Can Markets Rebound from Recent Lows?
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Welcome to the Risk Reversal Podcast. I'm Dan Nathan, joined by Guy Adami. Guy, good morning. On this rainy Monday, rainy days and Mondays always get me down, but not today, Dan. I'm up. You know why you're up? Because it is St. Patrick's Day. You will be found in an Irish pub later this afternoon, probably right before Thanksgiving.

the CNBC's Fast Money. So guys tune in there. Guy might be all tuned up as they say, but probably not here. Guy, we got an interesting Monday after a ripper of a Friday. Over the weekend, we saw Treasury Secretary Besant on Meet the Press on NBC. Some interesting commentary there. We know we have the Fed meeting coming up on Wednesday with a presser by Fed Chair Powell. We have Jensen Olsen

He is the CEO of NVIDIA at their GTC conference. That's Tuesday night giving the keynote. There's some China data. There's actually still some earnings this week. Where do you want to start? Let's talk on Friday a little bit. I think both you and I were in the camp yesterday.

Not a great press last week. Things were getting a little bit overdone. You had been highlighting the fact when we see the VIX approaching 30 that normally we will see a tradable bounce. What is interesting to me, Guy, about on Friday, we never really had that sort of panic move where the VIX just blew out above 30. I think you and I were both saying the stair-step way in which the VIX was moving up and the

orderly part of the sell-off. That 10% sell-off in the S&P 500, I think it was one of the quickest down 10% in the last 80 or 90 years or so. Give me a sense of Friday's action and what you think it means into this week where we got a lot going on. It's easy to say it makes sense, but on Thursday and actually earlier in the week, as you just pointed out, we talked about the potential for that to happen. I know on Thursday's market call, and I know for a fact on Thursday's Fast Money,

We said what was likely on Friday was to have a disastrous consumer sentiment report, which it was, and then see the market basically have this mind-numbing rally seemingly on the back of nothing other than the fact that, as you just pointed out, we were just in some pretty oversold conditions in terms of sentiment, in terms of sort of –

relative strength index and all the different metrics we look at. So in retrospect, it made a little bit of sense. Now, the question is, was that it? Do we get a sort of a follow through to the upside and we put in a bottom for the foreseeable future? Or is it just a temporary refrain? That's what I think it is, by the way. You know, I still think there's a little bit of bounce here and you can trade back up to uptrend lines that have been violated. But

I think sort of to a certain extent the die has been cast. And as we're sitting here on Monday morning, we still have a VIX north of 20. Yeah. You know, it was interesting over the weekend, too. I guess last night on Sunday you saw Mike Wilson and Morgan Stanley. I think it was JP Morgan and maybe Wells Fargo talking about a tradable bounce in the market. Mike, Tom Lee of Fundstrat, he said that to us two weeks ago on the pod, but kind of reiterated it.

Last week, you know, not that hard of a call to make, like for all the reasons and the inputs that you just mentioned. I think Vinny Daniel was on our pod on Friday and he mentioned the RSI's and everything, how oversold they were. We also know that Peter Bookvar had said to you last week,

Also, that some of the fear, greed sort of stuff was kind of ticking to the point where it was getting a little overdone in the short term. But, you know, you and I as sort of traders, if you will, you know, there's a lot of stocks that we will be watching, whether they confirm, you know, the sort of kind of

follow through that you might expect after a move like that. Before we get to the Fed, I just want to hit this NVIDIA GTC because some of the data, I looked it up, Guy. So on average over the last five years, the stock has rallied about 7% into the event, into Jensen's keynote, and then 4.5%

after for the next two weeks or so. We've already had a 17, 18% rally or so. And again, why are we putting this up there right with the Fed meeting that we have in the middle of the week? It's been a huge driver for tech stocks.

Yeah. And I think, look, you know, you can understand why people want to get excited ahead of it, given the sell off. I mean, NVIDIA made an all time high of 153 and change in January. I think on March 11th of last week, we traded down either side of 106. So it was a pretty precipitous decline in a pretty short period of time. Obviously, you had that Monday that that was what was the name of that thing that deep seeker or something? Yeah. Yeah.

Yeah. So anyway, I mean, on the back of that, it makes sense that if you were short the stock, you're squaring up. And if you want to play sort of for a bounce into this thing, you know, again, all this sort of makes sense. Again, the question comes down to, you know, is this just a sort of a bounce over an oversold condition or is this something more? I think in terms of NVIDIA, I'm hard pressed to imagine what he's going to say to further excite people. They already talked about the reacceleration of margins in the second half of this year. So

most of the news is already out there. So it remains to be seen what they can say to sort of reignite or reinvigorate some of the people that have been so obsessed with this name. Yeah. So reinvigorated right here. Intel's up 6%. We're shortly after the open on Monday. We know that they made an announcement of a new CEO. This is an epic move guy. It's up about 30%. I want to say in the last kind of week and a half ago, I also see AMD getting off the mat. It's up 4% today. So you have semis in general, you know, following through and it

be really interesting to see what sort of cues that they take off in the NVIDIA. But again, the Sox is interesting to us because of the relative underperformance that we have seen versus the S&P 500, despite all the focus that has been on NVIDIA over the last couple of years or so.

Do you want to talk while we're here a little bit about, you just mentioned DeepSeek, so I'm going to jump the rundown here to China and some of the data that came out over the weekend. They're talking about re-stimulating. They're talking about some better than expected consumer data. And one of the things that I think is interesting is you've been all over this BABA trade, and this thing had this epic, epic,

move. It's been consolidating. I mean, on a chart, it looks like one of the best looking flags formations that I've ever seen. And what is that? When you go straight up like this and then you consolidate right over there. And usually that would mean after consolidating the gains after such a sharp move that there's another move higher. You have been in that camp.

You've also said if you caught this thing down near 80 or so, that you got to move your feet and do something. But when I think about what's going on in China, you know, and you said this and you've corrected me because I've been kind of, you know, fading a little bit when you see this sort of move. You say that we have a situation where the stocks got divorced from the fundamentals, which means that you could keep going. And the only reason I bring this up right now, Guy, is because there was a headline this morning about

Baidu, which has not participated in this rally. And they have introduced a model that supposedly has performance very similar to DeepSeek. So those sorts of announcements by some of their tech champions and the kind of notion that the country or the CCP is going to continue to stimulate the economy, that would lead to your belief that this market has more room to run.

I think so. And we're looking at, by the way, an FXI today, if you want to play the ETF game, that's trading either side of 38. The last time we were here, Dan, I want to say it's probably sometime in 2021 or 2022. So this has obviously been a laggard for quite some time. And I do think regardless of what you feel about the Chinese economy, I don't have any real thoughts, but I also think they're going to do whatever they can to sort of

re-accelerate some of these stocks and sort of get some excitement back around their market. And we're seeing it in the form of all these names you just mentioned. Even with the move we've seen in Alibaba, and yeah, that's one we've actually done a decent job with. We traded up to sort of 145 and change. We thought there was a really good opportunity to trade back to that prior recent high of about 118. It actually only got to around 125. And here we are basically right back to those levels.

I think it's going to continue to surprise people to the upside. And I still think there's probably another 40 or 50 percent left in this name, which sounds ridiculous. But if you think about it just in terms of some of the valuation and the metrics around it, it does make a little bit of sense. So I think China, regardless of what you think about their economy, regardless of what you think about what they're doing,

I think the individual names and the ETFs, if you want to play that game, are still very attractive here. Yeah. And I just, you know me, I just have a tough time chasing stuff in general. The FXI was trading, I want to say, at the end or early March at about $28. Here it is about $38. And again, a lot of the stocks that make up a

big, you know, you know, waiting in that ETF have had massive rallies here. But I see what you see. And you're right. It was late 21. The last time we saw the FXI here. And we've been talking about this also is just like as the US stock market has sold off over the last month or so, we've seen money go into China and we've seen money go into Europe. So on the US stock market, Treasury Secretary Besant Guy on TV yesterday. And, you know, you and I, we've been talking about this a little bit, you know,

and having nothing to do with the administration and then their policies and what the reaction, I guess, to trade in tariffs have been in the stock market. You and I, we kind of usually have this tone when you see a euphoric market. We'll say this on our pods. We'll say it on Fast Money. You know, the healthy thing often is to take some of that, you know, overly euphoric, you know, sentiment out of the market. So divorced of what

the reasons why the Wall Street Journal or Bloomberg or CNBC on their main pages are saying why the stock market sold off 10%, you and I would just think sometimes it just takes a little bit of cooling down a little bit. You know what I mean? And so I was on MSNBC on Thursday night and was asked the question about the stock market. And I said, listen, every year, year and a half, we have a really healthy 10% decline. Rarely do those turn into bear marks.

And so these present opportunities having nothing to do with policy and the like here. So do you agree with what Besant said? And he's saying that to the U.S. public that has an interest in this as it relates to their 401ks and the like. And my point is, if you just hold out, they're going to be higher, whatever that time period, whether it's a year or two. Yeah, I mean, that's the thing. I mean, it's all about time frame, right? And so regardless of what I think about

some of the posturing and some of the delivery methods. I mean, there's some truth in what he said. You know, there might be a bit of a rough patch and it's, you know, somewhat to be honest with you, it's sort of refreshing to hear people at that level talk about the potential for and almost the need for going through a bit of a soft period to get to the other side, regardless of what you think about

the other side or whether or not we should be trying to get there. I mean, there's a truth sort of embedded in that. So, and I, and I, I agree with it. You know, I do think there's going to be a bit of a rough patch and it's sort of, it's, it's self-serving in a certain way, because if they get it, they'll say that, you know, we talked about this and we warned you. And if they don't get it, they can talk about how great their navigation was, uh,

of the economy and of the markets in order not to have you suffer some of the pain that they thought was inevitable. So, you know, it makes sense sort of getting in front of it. It makes sense going on these news shows. I know people will wring their hands around it and say, what are we in the midst of? But as you just pointed out, what we're what we've seen over the last couple of weeks is pretty normal market behavior

And albeit the speed is sort of surprised people, I think, but things move a lot faster today than they did 10 or 15 years ago. Yeah. And so your point about timeframes as it relates to the market, I mean, that's something that you and I are generally consistent on. You know, how we kind of navigate the markets on a short term basis, you know, is more about from a trading perspective. We know a lot of folks that tune into this podcast or whether it's market call or

or it's fast money, I mean, we're thinking about some shorter timeframes, no doubt about it. But we also, I guess, on this podcast, talk a little bit more about policy and how it's going to affect the economy and thus through the lens of the stock market or other markets, currency, credit, commodities, and the like. So separating it from the market's

You know, this is the second Sunday in a row. We had Trump two weeks ago on a Sunday or about a week and a half ago, whatever it was, and then Besson saying they're not ruling out a recession. I am not in the camp that they are trying to tank the markets and tank the economy and therefore do a reset. And we use this expression all the time where a new CEO comes in the first quarter, they kitchen sink the near-term guidance and the long-term guidance, and they basically blame everything on the prior administration, and then they set up for a bunch of beef.

I just don't believe that's what they're doing. And you know I've used this expression. And I want to bring it back to something you say all the time about the Fed's ability to control interest rates. Bessette knows this.

That if they start tinkering around with the economy and trying to weaken things a little bit, right, you have the potential for things to go off the rails. And, you know, and it brings me back to late 21 when the Fed finally admitted that inflation was not going to be transitory on a near-term basis. And they basically said the same thing that Besson's saying, but it's a very different thing, that the economy is going to have to take its medicine a little bit.

Now, I think they thought that we're going to be able to navigate to a soft landing by raising interest rates, cooling down the economy. And for all intents and purposes, they kind of did. Right. And so they did not. We did not deliver a hard landing for the most part. We had a bear market in 22. So when you think about this, do you agree that they are playing a little bit of chicken with the U.S. economy and thus the global economy?

I think they're playing a little game of chicken for sure. I also think they feel like they can sort of control the narrative a little bit as well. I think if you listen to what they said over the last month or month and a half or two months, first Trump administration was laser focused on the stock market. They talked about the stock market and the performance of the stock market being a report card for how well

or not how well their administration was doing. I think they've pivoted this time to interest rates. They've talked about their want and their need for interest rates to go lower. And I think part of the plan is, you know, if they can talk things down enough, by definition, they will get those rates lower. If they were to get rates lower, it solves for what they think they need to have happen. And typically lower rates inevitably lead to higher stock markets. So I think they believe that if they can get rates down,

It might be painful in the short term in terms of the stock market, but at a certain point, the stock market will pick up on lower rates being positive, and then it becomes sort of a self-fulfilling prophecy. So I think there's some of that going on. Again, I'm not suggesting I'm right.

But if they're so focused on rates, the way to get rates down is to basically jawbone them down. You jawbone them down by talking about the potential for a soft patch. And it's sort of happening before our eyes. You know, you're going to endure some stock market pain. Stock market picks up on lower rates and off we go. So I think there's some method to their madness, whether you agree with it or not. I think that's what they're trying to do. Yeah. And I guess the one thing I'd say, guys, if we saw a reemergence in inflation, let's say in the next year or so, because the trade war stuff goes on longer than people expected.

I could never, ever see this administration advocating for higher interest rates. That's the one issue. And you've been talking about this. You were talking about it last year before we knew there was going to be, you know, the Trump administration, you know, take it to the bank that there was going to be a Trump administration that,

you were 100% in support of rates staying where they were and possibly going higher if they really wanted to tame this inflation because it's not about getting to that 2% target. It's about the cumulative nature that we've had over the last three or four years. So for whatever that's worth, a couple, just a little housekeeping guy, Marco Kalanovic, former JP Morgan strategist is going to be on with us this afternoon, drops tomorrow morning in the Risk Reversal Podcast episode.

I don't know, whatever you want to call it, feed, store, you know what I mean, guy? We got the whole thing. And then you and I have David Rosenberg of Rosenberg Research is going to be on Thursday dropping for Friday. So we're going to get Rosie on the Fed and what the Fed said. We're going to get Marco in the lead up to that. So that'll be really interesting. Also,

In our newsletter that dropped last night, you can get that at riskreversal.com. Our main man, C.C. Lagater, writes that he put the expected moves guy for the week. The S&P 2.2%. The range is 5,500 to 5,775. The QQQ nearly 3%. IWM nearly 3%. TLT 1.3%. So we got a lot of stuff going on this week. Into the Fed meeting next.

And the Fed pressure on Wednesday, you know, I don't think there's any reason for the market. Just the market might rally into it. But I don't think there's any reason to believe that the Fed is going to have some sort of dovish commentary. Right. By that same token, though, if they were to continue with this kind of hawkish pause, you know, which is the sort of thing I think that has kind of kept the markets, you know,

kind of in check a little bit since the september rate cuts what do you think from a political standpoint jerome powell has to do because there's been a lot of commentary how you know he's kind of trying to appease uh the administration a little bit keeping an open mind about things do you think this is going to be a market moving event yeah i don't think well i mean my view is i think he's been pretty steadfast and earnest in his desire to remain independent and i think i

Again, you know, this is a much different Jerome Powell in 2025 than we saw and heard from in the fall of 2018, where I think he sort of bowed to the administration and he acquiesced to a weaker stock market. You know, I think he's learned from what I would deem a mistake seven years ago, and I think he's moved on from it. So I don't think he's beholden. I think he realizes that he's not going anywhere. He will serve out his term.

It is virtually impossible to fire a Fed official or a Fed chair. And I think the administration probably knows that. I mean, they can talk tough all they want. But, you know, I do think there's an independence here. And I think he's going to do what he feels and the members of the FOMC feel are the right things to do. So with that said, I mean, it still makes sense to me. I haven't seen anything deteriorate in such a way that would suggest

they get all of a sudden magically turned dovish other than the stock market. Some of these consumer sentiment numbers have been weak without question, but the job market still hangs in there. Consumer spending seemingly is starting to drift the wrong way. But again, these things should be the normal course of action that we would see at this point of the cycle. Yeah, I just want to say something you said. So it's virtually impossible for the administration to fire Fed chair Jerome Powell. And I'm going to key on the virtually because I

I just feel like some of the stuff that's going on, I read an article over the weekend where the Trump administration is lobbying the Supreme Court to undo some rulings at lower courts. If they were to do that, then that means he can do whatever the hell he wants. I really do, because that will be, you know, a constitutional sort of crisis in the making. And if they don't care about it and they have Congress in their back pocket and then they have, you know, the

they have the Supreme Court in their bed. So it's the executive, the legislative and the judicial, you know what I mean? And so that at that point, if they roll over and just remember three of those folks are his appointments, then he can do whatever the hell he wants. So again, I just want to be on the record for that. I just don't see it as a as a near certainty. And especially if things start to go haywire, you know, with the economy.

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Last thing before we get out of here, let's talk earnings Thursday after the close. I think it's a really interesting day because we're going to get a cross section of a little consumer, a little trade war, a little semiconductor stuff. So we have FedEx, we have Micron and we have Nike. Take your pick where you want to start.

Well, I want to start with FedEx because I still think FedEx, at least in terms of the economy, is still an economically sensitive name. And I understand a lot of the problems with FedEx have been self-inflicted wounds, but they're still obviously pretty important in terms of what's going on with the consumer and what's going on with the economy. So FedEx is a stock that if you look,

I think, Dan, and you correct me if I'm wrong, this is a stock that made its all-time high, I think, in the spring of 2021. And it's been trading sort of drifting sideways ever since on a broader market that's done extraordinarily well. So I think FedEx is really important. And by the way, over the last couple of weeks, we've seen a pretty significant sell-off in FedEx as well. So I'm pretty keyed on FedEx. And Micron, which a lot of people say it's different this time, I mean, it's still an extraordinarily good,

cyclical, potentially commoditized company. And you've seen the moves in the stocks that suggest exactly that. So in order of importance for me, it's FedEx one, it's Micron two. Yeah, Micron, interestingly to me, Guy, is that this is one that in kind of spring, about a year ago, it joined the generative AI party, right? So the whole idea is that these high-end GPUs that go into these servers, that go into the data centers, that train the models, right? They're going to

need a lot of memory. And so investors came around to that. And that was kind of the Micron trade. Micron has been in a really interesting range, guy, mid to low 80s. This is going back to August. And just so you know, and I think you do know this, but late June, Micron traded nearly 155. By early August, the stock was trading in the mid 80s. So it's traded within this range of about mid 80s to

I don't know, one 12 or something like that. And it's gone back and forth. So here we are. We just had this little bit of a rally here back to one Oh two and a half from about, I don't know, 86 or something. And to me, it's going to need to be a big beat and raise to get this thing going. And it might be, and it might be an interesting data point though, guy on just in general, because Dell had, uh,

not a great number when they reported a few weeks ago, obviously Nvidia after its report sold off. And by all accounts, it was a good quarter and a good beat. And the narrative was really good. So this one might be a good sort of a checkup in the gen AI trade. Look, I mean, you just mentioned those levels. That's sort of 83 and a half to 85 level, which was a low, I think in December of late December of last year, if you go back to the fall of 2024, both in September. And I think it,

late august we saw a trade down to 83 and a half and we recently i think is as recently as march 11th or so traded pretty much down to those levels again so you have all these bottoms to trade off of and we bounce pretty significantly but i still think we're in a pretty much this sideways to lower environment where you know if you look at it on valuation it makes sense but you don't really trade micron on the back evaluation it really comes down to what point of the cycle are we in

And what are we seeing in terms of DRAM and NAND pricing? And with this bounce, I'm hard-pressed to believe you're going to see a continuation of this recent bounce. So let's see what happens at the end of the week. All right, let's talk Nike really quickly because this has a little consumer. It's got some China. It's got some trade war. It's got some structural issues in and of itself. The stock has obviously had a very, very bad run. But from mid-February to earlier this month, the stock went from, I want to say...

69 up to the high 70s or something like that. And then it's given a lot of it back. And so when you think about this one, we have a new CEO in there, a gentleman named Elliot Hill, and he was named in October, I think. And so the stock did not have the benefit of, let's say, a Starbucks when they put a new CEO in there. The stock gapped up.

higher. So when you think about this, is this Nike specific? Is the stock at its lows just about a month and a half ago or so was trading very near its COVID lows. And when just as far as you and I are concerned, we made this kind of observation on many occasions psychologically, that was a really important kind of point, or at least from a technical standpoint for a lot of these companies. So are you expecting anything particularly interesting out of this report?

I'm not. I mean, an iconic brand, it's lost its way. I mean, think about Nike just for a second. I think this was a stock in the November of 2021, which was either side of $180. I think that was its all-time high. And if you go and look at a downtrend line, and we've been in a pretty steep downtrend

ever since then, a series of lower lows and a series of lower highs. And we haven't really changed that trajectory at all. Now, what am I expecting? Well, you know, competition came in a meaningful way. I don't know if they were necessarily prepared for it. And obviously they have some China issues as well. And when you throw all those things in the mix on top of what seems to be a softening consumer, it doesn't bode particularly well. Now, people will point to the valuation and say, you know, this is cheap as the stock has been in quite some time.

And that's probably true, but there's a reason for that as well. And, you know, a lot of time these iconic brands run into competition to a certain extent. Dan, we saw with Lululemon as well, where seemingly competitors come out of nowhere to sort of take share and obviously hurt the share price of the number one in the field. And number one in the field has been Nike for quite some time.

And they still might be, but the stock suggests otherwise. So, yeah, I'm curious to see the reaction and hear what they have to say. But I'm not expecting anything particularly great. Yeah. So just to recap this week, we have Jensen Wang Tuesday night. That'll be an interesting one for the tech trade. We have Fed Chair Powell.

on Wednesday with his presser. And then we have a bunch of earnings Thursday after the close. I would also mention, Guy, there's a bunch of interesting economic data. Just from a data point standpoint, that might be interesting. None of them are going to be sort of market moving tomorrow before the opening of housing starts, building permits, industrial production. And then on Thursday, this one's kind of interesting because you're going to get a little piece of

everything as you're trying to figure out maybe some of the recent data, jobless claims, Philly manufacturing, existing home sales and us leading economic indicators. I think you bought you and I would both agree. Not particularly interesting on Friday. You have fed, uh,

Governor Williams, and it'll be interesting to see maybe how he parses out some of the stuff that Fed Chair Powell said on Wednesday. All right, so a lot going on here. We have a huge, huge week with Marko Kalanovic that's dropping on Tuesday, and we have David Rosenberg dropping on Friday. Guy, I know you're running out. You're going to get your green jumper on, and you're going to head to your local Irish pub today.

So, you know, doubtful. By the way, Vinny Daniel was on the podcast that dropped on Friday. It was you, me and Vinny. And that's always a fun conversation. I think people really enjoyed that as well. So if you haven't listened to that, you definitely should. Yeah, we got a lot going on. All right, everybody, we'll see you on the market call live in a.m. Monday through Thursday. And I'll see you on Fast Money after that five o'clock.