Transcripts For CNBC Fast 20240704

Bonawyn eye sonson, karen finerman, dan nathan, and guy adami. Ceo jensen huang of nvidia speaking right now. Hes announced new partnerships and unveiled a new gpu. Shares up 5 earlier in the day, but closed up less than a percent, currently trading down by a quarter of a percent. Kristina partsinevelos joins us now with the very latest. Kristie anyway . Nvidias ceo reiterating we are just at the Tipping Point for a. I. , and all that means is that youre going to need bigger gpus. Nvidia revealing its new generation Artificial Intelligence platform. Key word platform there, to run a. I. Models. They are calling it blackwell, and it comes with the blackwell bh200 gpu, the graphics processing unit, the latest one weve been waiting to hear about. Its going to be four times the training performance of the h100. 25 times lower in energy use and 30 times the inferencing power, compared to the previous hopper architecture, or the h100 chip that weve all talked about constantly. Inferencing is a big driver. The fact theyre mentioning that, we know just in the last earnings call, inferencing contributed data center revenue. The fact this chip is going to be Even Stronger with inferencing allows nvidia to maintain that lead. The blackwell will also be manufactured by tsmc and set to be launched later this year. You have amazon, google, microsoft and oracle, all selling access to this play chip through their cloud services, as well. We havent received costs on this chip. Usually nvidia doesnt reveal pricing. But the previous older chip was between 2,500 to 40,000 per chip, and you need a lot of them to build your entire a. I. System. So, it could cost up to 200,000. That was the older generation, so, you can only imagine that this one will probably be a little bit more than that for a lot of companies, if they can get their hands on it. On the partnership front, we know theyve talked about partnerships so far with ansys, synopsis, weve seen those stocks and cadence. Right. Have there been the star appearances yet from any ceos or luminaries in the tech world . Well, i was just told theres some celebs right next to me right now, but im not dur. Swing that camera around, ch kristina theres security everywhere, and thats why my eyes darted when i was going live. But its just a rumor so far, but they happen to be right behind the camera, i havent seen any ceos just yet, but you ment mentioned ansys, tsmc. Look out for oracle, amd, a few others that may move soon. All right, kristina, thank you. Kristina parse lef nous on the ground in san jose. Its funny, we were listening to jon fortt talk in overtime about the similarities between this event and apples event, and how when apple launched a new product, it was sort of like this, and typically it was a sell the news kind of event. What did you make of the stock action in todays session going into this event . Im glad you said that. So, blackwell is replacing hopper, right . Uhhuh. As you know, mel, because we watch it, hopper is the sheriff in Stranger Things and the price action has been really strange over the past couple weeks. From fridays ago, that reversal in nvidia, where from peak to trough gave up a quarter of a trillion dollars. And today from peak to trough was probably close to 100 billion. I mean, to me, thats not an encouraging sign now. Its a great company, this new chip, four times more efficient, i get it. Price action is everything. And over the last week and a half, when you see moves like that you absolutely have to take note. Its really interesting, when you think about that comparison to the apple events, and they were fabulous, right . There was a whiz bang new thing that a consumer could go out there and buy and they could have it in their pocket. And it happened in and around, i think it was 2012 or so, the events were just kicking off. Tim cook had taken over, the Company Started buying back their stock. Consumers were buying the products and buying the stock. One of the biggest differences here, most consumers dont have a clue what a gpu is. They dont understand what i dont mean that in a con desensing way, a data center, all this stuff. This is a product that is powering something they havent used that well yet, because theyre still hallucinating, a lot of these things. I bring it back to the company, their earnings, their sales. In my career, on any sort of scale, i have never seen a company go from 3 3 in earnings to 12, to 24 in expected earnings. From 25 billion to 50 billion to an expected 100 billion. Its never happened. Are you saying you dont think its true . It did happen. So, what im saying is, what comes this year, this is the one where its up again, up 80 year over year after weve already seen so, what im safing is that in the last 2 1 2 months, weve seen this company, this stock, double, okay, on expectations of all this stuff that were just hearing about right now. All the names that dont mean anything to most consumers. We dont know what the demand is going to be like when they finally come to market. We tonight know what the margins are going to be, we dont know what the competition is going to be. I think were at a weird spot. A lot of folks said you could have said that a year ago. And ive said, whats happened here, weve never seen happen before. If you are going to make that same bet right now, right here, at 900, then its going to continue to go that way, thats a bad bet. Lets play the game that amd is making a product, that intel is making a product, they are offering soft ware solutions. Nvidia has the lead at this point. You two are nvidia holders, so, what is your take . At what point do you start getting concerned that that competition is actually real, and that share will actually i mean, shares already going away from nvidia. Its still dominant share at this point. True. I think this is a situation where the pie is growing tremendously, right . Theres room. I remember early on in amazons Cloud Business, thinking, well, eventually there will be competition. Okay, so, that was years ago now, and the Cloud Business has just continued to grow and accelerated at various points. So, i dont think there will be no competition. I think there will. Im sort of more curious about, all right, they have all these imbedded h100 gpus, which were from 40,000, some of them. What are those worth now . Im wondering, if you are meta, and you own 8 billion of these, if you mark those down, what happens to that . I dont know. Do they im curious what happens to that, before they get to now, these may be wildly more efficient, im confused also by that 25 times more efficient, does that mean theyre 4 the power usage . Is that what that means . Or are they 25 less powered . I dont exactly understand. So, theres i mean, the other thing that im sort of intrigued by here is, aside from being a genius at this business, jensen huang is also a genius at being a ceo of a company that is in the middle of a huge wave and how to manage expectations and sort of how to manage the stock price, which is a very difficult thing to do. And the higher it goes, dan, the harder that gets, of course, right . Right. So, hes done a masterful job so far. I am long, im staying long, i do think that we are still in the early innings of this story. Theres a lot left to play out. I think that absolutely amd, im long amd, as well, which is actually more expensive. I do think they will have some share, but i think the pie is just growing tremendously. Yeah, i would agree, the pies growing, and dan mentioned the fact that most consumers dont know what it is, but a lot of the knock on the stock, they had that consumer concentration, and what youre seeing with the partnerships, they are bolstering and addressing that issue. I think a lot of the knock on the Company Going in was that, listen, when it comes to training the Large Language Models, this is really the only show in town. Once we get an opportunity to pivot away from them with inference, were really going to see cutting into margins and diver if i case away from them. Youve seen 40 of their revenue last was inference. So, the fact they are starting to broaden out their Revenue Streams and become a bit more of a household name, not to mention the software, and to me, thats where the moat is. So, im with everyone in terms of, yes, expecting them to continue to grow at this rate, no. At some point at some point, thats not going to happen. The question is, at what price . Okay. As i said before, i do expect there to be some consolidation in the name, but there are a lot of unknowns. We may not know what a gpu is, we dont know what the overall target adjustable market is, or what this whole a. I. Thick really is. And until we get her of a grasp on that, saying that we dont understand the opportunity, but that we do understand the risk, to me, is really kind of like speaking out of one side of our mouth. So, im willing to grasp the unknowns. Right now, as things stand, they are if ecthe picks and shovels this gold rush. This is a developers conference, right . They want people to develop their models on the back of on their hardware, on their software, they want to make it harder to switch. And thats sort of, you know, the comparison to apple. I dont you didnt like it. It was fine. It was fine. But thats the whole point. So, thats their advantage, right . Thats probably three to four, fiveyear head start with everybody else. But again, price action is important, and we outlined the price action over the last week and a half, and at some point, youre going to look at peak margins and maybe this last quarter wasnt it, but 70 margin, and again, we tried to do the math, karen does it very well, but price to earnings, cheaper than amd, without question. Price to revenue, a lot more expensive than amd, without question. So, at some point, thery are outkicking their coverage in terms of their revenue and in terms of their earnings, which means, in my opinion, that 77 is going to start to come down. The question is, is that just a natural progression . Will the market give them sort of a pass on that, or is that sort of the Inflection Point for the stock . It clearly, its been heading the right direction. At some point, that 77 stops, starts going down, thats when people get concerned. And thats been the i mean, thats been true with technology and chips all since chips were started to be made and traded. For more on what this could mean for a. I. , lets bring in brett winton. Good to have you with us. Have you heard anything out of jensen huang so far that, you know, changes your mind about the story . No, but i mean, i think a lot of the panel covered the key issues here. Its clearly an Amazing Company you i , i think 14 trillion will be spent on a. I. Software by 2030 and youre going to need trillions of dollars of a. I. Chips per year to power that. And we underwrite that into the stock, and still, its a difficult Valuation Case to make over the course of the business cycle, relative to other opportunities that are out there in the market. How do you think about the sort of halo effect that spending on a. I. Chips will have in terms of broader tech spending . Web bush said that for every dollar, they estimate is spend on h100 chips, theres 10 to 12 being spent on software and other parts of the tech ecosystem that you need to make the a. I. Chip work. So, what is that sort of trajectory, in your view . Yeah, both on the kind of powering ecosystem of tooling to have a. I. Chips work, and on the soft ware that needs to be generating revenue on the back end, to justify the Capital Investment in the a. I. Chips. You know, we think the Foundation Model Layer Companies are really profoundly interesting. I think that thats probably a new emerging operating system for come pewation, and it puts a lot of the tech heavyweights at risk. There was news today that reportedly google and apple might team up for apple to license googles gemini model. I think thats a sign that these companies dont get that this is a new operating system thats emerging, its not a feature to layer on top of existing tech platforms. Brets, its karen, thanks for being on today. It sounds like there are other names that you might like more than nvidia. Can you tell us what those are . Sure, on the private side, we think anthropic is extremely interest, and enterprises are scrambling to figure out how to deploy these things. And tesla is the most compelling a. I. Story in the market. Youre not being honest if you dont think that autonomous driving is not more likely to happen today than it was two years ago, because of the advances in a. I. , and they have an amazing Distribution Network and their Business Model transforms if they can turn kind of their autonomous robotaxi software into a working commercializable product. Along those lines, brett, since you have a futurist, when you think about future ways to play a. I. , there was an analyst on this morning and he had an interesting take on it. When refrigeration was invented, it wasnt the refrigerator parts makers that became the winners in that all, it was cocacola. So, when you sort of apply that metaphor to this situation, what do you think will benefit the most . Well, theres a clear opportunity on the consumer side, and its entertainment is going to be transformed by having hyper compelling a. I. Models that captivate our attention, so, think of tiktok as the feed, which facebook or meta has coopted, well, imagine generated media content and how compelling that will be for end users. And we think that metas open sourcing of its a. I. Operating systems is actually an interesting angle that theyll be able to play, to generate that really compelling Consumer Experience across their entire portfolio of apps. Brett, thank you. Good to speak with ou. Brett winton, the chief futurist at arc. Interesting job. When do we move from picks and shovels to the Bigger Picture . Because thats really the question, if enterprise is going to continue to spend on it, you want to see that there are gains, productivity gains, product yeah. Well, i mean, listen, i think most folks that weve had over the last few months, meta has been a universally liked name, how they are using generative a. I. To aid their own business, how theyre basically monetizing the ads, that is their business. I dont know if you noticed in your instagram search feed over the last week or two, you are seeing meta a. I. As part of the thing there, its working throughout the Consumer Products there, and you are getting served better ads. I know that most people think that instagram is pretty good on the ad front. Theyre going to have better monetization. Thats why that stock keeps working. I know it was one of your early picks, how to play gena. I. And the one that continues to be disappointing was google. You know, and so, ultimately, hopefully some day theyre going to get it together, but right now, even with todays gains, it doesnt seem like thats a great validation, because apple has no strategy, is looking to them, rather than an aboutnthropic or doing a deal with openai. I think when we kind of dig into this apple google possible partnership, the headline and the initial gut reaction is for us to say, this is probably not good for apple, and i had the same type of reaction. But when i think about the distribution, the apple watch, the kind of the glp1s and all the focus on fitness, i actually think in the longterm, maybe a few generations down, they actually end up winning, again, because of Distribution Network and how ubiquitous that name is. And from an application standpoint, to me, i can see how having a realtime suggestion on what one should do to solve a certain problem that comes up in realtime, that seems to come to mind for me. Quickly, in the here and now, though, so much of the Broader Market is predicated clearly on the nasdaq, on semiconductors, more specifically, on nvidia, which is 27 of the smh, and you can pull up an afterhours chart here and injade is trading 865 or so. If we came in today waiting for something, and this is at least 5 17 at night, a sell the news event, what does this mean for the Broader Market . So, just keep your eye on the price action here. Do not miss a cnbc exclusive interview with jensen huang tomorrow, 10 15 a. M. Eastern time on squawk on the street and then with jim cramer on mad money at 6 00 p. M. Eastern. Coming up, how apple and alphabet could be coming together. And what it will mean for the iphone in your hand. More on that next. Plus, crude, copper, and rates, oh my. All three ticking higher as investors await the feds next move. How to prepare yourself ahead of this weeks policy meeting. Dont go anywhere. Fast money is back in two. This is fast money with melissa lee. Right here on cnbc. Rylee from rylees realty hi this listing sounds incredible. Lets check it out. Says here it gets plenty of light. And this must be the ocean view . Of aruba . Huh. This listing is misleading. Well, when at t says we give businesses get our best deal, on the iphone 15 pro made with titanium. We mean it. Amazing. All my agents want it. Says here. inviting pool. Come on over too inviting. Only at t gives businesses our best deals on any iphone. Get iphone 15 pro on us. personalized Financial Advice from ameriprise can do more than help you reach your goals. I can make this work. It can help you reach them with confidence. No wonder more than 9 out of 10 of our clients are likely to recommend us. Ameriprise financial. Advice worth talking about. This looks like an actual farm. It looked cute on the app. meanwhile, at a vrbo. When other Vacation Rentals arent what theyre cracked up to be, try one where youll know what you get. You can make money the hard way as a bullfighter arent what theyre or a human cannonball. Or save money the easy way, with xfinity mobile. Existing customers can get a free line of our most popular unlimited plan for a year not only will you save hundreds but youll also be joining millions who have connected to americas most reliable 5g network. Sure is a lot safer than becoming a stuntman for money. Get a free line of unlimited intro for a year when you buy one unlimited line. Visit xfinitymobile. Com today to learn more. Welcome back to fast money. Google would be on the verge of a deal to bringgemini a. I. To apple. Sources saying that apple had recently held talks with openai and has considered using its model. Google parent alphabet up more than 4 for its best day since december, while apple closed half a percent higher. So, it did give up the gains, about 1. 5 during the session. I had your same take in terms of, wow, apple cant get it together to have its own a. I. Offering by if dthe developers conference, which was expected. Yeah, that was my initial reaction, like, okay, if all the Major Players have been investing here and allocating resources here, what has apple been doing . And i think in the shorter, intermediate term, that probably is what this stacks up to be, but again, i do think they have the stack, distribution necessary, to be able to take advantage in terms of the presence with consumers in the long run anyway, so i think perhaps it is a shortterm headwind, but ultimately, i think theyre able to play through. Im sort of wondering, why build it if we can buy it. Theyre not buying it. We dont know what theyre doing, actually. Right. We dont know. We dont know. So, it is quite possible that this is a more efficient way to do it. Right. And maybe thats the simplest expla explanation, i dont know. Thats what popped into my head. We talk about apple just making whatever it is better, not first, right . They do it better. Think about this. Its probably an extension of this existing deal they have for safari on ios devices. So, google pays apple 20 billion a year, 36 of the search traffic that goes on safari devices. If you go to google right now and do a search and, you know, subscribe to gemini, gemini is powering that search, the way openai is powering the search on bing. It has the potential to be a stop gap, you know what i mean . An extext of the existing search deal and the sort of thing where their may are not spending a whole heck of a lot of money. I dont know if they can pull up a day chart of apple right now. This stock gapped up at 175 and went a bit higher to 177 1 2. It flatlined at 175 all s afternoon. Whoever is buying that stock all day, its kind of interesting action. So, the fact that it closed on the low, opened on the high, not like, that encouraging for the way, at least investors are thinking about this teal. If the model is the current relationship, this product, whatever it may be, i would think, would be an apple product to any consumer using this, and that is a stamp of approval for the gemini product, you know, vote of confidence that google can actually get its act together, fix whatever needs fixing approval, yeah, exactly. And talking about trading stocks again, google traded up to 152. 153 and change, if line in the sand, that was a prior high a couple years ago, a high we made a month, month and a half ago. You can do this one or two ways. This is a value stock, im staying this through hell or high water, thats been right. Or, you can say, you know what . Price action wasnt great. Doing one or two things. Im going to buy it on a breakout above 154, which sounds somewhat counterintuitive or wait for the pullback. Because right here, to a certain extent, youre flipping a coin. We want to get back to kristina with more from nvidias gtc conference. Kristina . One of the things we wanted to hear about, how theyre going to monetize software. Nvidia is launching a new service, an Enterprise Software subscription called nim. You can take nvidia gpus that you already own and they will provide the extra software and allow companies to build Large Language Models on said gpus. Instead of using openai for example, you would turn to nim. So, you would buy the gpus for a cost of 30,000, 50,000, and per gpu, the new cost will be 4,500 per gpu per year for a license. So, again, this is a way to monetize software, a reoccurring source of revenue for nvidia on top of the hardware theyre already selling. All right, kristina, thank you. Kristina partsinevelos. Repou rebound oaf f a percent. We were worried about the pull forward, overordering, but this addresses this problem. Recurring revenue is why ibm got that premium valuation, because they had visibility with the recurring revenue stream. So, clearly, thats a good thing, and thats another plus in terms of why you can wrap your head around this on valuation and the stock is actually bouncing in kind on the back of that. Theres a lot more fast money to come. Heres whats coming up next. Prepping for powell. Oil, metals, and rates all on the move. As investors await the feds next decision. What to expect out of the Central Bankspolicy meeting. Plus, a carbonated call on pepsi. Shares of the sodamaker bubbling higher after a big bullish note on wall street. The fizz on this biz, next. Youre watching fast money, live from the Nasdaq Market site in times square. Were back right after this. With tailored education. Get an expanding library filled with new online videos, webcasts, articles, courses, and more all crafted just for traders. And with guided learning paths stacked with content curated to fit your unique goals, you can spend less time searching and more time learning. Trade brilliantly with schwab. Fisher Investments at Fisher Investments we may look like other money managers, but were different. other money manager you cant be that different. Fisher Investments we are. We have a team of specialists not only in investing, but also also in financial and Estate Planning and more. other money manager your clients rely on you for all that . Fisher Investments yes. And as a fiduciary, we always put their interests first. other money manager but you still sell Commission Based products, right . Fisher Investments no. We have a simple Management Fee structured so we do better when our clients do better. other money manager huh, were more different than i thought Fisher Investments at Fisher Investments, were clearly different. Welcome back to fast money. Stocks kicking off the week in the green, with the dow up 75 points. The nasdaq up 0. 8 . Some stocks hitting alltime highs, chipotle, oreilly automotive, progressive, cat pillar, and Waste Management all trading near records. And shares of boeing lower again today. A United Airlines flight landing in oregon over the weekend without one of its fuselage panels, it went unnoticed until after the plane landed. This just the latest in boeings high profile safety incidents. Not sure where you want to go here, ill go to guy lets go to boeing real quick. I think they report middle of aprilish. I mean, again, 179, we talk about this. The selloffs are there, clearly. Decent day again, market trades lower. Theyre pushing against something now, i think theyre pushing too much to the downside. You get any incremental good news, i think for boeing. You want to trade from the long side. I said that at 185, i said it at 190, im saying it here at 179. This is one that i think the push to the downside, now youre tempting fate, i think, if you are playing boeing on the short side of things. Theres a desire of investors to sell regardless of how old that plane is, that has the issues, so, it could be just a Maintenance Issue on the part of whatever airline is operating that plane and not a boeing, per se, problem, but the reaction is still to sell. Thats it is. Did it take off with the panel . Or where is the panel . Where is the panel . I dont know. I kind of agree with you. If it stops going down i mean, today it was down a little bit. You know, keeps testing bad news and how much will it go on down on it . I dont know when that will be. Can we divorce the stock and the company and whats going on here . Because theres hundreds, if not thousands of stocks that trade and buy and this and that and whatever, and the news flow here just doesnt get any better, and you have to start thinking about, like, what has gone on with . Company . And is it broken . And is the culture broken that, you know what i mean . That got people to buy dips for 50 years . You see what im saying . Its interesting to me. We talk about this name, i think we should just take it off our pages and maybe stop talking about it and maybe thats the reason you should buy it. I dont know. Theres a lot of stocks to buy, trade. And this Company Seems like they are just not firing on all cylinders. I take it off the page. One last comment . One last go. Listen, its essentially a duopoly. There is value, its just at what point . Im with you. Once the news flow stops, thats when the negative news will stop, because there is very little to like about the performance of the planes or the stock, and i dont think you can decouple the two. Coming up, to cut or not to cut . Investors awaiting powell and the Central Banks next move. But our next guest says the fed may not cut rates at all this year. Jim bianco is with us to talk about why the fed may be on hold much longer than markets hope. More on that when fast money returns. Missed a moment of fast . Catch us any time on the go. Follow the fast money podcast. Were back right after this. Your skin is everchanging, take care of it with gold bonds age renew formulations of 7 moisturizers and 3 vitamins. For all your skins, gold bond. The future is not just going to happen. You have to make it. And if you want a successful business, all it takes is an idea, and now becomes the future where you grew a dream into a reality. The all new godaddy airo. Put your Business Online in minutes with the power of ai. vo what does it mean to be rich . Put your Business Online in minutes maybe rich is less about reaching a magic number. And more about discovering magic. Rich is being able to keep your loved ones close. And also send them away. Rich is living life your way. And having someone who can help you get there. The key to being rich is knowing what counts. Welcome back to fast money. Commodities climbing higher this year. Crude Oil Prices Surging today, climbing back above 82 bucks a barrel. Their highest level since last november. Iraq and saudi arabia both planning to cut exports, even as demand from the u. S. And china grows. Copper also continuing its climb higher. The industrial metal up more than 6 this year, bringing copper miners along with it. Meantime, rates also on the rise. This week marks two years since the current fed tightening cycle began. And the tenyear today is trading near the highest levels of the year. I feel like we should have had a cake or something to mark that anniversary. Cakes are fun. Im not a cake do you like cake . Youre a pie person. Pie. Warm apple pie. Can we get back to we can. We talked about the refiners last week, those stocks seemingly off to the races. Thats one side of the equation. Copper is the other side of the equation. Second or third most important commodity out there. Absolutely breaking out to the upside. Fcx, you can see, if we close above 45, were through resistance weve had a kple years now, so, energy is in play, resources clearly in play. Fed job gets more and more difficult with each passing day. Yeah, so, according to this picture, inflation is not abating, at least in this space. Right. So many spaces. I dont see i think we are down from three cuts to two. I dont even though that two why necessarily two . For a long time, weve been saying, why do they sort of need to give it away . As we get closer to the election, then theyre sort of hamstrung. If they do nothing, is that political, if they do something, is that political . I dont really know. But i think the expectations of a june cut just because it will be the last chance to do something that isnt political, i dont really buy that actually. A lot of hope in your view, bonawyn . Yes, but i think the markets have been trading with a lot of hope for the better part of a year. I mean, even when the fed was telling them, we are not going to cut, they were expecting cuts or pauses or, i mean i cant even keep up with all the acronyms for whats been out there in terms of flying in the face of what the fed has been delivering. And the last ppi andcp numbers dont really tell you a story of us getting inflation at least to a target level where the fed would be comfortable. Dare i say responsible cutting. Growth is still there, employment is still there. I dont see the reason why you need to, aside from the fact that they did signal to an extent in the last conference, but outside of that, i dont see the logic. For more on rates and the fed, lets bring in jim bianco. You dont believe were going to see cuts this year, why . The economy is too strong right now. Its in a no landing phase, as we like to call it. Its not a boeing plane, theres no parts falling off of it. And its just continuing to move along at a 2. 5 or 3 phase, along with that consumers are spending more money, and it looks like were probably bottoming on inflation at around 3 . Now, i dont think we go much beyond 4 at the most, but thats not two, and the fed has made it very clear they need confidence were going to two and were not getting that, and thats why i think theyre going to hold. And finally, im in the camp that the fed doesnt change policy in the summer of an election year. Change policy. If they were in cutting mode, they can continue to cut, but theyre in hold mode. And if they dont pull the trigger by june, then its then its november, december, at the earliest, only if the data warrants it, and right now the data is not. Jim, we both agree that rates are going higher, we were proven correct. Well see how it plays out, but whats the catalyst, in your opinion, for rates to continue to go higher in tenyear from 4. 30 to 4. 7 5, which is the nex level, in my opinion. I think they might go higher. I think its going to be the reality of inflation if were in a 3 to 4 inflation world, which is what i think we are, then a 4. 30 tenyear note is not enough if you will, compensation for that. Its got to go higher. I think the yield curve steepens. I think that we eventually start to maybe draw a beat on where the funds rate is at 5. 25 to 5. 5, and maybe see the curve start heading towards a zero curve. Yeah, so the tenyear going over five as the funds rate stays at 5. 25 to 5. 5. I dont think that is a consensus view right now in the marketplace. We were almost there in october, so, its not much more than where we were in october, and when we were at 5 in october, we were throwing up 3 growth rates in the economy, and it was able to handle that level of Interest Rates just fine. Jim, so, you mentioned the domestic issues that might lead to higher rates. Can you speak to the japan carry trade and perhaps them pivoting on Monetary Policy and what affects that might have on rates, as well . Yeah, so, its a long time coming. They are probably going to raise rates for the first time in 17 years. And theyre going to probably finally get off of negative rates goorate rates. Its wellearned, because they got inflation above 2 in japan, and youre right, if you look at a chart of the Yen Dollar Exchange rate, overlaid with the tenyear yield, its effectively the same thing, because so much of the financing of tenyear notes comes from japan. If Interest Rates are heading up in japan, then a lot of japanese players that are playing that trade will say, ill just leave my bonds or my investments in japan, get the higher yield in japan and not take the carry risk. And japan is the largest owner of treasuries in the world, and if theyre not going to start waning, its just another problem for the treasury market that could push yields higher. Jim, great to see you. Thank you. Thank you. Jim bianco. What happens if there are no cuts this year to equities, dan . Well, i mean, listen, i would have thought by now, like, when the market took off in middecember, it was because basically they were pricing in, or, the fed indicated that they were going to be cutting in 2024 and Market Participants started pricing in five, six cuts and it just seemed warranted in a way. Now, here we are in a scenarios maybe they get into a weird situation this summer or into the fall where they cant cut, and i guess if the economy keeps humming along, if we dont have unemployment above 4 , if inflation has stopped going down, but it is not going up, if things slow down gio politically, crude oil, fine, its 82, it doesnt be go to 90 i see a scenario where the economys doing okay, real rates are okay, and maybe your question was about stocks, sooner or later, theyre going to start looking ahead, say, what will be the reason . We will have a slowdown, recession, remember, that we were pricing in for last year, ultimately, well be that much closer and stocks will have to price it, but i dont know when. What will do well in a higher for longer environment, and i think if you look at sort of a jpmorgan versus a regional bank, i would think jpmorgan would do a lot better. I think, you know, for commercial real estate, this is a really tough situation, extended long rates is hard. Yeah. Interesting now, we talk about it, the fed not being subject to political pressure Elizabeth Warren and Bernie Sanders sending a note to jerome powell, i think, or some open letter, saying, we need a rate cut, and we need it soon right. Which shows a complete lack of understanding of whats going on, becut the rhetoric is just going to get louder and louder. I think the best Case Scenario this year, one, maybe two, and if you get that, it means things are actually going pretty well. Coming up, cola and ket that mean. Shares of pep sip getting a pop after a bullish call out of morgan stanley. Why analysts are feeling the fizz ahead. And tesla topping the tape today. The price hikes helping boost that stock, and how elon musk is defending his prescription ketamine use as being good for investors. The details on that when fast money returns. Welcome back to fast money. A call of the day on pepsico. Morgan stanley upgrading it from overweight. They see a clear inflection. That call sending shares up 4 , for pepsis best day since october 2022. Throw a chart up on this one if you can. Look at the september low and the low we just traded down to. Technically, we held a really important level. Now, were moving 20 times next years numbers, maybe you got 11 eps growth. Maybe high Single Digits earningearning s growth. This stock might get back on its horse, especially if some of these high flyers are going to give a little bit back. The market will find its way into names like pepsi. Bonawyn . I think a 4 move on a relatively low beta name lets you know where we are in terms of themarket being a bit overextended, seeing a rotation back in there. And i really think ultimately it speaks to the real power of the glp1s. We were talking about in terms of the bottoming out of this business. In terms of, like, unless youre going to hold this name for longterm, and im talking about fiveplus years, i think you can find other pockets of the market that get more volatility and juice. Do you think the price of doritos goes down if the input costs come down . No. Transportation costs come down . Yeah, exactly. Yes, a little, but not as much. And Raw Materials arent their only cost. Labor. On the upside, when those raw material costs go up, well do 100 raise consistent with that inflation. Not on the downside. Theres no limit to what people will pay for doritos. Once you are at a certain price point 7. 99 a bag is no big deal. Its highway robbery. Thats how much it is . I dont know. You said that like you know. I think its 6. 29 on amazon fresh. Not the giant size. Anyway. Coming up, tesla shares jumping over 6 after the ev Company Announced price hikes for its model y. What ceo elon musk had to say about the state of the company and some of his extracurricular activities, next. And heres a sneak peek at the cramer cam. Jim is talking with the ceo of crowd strike. Catch that at the top of the hour on mad money. More fast money in two. Of aruba . Huh. This listing is misleading. Well, when at t says we give businesses get our best deal, on the iphone 15 pro made with titanium. We mean it. Amazing. All my agents want it. Says here. inviting pool. Come on over too inviting. Only at t gives businesses our best deals on any iphone. Get iphone 15 pro on us. so this is pickleball . Its basically tennis for babies, but for adults. It should be called wiffle tennis. Pickle yeah, aw whoo these guys are intense. We got nothing to worry about. With e trade from morgan stanley, were ready for whatever gets served up. Dude, you gotta work on your trash talk. Id rather work on saving for retirement. Or college, since you like to get schooled. Thats a pretty good burn, right . Got him. Good game. Thanks for coming to our clinic, first ones free. My name is oluseyi thanks for coming and some of my favorite moments throughout my life are watching sports with my dad. Now, i work at comcast as part of the team that created our ai highlights technology, which uses ai to detect the major plays in a sports game. Giving millions of fans, like my dad and me, new ways of catching up on their favorite sport. Welcome back to fast money. Tesla shares topping the tape after the Company Announced more price hikes on its model y e leg vick vehicle. Prices in some European Countries will go up to 2,000 euros. Former cnn anchor don lemon releasing his wideranging interview with musk on social media platform x today, where he discussed his prescription ketamine use. Tesla is worth about as much as the rest of the car industry combined. Right. From nothing. So, you know, thats pretty good. We have the bestselling car on earth last year. So, for investors, if there is something im taking, i should keep taking it. Tesla shares down about 30 year to date. So, are these price hikes what turns the stock around, is the position of strength, position of weakness . These price hikes are being implemented and should we care . I mean, if the company is doing okay, do we care what the i mean, you know, im not i dont care what he does, but. Last week, we talked about, youre looking for a place to buy the stock, not sell. And we thought in the form of last aprils low, like 161 or so, it made sense. Think the friday low is 162 and change. The stock gave you something to trade it from. Dan says all the time, at certain points, you know longer pressing shorts, you are looking for opportunity. You probably got it last week in tesla. You said that last week and i think it was really smart. At the point that the street had come around to, like, a low level of q1 deliveries, right, so, they finally got down from a 485,000 consensus to something thats now under 430. The one thing ill say, what the Company Really got wrong is the notion of price elasticity. It didnt come. So, im not sure raising the prices is going to do the thing they hope to do. At least change the narrative for a day, which is today. Right, or, it could send the signal, you know, buy now, and so, you can see that little bump that they might need to meet that delivery number . Right. Thats saying they need that, right . Youre saying it comes from a place of weakness. Its kind of surprising, but i dont know. Not you see the data, you know you see vin registrations, you see the demand, you see the wait times. If it doesnt happen, then theyre going have to change course. That might be a lot more negative than this was positive. They dont mind changing course. Well, they havent done a price hike in a very long time. Better than slashing prices. Which they have been doing. Continuously, to dans point, and not led to demand. Theyre putting a line in the sand, saying, were going to cut into our margins. But i think its at least a pivot from what theyve been doing, which has been a negative signaling effect and the stock has traded down as a result. From a Corporate Governance experience, should we care what he does on the you know, theres key man risk, i would think right. I dont know. Is there key man insurance . I cant imagine there would be enough for what would happen to the stock if something were to happen to elon . Should we care . I dont, really. I think some of the other to me, the huge, huge divergence of his attention to x. And then, oh, im going to take a. I. Assets, those kind of things far worse than this. Up next, final trades. upbeat music with the push of a button, constant contacts ai tools help you know what to say, even when you dont. Hi constant contact. Helping the small stand tall. [alarm beeping] amelia, turn off alarm. Amelia, weather. 70 degrees and sunny today. Amelia, unlock the door. Im afraid i cant do that, jen. Why not . Did you forget something . My protein shake. The future isnt scary, not investing in it is. Youre so dramatic amelia. Bye jen. 100 innovative companies, one etf. Before investing, carefully read and consider Fund Investment objectives, risks, charges expenses and more in prospectus at invesco. Com. Things far worse than this. Third, these nims moments ago, there are robots on the nvidia stage in san jose. Two robots, in fact. One named orange and one named green. There it is. Maybe thats orange thats the guy from walle. Well find out. Final trade time. Bonawyn . Speaking of not pressing shorts into an extreme down tape, zillow. Karen . Yes. Tomorrows day three, ulta, those werent bad earnings. Time to buy. Dan . Happy anniversary to luckiest woman in the world, my wife. How about that . Rivian. Ilence. Guy . Free port, mel. Thank you for watching fast mad money paddy harverson with jim cramer starts right now. My mission is simple to make you money. Im here to level the Playing Field for all investors. Theres always a bull market somewhere, and i promise to help you find it. Mad money starts now. Hey, im cramer. Welcome to mad money. Its a special west coast edition coming to you from cnbc one market in san francisco. Welcome to cramerica. Other people want to make friends. Im just trying to make you some money. My job isnt just to entertain but to educate and teach you, so call me at 1800743cnbc everything takes too long. Everything is too expensive. Wa