easy delivery. So level up your grill game and your outdoor chill game and head to Wayfair.com to get your outdoor space ready for the season. Wayfair, every style, every home. Buy the dip and save on CNBC Pro. 24-7 access to market-moving news and interviews across three global live streams for$59.99 at cnbc.com slash join CNBC Pro. Terms and conditions apply.
28:11Tim Seymour:Welcome back to Fast Money. Shares of Take Two popping early in the day after a report from LightShed Partners that NBCUniversal could buy the video game maker. Last week, Comcast, the former parent of CNBC, announced plans to spin off NBCU and Sky Networks into a separate public company. Such media dealmaking sure to be front and center at the Allen & Company Conference in Sun Valley, Idaho this week. Julia Borson is there, has more on what to expect. Julia. Well, Melissa, we saw dozens of private jets at the airports. Many of the media moguls have already arrived here in Sun Valley. Disney CEO Josh DeMauro is here, along with his predecessor, Bob Iger.
28:49They're here on the heels of this morning, ABC filing an aggressive rebuttal to the FCC pushing back on the FCC. ABC is pushing back on the FCC's demand that the network file early for license renewal, saying the FCC's actions threatened to upset decades of settled law. Meanwhile, on the heels of Comcast announcing it's split, Brian Roberts is here along with Mike Kavanaugh, who will run NBCUniversal Post's spinoff. Banker sources telling me that those entertainment assets of NBCUniversal are sure to draw the attention of the tech giants who will be here, such as Amazon, Apple and Netflix. Their CEOs are all expected to be here.
29:31They might see this as a last chance to snap up a big studio and theme parks. We also caught Warner Brothers Discovery CEO David Zaslav walking in, but he did not want to answer my questions about the EU just delaying the deadline for approval from today until later this month, that EU approval. And we'll have to see if Netflix CEO Ted Sarandos, along with YouTube CEO Neil Mohan, both of whom arrived today, meet up with the many sports leagues commissioners who are here amid talk of so many more sports rights going to streaming. Of course, in addition to that news that Alec Sherman just reported about the World Cup.
30:13Now, our first interview tomorrow is with NHL Commissioner Gary Bettman, and we'll have a lot more as the conference kicks off with the first sessions tomorrow morning. Melissa?
30:23Tim Seymour:Julia, thank you. Julia Boorstin. Is that a painting she's in front of, or was that actual painting? Every year, right? You look at it, and you're like, that's stunning. That's got to be fake, but it's actually real. It's real. We actually live in a real world. It is real. You can actually do things like that. Stunning backdrops. Like go travel to someplace. Think about what we've done in the last minute and a half. We talked about live sports, the importance of that, and then gaming, which is sort of the other side of live sports. And these two worlds obviously not colliding, but we're having this conversation within five minutes of each other.
30:52And the importance of it. Dan, for years, talked about somebody should buy electronic arts. That sort of happened. Now all these things are starting to happen right before our eyes. I think traditional media understands the importance of both those groups.
31:04Tim Seymour:I mean, that report mentioned Nintendo. It mentioned Take-Two. and the intellectual property that goes along with, I mean, think of the Mario movie that just came out, things like that.
31:14Melissa Lee:Yeah, and I think it's important to remember, you know, EA was a financial deal, right? And then Microsoft and Activision was a strategic deal. And this would obviously be a very strategic deal. The idea is that you could kind of leverage this content, get paid subscribers, that sort of thing. It makes sense in light of what we've seen over the last few years with this. But again, I think you look at Microsoft, they're cutting jobs at Activision, across Xbox and that sort of thing. there's probably a way in an AI world to run these businesses a lot more efficiently. What did you think of that report?
31:44I thought it was interesting. I think, you know, you've got to try to be creative, right? I mean, things are changing so quickly. The landscape is changing. A year ago, I would have thought, I don't really see it at all. I don't see it fully now. But, you know, when you think about some past mergers in the past, obviously if they're past, they're past. But you think of ones like, you know, Fox selling. That was timed superbly to Disney. And then you think of, you know, Time Warner a couple of times. So I don't know. I would not be a very good media banker right now because the landscape's changing.
32:22I would say don't make up a giant bet, but that might be the exact thing you need to do.
32:26Tim Seymour:Coming up, a major milestone for Chimera Therapeutics. We'll hear from the biotech CEO on its latest trial data and how pills could transform treatment of some of immunology's most challenging, diseases. Fast Money is back in two.
32:44Tim Seymour:Welcome back to Fast Money. Stocks pulling back today. The Dow shedding 130 points after hitting intraday records. The S &P losing half a percent in the Nasdaq led the declines down by more than one percent. Amazon confirming details after hours of its nearly $25 billion bond sale, saying the multi-tranche offering will have rates between 4.6 percent and 6.25%. SpaceX, meantime, dropping nearly 7 % during the regular trading session, even after a slew of bullish initiations on Wall Street. Raymond James slapping a street-high price target of$800 on the stock. That is more than five times today's closing price and would imply a market cap of over$10 trillion.
33:23Tim Seymour:And Eli Lilly surging 3 % to close at a record, JP Morgan raising its price target to$1 ,400. That's up from$1 ,300, citing continued strength in the GLP-1 business, both in the U.S. and internationally. Just quickly on the Amazon, since we are getting the percentage, four and a quarter, six and a quarter, I'm wondering what you think of that. I mean, it's a great credit. I'm not surprised that, you know, if you look at the balance sheet, also in great shape. This is very different than when we talk about Oracle's needs, for example. I think that would be different pricing. Yeah, I think it's also different from when we talk about other hyperscaler bond issuance, issuance because Amazon, over the course of its history, has raised money for build outs of various kinds.
34:05Without problem at all, right? But as Dan pointed out earlier, you know, the canary in the coal mine continues to be how poorly these private equity, look at Apollo, look at Blue Owl. I mean, I think they're trying to tell you something. We'll talk about it, I'm sure, in a later show. All right.
34:18Tim Seymour:Meantime, let's get to Chimera Therapeutics jumping almost 4 % today. To notch a record close, the biotech recently giving a better than expected timeline for its fast-tracked eczema oral treatment trial. Shares are up 172 % in the past year. Chimera founder and CEO Nelo Meinolfi joins us now on set. Nelo, great to have you with us. Thanks for having me. Can you explain sort of the backbone of what you do, targeted protein degradation? Great. So this is a technology that allows us to go after targets that have been undrugged over the years. So we're able to open up new target space, new biology, and more importantly, new therapies for patients that want oral drugs.
34:59So this program that is the focus of the attention today allows us to go after, let's call it the most common allergic diseases, diseases like eczema, like asthma, potentially even food allergies that are completely underserved by existing therapies. If you look at the number of patients that suffer from these diseases globally, are close to 150 million. And only one or two millions have been those with systemic advanced therapy, meaning therapies that actually address the underlying condition. And most of these are injectable biologics. So we have this, I call it, once in a generation opportunity to bring forth an oral pill that gives patients control of the disease and will be the first oral drug, the first oral pill to treat eczema, asthma, and all these other allergic diseases.
35:51So a small company like Chimera has probably one of the most exciting programs in the industry. And I think that's where a lot of excitement is coming from.
35:59Tim Seymour:So basically, this mechanism can be applied for the treatment of these various diseases. Yes. It's a platform. Yeah. So the mechanism called targeted protein degradation allows us to go in the cell where most disease-causing proteins are. And unlike injectable biologics, being able to address the disease at the core, where the disease is propagated. And again, with the potential of having efficacy or safety like this injectable drug, but the convenience of an oral pill. I think 15, 15 % of your market cap is cash and cash equivalents, which I think funds you through 29. Correct me if I'm wrong.
36:37That's a huge runway in your world. It means you could probably go it alone. Is that fair to say? Well, the plan is to build a global commercial company. This has been our vision since we started the company. We have funded that we've raised over the past 10 years close to$3 billion. As you said, we still have one and a half that will allow us to get into 29 and more importantly, get us close to our first marketed product. And I think the mission about going it alone is not so much of a desire to do something that very few companies have done. but I feel it's the responsibility to take a new drug modality all the way to patients.
37:17And I think no other company can do it better than Chimera because we have the passion, the commitment, the team, and the understanding of the technology that nobody else would do.
37:27Tim Seymour:So do you think you have enough money to, when we say, you know, there are a lot of endpoints you can define as sort of like the point in time. I mean, is it just to get you through phase three and FDA approval? Is it also for commercialization? or do you look to a partner to help you with that? So the money that we have through early 29 would allow us to go into phase three and probably complete at least one of the phase three studies will not support commercialization of the drug. That does not mean that we need a partner to commercialize the drug. It might mean that we need other means to bring more capital, whether it's through equity financing on other vehicles, to continue to fund the program.
38:03So partnership is an option, but it's not a must option. I think is one of the options that we might consider down the road. But as I always say, I like to be in control of our destiny. And there is no better way to do it than if you have the commitment to the program, you have the right data and the ability to continue to build on the enthusiasm that already is out there for us in the investor community, in the doctor community and in the patient's community.
38:30Tim Seymour:And just to sort of give us some perspective, the atopic dermatitis trial that you're in right now, How big is that market? Well, if you just look at the U.S., we're talking about patients that are diagnosed with atopic dermatitis, close to 40 million patients. So if you look at the most successful drug, I'm going to do a bit of advertisement for Sinophil Regeneron. The drug is called Dupixent. That drug has been probably in between one and two million patients. So the penetration in all diagnosed patients is in the single percentage. And the main reason for that is because patients want oral drugs.
39:08They want to be in control of their disease. They want to have a therapy that is something that they're used to, they've done all their lives. And so the opportunity for Chimera and our KT621 program is to actually being able to present to patients what they're looking for, an oral drug that, again, will have the efficacy, the safety, and the convenience that they're looking for. And that's true for also other diseases we're seeing with the GLP-1s. We're seeing in some areas of oncology where orals are changing the landscape and are activating patients that are sitting now at the sidelines because they're not comfortable with existing therapies.
39:44Tim Seymour:Nello, thank you. Keep us posted on developments. Nello Meinolfi of Chimera. Coming up, CNBC investigates how a Shanghai-based company the Pentagon says has tied to the Chinese military has become embedded in America's autonomous future and the concerns about the national security risks it's raising. More Fast Money right after this.
40:09Tim Seymour:Welcome back to Fast Money. The race to build out physical AI is on from self-driving cars to humanoid robots. And at the center of it, Hesai Technology, a Chinese maker of LiDAR. the sensors that allow these technologies to see their surroundings. But HESI has been blacklisted by the Pentagon, which says HESI has ties to China's military. Despite that designation, HESI has partnerships with AI leaders from NVIDIA to Amazon's Zooks, and its reach is expanding legally because being on the blacklist only prevents HESI from securing DOD contracts. That, though, raises questions about the security risks the public may be exposed to, including the possibility that China could access the data the LIDAR collects or use malware to tamper with the LIDAR.
40:52Tim Seymour:Here's a preview of Blacklisted. Questions about how and where Chinese-made LIDAR sensors are being used come alongside broader concerns about Beijing's oversight and its potential to access data collected by Chinese companies. The SEC requires China-based companies to disclose the risk of Chinese government intervention or control. In its SEC filings, Hesai has disclosed that the Chinese government has significant oversight in regulating our operations and may influence or intervene in our operations at any time. Craig Singleton is a senior fellow for China at the Foundation for Defense of Democracies, a conservative D.C.-based think tank known for being critical of the Chinese government.
41:37Tim Seymour:He says that in part means Hesai can be compelled to share data collected by these LIDAR sensors with the Chinese government. There is no way in your mind that Hesai could be operating as a respectable, dependable company that will not transmit information to the Chinese government.
41:54Melissa Lee:Whether they want to transmit that information or not isn't a question. It's mandated by law.
42:00Tim Seymour:David Lee is a founder and the CEO of Shanghai-based Hesai Technology. He says Hesai has no data to share. So where does the data live? Is it on the sensor? It's only on the computer? Does it go anywhere else? So first, what I do know is it definitely doesn't live in my sensor because we don't have the capability to store that. Is it physically impossible? Even if we wanted to, it's physically impossible to do that because our device just don't have the memory to store that. They also told CNBC that Hesai has no way to communicate with the sensors once they're shipped out and that the sensors send data directly to the company using them, not to Hesai.
42:45Tim Seymour:The company further said its products are sold exclusively for civilian use, and it is appealing the blacklist designation in federal court. In a statement to CNBC, NVIDIA wrote its autonomous platform is consistent with all regulatory and commercial requirements. Zooks did not respond to our request for comment. To see the full story in our extended interview with Hessei's CEO, go to cnbc.com slash blacklisted. And we talk about AI every night. We talk about this build-out. We talk about autonomous vehicles. All of it depends on these low-cost sensors because you want this technology to proliferate.
43:17Tim Seymour:Low-cost is one way of doing it. And there aren't that many options in reality. A U.S.-based sensor can cost up to 50 percent more than a Hessei sensor, according to one U.S. competitor that we contacted. So when you have a choice amongst these sensors, you're going to choose something that is low cost and good. Yes, you're going to choose low cost, right? And what are the ramifications around that? And one thing I've learned working with you now for 18 years, is that right? Yes. When you do these docs or whatever you want to call this, you are typically three months ahead of the story that breaks.
43:54So this is something that people should very close attention to.
43:56Melissa Lee:Amazing reporting. I can't wait to watch the whole thing. You know, it's kind of topical right now. If you think of Apple, you know, lobbying the White House to buy cheaper memory out of China. I mean, this is something we are so tied. And I know you guys talk about it in this doc. You're so tied to the infrastructure or at least the supply chains of all of these components that are going in really key technologies for us. If you think about physical AI, where are we getting a lot of the components? China. And there's just going to continue to be this sort of overlap between government demand, consumer demand.
44:27Melissa Lee:But the one thing I'll say is Waymo is building their own LIDAR. So they are vertically integrated. And that's something I think should continue to probably, you know, be in the benefit of Google, which owns Waymo, obviously. How did you get to this?
44:40Tim Seymour:I saw a press release during the Consumer Electronics Show about HSI expanding its partnership with NVIDIA. Jensen Huang was on stage at the Consumer Electronics Show. And in his keynote, he talked about the Hyperion architecture, the platform that they are offering OEMs, and saying that they want this to be the backbone of the future. They want it to be in every autonomous vehicle. So the question is, if that's in every autonomous vehicle, Hesai could possibly be in every autonomous vehicle. It is a choice for automakers in terms of a LIDAR partner. They could choose Hesai. They could choose others, probably at a higher cost.
45:12Tim Seymour:But there you are. And so that's how the idea came about. And the question is right now, as we are building this out, do we want to question now and see what we're getting into or later on find out that it is something of a risk and that we have to replace it, which we have been which we have seen in the past with Huawei technology in terms of the build out of telecommunications. The reporter in her. Nancy Drew. Nancy Drew is a favorite. Nancy Drew. And the Hardy Boys. Sherlock Holmes. All of it combined. Lois Lane. Right. Coming up, a soda pop for Coca-Cola. What is feeling the stock's record run?
45:47Tim Seymour:And is there enough fizz for shares to keep climbing from here?
45:58Tim Seymour:Final trade time, Courtney. We talked a lot about M &A activity and the banks coming up with earnings. I think Goldman Sachs is one to take a look at. Karen? I love when you do docks, Missy. You're just really into it and you just dig up stuff that other people wouldn't find. It's pretty impressive, I've got to say. Thank you. Congratulations. Amazon. The debt offering to me, I know it's a lot of money,$25 billion. Not really to them. I like it here. Dan?
46:24Melissa Lee:You used to be into these Vice stocks. These were fun. Oh, like foreign and pot. Foreign and pot. There's probably something else horrible. Oh, Coke. Didn't you do Coke?
46:31Tim Seymour:I like PG these days. Coca-Cola. Like Coca-Cola, yeah. Yeah. I'm fading the move in IGV. Shout out to my cousin, Michael Rocco. Rocco is retiring after a long time. I love him, by the way. C.O.P. Thanks for watching Fast Mad Money starts right now.
47:12Thank you.
47:35it right from the app. Done? Go back to free. No long-term contracts, no pressure, no surprises, just wireless that works around you. TextNow, we've got your back. Download TextNow in your app store today. Wireless plans require the purchase of a SIM card. Visit textnow.com for terms and conditions.
From the publisher
Financials surging as investors countdown to second quarter bank earnings next week, expecting major growth. The traders break down what the results could mean for these names and whether banks will see major gains. Then, shares of Kymera Therapeutics soaring as its Eczema drug trial timeline moves faster than expected. The firm’s founder, president and CEO Nello Mainolfi talks trial data and where the company is heading next. Plus, SpaceX stock plummeting despite bull calls on the Street, the media market under pressure, and Coke hitting all-time highs back to its century-old IPO.
Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.