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Live from the Nasdaq Market site in the heart of

0:34

New York City's Times Square, this is Fast Money. Here's

0:37

what's on tap tonight. Days in confused, investors trying

0:39

to make sense of what's next to rates, where

0:41

earnings are going and the true health of

0:43

the economy. With a quiet week on tap

0:45

for data, where will this market turn for

0:47

direction? We'll debate that. Plus, bashing the new

0:50

boss, former Starbucks CEO Howard Schultz calling for

0:52

an overhaul to the coffee chain he ran

0:54

not once, not twice, but three times. And

0:56

he thinks his hand-picked successor needs to do

0:59

to get Starbucks back on track. And later,

1:01

the chart master will be here to tell

1:03

us why it could be time to play

1:05

oil for a bounce, Tyson investors crying foul

1:08

after earnings this morning, and a record-breaking weekend

1:10

at the track of betting Bonanza on

1:12

the Kentucky Derby. I'm Alyssa Lee. Come to you

1:14

live from Studio B at the Nasdaq on The

1:16

Desk Tonight. Fano and Isohn, Steve Brossely here in

1:19

New York. Dan Nathan and Guy Dami live from

1:21

the Milken Conference in Los Angeles. They

1:23

start off with the interest rate tug of war,

1:25

10-year yields down again today. They've now dropped 25

1:28

basis points from recent highs hit just two

1:30

weeks ago. They're now at their lowest levels

1:32

in almost a month, the move coming amid

1:34

renewed hope of Fed rate cuts this year.

1:37

Chances of at least one cut have risen

1:39

over the past week after the Fed meeting

1:41

in Friday's softer-than-expected jobs report. Markets

1:43

now pricing in a nearly 90 percent chance

1:45

of a move by December. Rate-sensitive

1:47

areas in the market seem to be

1:50

applauding the action today. The small-cap Russell

1:52

2000, the tech-heavy Nasdaq, leading the broader

1:54

indices higher. But is this move in

1:56

rates warranted? Will we actually see them

1:59

go higher eventually? Steve, what's your take? I

2:02

don't know if they're going to go higher.

2:04

I mean, we're in this period where everyone

2:06

is very nervous, right? It's about earnings, it's

2:08

about the Fed. But when you see a

2:10

number like that, that's what makes everyone sort

2:12

of grip tight and say, okay,

2:14

so maybe he's not going to

2:16

keep rates at this level for

2:19

a longer time, and maybe we're

2:21

going to have a bumpy landing. So is the economy

2:23

going to be good, or is the Fed going to be over

2:25

hawkish, or is it going to be both? That's

2:27

what we're dealing with right now. So I think at

2:30

this point, we have enough in the tank

2:32

to get us a little bit higher, but

2:35

I'm still holding on for my 200-day test. Interesting.

2:39

So are you still betting that we're going to have three? I'm

2:41

still betting we're going to have three. Okay.

2:45

I think, no, I'm not mocking you. I

2:47

feel better today than I did before I arrived. Go

2:50

ahead, Monowin. I mean, because now we're celebrating

2:52

one, and I just want to know if

2:54

three is still on deck. And

2:57

that probably speaks to what's going on in the

2:59

market right now. You've seen the oscillation between ...

3:01

Last week, we were talking about how far will

3:03

this market fall, right? And that was because, listen,

3:05

you're getting macroeconomic data that on one hand is

3:07

telling you

3:10

that the Fed needs to continue to fight

3:12

inflation. I understand that that's front and center.

3:14

That is one half of the dual mandate.

3:16

And then on the other hand, you get

3:19

one singular job report. And we've had downward

3:21

trending inflation, a deceleration for the better part

3:23

of two years. And every time

3:25

we get ahead of ourselves, the Fed comes

3:27

out and says, listen, we still need to

3:30

see continued momentum towards our target policy rate.

3:32

And I don't think anything has changed. Now,

3:34

we can sit here, we can pardon parcel

3:36

of what we think is going to happen

3:38

from one week to next.

3:40

But I absolutely think that this singular data

3:42

point does absolutely nothing for the Fed. Not

3:45

a thing. Listen, I

3:48

think that if anything,

3:50

it gives you a body

3:52

come up hope because you're not seeing a 300 K

3:54

jobs number. But

3:58

and I think it shows that, people. People that

4:00

are expecting records that there is perhaps

4:02

some weakness but again one this number

4:04

might end up being revised and what

4:06

happens if next reading we can one

4:08

say what. There's two hundred eighty jobs

4:10

that have been that have been hearts

4:12

and we're seeing a react celebration of

4:14

of are you know wage pressures because

4:17

we have seen a pool back in

4:19

Inflation on the good side but until

4:21

we see that sticky mess in services

4:23

start to dissipate I really don't understand.

4:25

Structurally hide you get back to that

4:27

base rates with continuing to at least

4:29

keep things are. In and M are tighter

4:31

economic and monetary policy that. The great pointers

4:33

the revisions because they have been notable when

4:35

it comes to the jobs for we got

4:38

a C P I report next week, but

4:40

is Marilyn Manson one single that? A point

4:42

that says inflation is continuing it's downward trajectory.

4:45

Guy. Won't won't be and I

4:47

mean that reestablish the trends we have

4:49

issue and from the Treasury Department. High

4:53

Mountains the way to be out here.

4:55

Sitting there some friends and Nathan but

4:57

I don't think it's about the fed

4:59

is this point. I think it's about

5:01

other factors and he is suing me

5:03

that one of the biggest is not

5:05

the biggest factor With a lesson coupled

5:07

with the fact was sort of the

5:10

silver the for the war it makes

5:12

sense as on one side yup economic

5:14

activity that is clearly slowing feel that

5:16

manifests itself in his musab number and

5:18

city to report on one side of

5:20

poison is clearly saw. Problem. and oh

5:22

by the way of hands in the

5:24

midst of a bit of a consequence

5:26

of without question if we look at

5:28

last week and a half and they're

5:30

busy Been the buyer foot of last

5:32

resort and the if someone says be

5:34

our real people via suited a higher

5:36

rent so I'm surprised we came down

5:39

as quickly as they have from for

5:41

three quarter support a half and I

5:43

will remain in the hired singer deal

5:45

camp for the foreseeable future select area

5:47

of course. yeah with that. Barack

5:50

Obama just made a really. Good point. He said

5:52

that last week we're trying to figure out

5:54

how long is drawdown. My go was as

5:57

if you sound like to say five percent

5:59

or so. Ronald Reagan. I now as

6:01

you think about where to eighty percent of

6:03

us to be five hundred earning for he

6:06

was I think it really was a guy

6:08

been set hit somebody Pacific sorry for these

6:10

sectors here and a little bit when I

6:12

think about what are some input to earning

6:15

won't come in and a quarter Expectations are

6:17

other three point four percent less profound Said

6:19

okay with same in about five percent rear

6:21

wheel year over year and that's an improvement

6:24

right from that point four percent that was

6:26

expected to think about the dollar coming. Anything

6:28

that crude oil painting is. Coming

6:31

and that is the thing I

6:33

really of her making equity investor

6:35

feel a little bit better about

6:37

the multiple coming into this year.

6:39

We're all kind of scratching our

6:41

heads against year over year ten

6:43

eleven, twelve percent earnings growth which

6:45

is pretty much consensus and I

6:47

think that to do something better

6:49

than expected. The thing that half

6:51

hours the market iron ore looking

6:53

at about forty times right now

6:55

saying that not horrible relative the

6:57

five and send your average. For

7:01

this is Sylvia a strange scenario

7:03

question to find shall office in

7:05

any way because that's my business

7:07

unless same the tenure yield does

7:09

said four point eight percent What

7:11

invidious are he has come out

7:13

on may twenty second are really

7:15

strong and may raise their guidance.

7:17

What of out is it's a

7:19

higher yields the pressure the market

7:21

or in videos report said he

7:23

will the rally on my posits

7:25

that it is in video. Guy

7:27

as as a gift that would be in

7:29

video. As if people want to see an

7:32

environment where these darlings of the markets. I

7:34

got us here since still out for for

7:36

warm and there's still something left for them.

7:38

Plus they have eighty five percent more teacher

7:41

shortage video to do with them. There's enough

7:43

ships that my song size for the rest

7:45

of the companies to do it, but in

7:48

video? Awesome. Yeah, sorry, what's your take on that?

7:50

Southwest know that some that that

7:52

is the right question as a

7:54

fair question. also think so forth

7:57

back and see yields rules again.

8:00

is a single stock and I'm not going

8:02

to underestimate its importance not only to obviously

8:04

semi's but to the broader market as well.

8:07

But I think it's about yields and about

8:09

what's going on on that front. So maybe

8:11

for a day or two, Nvidia will capture

8:13

the imaginations under that scenario. But

8:15

I think yields at those levels will sort of

8:17

dictate a lot of things going forward from there.

8:20

Surprise, surprise. I'm in the Nvidia camp

8:23

and not just because I'm sitting here.

8:25

Should I hold her? Yes. I'm

8:27

not going to argue or gung-ho about the stock, but because of what I believe

8:29

that it implies, it means that capex spinning

8:32

going forward remains strong and that

8:34

the outlook of companies that are

8:36

allocating those dollars to capex believe

8:38

that there's growth to be had

8:40

and the ROI supports the accelerated

8:42

capital expenditure. I think

8:44

that bodes well. I think it probably flies

8:46

in the face of our most recent GDP

8:48

number, but it also speaks to the confidence

8:51

that companies have to continue to allocate, grow

8:54

both top line and ability to maintain

8:56

margins with the capital outlay. I

8:58

think it would also, Dan, highlight one

9:01

theme of the earnings season versus another.

9:03

One theme is the continued spending and

9:05

emphasis on AI. But the other one

9:08

underlying this is weakness in the consumer,

9:10

the consumer sort of getting

9:12

fed up with price increases. And we've heard

9:15

this time and time again, whether it be

9:17

Starbucks to Tyson today, I mean, you name

9:19

it, there are very few companies right now

9:21

that feel confident about further increasing prices. Yeah,

9:25

and that's a great point, Mel. I mean, there is

9:27

a massive bifurcation. If you think about the companies that

9:29

are driving S&P 500 earnings right now, they're the

9:32

very companies that Vanuar was just talking about,

9:34

the ones betting on these high end GPUs

9:37

for their generative AI model. And

9:39

when you think about how they monetize that, we

9:42

heard it from Amazon, we heard it from Google,

9:44

we heard it from Microsoft, Meta is obviously more

9:46

consumer focused there, but it

9:48

is going to be from enterprise spending.

9:51

So to your original question, if

9:53

Nvidia does not guide up in a

9:55

meaningful manner, given what expectations are for

9:57

this year, 80% revenue

10:00

growth on 80% earnings growth and it's

10:02

not something that folks can kind of

10:04

see kind of continuing to accelerate then

10:06

I just don't think that those facts

10:08

are going to be the leadership going

10:11

forward and it's your point about Consumers,

10:13

look at all these consumer companies We're

10:15

gonna get a lot of data from

10:17

retail companies that are going to set

10:19

the report starting next week into the

10:21

next couple weeks If the consumer is

10:23

not holding up and there's a D

10:25

cell in enterprise spending on generative AI

10:28

Then I think you have a problem for the market

10:30

not too different than what we saw from the highs

10:32

in July in 2023 to the lows

10:35

in October because then you do have a

10:37

valuation problem Relative to the spending because if

10:39

the spending is going to increase and they

10:41

don't monetize it that's get away on margins

10:44

One of the three biggest falls is potential

10:46

for a bumpy economic landing John Salt is

10:49

this Oppenheimer's chief investment strategist He joins us

10:51

now John great to have you with us

10:53

You think recession is off the table completely

10:55

correct? I mean, so you must think that

10:57

those who even under the word stagflation are

10:59

kind of crazy Yeah,

11:02

I just don't think that's where that's where we're

11:04

headed. We've had 11

11:07

hikes we've had seven

11:10

Now the pauses by the Fed

11:13

no recession earnings growth

11:16

is substantially better than was anticipated

11:18

You've got three sectors with

11:21

double-digit earnings growth that include

11:23

communication services You've got consumer

11:25

discretionary and information technology Okay

11:28

all over 20 to 40

11:30

percent earnings growth And

11:34

then and then you have the

11:36

three bad sectors that are negative

11:38

earnings growth double-digit down our energy

11:40

Materials and health care believe it

11:42

or not It just

11:44

what it tells us whether we look at

11:47

earnings growth whether we look at

11:49

the jobs growth that continues I'll be

11:51

at a slower pace But

11:54

the history of this Fed funds hype

11:56

cycle tells us that the Fed

11:58

has done something, right? Business

12:00

has done something right, likely that AI

12:03

that's been talked about that already

12:05

exists today, and it's been invested

12:07

in, that's how business navigate things

12:09

better. The consumer is navigating

12:11

things better, likely to just the technology

12:13

that they have at hand today, and

12:15

the information that is much fewer delivered

12:17

than it ever has been in a

12:19

Fed funds high triangle that I can

12:22

remember over 40 some years in this

12:24

market. So it's pretty good to me. Is

12:27

there trouble? There's always trouble all the time.

12:30

I've been on the show how many times in the

12:32

last 12 years that I did with Oppenheimer, and

12:34

I've been decidedly positive most of the time.

12:37

For the last time I looked, I think

12:39

we were about 1565 when we started, and

12:42

now we're at 5100 and change. We

12:46

call you the streets most bullish strategies because your price

12:49

target is the highest on the streets, 5500. But

12:52

you still don't rule out a bumpy landing. Does

12:54

a bumpy landing rule out a bear

12:57

market pullback in the markets? What

12:59

does the contours

13:02

of the market rally to 5500 look

13:04

like in that context

13:06

of a bumpy ride? Bumpy

13:09

ride could be the bond

13:11

market pricing the 10-year to

13:14

yield closer to 5, then

13:18

closer to 3.8 around where we

13:20

started this year, but

13:23

causes concern. Are we going

13:25

to see the consumer fall

13:27

apart? Are the businesses going

13:29

to get into trouble with

13:31

refinancing? What happens to real

13:33

estate? But this thing, just like

13:35

a few weeks ago, I mean the bears

13:37

were basically saying it's the end of the

13:39

bull market, it's over, that kind of thing.

13:42

Then all of a sudden, we look at

13:44

the economic data, we hear from the Fed,

13:47

and it looks like this has longer to

13:49

move. A lot of it is that secular

13:51

trend of technology

13:53

that drives all 11 sectors

13:56

by management of companies.

14:00

Wanna be a great value company

14:02

or a Great Bros company? And

14:04

Arden's acknowledging they need the developments

14:07

which are occurring today. Sensors are

14:09

investing dinner and and the consumer

14:11

has been remarkably resilient. This verse

14:13

particular cycle as well as been

14:16

jobs broke so out yet a

14:18

bumpy. There's always a possibility that's

14:20

why would he have no of

14:23

we don't rule that out. John.

14:25

Greatest Atheists Answer Time. Sides.

14:29

You freezing abortion. Some. Salsa

14:31

of Oppenheimer. Fifty Five hundred,

14:33

Agree with that. Are ultimately been our biggest

14:35

history pass their I figure to get a lot

14:38

a bit of a pullback. As I said before,

14:40

I think we're a test that two hundred days.

14:42

the market set up such as Technicals looked to

14:44

me like a set up from July twenty twenty

14:46

three where you have these little bit of as

14:48

a taste and a little starts and men as

14:50

sort of followed a bad sets the two hundred

14:53

day and then move higher. I think we're probably

14:55

not going to do it in one fell swoop

14:57

but I think probably the next month or so

14:59

we'll see that as. The I Die. What's your take

15:01

on Fifty Five hundred? And.

15:06

Forty Marathon marathons mouth is the most

15:09

money manager think another make a set

15:11

of a sign that sort of was

15:13

gonna about but I'm sort of a

15:16

see my other phone and a moving

15:18

average for me for a sore thumb

15:20

and I'll say that about the consumer

15:23

yard. Seven thousand five hundred number and

15:25

I. Want to

15:27

focus on what's now is

15:29

spending? On

15:34

health. facility

15:37

to figure things out on the fly as

15:39

into last two years of kind of sport

15:41

has gotten used to fifteen twenty if not

15:43

thirty percent booze m s m p and

15:46

i just i think honestly there's very little

15:48

upside from here and given what receives since

15:50

we confluence of events we have ah you

15:52

know opposing macro economic data we have a

15:55

lack of of unity around what fellow at

15:57

fed policy is going to be going forward

16:00

we already have uh... you know we continue

16:02

to raise expectations around uh... earnings

16:04

growth and and we do have in a

16:06

city group since they came up today and

16:08

said listen the the the bottom half of

16:11

the consumer is starting to struggle and we

16:13

and we do have persistent inflation and i

16:15

and all the the the um... global issues

16:17

you know put put aside i really do

16:19

think that the de-globalization puts upward inflationary pressure

16:22

period and i don't think that's going away

16:24

anytime soon i think that's being massively underestimated

16:26

so i i think the five hundred likely

16:28

does not have meantime boeing share

16:30

falling mid-day after the f a m

16:33

now that would launch a new investigation

16:35

into the air space giant seven eighty

16:37

seven dreamliner this one is around employees

16:39

potentially falsifying records around inspections fell about

16:41

that all the details let's

16:45

have this played out over the last several weeks and

16:47

once this report came out in the middle of the

16:49

afternoon we're able to sort of piece together exactly what

16:51

has happened and what the f a is looking into

16:54

yes it does involve the seven

16:56

eight seven dreamliner and the question

16:59

of whether or not employees have

17:01

falsified records boeing was alerted by

17:03

an employee last month late

17:05

last month and they alerted the

17:07

f a a which says you

17:09

know what let's look into this

17:12

hence the beginning of investigation with

17:14

regard to the uh... employee who

17:16

said hello something doesn't add up

17:18

here boeing's uh... head of the

17:20

seven eight seven program issued an

17:22

employee email saying after receiving the

17:24

report from an employee we quickly

17:26

reviewed the matter and learned that

17:28

several people had been violating company

17:31

policies by not performing a required

17:33

test but recording

17:35

the work as having been completed

17:37

boeing builds about five seven eight seven dreamliners

17:39

a month and by the way both

17:42

uh... boeing as well as the f a say

17:44

this is not a flight safety issue but it

17:46

does need to be uh... investigated melissa

17:48

because you need to determine a how

17:51

widespread was it how far back do you

17:53

have to go in terms of checking previously

17:55

built seven eight sevens doing the test that

17:58

had been marked as being complete though

18:00

it may not have been completed, and they

18:02

will also be doing checks of those that

18:04

are currently in the production process. We

18:07

don't know what the test is for Phil, do we? No,

18:11

but we do know that Boeing is

18:13

pretty emphatic about saying look, this is not

18:15

a flight safety issue. This is not a

18:17

case where the plane should not be flying

18:19

if we think that this was a completely

18:21

falsified test. Right. Okay. Phil, thanks.

18:24

Phil, a bow. I

18:26

guess that makes me feel a little better. I'm

18:28

not, I don't know how, I mean, I think

18:30

it makes me question Boeing a little bit more

18:32

at this point. If

18:34

you're not questioning Boeing, there's probably something wrong

18:36

with you. This should be a miniseries. All

18:38

the drama that's gone on on

18:41

this, this is going to be on Netflix within two to

18:43

three years. The only

18:45

reason why the stock is staying where it's at is because

18:47

they have a duopoly. Right. Them

18:49

and Airbus. If this were any other company,

18:51

it would be trading probably in the 20s.

18:53

Like this is, it's crazy to me that

18:56

they're keeping their head above and only down

18:58

30% for the year. Guy,

19:00

at some point, isn't it so bad it's good to

19:03

use a phrase from Carter Bracken, work at Chartmaster? 100%.

19:07

But I thought that Melissa, and if I'm being

19:09

honest, when the CEO stepped down and that stock

19:11

went from a basically, you know, 185 or so

19:13

to 196 in a straight line, I'm like, that's

19:16

it. You finally caught this thing cold. And I

19:18

thought it was headed to 220, 225. I'll

19:21

also say that I understand exactly what

19:23

Steve's saying, but their defense portion of

19:25

the business gets absolutely zero credit whatsoever

19:27

in this environment. So I'm with you,

19:30

but I would have said that 20

19:32

dollars or so ago. With all that

19:34

said, I mean, I'm not in the business,

19:36

but maybe I should be. Because the crisis management

19:38

is falling in a word sucks and they got

19:40

to do a lot better job. Coming

19:43

up, Elon Musk has a thought or two on

19:45

what Berkshire Hathaway's next big investment should be. Why

19:48

he thinks the Oracle of Omaha would be

19:50

wise to take a stake in Tesla. That's next.

19:52

Plus, a showdown at Starbucks. A former

19:54

CEO, Howard Schultz, had to say about

19:57

the man he chose to replace him.

20:00

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21:16

back to Fast Money. Warren Buffett's Berkshire Hathaway revealing

21:18

in his Q1 report over the weekend a 13%

21:20

cut to its

21:22

Apple stake in addition to a record cash

21:24

hoard. That news, prompting Tesla

21:26

CEO Elon Musk to suggest the

21:29

Oracle of Omaha takes a position

21:31

in his company, tweeting on Sunday

21:33

that investing in Tesla is, quote,

21:36

an obvious move. But with

21:38

shares losing a quarter of their value since the

21:40

start of the year and the EV maker's growth

21:42

prospects in question, what, if anything, would make this

21:44

legendary value investor dip a toe into

21:47

Tesla? Dan,

21:50

I feel like I want to go to you because I think that

21:52

you're going to call him crazy for one. But

21:54

hear me out. Hear me out. One

21:56

could make the argument that this is, you

21:59

know, in some. ways a Berkshire Hathaway

22:01

sort of investment because it would require

22:03

a very long time horizon to

22:05

actually pay off. Yeah,

22:10

you know, listen, Mel, we just spent a lot

22:12

of time, five minutes talking about Boeing, the quality

22:14

assurance there. You

22:16

know, that was a culture for decades and decades

22:18

that you could take it to the bank. Steve

22:21

mentioned the duopoly. I think about

22:23

what's going on in the EVs and I'm hard

22:25

pressed to think, like, if I was Warren Buffett,

22:27

I'd take like $100 billion in

22:29

investment space X because to me, that's

22:32

still a very untapped. If

22:34

you believe in what Elon Musk is

22:36

able to do in each one of

22:38

these verticals that he's basically applied his,

22:40

you know, his know how to, I

22:42

think the Tesla story is much less

22:44

interesting. And again, a lot of

22:47

investors, you just look at the valuation of Tesla

22:49

or some of these other companies, they're really making

22:51

a bet on him. I'd rather bet on him

22:53

in space and Starlink and these other things than

22:55

Tesla right now because, you know,

22:57

Berkshire's made their bet on BYD. They think China is

22:59

going to be the market. They think emerging markets are

23:02

going to be the market. And I

23:04

don't know about you, but Elon didn't give me any greater

23:06

confidence about what they had to say over the last few

23:08

weeks about them doing a mass market car. So again,

23:10

not something I think that Berkshire would ever be

23:12

doing any time soon. Yeah,

23:15

I mean, I tend to agree. I'm

23:17

actually surprised that you suggested that he might

23:20

or should invest in some of the other issues. I

23:23

said, kudos to you in terms of finding a

23:25

creative way to find some type of alliance between

23:27

the two of them. I really don't think this

23:29

fits the profile of what Charlie Munger

23:32

historically and Warren Buffett are in the business

23:34

of doing, which is value invested, which is

23:36

essentially bottoms up some of the

23:38

parts, essentially saying we're able to buy something at

23:40

a discount. And right now, you know, in

23:42

terms of I can understand the logic in

23:44

terms of wanting to be behind a secular

23:46

trend towards, you know,

23:48

EVs or battery operated vehicles,

23:51

electrification, and move away from fossil fuels. But

23:53

that also flies in the face of what

23:55

he's done historically with OXIE and some of

23:57

his other investments. So I really just don't

23:59

think that the value at point of

24:01

transaction suffices for it to be a

24:04

Warren Buffett move. I think

24:06

what you're going to see Elon Musk do

24:08

is move and pivot. He's the ultimate salesperson.

24:10

Whether you love him or you hate him,

24:12

and it's that binary, he's going to move

24:15

more into AI, more into robotics, less into

24:17

EV, but he still is the number one

24:19

player. I agree with Dan

24:21

on the SpaceX because everyone's clamoring for a

24:23

piece of SpaceX. That's the golden

24:25

jewel. I think if he can get someone

24:27

like a Buffett who, by the way, Buffett's on his way out,

24:30

not dying, but handing over leadership,

24:34

it might take a different stance and it

24:36

might not look like the Berkshire that we're

24:38

all used to. They're saying it's a possibility.

24:40

I'm saying anything is a possibility.

24:42

How big of a possibility we could

24:44

all debate, but if you could pivot

24:47

that to an AI bet, and he's

24:49

still, let's face it, he's still the

24:51

number one player in EVs here. Rivian's

24:53

the second player, distant second player. There's

24:55

a lot more fast money to come. Here's what's coming up

24:57

next. Disney

25:00

On The Docket, the entertainment giant

25:02

getting ready for a rare before

25:04

the bell earnings report tomorrow. Can

25:07

the company deliver some magic? Will

25:09

debate the big report. Plus, former

25:11

Starbucks CEO Howard Schultz with some

25:13

choice words for the coffee giant's

25:15

new boss. Will this roasting give

25:17

shares the jolt of caffeine they

25:19

need? Will percolate on that right

25:21

after this. You're watching Fast

25:24

Money, live from the Nasdaq market side

25:26

in Times Square. We're back

25:28

right after this. What's

25:33

on on the horizon for financial

25:35

markets? at P-GIM, it's a

25:38

a question that over 1,400 investment

25:40

professionals relentlessly research in pursuit

25:42

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today. today. Pursue

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your tomorrow with P-GIM, at

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leading Global asset manager. Welcome

26:06

back to Fast Money Stocks, here with the week in

26:08

the green, the Dow gaining about half a percent

26:10

for its fourth straight positive session. The S&P up more

26:13

than 1 percent and the Nasdaq jumping nearly 1.2 percent.

26:16

Tyson Foods falling hard though after this

26:18

morning's earnings report. It was the worst performer

26:20

in the S&P today. The chicken producer warning

26:22

that inflation is taking a big bite out

26:25

of consumer budgets, forcing them to trade down

26:27

when grocery shopping. And a pair

26:29

of sports betting stocks filling the love today,

26:31

DraftKings and FanDuel parent Flutter, both getting a

26:34

boost today. Churchill Downs reporting a record. $210

26:37

million was bet over the weekend

26:39

on the Kentucky Derby specifically. And

26:41

finally, Palantir tumbling after hours after

26:43

giving light for your

26:45

revenue guidance, the company reporting in-line EPS

26:47

for Q1 and beating on sales. Guy,

26:50

which one do you want to take here? Tyson,

26:53

because I think that's really interesting. If you look

26:55

at where that topped out, it's not coincidental at

26:57

around the same time that inflation

26:59

really started to become a problem and they no longer

27:02

could sort of pass on those costs.

27:04

The stock bounced off the 44 level. I think

27:06

the sell-off today makes sense given the run that

27:08

it's had over the last six months or so.

27:12

But I wouldn't run all that far from this.

27:14

They're going to figure things out. There's some initiatives

27:16

in place and I think it's going to level

27:18

out. Unfortunately, I don't think it's going to be

27:20

here. There's probably another 10 percent of downside in

27:22

the stock, which probably gets you about 52 and a half,

27:24

53. The

27:26

comment, really, that's supposed to be people, was a

27:29

comment about the consumer and pricing

27:31

pressures and the shift to in-home from

27:33

QSR. I think they were trying to

27:35

explain that away, but it was sort of out

27:37

of the gate and it was too late to sort of

27:40

claw back. And that's what a lot of people are focused

27:42

on if they cannot raise prices anymore and consumers

27:44

are actually watching what they spend

27:46

in terms of protein. And they're the

27:48

ones, but if you look at how much on a

27:50

notional value, how much they've made off chicken. Chicken

27:53

is a ... They're 25 percent of the market

27:55

in chicken. They also have pork. They also have

27:57

the beef. And then you look at the other

27:59

player. pilgrims pride they're about twenty percent

28:01

of the chicken market so they're going to

28:03

be volatile but they have more levers to

28:06

pull as far as protein so i i

28:08

agree with god think it's a little bit

28:10

more of a press to the downside but

28:12

ultimately we talked about i do what believe

28:15

there's not a lot of places you can

28:17

go for pure plays in protein and tyson's

28:19

probably mainstay you know i will

28:21

say it's pretty expensive historically we're talking about the

28:23

raising earnings forecast and and ability to kind of

28:25

support the twenty multiples this includes in the mid

28:28

twenties i think there is a bit of challenge

28:30

there uh... you know i i i'd will

28:32

see on the positive side them their

28:34

ability to cut around the bottom line number because

28:36

i was essentially appalling last year you saw the

28:38

fact that sixteen seventeen percent nothing i think is

28:41

for a name that have taken point seven five

28:43

beta you see some real exacerbate a move to

28:45

talk about an apple we talk about in tesla

28:47

some of the others so i would live with

28:49

the court if you put but i would not

28:51

be surprised to see some ongoing volatility coming

28:53

up starbucks showdown former CEO howard

28:56

shultz's choice words for his successor

28:58

just copy company find itself to target

29:00

a political process on that but

29:02

the chart master stop by person he

29:05

technical what he thinks is going to get in

29:07

on this high-energy trade missed

29:11

a moment of fact catches any time

29:13

on the go followed a fast money

29:15

podcast back after

29:17

this welcome

29:25

back from a start-up to you howard shultz

29:27

with some pointed words for the current head

29:29

of the company the man he appointed as

29:31

a successor when he announces latest resignation in

29:33

twenty twenty two shall telling last

29:35

man our salmon in a letter post on

29:37

linked in this weekend to quote make the

29:40

stores better uh... this is for

29:42

palestinian boycott for the company heat up on

29:44

social media potentially exacerbating the slowdown that we've

29:46

seen in in-store traffic the company reported last

29:48

week cbc's kate rogers is here to break

29:50

this all down for us hey kate hey

29:53

their most of the former the a way

29:55

in on the earnings missin a lengthy post

29:57

on linkedin he says the problem is the

30:00

U.S. business, adding, quote, the stores require a

30:02

maniacal focus on the customer experience through the

30:04

eyes of a merchant. The answer does not

30:06

lie in the data, but in the stores.

30:09

He says senior leaders and board members need

30:11

to spend more time with workers and that

30:13

mobile order needs to be fixed. Despite his

30:16

critique, Schultz did say he feels confident that

30:18

the company will recover. He's no longer on

30:20

the board, but is the largest individual shareholder

30:22

of Starbucks stock, per fact set, with a

30:25

stake just under 2 percent. In response, the

30:27

company said, quote, we always appreciate Howard's perspective.

30:29

The challenges and opportunities he highlights are

30:31

the ones we are focused on. And

30:34

like Howard, we are confident in Starbucks

30:36

long term success. Starbucks has been hit

30:38

with boycotts over its perceived support for

30:40

Israel, which executives have called, quote, misperceptions.

30:42

Last quarter, the company pointed to the

30:45

boycotts for its sluggish sales. Bank of

30:47

America buying it, saying today and note

30:49

that social media coverage of Starbucks and

30:51

the war is likely behind the recent

30:53

slowdown in sales. Melissa, I'd also note

30:56

that McDonald's was similarly hit with boycotts

30:58

over what the company called misperceptions on

31:00

its stance on the war. And that also

31:02

hit their sales last quarter as well. All

31:04

right, Kate, thank you, Kate Rogers for

31:07

more on what is next for Starbucks. So

31:09

let's bring in Gotham, a tough professor, author

31:11

and leadership expert. Gotham, great to have you

31:13

with us. I want to get straight to

31:15

that issue of the protest because it's an

31:17

interesting one. I mean, we can, you

31:20

know, see that maybe consumers don't want to pay a

31:22

lot for coffee, you know, all these various obvious reasons.

31:24

But in terms of the protest

31:26

and how the company has handled them, what's

31:28

your take? So, start with

31:31

got caught in the protest for just a fluke

31:33

occurrence where their union used their logo and they sued

31:35

them and sort of they really haven't taken a stance

31:37

one way or the other. If I were the manager,

31:39

their management, I kind of looking like, what did we

31:42

do to deserve this? Seems like a fairly reasonable response

31:44

to that. But if the protests

31:46

are the driver of the boycott of the

31:48

cops and I'm a little skeptical about that,

31:50

that's the best possible story that management can

31:52

tell because it means this is going to

31:54

go away. This isn't about deeper underlying operational

31:56

problems. That means the stuff that Howard Schultz

31:58

has said is actually irrelevant to their. concerns

32:00

and everything will be fine in a quarter or two.

32:03

I'm not persuaded by that

32:05

story. I do want to

32:07

pause and have a moment of sympathy for

32:09

Lushmanara someone. Doing anything

32:11

with a backseat driver is hard enough. Leading

32:15

with a backseat driver who has a James Bond

32:17

style eject button to fire you out of the

32:19

car and has used it twice before strikes me

32:21

as a somewhat interesting leadership challenge. When I'm teaching

32:23

that in class, I think my students would have

32:25

some great things to say about that. But

32:28

the basic question that we should be

32:31

asking if we assume that whatever happens

32:33

with a boycott will end reasonably soon is,

32:35

is Schultz right? And I think

32:37

that's what we should be focusing on. So I was curious

32:39

about that. So on my way to the studio, I walked

32:41

into a Starbucks and I looked around to see like what

32:43

was my take. This is on Sixth

32:45

Avenue in Midtown, presumably a pretty high traffic

32:47

and important location for them. There

32:50

was trash on the floor. It looked dingy. The

32:52

signs were not hung up straight. And if there was any

32:54

sign that the employees really cared about the appearance of the

32:56

place, I could not detect it. It

32:58

seems to me that that's an end of one

33:00

data point, but it's still pretty telling

33:02

that they are having some bigger operational problems that

33:04

they should be thinking about. So

33:07

is it as easy as Schultz says, you

33:09

know, go into the store, be closer to the

33:11

customer. It's all about the store as opposed to

33:14

the data. I mean, do you get that sense? I

33:16

mean, it's never easy. I

33:20

mean, I think when he came on, when Narasimhan

33:22

came on, it was actually quite admirable the extent

33:24

to which he really went all in to become

33:26

a Starbucks person. In fact, he still spends half

33:28

a day working in a store as a barista.

33:30

I would not want that job. So like good

33:32

for him. But that tells us a lot about

33:34

his dedication to the culture of the company. But

33:36

at the same time, he is an outsider and it's

33:38

always harder for outsiders to process in in this way.

33:40

This is actually what my books are about. And

33:43

it can be hard for them to acculturate into

33:45

that environment in a way that an insider would.

33:48

Schultz has chosen three successors. The

33:50

first two didn't work out that well. And

33:53

they were also outsiders. So

33:55

I want to ask this question about what's going on there

33:57

that this keeps happening to him. At the same

33:59

time, maybe you want somebody. from the outside we may be do

34:01

you want maybe in this case you want somebody to

34:03

to be from the outside and walk into a sort

34:05

of a historic dirty it used to be clean what

34:08

what where has the company gone wrong as opposed to

34:10

somebody who is an enemy i

34:12

don't know when you want to clean up the

34:15

company oftentimes an outsider's product so outsiders are

34:17

changing right on the question that

34:19

i would ask myself when i'm whether debating whether

34:21

bring an insider outsider because change is always a

34:23

high variance process right you could do very well

34:25

or you could very poor leave a change is

34:27

going to drive up your variance and outcomes is

34:30

when they brought him did they really feel that

34:32

service needed a change or was

34:34

continuing on with their strategy in their approach and

34:36

just honing what had already done the right approach

34:38

when when steve jobs replaced himself he

34:40

didn't think it changes he picked him cook if

34:42

you're not a proper thing but worked out pretty well for

34:45

you right now if you look at what

34:47

what happened with starbucks it was the the pandemic had

34:49

a lot of our overlay over and i think that's

34:51

a lot to blame for the workers morale

34:53

and everything else could be more out of the

34:55

offices people didn't take the pride where they work

34:57

and to switch it up they had to go

34:59

strong into digital and now we we

35:02

look back on it starbucks with the premium

35:04

brand you paid for that experience they've

35:07

been during the pandemic is hurting them

35:09

now if in the case for

35:11

all of these restaurants starbucks might be the

35:13

poster child for it's definitely true that sort

35:16

of high-end consumption things like that are being

35:18

hit we tell you i heard you talking

35:20

about mcdonald's earlier we can go down

35:22

the list of different places there doing that it's not a

35:24

short list they seem to be hit worse

35:26

than others and some of that is definitely fluke stop

35:28

if you're i'd be willing to try

35:30

to you spend time in china and starbucks is very

35:32

popular but you can see challengers to starbucks

35:35

that have advantages and that do not have the overhang

35:37

that's our books close association with the united states is

35:39

going to cause you in the chinese market and in

35:41

other markets to break the moment i

35:44

wonder if i'm starbucks cases of good they will we're

35:46

just getting a worse deal and everybody else because of

35:48

those things but again that is

35:51

not right that's not short of argument

35:53

at all he's focused entirely on a

35:55

upon operational problems and operational problems are

35:57

indictment of a leadership team that has

35:59

has not been around in charge of the company

36:01

for that long. So

36:04

as an expert in leadership, and you mentioned

36:06

change, that's one of the things that really

36:08

cut my ear. Change is inevitable. And

36:11

when you're a leader, isn't it part of your

36:13

task to be able to train the next person

36:15

that's going to lead in the manner that you

36:17

want, or at least have the

36:20

wherewithal to make a determination about the correct

36:22

direction of the company going forward? So for

36:24

me, is this just an indictment on new leadership,

36:27

or is this also an indictment on

36:29

preexisting leadership's inability, because as you said,

36:31

this is the third time now. It's

36:34

the third iteration of choosing someone and

36:36

having him not fail. So that seems to be

36:39

the common theme throughout this. What's your take there?

36:41

The fundamental task of any leader who thinks of

36:43

themselves as a steward, as opposed to just someone

36:45

who's squeezing the last drop out of the institution,

36:47

is to hand it off to someone else in

36:49

better shape than when they found it. Now, whatever

36:51

shape Schultz's hand starved was often, it's in better

36:53

shape than when he found it, given his extraordinary

36:55

track record as a CEO. But yeah,

36:57

he's got to look in the mirror and say, how come

36:59

if he is not happy with this team, he

37:02

chose this team, how come this keeps happening to

37:04

him over and over again, is a serious concern. And at that

37:06

point, he would say, maybe it's time for the board to step

37:09

in. Because not in terms of

37:11

pushing out the CEO, but saying that, Howard,

37:14

you have a lot of amazing skills, but maybe

37:16

picking a successor isn't one of them. And it's

37:18

time for us to take a larger role in

37:20

that. Daphne, thanks for coming by.

37:22

Appreciate it. Thank you very much. Daphne,

37:25

what's your take? Yeah,

37:27

it reminds me a lot of Disney. Obviously,

37:30

that's the easy one there. And once we

37:32

started seeing board members or ex-CEOs chirping the

37:34

way we're seeing Howard Schultz right now, Chase

37:36

Eck was gone. It was over. And we

37:39

can kind of start the clock on this

37:41

CEO right now, because he's no longer Schultz,

37:43

a board member. He's the fifth largest shareholder.

37:45

So when you think about him going to

37:48

LinkedIn and being so public about this, he's

37:50

probably tried to speak with existing management and

37:52

board. And they're kind of giving the Heisman

37:54

a little bit. So again, I think

37:56

he's going to have a greater emphasis than the new

37:58

CEO when he comes back. speaks publicly about

38:01

this situation. So this guy's

38:03

toast and the company

38:05

needs you know some sort of major overhaul.

38:07

I think we could probably figure that out

38:09

before this CEO you know put out a

38:11

couple really bad quarters. Guy,

38:14

do you step in at some level

38:17

near here or do you wait for a change

38:19

at the top? So

38:21

look go back to our correct staff back in EC can

38:24

pull up a chart you can see what the low back

38:26

in May of 2022 was and we're

38:28

precariously close to that level now and you

38:30

said it about Boeing so bad that it's

38:32

good and we're probably pretty close to that.

38:34

In Starbucks of course the problem is you

38:37

know they make very expensive things that a

38:39

strapped consumers probably trading down from. This stock

38:41

move by the way happened long before boycotts

38:43

and all these other things. I mean go

38:45

back and look this stock probably topped out

38:48

sometime in the middle of 2021. It has

38:50

not traded particularly well since. There will come a

38:52

point where it makes sense on valuation. I just

38:54

don't think we're there yet Mel so we'll get

38:56

there but we're not there yet. Coming

38:59

up Disney is on the clock the entertainment

39:01

giant reporting before the bell tomorrow will dive

39:03

into the key numbers investors want to hear

39:05

after the break. And we'll test out the

39:08

technicals on Texas T WTI crew down nearly

39:10

10% in the last month

39:12

and the chart master says now is the

39:14

time to buy. Why he is bullish right

39:16

after this. Welcome

39:28

back to Fast Money. Oil prices holding steady

39:31

today amid rising geopolitical tensions but have fallen

39:33

almost 10% in the past month. The chart

39:35

master says it is testing a key support

39:37

level. Let's bring in Carter Braxton Wirth to

39:39

dig into where oil could go from here.

39:41

Carter what are you seeing? Well

39:43

it's just as you've articulated a sell-off

39:45

of three weeks about ten dollars a barrel

39:48

to a level where by my

39:50

work rebat potential is high. Let's do it. Five

39:52

charts they're all identical. First one no lines no

39:54

drawings have been as low as 65 high as

39:56

95 a one-year chart. Let's

39:58

put the first annotation second chart. This

40:01

is a drawdown, perfectly normal. 9%, 10%, 11%.

40:04

Let's put the next chart. And

40:07

so the selloff leaves us at

40:09

a well-defined trend line. Last

40:12

two charts, is this a level

40:14

where it rebounds? I put that green arrow there. Someone

40:16

else might put a red arrow, but that's what makes

40:18

a market final chart. Just

40:20

a very simple line with arrows.

40:22

It has come down to the penny,

40:24

to the penny, to the penny. Going

40:27

to play for the bounce again. What

40:29

kind of bounce high are we talking about? Do you

40:32

put a line on the top and that's the upper channel? Yeah,

40:34

I mean, at least back into the sort of 84, 85 and then

40:36

with a little luck,

40:39

perhaps even more. All right, Carter, thank

40:41

you, Carter Braxton-Worth of Worth Charting. Guy

40:44

Dami, just in time for summer

40:46

driving season, paying for the consumer. I'm

40:48

with subs on this

40:50

one without question. The uptrend line is in place. If

40:53

you look, there's a channel as well. And I think

40:55

if in fact we hold here, which I think we

40:57

do, these equities are still cheap. ExxonMobil is trading like

40:59

a champ, by the way, to know. Yeah, and

41:02

you like XLE. You like energy. I do.

41:04

I do. I think whether we get

41:06

good luck or bad luck, geopolitical flare

41:09

up or demand. How about

41:11

you? I think we're heading lower. I think OPEC plus

41:13

is probably

41:15

going to keep their production at

41:17

the same levels. They're not going to

41:19

cut again. And then

41:22

if you even flirt with a ceasefire,

41:24

I think everyone is so poised for things

41:26

getting worse geopolitically and OPEC getting in the

41:29

way. I think that this sets up for

41:31

oil to come in. All right, up next,

41:33

final trade. This time

41:45

for the final trade, we served out at the

41:47

Milken Conference with Guy Dami. Deputy

41:51

Bureau Chief Laura Botts from Making It

41:53

Happen. Happy birthday, Tim Seymour, that CLAI

41:56

good looking guy. Ali Baba, Mel. Dan

41:58

Nathan. Yeah.

42:01

Visor break it out below or above.

42:03

in Africa. One

42:05

I am with guy I'm with carter

42:08

actually sea bass. I was rock and

42:10

we are to break him out. Happy

42:12

Birthday! Same things to watch. Money than money

42:14

with you forever. Since right now. All

42:21

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42:51

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42:55

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42:58

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