Record national debt as stocks keep climbing…and retail investor playbook 8/13/26

[Music] Live from the Nasak Market site in the heart of New York City's Times Square. This is Fast Money. Here's what's on tap tonight. Doom over debt, the national debt topping 40 trillion corporations continuing their borrowing binge and yields across the curve staying stubbornly high. All this is stocks keep hitting new highs. Why the disconnect should you worry? Well debate that. Plus, streaming higher Netflix shares after buffering for quite some time. They're serving higher. Is this a breakout you can actually believe in? Later, a major comeback in Korea. Birkenstock fucking the latest shambles. And a good day for work day. I'm Melissa Lee, country of the Alachon Studio of the Nasak on the Destiny Night. Karen Piderman, Danny, Thin Guy, Tommy, and Tim Seymour. We begin with the growing concerns about our rising debt levels for both government and corporate borrowing. Yes, the S&B 500 hit another all-time high today and yes, yields did moderate just a bit. But this does come on a day when the US government sold 30-year bonds at the highest interest rate. It's a 5.21% in over 25 years. It is the latest sign that the debt investors want to be compensated to finance a nation's spiraling deficit. When you layer on all the corporate debt that's flooding the market up nearly 27% year-over-year through July, this according to Simfa, tonight we are asking our investors to complacent about the early warning signs coming from the credit market. Or do you just hold your nose, buy stocks, and pose along? There will be people saying at 501-30 that while you're leading with credit and debt and bond yields, when the S&P 500 made a new all-time high today and everything looks great. Because we know it made a new all-time high and we're doing this to point out some of the things that can't go wrong. And I'm glad we are because it was a pretty miserable auction. I may be miserable as a strong word, but I think Rick Santelli gave it a C+ which is not particularly great. C-minus, thank you Sandy Candle in my ear. Of course. I think it's a good thing to talk about what we've gotten over the last couple days. I'm not a believer that things are softening in a material way, but people are saying CPI and PPI came in tame. There's a reason why yields should go lower, but they're not decidedly lower. And one of the reasons because the way we're leading the show. Yeah, in the tenure. At the auction yesterday in the tenure yield, that wasn't that great either. So this is all, it's not just the third year yield that we're seizing on. It's also the tenure. Well, you probably never got a C-minus in anything in your life ever, so inconceivable that that would happen. But as you open the show and talked about the $40 trillion, 15 years ago, if you would say we're going to have a show, in 15 years and open with the deficit hits, you know, $40 trillion, and the market's going berserk. You would have thought one of those two things is improbable or both. And yet, here we are. I have thought for a long time it would matter and it doesn't seem to matter at the moment. So I think the other parts of the story that an AI is the most, by a lot, the most important are more important to this market than the deficit. Yeah, and it kind of takes you back to late 21 into 22, right? And we had a stock market mania. We had a risk asset mania in general. And you know, at some point it became very clear that the Fed was going to be raising interest rates. And I think that where we ended up the Fed funds, it was probably well, excuse me, well above where anyone thought at some point in 2021 when the Fed share admitted that he was wrong, I guess. And the stock market had a tough year in 2022. But it was very orderly, right? And since then, we've had years 23, it was up 25%. 24 was up 25%. In a last year, I think we're up about 20%. And here we are. I'm looking at the S&P. It's up 14% or something like that. So the stock market has not really been bothered by rates that have been higher than what we've become accustomed to over the last call it, you know, 10 years or something like that. So you ask yourself, okay, when does that debt load and the debt servicing really matter? We have lots of smart people, much smarter than guy and me. And you know, who come on the program, come on the network and they're not bothered. You know what I mean? Like they keep just saying, yeah, that'll become a problem at some point in the stock market now. Really from the September 2022 lows, up like 137% or something like that, you know, and we've had Fed funds, you know, in and around this sort of 4% range or something like that. So even if the Fed were to do like one and done for a bit, like the stock market goes higher. Steve Eisman, by the way, he was on earlier this week, last week, some day when I wasn't here. But he is one who says that these deficits do not matter right now, Tim. And we shouldn't worry about it. And all those people who highlight the deficit all the time and are worried about the deficit, they're just doing that to say to sound smart, basically. The fact that matters, those interest rates look like they are stuck up here and there are upward pressures to keep them higher. So it's not just that we are up here and we're going to come back down. But all that AI issuance, that definitely puts a floor there on rates. Well, there's a lot to impact when you just said, I mean, the AI issuance is another dynamic that's putting long-rate tire and this is where they're issuing. They're issuing, this is long-dated debt to mass liabilities to long-dated projects and projects we don't know a whole lot about. To get into the deep end of the fixed income pool, duration time spread or DTS, which is just that. It's the amount of bonds outstanding times the duration and the spread over them. The hyper scalers are now a bigger part of the corporate debt market than bank debt. And that's crazy to think about when you do it on a DTS basis and that's a risk basis. So much like the US government who is issuing long and is paying more and paying more than they have in 25 years to issue long, there's term risk. And that's another part of what investors are going to pay attention to. I think in the short run, deficits matter a lot less when our deficit relative to some other places or at least on a basis of credit worthiness. It probably doesn't matter. When you add it to the dynamic that there is inflation, you have to understand that the Fed is committed to inflation than nothing else. And I think that's where we are today. Fits just on the tape. I don't know if anybody cares about Fits anymore, but they were talking just about the interest burden. They were just talking about a fiscal spending environment that needs to get better. They're basically saying that the credit limit is constrained by that. So we will be talking about this for a while and I still think we're in an upward trend in long interest rates. Does any of this make you feel differently guy about stock market levels and valuations? You know, I've been concerned about this for how many hundreds of S&P points. So the answer is nothing is the sway those concerns, but the market continues to do its thing. So you become the boy the cried wolf because as the market goes it's judge and jury. But no, it doesn't, makes me feel worse about things. Now people will say maybe correctly that you know what, valuations are not the same they're concerned they were maybe years so ago because of the earnings growth that we're seeing. Of course the problem with this, if there's a problem it's the earnings growth is consolidated in a very not narrow sector, but the sector we seem to talk about all the time. So seemingly rates don't matter because of that earnings growth and people say wait a second the valuations are reasonable. The problem of course is if that sort of cubed that blocks taken out then all of a sudden people look wait a second rates over almost 4.7 percent. Dead load is this. By the way all the companies that are looking to raise that, I mean that's problematic. I mean that sector that's driving the market higher is dependent on borrowing at these high rates. Yes, although I mean they're great credits. Yeah, right? So I'm always long. So regardless what the market is doing always long. I do like good balance sheets and when I have you know a big bet like the hyper scalers and Dell and Nvidia. I want a good balance sheet. So I mean I think they're going to keep borrowing and then maybe issue equity as well which is a more expensive end cheaper way to pay for depending on how you think about cost to capital. But it's not changing, I'm not changing my portfolio because. All right. For more and all of this let's bring in Michael Contapoulos to the conversation. He is of course head of multi-acid macro investing at Janice Henderson investors. Michael it's always good to see you. Thank you. How do you think about this looming issue because it's been an issue for decades now and a lot of people will say you know what who cares. We're here on the S&P 500 all time highs. Yeah, my entire career we've cared about the deficit and you know I've heard that it's going to blow things up and it hasn't done so yet. And long before my career started as well with that said I mean obviously you hit a tipping point because unlike any other time in history you have massively expanding deficits at the time of much higher interest rates and you're coming from such a low base it just starts to accumulate and you could you know risk shocks. With that said I am sort of in the camp that this is more death by thousand cuts than it is by arsenic not with standing some sort of fiscal calamity of course which you know I call it the Liz Trust moment. You know absent some kind of Liz Trust moment. Yeah I think this is kind of going to be a slow bleed. Where do you see rates going from? I mean do you think that there is something structural about what is going on here at this point to keep rates just higher? Yeah we're definitely in a higher for a longer environment we've pretty much said that since you know 2021 we continue to believe that we're now you know basically five and a half plus years into a higher rate environment. There are real structural changes in the global economy to assume that you're going to have higher rates. You have changing labor dynamics you've got de globalization probably your biggest reason for higher interest rates and higher inflation going forward. And then more cyclically in what's going on today you just got strong growth. I mean there's just no doubt that you know growth is reasonably strong in the United States. Earnings growth throughout the world is accelerating. All of these secular and cyclical forces probably mean you're going to go higher not lower. So you think that rates are higher probably remain high for the right reason so to speak as opposed to the wrong reasons which would be concerns about inflation and maybe the Fed could lose control of the long end of the curve. I think it's both. It's both. I think the answer is yes. And that's what makes it somewhat dangerous, right? And that's why, although you could argue this is a slow bleed, death by a thousand cuts that I mentioned earlier, you're getting much closer to an accident, right? Because you have these secular forces pushing up inflation and pushing up rates at the same time that you've got rates going up for the good reason. And I think you're starting to see the Fed pay attention to that, right? I mean, you're no longer hearing about cuts, you're now hearing about hikes. The problem is they're just not aggressive enough. And I've been on the show many times where I've talked that the transmission mechanism of monetary policy is through credit channels, credit spreads are at all time tights. Right. We're not tight. So they need to tighten policy. So what's the most likely type of accident that we see? You get either a very, very weak auction, a failed auction, something of that nature, a buyer strike, most likely from foreign investors. That's what I would be worried about. And the more the Fed speaks hawkishly, the less of a chance that actually has to happen. It's when you have massive amounts of fiscal and monetary stimulus coupled with a Fed that doesn't do anything about it. That's when you get the accident. It seems like they're moved to being slightly more hawkish. So I want to take that a little bit off the table, but what I would be fearful of is that the Fed somehow sees lower inflation, Prince recently, with energy prices coming down, and they start to react more dovishly. And I think that sets up a potential for some sort of buyer strike for treasuries. Or are we in a much more precarious position when some of the largest holders of treasuries decide to sell? For instance, in Japan, maybe that's why we went in with intervention. Or China could pull that card as well. They could. It's a little bit of mutually destructive if you do that. And so I think there's some protections there, but I do think that's largely why Besson has gone into Japan and is helping to support the yen and is playing friendly internationally. So I think there's some truth to that, Melissa. But at the end of the day, I think everybody's looking out for their own best interests, and that necessarily isn't in everybody's best interest. We had a conversation about the labor market last night. I was pushed back on. I don't think the labor market is as strong as a 4.1% unemployment rate suggests, but it is what it is. Maybe it is. But there are other factors at work that suggest with revisions and stuff and the predominance of jobs in healthcare that maybe it's not that strong. Because if the employment picture is not great, that throws a monkey wrench in this entire thing. It absolutely would, guys. There's a lot of conflicting signals obviously in the labor market and a lot of labor dynamics going on with immigration, 12,000 baby boomers retiring every single day. So there's a lot of sort of competing things that are happening. I don't disagree. Labor and profits ultimately are going to decide what happens with the economy, what happens with the equity market, probably what happens with rates as well. But you can't argue that you have some of the lowest jobless claims since the 1960s, a 4.1% unemployment rate. Those are real numbers. They're not made up. It might not be the highest quality employment numbers that we've seen, but they are reasonably strong. If you have reasonably strong employment, you have 2% to 3% GDP and you've got 20% plus percent earnings growth. Plus inflation that's nowhere near target. I'm not sure if that's a picture for lower yields. Okay. So all that said, far from the trees, are you bullish this market? S&P 500, 7800 basically. Yeah, the other thing I talk a lot about is earnings growth. Matters more than anything else and earnings growth remains strong. So we are constructive on the equity market. We're constructive on lower duration areas of the equity market. A lot of people think about rate sensitivity being a fixed income only construct, but it also works in equities as well. High dividend payers are short duration. Value tends to be short duration. Whereas growth, the hyper scalers, those types tend to be longer duration. So we actually are overweight equities and our portfolio is. But we are doing it more in the short duration equity space. Michael, thank you. Thank you. Good to see you, Michael Katopoulos. Earnings alert now in applied materials shares of the chip equipment maker under some pressure outfairs. Despite raising its portfolio revenue forecast above street expectations as the bar for tech earnings reports remains sky high. The conference call is ongoing. Meanwhile, the rebound in the memory trade continues. SK Heinz up a whopping 20% this week while micron posting backed back days of more than 4% gains. And of course, we should note the cost fee in a technical bull market once again, Tim. So it'd be risk to know it's re risking. Well, you're back through that 50. You've gone aggressively through I think Korea. So up 30% off that July 29 bounce. I do think we're back in a semi market. So what you want about and again, we can see this with with A-MAT and earnings for certain parts of the overspent and certainly overinflated share prices. But I also would bring this back to Envidia. I still think Envidia is the key and I think Envidia has been biting its time. I know all we've done is talk about the gathering that Envidia had on Monday. And I worry about Envidia trading at a discount almost like a holding company does because of how they have positioned their AI infrastructure exposure. But I think Envidia is about ready to take off. And I think this is going to continue to lift semi. So I would not be a seller of this move. This is different than a view we've just had on rates and credit. But right now growth is winning. >> Yeah, as far as growth is concerned, I mean, we had San Just this morning and their annals meeting and the guidance that they gave and we're looking at 27 through 30. I think that was some of the metrics and it looks great. You know, I mean, and I think you'd probably have to expect that right here despite the fact the stock sold off 50% from those highs a couple months ago. I think the quarter that they reported was fine. I think relative to the expectations at the time, I think it goes back a week, we can have her. So, you know, it didn't clear A-Bar. But when you look out this much further, 27, 28, you know, it gives you more confidence. The only problem I have with that is at some point in the not-so-distant future, you're going to start as an investor discounting a little bit of that. And you're going to see this major deceleration, which is what is built in right there, but these stocks are cheap. And if you believe the cycles are longer than a lot of folks that are skeptical, I'm one of them. And, you know, then you buy this thing as it was down 50% from those highs. It's not something I'm interested in doing because I think that this is going to be the eye of the storm when you do see a pullback in some sort of demand. And maybe that's a 20/27 thing, but between now and then, you know, the stock could make up a lot of room from where it came from a couple months ago. So, to Tim's point on a video, I agree with him. I thought it was excessively cheap for a while. The only thing I don't like about the set up going into earnings, which is August 26th, is the run that it's had. I mean, it got caught up in the whole situation. Awareness, it's up, I don't know, $28 from there, maybe. But I'm staying long, for sure. Look at the quarter of AMAT since we brought it up. It was, by all metrics, very good quarter. Beat and raise, right? Revenue better. Not a ridiculous valuation if you really look at it in terms of the earnings growth they have, but look at the price action. I mean, this was a $735 stock, I think, at the end of June. We've got it down to 435, almost in a straight line, bounced. Now here we are, 505, 510 or so. The volatility is staggering, and that speaks again. That just reinforces some of the things we've been saying here. Many of you talks about this. Stock, individual stock volatility continues to be almost historic. Get the VIX is nowhere. And the question remains, is it a matter of time before the VIX sort of sniffs us out, or is that just where we live right now? Coming up from Cupertino to Houston, we are going inside Apple's brand new Texas manufacturing site in the mini computer coming to the large, low-n star state. Plus, a streaming war winner, a billionaire Bill Akman says Netflix is miles ahead of its peers. And the big bet he is making on another season of growth. Don't go anywhere fast when he's back in two. This is Fast Money with Melissa Lee, right here on CNBC. Welcome back to Fast Money. Apple opening a new manufacturing facility in Houston. The plants set to begin producing Mac Minis later this year. Mackenzie Segalas is here with all the details. Hey Mac. Hey Mel. So Apple CEO Tim Cook and Commerce Secretary Howard Lutnik were both on the ground in Houston this afternoon with a lot of fanfare around the opening of Apple's new manufacturing site. Now Cook says they've already started shipping advanced AI servers from the facility, and later this year, it'll begin producing the Mac Mini there. This is the first time that a consumer facing product will be made in the US. And less than nine months, we have invested hundreds of millions of dollars here. With Mac Mini production set to begin later this year, the most powerful Mac Mini we've ever built, we have no intention of slowing down. Cook also put numbers around Apple's broader US build out more than 20 billion chip source from 24 US factories last year and more than 100 million expected from TSMC's Arizona plant. Lutnik meanwhile cast Apple as a company that can help lead a broader return of advanced manufacturing to the US. But there is something in this for both sides. The administration gets a marquee example of its manufacturing push, while Apple gets a bargaining chip in its relationship with the Commerce Department at a critical time too when the company is reportedly testing Chinese memory, which still requires the department's permission to add into its supply chain. Mel? Alright. Mac, thanks. Mackenzie Segalos. You know, part of the desire to have Mac Mini is that it's a smaller local energy efficient server for large language models. models and other AI uses. We were talking to BK, Brian Kelly. - I was talking to him today. - No, did you talk to him today? - I talked to him today. - About this? - I did talk to him. Did you talk to him about this? We talked to him. - You did. - And he told me you're gonna interview him the first piece of timber. - Yes, we're gonna do a whole thing. Oh no, we don't wanna spill the beans. - Well you just can't spill the beans. - But basically, that these are used to run AI agents in your own businesses, et cetera. So we'll be, K, we're talking about all his own agents. - Right, exactly. - That is good. - Yeah, I mean, they'll spill the beans. - Yeah, that's gonna run. - Yeah, the thing is that we're, this is how the stories are getting stretched out a little bit as far as different places to express views and AI. And there's nothing wrong with this. I mean, when you think about it the other way as far as its contribution to Apple's sales, I mean, it's tiny, you know? And so that's great that they're gonna bring advanced manufacturing back here. This comes at a time where Apple's already told us that the constraints as they look for memory to put in their iPhones and they got a big one coming up here in the fall, they're gonna have to raise prices, right? And just think about reshoring. That's also gonna become more expensive. You might see replacement time cycles. You might see them stretched out because of this, because of increased costs as it relates to that, because this new foldable phone in Mac was on, showing us the Google one. - Nice, right? - Yeah. - Are you gonna get one? - No, it's gonna be $2,000. - Oh. - That's more than a Mac meeting mail. That's more than-- - But all the gadgets. - No, I don't. I mean, this is like the most dope phone they've ever made. This is like the thin one, the iPad. This is a great example. Less than 5% of the phones that they sold last year were this air phone. It's a great phone. - Okay, I'm excited. - We have a crack staff in E.C. that we mentioned all the time, right? I mean, I don't know if they're able to do this on the fly although I'm sure they are, but there's an uptrend that's been in place since the March love about 250. If you connect that next low, the low that we made, I believe in June of this year, believe it or not. And we have just reached basically the third point of an uptrend. So I think Tim would agree, 'cause I know him very well, but this is sort of a garden variety cell of an apple that we've seen dozens of times before and we stopped pretty much what we should have, I guess. - Tim, do you agree? - Yeah, I totally disagree with that. No, I'm kidding. I agree that in fact, what I was gonna point out is this is all great news and it makes for great headlines and Mackenzie has always did a great job. This is apples not trading on any of these headlines right now and in fact, apple is trading on the charts. And if you take that gap down from July 29th when the rest of the market bounced in other words, apple as the defensive play sold off as much because it wasn't a sandy conductor that was oversold and the momentum that was bought. I think this chart looks great, but I think that the iPhone sales dynamic is something that has been very encouraging. At one point, we were just saying, "Cold forward, et cetera." But I'm gonna go back to saying, "It's less about fundamentals right now than it is about apple and their balance sheet and they're not spending." - We got a newslett right now on changes in the S&P 500 Reddit. We'll be joining the S&P 500 effective prior to the opening of trading on Tuesday, August 18th, Reddit will replace Avalon Bay communities in the index. You see, Reddit there, we'll be higher by that. - Is that in Sandy's acronym? Is it in Sandy? Is that in your acronym? Two years ago. - Okay, two years ago, it doesn't. - All right, let's hold that out. - Too late. - All right, a lot more fast money to come. Here's what's coming up next. - Coming back in, and whether this rally gets renewed for another season, plus taking the pulse of retail traders, a major trading platform says AI is changing the investing playbook, where the money is moving, and what it could signal for the market. You're watching Fast Money, live from the NASDAQ market site in Times Square. We're back right after this. - Welcome back to Fast Money Shares of Netflix. Finishing the day up over 5%. This after Bill Akman, a Pershing Square said his hedge fund is making a major investment in the company. This is Akman's first return to the streamer. Since he abruptly exited four years ago after losing around $400 million, Netflix is currently down over 40% from its 2025 all-time high. - You with Bill? - I am. I get a kick out of Bill. I think he's a great investor in a lot of-- he swings that big, right? This isn't a huge bet for him. I think it was $225 million worth. It looked like the average price was around $71.40. So he seems to have bought it well. That was at the end of-- I don't know if he's bought more since. Doesn't have a big enough position to file. But I mean, he's had some huge blowups and some huge winners as well. General Growth Properties, this levered real estate play, going back to the great financial crisis, was extraordinary. And then on the other hand, he had something like a valiant disaster, Chipotle, giant score. So he's an interesting investor. I don't read anything to what he did last time around. I don't think it's relevant. $400 million is-- I'm sure quite painful to lose, maybe not for his size. - He says this time around, he's even more confident in Netflix, by the way. And he also bought a lot of other stocks. Be some mastercard, ice, SMB global. - There's a reason to be optimistic here. Just valuation alone and the amount of just fraud that's been taken out of the name. And I think on a technical basis-- and let me be clear here, I thought Netflix would stop countless times over the last six to nine months and it hasn't. But it recently stopped at the prior all time high from October of 2021 if you want to go back and look around $68.5, $69. And that's a good sign. Now we're bouncing on decent volume. Suggest at least you have something to trade around. So my feelings about him, notwithstanding, I actually think you could follow him into this trade. - What were those feelings for you guys? - I just said, notwithstanding. - I know, I know. - My understanding. - Excuse me? - My understanding. - Oh, Tim. - Oh, Tim. - Well, I think it's a story of size. And this is part of his argument, the subbase, at 325 million is dominant. And it's more than the combined two competitors. The valuation is interesting. The concern might be for people that say, hey, the viewing hours kind of fell. Some of those metrics on a relative basis, relative to the spend on new content. And that might be part of the concern. The free cash flow less than you might expect. At some point, at least in a world where they're not dumping a lot of money into some new frontier, you would think this company would be paying out more to shareholders, just saying. I like it here. I'm longing here. And I think it is an interesting place to own it without a big catalyst. - Yeah, next year, I think expectations really low. And if you think it earnings expected to be like high single digits, I don't think this company has ever printed a high single digits growth number as it relates to earnings. And every time you want to count this company out, I think it seems to be a mistake a little bit. So if this is a retooling year and it seems to be, that sort of thing, I think a lot of folks were asking questions about the Warner bid and then you look at some of the other metrics and you look at what expectations are for next year, it does seem to be like, it's not that risky of a bet right here. - Tell me up, a fresh read on the retail trader, the USC of MUMO trying to just dive into the trends. - He is seeing on the platform and how a new generation of investors is stepping up its game. More fast money right after this. - Mr. Moment of Fast catches any time on the go. Follow the Fast Money Podcast. - Welcome back to Fast Money Stocks. Ending the day higher across the board. The Dow adding 70 points a snap of three day losing streak, the S&B up to thirds of a percent to close at records and then as I can nearly a percent. Workday soaring late in the session to close 18% higher. Reuters reporting that private equity firm Silver Lake isn't talked to by the HR software maker. Subhub meanwhile sinking 10% after last night's earnings miss even with a big tailwind from the World Cup and Q2, the company's latest guidance underwhelmed investors. And Starbucks heading its highest levels since March 2025. This year alone shares have surged nearly 30%. I wanna go to Workday only 'cause we saw the whole IGV turn higher on the back of this. Workday would be a huge bite caring for anybody. - Huge. - 43 billion dollars prior to the pot. - I think the day higher across the board. - Oh, that's new. - Sorry. I don't know, I didn't even know what I just said. - That's amazing. - That is really sweet. - That's really sorry about that. - But as I was saying, say again, I'm sorry. Is that prior to today's pot? Is it 43 billion dollar market gets on point? - And then plus a premium, it's enormous. - It is enormous and I'm not sure have they confirmed it? I think we know. And there seem to be a little bit of leak maybe. - Perhaps. - Perhaps, but it is a very big deal. It's no surprise that that would be very good news for the whole space, right? And private equity firms just like any animal, move in packs, they see one of them does something. There's a great need to feel like, all right, I gotta do something, it's time. The bottom's in, I gotta buy. - Yeah, this makes some sense though. If you think about it, we've talked a lot about the AI disruption aspect of this and these companies have huge install basis, right? And so a lot of large businesses are not gonna rip these things out anytime soon. And so if you are private equity, and you're looking at a company like this, expected to grow earnings, high teens for the next couple of years, your gross margins have improved year over year and you still have revenue growth that's like 10% or something like that. You say to yourself, if the numbers aren't gonna degrade that much, if the disruption is overdone in the near term, then this is a company that probably can get retooled to some degree and it's gonna make some sense. I do think though it's also gonna cause some smaller names in the like kinda the single digit billions to see some strategic sort of acquisitions and it might be from some of the other companies. of these AI companies who are looking to kind of pick up some of these customer bases if you will. So again, I think this big sense service now is probably on the list too. I don't know what percentage workday is of the IGV, if any, but what I'll say is this reinforces, I think, the bulk case for the IGV. I think these stocks are now in play and we've said for a while that the IGV can trade to the mid-one teens and I continue to stand by that. All right, meantime, retail investors are still leaning into big tech according to online trading platform Moo Moo, almost 50% of their users hold at least one mag seven stock for more of how the gamers are playing the market. Let's bring in Neil McDonald, the US CEO of Moo Moo. You're great to see you again. Thank you. Great to be back guys. What have they, we saw a de-racing in the market, a re-racing in the market. How have you noticed retail traders ride that? So I was looking today at the percentage of all clients that are their own, the semis or just the mag seven. So semis X and video, then the mag seven. So beginning of the year, 31, 32%, it climbed, dipped a touch, but then the big acceleration has been with the sell-off. So they've used the market disruption to actually add and for the semis and for, so the semis X and video and the mag seven with the video, they're both at highs. And what's interesting is the US domestic clients compared to our Asian clients, we always celebrate percentage points behind. The US clients in the semis in the last two months have caught up and are now at higher than our Asian clients. Speak to a level sophistication in retail traders. It probably wasn't there pre-COVID. I mean, typically on the bottom, those numbers were diminished. And now you're seeing they're actually growing. People are taking advantage of sell-offs. So my question to you is, that's one sector, but I see aerospace defenses, another one, which historically in terms of retail traders, they probably were not necessarily trafficking. No, I think a lot of us down to the AI, sort of the AI component that we have. So you can ask all sorts of questions. Find me a stock with this earnings growth, with this market cap that has this many recommendations. And so the universe of stocks is too much for most people. With our AI app, you can screen them much more efficiently. You can do months of research in like 10 minutes. So looking, so a retail client may not look at aerospace because they care about the mag 7, they care about what's hidden in the headlines. But all of a sudden the finding value in sectors that they hadn't looked at previously. Unless it's SpaceX. And SpaceX. So let me ask you about the margin use over the course of the down and the up. How has that changed? Where's it now? It got slightly extended, I think, before the sell-off. It's all kind of changed now with the change in the rules. We haven't seen a big, big difference in people using margin. Our average account is $70, $75,000. So we don't have a lot of the smaller 2.5 grand account, who can now use margin, who couldn't use that previously. Up to the sub-$2,000 account. So we haven't seen a big difference. Our clients do use margin, but we see them using it sensibly. In terms of the AI companion that people can utilize, what are some of the most common queries? And are you finding, and what have you found in terms of the uptake of the usage of this feature? It's been astonishing, absolutely tremendous. So 139% growth in a number of people using the agentic AI. Volumes up 4x. And now it's a considerable material part of our overall volume. So we have this big community of 30 million people. We have this very active chat room that's global, it's super busy. We have hundreds of thousands of daily interactions. And I asked the questions of the clients. I speak to them all the time. So I used to work for Ken Griffin for years. And everything we did at Citadel was completely automated. My best trading day was when I didn't press a button. I had an army of engineers and people to code for me. I had a big back testing infrastructure. All of that was now available on the Moomoo platform. So for example, I asked today, can you some examples? What are you guys using it for? One of the clients had just a natural language stress test my portfolio. It's a Nasdaq's down 5, 10, 15%. It didn't like the 10% down. Find me a cheapest option strategy. Go at one for them. Click trade at it. Wow. And so that would take you a while to research. We have clients who are more technical. So they'll look at, if the RSI is above 80, sell me 10. It is below 20, buy me 10. You back test it. And it runs all day, right? We've all got day jobs. We're watching CNBC. We're walking the dog. We're going for a coffee. In that order, hopefully. This runs in that order. And this just runs all day for you. So it just takes the emotion out of trading. We've all traded. We all know the worst trades you do are when you panic in or you panic out and you have another strategy. So the constant narrative of more clients is it just takes away the emotional trading. You know, always great to see you. Thank you. Thank you very much, guys. I'm like Donald's US CEO of Mooo. I mean, the species sophistication of their client base. And the other thing that we didn't get a chance to talk to, I mean Bitcoin has been abandoned by a lot of people. And rightly so, because it hasn't moved now probably in six months. But in the notes, suggest people are we looking at Bitcoin again? So if they were right about some of the other names, semis and some of the other things on the cell-off, maybe it's worth looking at crypto again. It's interesting when we see these sorts of tools given to a lot of folks who had not have access to them prior. We're seeing a proliferation of a lot of new products also. And I think that probably enables that to some degree if you think about event contracts or single stock futures and a whole host of other things. So these platforms, they kind of keep up, I guess, with the technology as quickly as it is improving. And we're seeing that with a lot of these models. So the integration, I think, is great for a lot of these companies. Coming up, the latest results, sending a pair of retailers in opposite directions. Why tapestry is taking a beating and is the Birkenstock bounce enough to get Guy down me to slip this cookies into a pair of sandals. A fast one is back right after this. We've got a lot of data. It was just disappointing guidance. It's a coach story. Heads paid is not really -- exactly. They've done a great job. It was expensive-ish going in. Ralph Lauren, who was often seen as a competitor, had a better quarter. I think it was just a little bit too expensive going in and maybe a little bit over done here, but I don't know. Birkenstock revenue in the Americas, up 11% in EMEA, up 15%. In Asia, up 18%. Everybody wants to wear Birkenstocks, Guy. I'll let Tim do the Birkenstock thing. No, it is a great story. I mean, I am not a Birkenstock where I hate feet. I don't like my feet and I don't want to see your feet. Let me quickly pivot back to tapestry if I may because operating margins were like 19.5%. Karen, you're over here. That's very good. And Karen, of course, is always right. It's strictly a coach story. The problem, if there is one, look at the run the stock has had over the last couple years. So, how to historic run. It's trading back down to levels that have bounced off of I want to say in May. Actually, I'm going to be crazy. I think you buy the stock. Tim, I'll let you pick. Bags are Birks. I'll go Birks, not because I want to see you guys. Tootsies in there. In fact, I would probably need some Maylocks if I saw guys toes in a pair of Birks with us. So, I think it's a story of across all segments you talked about the geographies. But they're growing everywhere they go. There's an argument that their DTC presence just reinforces that. And that DTC part of it is where I think the analyst community, which is incredibly bullish on the name, by the way. First stock that's done nothing since its IPO. The retail analyst community, those covering discretionary spend, seem to want this thing to be a lot higher. That would be, I don't know. These were fantastic numbers. The demand is there. It's crazy, but it is there. And there's probably 19 pairs of Birks in my house. And they're not mine. Coming up, betting on Brazil is now the time to buy weakness in the South American market. Or, both from the Bovespa. We'll grill the ambassador. And here's a sneak peek at the Kramer-Cam. Jim is chatting exclusively with the CEO of Stanley Black and Decker. Catch the full interview. Top of the hour on mad money means I'm more fast money than two. [MUSIC] Welcome back to fast money. Foreign investors are pulling out of Brazilian stocks at the fastest pace in five years. JPMorgan just this week, downgrading Brazilian equities, setting the end of their monetary easing cycle, slowing growth and political uncertainty. The I shares MSCI Brazilian TF-EWZ is down nearly 6%. This week in this all comes, of course, ahead of an October election. And Lula right now, Tim, is in the lead. And that's causing some uncertainty there. Yeah, I think the election cycle is what it's all about. You know, Lula versus Bolsonaro. You have a dynamic where there's really some concern about moving back to more extreme socialists, say, Parleses. Things that also would be negative on the BRL, so the reality is that which has been a big part of the, it was part of the bullish trade. I like Brazilian banks here. Bank of Italy has got a great both balance sheet and an approach to, you know, say credit risk in NPLs. And in fact, it's growing and their names are fantastic. We've seen a lot of very strong net interest margin numbers out of Latin banks. I'm long Italy in Idevo. I'm long Petrobras in Idevo. I mean, I think Brazil is not the hottest market to play. And in fact, Mexico, even south of the border, there's been more resilient, especially on the consumer side. I think if you look at EM more broadly, you're just off of all time highs. And as the big three or the Mag three of EM, Taiwan, semi high necks and Samsung goes, so goes EM. International markets are starting to pick up their mojo. And I'd just say this, if you actually have some kind of normalization in the Middle East over the next one to two months, I think international is going to outperform the S&P as it was. In the meantime, I think you're selective. Are you going to speak Brazilian Portuguese? No, I rule refrain from that because I don't want to take up too much. Oh, Brigado. I like what you did there. I will echo some of 10 sentiments to say, mining stocks, you have mining, you have energy, and you have banks. I mean, think about what those three sectors have done here. And I think you're getting them at a discount there. So I get to downgrade. I get the concerns. I think they saw off into stock over the last month sort of encapsulates that. Yeah. If you are a believer, we've talked so many times about the commodity cycle tim and copper, and which emerging market is the most exposed if you want to play that way. Peru, Peru and Chile. EPU is Peru. I think ECH is Chile. Those are ETFs you can own. That's where you have your antopagostas and names that people couldn't pronounce. But I can. And I think that's interesting. Once again, I don't know that you should be putting an enormous amount of an allocation. And even in copper, which I believe long term and structurally, et cetera, is going higher. Copper's at all time highs. And you don't hear about the infrastructure buildup that we used to. So there you go. All right. Thank you, Ambassador, up next, final trades. [MUSIC PLAYING] Time for the final trade, Timbo. Yeah, I could trade invidients on the long side. In fact, I am on 21 times forward for the 50 day invidients. Karen? Yes. I like Netflix. You know what I would say? If you go home long, it's same as buying it here. I would buy Netflix here. That's what Phil Axen did. It's sort of an interesting catalyst. Dan. Yeah, last night on final trade, I guess that's what we do here. I thought Cisco, by the way, is I still think you do here. Got you. All right, fun. I wish Tim was here. It's fun when he's here. He's here. Thank you. Well, no, it's not. He's basically here. He's basically here. I gee, V. I'm really good like this. All right. [LAUGHTER] You're watching bad news. Not when he starts right now. 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