A

At Edward Jones, we believe rich is more than caring about the latest and greatest. It's also taking care of what gives your life meaning. That's why your dedicated financial advisor meets you where you are with personalized financial strategies that help protect what matters so you can preserve your progress while creating a path forward. The key to being rich is knowing what counts.

B

Let's find your rich together. Edward Jones Member, SIPC it's smart to

C

always have a few financial goals and a really smart one. You can set earning cash back on what you buy every day. And with Discover, you can get this. Discover automatically matches all the cash back you've earned at the end of your first year. Seriously, all of it. And we trust you to make smart decisions. After all, you listen to this show see terms@discover.com credit card live from the

B

NASDAQ market site right here in the heart of New York City's Times Square, this is fast Money.

D

Welcome.

B

Here's what's on tap. An historic debut. South Korea's SK Hynix, the biggest ever foreign stock listing in the U.S. what you should expect from the shares next and what it might mean for the memory market at large. Plus all the big bank earnings. They're on deck. We'll tell you what to expect for the money centers and the investment banks when they report next week. We'll hear from one top analyst this hour. All that and Delta getting grounded a bit after earnings, how options traders are positioned for Netflix results and more on Meta's big week. It has been far outpacing the rest of the so called Mag7 all since Monday. Happy Friday. Hello everybody. I am Brian Sullivan in for Melissa Lee coming to you live from Studio B at the Nasdaq and on your desk tonight. It's not Friday, it's Guy Day. Guy Adami here on a Friday. Happy to have him. Bono and Iasson, Mike Koh and your guest trader for the hour, that is Joe Zeitl, chief investment strategist, ZYTL Macro Strategy Group.

A

Joe Welco, thank you for having me.

B

Thanks.

E

All right, we call him. Well, we know we call him on this desk.

B

No.

E

Well, he's Jay Z. I love it. Well, of course you do.

B

Fantastic. All right, we're going to get to that and SK Hynix in just a few minutes. But we're going to begin with some breaking news on Apple. It just crossed within the last hour. Apple is suing open AI over trade secret theft. Let's get more on the story. It's only minutes old. Mackenzie Sagalos has more back.

F

So, Brian, Apple has just filed a federal lawsuit against OpenAI accusing the AI startup of stealing trade secrets to build its own consumer hardware. Now, I have the 41 page filing here. Apple writes that quote at every level, from members of its technical staff to its chief hardware officer and in coordination with business partners, OpenAI has been stealing Apple's trade secrets and confidential information. Now, Apple says it uncovered a pattern involving former employees who joined OpenAI. The suit specifically names OpenAI Chief Hardware Officer Tang Tan, accusing him of using job interviews with Apple employees to seek details about unreleased products and technologies and then coaching departing workers on how to evade Apple's security procedures. The filing also names a former Apple product developer who allegedly brought a stolen laptop to OpenAI and used it for months to download highly confidential documents, including information from Apple's R and D lab. Now, Apple says OpenAI plans to use those trade secrets to commercialize its own consumer devices. Notably, the suit does not name Sam Altman or former Apple design chief Jony I've. This is a civil case with Apple primarily seeking damages plus an injunction to stop the alleged activity. Brian, you know what I'm going to be looking out for is discovery.

B

Yeah, well, okay, so the money aside, they want the injunction. They want, they want Open Air to stop doing something. You said it's a 41 page release. I know it just crossed a short while ago and you mentioned it a little bit. But if you had to sort of surmise what would be the thing they most want Open Air to stop doing.

F

So they actually went out to OpenAI OpenAI directly back in February and appealed to them saying we know that this is going on, please stop it. Clearly that didn't result in the desired outcome, which to your point is all about getting them to stop using protected intellectual property. So they specifically get into details of. There's one here about how Open. I was working with hardware firms to carry out a metal finishing technique that Apple had invented. So basically very specific things. Also talking about circuit boards and these components that go in to hardware devices and really we started to see this rift between the two companies because remember they signed that landmark partnership just two years ago. It was chatbots that was baked into Apple intelligence. But then Sam decided to get into the game of. Sam Altman decided to get into the game of, of consumer hardware and then he brought in Johnny I've. Who's this Apple alumni who was a huge design chief, very important to the iPhone's evolution, who reportedly is working on very similar devices meant for the generative era. To what Apple is working on right now in house.

B

Well, did they bring in ivory? Did they just pay? I've just a quadrillion dollars to lure 4 billion. Yeah. In part because of what he knows and what he's working on. We shall see. Very interesting. McKenzie Seagallos out in San Francisco. Mac, thank you very much. All right, so it's a really interesting story, Guy. Tommy, there's going to be a lot in the discovery, who knows what, but do we care about it from an Apple stock?

E

I don't think so. But this is interesting because OpenAI's Chief Hardware Officer is Guy named Tang Tan and that was formerly Apple's vice president of product design. So this sounds like a little bit of, you know what they call that, sour grapes here as well. So there's a lot of that going on. But we're tasked to sort of talk about the stock and what it means. And quite honestly, I don't think it means necessarily anything. What I do think is interesting is how well Apple's been trading over the last couple of weeks. I think it made an all time high today. If it didn't, it was within the last 24 hours.

G

Sniff of it.

E

There you go.

B

And we were interesting. Why is it interesting?

E

Well, because if you think about how soft some of the other names in the Magnificent Seven, which is a term that I don't like to use, but being that it's Friday, I'll slip it in. I mean, Apple's been outperforming now for the last couple of weeks. And you say to yourself, right, what's going on? And I think what's happening here, Apple really, if you think about it, they stayed out of that whole spending game and now companies are being punished for the spend and the market is saying, you know what, Apple's been right to sort of wait on the sidelines. And I think that's what's going on.

B

Yeah, so Bono and I said like again, Apple's near record high, kind of like one of the great stock runs that hasn't gotten a lot of attention outside of fine programs such as this one. What's your take?

G

Yeah, I mean I'm pretty much very well aligned with Guy here. I think it's essentially being used as a free cash flow hedge. I mean, I think it's something to the tune of 126 billion last 12 months in terms of free cash flow, particularly when you have other companies, Some of the other hyperscalers reportedly going to be teetering into the negative free cash flow. They're tapping capital markets in order to fund this capex spinning. I think it's exactly those things. It's being seen as a hedge. I mean now it's becoming an ever increasingly more expensive heads. I mean it's not cheap, it's not a valuation play, not at this price. But I think the, the more stretched valuations get within the complex, the more logic there is behind looking to hedge here and more sustainable this valuation actually, actually is through that lens. Yep.

A

And I would also add that you know, Apple didn't necessarily spend all that CapEx, right. But at the same time they stumbled into this whole AI thing with their powerful unified memory.

G

Right.

A

You think about when OpenCloud came out and, and all these sort of, you know, models where people could essentially just run their own agents at the orchestration level. They download the, you know the, the, the open clause of the world then they download the local models and turns out the Mac Minis are incredibly efficient for running these things. So Apple didn't necessarily have a quote unquote AI offering as we all know, they didn't spend the money but they stumbled into this with this unified memory. It's phenomenal. So as you think about these, you know, open source models are becoming more and more popular. One of the most effective ways to run them is on Macs.

B

By the way, those three old Mac Minis that I have at home that I'm now running for the GPUs, people laughed at me when I bought them. Who's laughing now? Seidel?

A

I spent six weeks looking for a Mac Mini on ebay just to launch one of these.

B

I might have a couple to sell you. Mike Koh, talk to us about Apple as well. And also what are you seeing on the option side are very. Are you seeing a lot of bullish sentiment around Apple?

D

There is a decent amount of bullish sentiment around Apple and there has been

B

for, for quite a while.

D

It traded nearly a million call contracts today for example. You know I think what's interesting is obviously this is one of the free cash flow monsters as Guy and Bono and were pointing out and you know, all of these other companies which were, have been spending their money and it's really become more of a hardware story as we were just hearing. Also they have some hardware strength.

B

The other thing is this is a

D

company that we thought they have this great installed base of users and obviously that's going to be a powerful platform for them going forward and they were right to wait. But if you just take a look at their operating Performance, we're looking at double digit top line growth. We're used to seeing good adjusted EPS growth. They've always had good size buybacks. But as the company has grown, you know the relative scale of that declines a little bit. But we're looking at probably somewhere between 13, 15% top line going forward over the next 12 months or so. And that's really solid. So this is actually more of a growth story, I think, than some people imagined.

B

All right, now to that highly anticipated offering from SK Hynix. It is a chip manufacturer and it priced its ADRs American depository receipts at $149 a share. Last night they opened right at $170, but they closed the day just below that at about 168 bucks. Still very good day, very good and very big debut, I think Christina Parsonaville who has been here covering the story all day. The biggest ADR or foreign stock offering in American history.

H

Biggest and the second largest share offering after Space X. Especially big win for NASDAQ because both were here. But that's 168 close puts the U.S. shares at roughly a 16% premium to the exact same stock in Seoul. So you need 10 US shares to make 1 SK Hynix SOL share if you want to convert. American investors are definitely paying up for the purest play on high bandwidth memory. You're seeing that premium. The memory that feeds AI chips and Nvidia's main supplier, Micron Sandisk and the SMH ETF have seen volatility just over the last two weeks as investors really look for sources of funding. Some see that as maybe money rotating from one memory name to another. But the demand data may tell a different story. So you've got first for example a headline all the chip guys are talking. Digitimes reports high bandwidth memory prices could more than double in 2027 thanks to Nvidia's latest platform, the Rubin. And then long term contracts. All of these memory CEOs are talking about locking up capacity. SK Group chairman Che told me he's doubling capacity within five years. And customers say man, that's still not enough. And then there was even a Jefferies note today saying hedge funds remain very long with memory. One thing to watch though. At least half a dozen leveraged products tied to SK Hynix launch next to week. Some Tuesday delivering twice the daily move. The re they rebalance actually every single day which can amplify swings in both directions. But seems right now like the big picture holds big Tech is set to spend 1.5 trillion on AI infrastructure in 2027. And bank of America estimates anywhere between 35 to 40% of that goes directly to memory itself, especially because prices are so high. So it appears that there's plenty of demand to go around to go a

B

little bit wonky in this. So today was the day the ADR is traded, but apparently the full stock trades Tuesday.

H

The shares. So it's when issued. That's why there is a V at the end of the ticker today. That V will disappear as of Monday. They priced last night when you read that. And so there's. It's T plus three days for it to settle. So it'll actually show up in your account on Tuesday.

B

So we're looking to go on cnbc.com whatever they're looking for, that ticker, the V goes away.

H

Yeah, it goes away automatically. And it's just something that happens with ADRs. And because it's South Korea, it's a little bit longer. Sometimes it's two days or the weekend, etc. But that would mean that we could see some changes on Tuesday. And I don't think anybody made mistakes with the ticker or anything today.

B

But just it's good to know and it's a story you've been on all day and kp, we appreciate it.

I

Thank you.

B

Thank you very much, Bono And I said your take on SK Hynix, the company and its reaction on Wall Street.

G

Listen, it's hard for me to buy into this IPO euphoria. I mean, and that's across the board. It's not necessarily only applicable to SK Hynek. I just think it's a peak euphoria trade. So in terms of participating, I tend to wait for these things to kind of have their, their run and then, you know, just his story tells you that with these IPOs there tends to be a drawdown more than 50%. So the odds are in the favor of waiting on these. With that said, there is no pushback to the super cycle that we are super cycle, if you will, in terms of demand for memory, particularly high bandwidth memory. So clearly there's momentum behind the trade. It's just a matter of positioning and the price paid for what is a tremendous business. This is still cyclical in nature and I think investors cannot lose sight of that few things.

E

I'm sure that Hester Prynne would have hoped that her scarlet letter A would have gone away as quickly as this V is going away. But unfortunately for her, it did not. You familiar with that tale yeah, of course. What's wrong with you?

B

Who isn't? Who is not what? Student of the classics.

E

Now I understand this, but you look troubled.

B

No, no.

E

Baldwin brings up. That's Mike Coe laughing by the way. Byron brings as usual class he is Great point. Now people laughing to my left. I'll say this. You know the Micron sell off over the last month or so maybe was an in anticipation of what we just saw today over the next couple of days. So one of two things are going to happen. Either that move we saw over the last couple of months mark some sort of turn on the back of this or is this sort of a by the rumor or by the event type of thing. If you believe that there's some secular shift going on, you buy Micron with both hands here because on valuation is cheap. If you think the cyclicality at some point comes back and now the competition for stocks is now one more with SK Hynix. You got to be really respectful of this price action over the last couple of weeks.

A

Yeah, and there's one other thing I would take from this conversation.

J

Right.

A

If there's any debate whatsoever whether AI is inflationary or not, this SK Hynix story I think puts that debate to bed.

J

Right.

A

High bandwidth prices are set to double. According to the report that we just heard. This manufacturing is locked up for years. They're investing billions of dollars in additional manufacturing and it's still not enough. I think that's one of the things that people are sort of missing about this story. The $1.5 trillion in estimated CapEx that's going to be deployed in 2027 is that means you're moving dirt. It is commodity intensive, it is labor intensive. And those are things that are all undersupplied in the United States.

B

But Joe Guy's point, do you think the reaction or some of the news around SK Hynix is a direct play on Micron?

A

Yeah, I would. I would think so. You've just got more ways to access this. It is to access this theme. There's probably going to be some volatility, some cyclicality. I am a long term bull on this theme. I think there will be stumbles, there'll be some, you know, mistakes made along the way. But in terms of this build out, I think this is going to go down in the history books comparable to things like the railroads in the 1870s, 1900s. We've already exceeded the capex spend that was deployed in tech and telecom in the late 1990s. I think this is going to go down as one of the truly most revolutionary things that we've seen in the last 150 years. I think we're still in relatively early days on that spend.

B

Wow, big statement there. I like it. We just tied the scarlet letter to Idaho Gold because Micron was funded with potato money from on all of today's tech.

D

Wait a second.

E

What? I knew that actually post the family. I forget the family name.

B

It was all the French fry potato money. Yeah, I know, I can't remember. Dan Ives tech strategist maybe Dan knows. Dan may know. We're not going to put you on the spot, Dan. Mischief. You remember the name of the family that helped fund Micron, but it was potato money. That's not whatever your take on sk, Hynix, what it might mean or what it may not mean. Maybe it means nothing for technology and the memory space in particular.

J

Yeah, I think it's a watershed day. I mean not just for sk, but I think for Korean tech. And in terms of what you see in terms of the memory market, because look, it speaks to our views. Some like myself spend so much time in Korea. Equilibrium, demand, spy. It's not happening for another two years. So we're going to continue to be in this call at 12 to 15 to one type of demand supply environment. That's what you see now. The revolution spreading continues to be third inning, one out relative to this game.

B

You were first inning not that long ago, Dan. So now you just said third inning. So what's, what's still to come then? Take us through the rest of the game. What are the plays? What are the companies and stocks to watch rest of the game?

J

I mean like you will talk about Apple in a second but like now the consumer AI revolution starts. It's going to go through Apple. They're going to be the toll collector. And then you look at the enterprise use cases. That's where software. We look at names like Palantir, Snowflake, and even though right now I got about Microsoft, Oracle and others, it's it's time for them now to get into that game. In terms of monetization, it's a very, very important earnings season in terms of 2Q that spread cybersecurity as well, it speaks to our view. This now spreads whether it's in Korea, whether it's what we see in software, whether it's chips and that is what makes us continue to be bullish.

E

All right, Dan, since you brought it up, Oracle, which has been now horrible since September, you remember, I know you remember. The Stock went up 40% on the back of that announcement. It's been horrible ever since they report in September. So we're obviously a ways away from that. We're through things. What's going to be a catalyst here? Because it's pretty clear to me that they've, Larry Ellison has pushed the chips all into the middle of the table.

J

Yeah. Hey, look, it comes down to obviously on a capex perspective, they got to show ultimately conversion RPO not just in terms of on open air but in terms of more and more of those deals. I think that's going to give the street more comfort because look, it's New York City Cab Drive right now is barriers and Oracle, I mean they are as much in the pound box as anyone. But I think that's ultimately the wrong move because they will be able to monetize. And it's just like what's happened with Microsoft. It's what happened with so many of these other names. Now it's approve it next, call it three to six months.

B

Well people, Dan, are worried about Oracle's balance sheet. They're worried about the debt levels. I mean that's really what it comes down to I think with Oracle.

J

Yeah. But I think to that point if you look at their debt load, it's still a small piece relative to their overall capital structure. And they've already talked to 45 to 50 billion how they're going to raise it. Now clearly they're going to have to do more. But I think, Brian, if you look out, you got to look at these stories over the next 12, 18, 24 months. That's the key. But for all the ones that are ultimately funding the revolution, they're in the penalty box. Oracle, Microsoft and others. That's why this is a very important earnings season to start to show monetization, start to show that trend change.

B

Dan Ives. Dan, always a pleasure to have you on, my man. Thank you very much. Have a great weekend. Talk to you soon. Listen, Mike, co, I mean there's some worries out there about balance sheets, some worries about open air, some worries about debt level, some worries about AI becoming some sort of commoditized product. And so some companies, I think to Dan Ives point, some companies are being penalized for this.

D

Well, I think they're being penalized because everybody realizes that the total addressable market for these businesses is enormous. But you have a lot of businesses that think they're probably going to command a larger portion of it than all of them will. And what that means is that in a Competitive marketplace. Some are going to win, some are going to lose. Those that are in a better cash position are obviously able to fight that battle a little better than those that aren't. So, you know, I'm inclined to say that I think the trade is still on. I wouldn't go after the players that are probably weakest. And as you point out. Would you buy Oracle?

B

Would you buy Oracle? No.

D

No.

B

Would anybody. On the reason I just described Joe Guy. Would anybody buy Oracle right now?

E

You know, a jump ball in television, when you don't identify a person to speak can be extraordinarily awkward, which is why I'll jump in.

B

But it's incredibly helpful as a television vehicle to engage the entire team.

E

No, that's fair. Now, what if we all started talking

B

simultaneously and like a basketball team, there are five of us right now on the court, so.

E

But I so would.

B

And we all know the tallest.

G

Yes.

E

And you know, you are.

B

Yes, I am.

E

And probably the smartest and best looking.

B

And Hans, thank you. You.

K

You know what?

B

I take back everything I said about earlier, so.

E

Yes. You know why? Because I'm pretty convinced that you're going to wake up one day and Oracle is going to be the next stock that the administration talks about in glowing terms in the same way they talked about intel and Dell and Micron and some of these other names. I think that I know historically that's a dumb reason to buy something in today's world. That is an absolute reason.

B

You know what? I don't think it's that dumb. Bona one. Listen, there is, there is a White House headline reaction on a lot of these stocks. If the President comes out and says, well, I like Dell or I like this, the stocks move. I don't think Guy Dom is that crazy.

G

Honestly. I was going to make a use case, but I wasn't going to go that route. That, that's a very compelling case. It just simply is. It's like you have to observe what drives price action. Another reason why I would actually support buying it is I do think a very small position of your portfolio should be alpha generation. And I'm talking about small single digits. So if you're going to size it according to that and you have a portfolio that largely consists of indexes, ETFs, blue chips. There is, there's a situation where you take 1 or 2% of probably 1 or half percent of your portfolio and you look for moonshots. This is, this is perhaps a generational opportunity. And I don't think that you can completely eschew that despite the negative price action that we've seen.

B

All good points and an interesting take on Oracle. All right, coming up, a little bit of headwind for Delta Airlines and earnings beat but not enough to lift the stock. Today we'll talk about the warning signs you are not ignoring. Plus oil breaking a five week losing streak. Tensions with Iran reigniting. How do you position now in energy? We'll talk about that and more fast money. Back in two minutes.

K

Now is your time to get into a new Dr. Horton home by taking advantage of its national red tag sales event going on right now through Sunday, August 2nd. Stop by any of its participating communities and find select red tag homes at incredible pricing. So whether you're buying your first home or looking for an upgrade, you don't want to miss the red tag sales event going on right now. Discover the Dr. Horton Difference at drhorton.com Dr. Horton America's Builder and equal housing opportunity builder at Amica Insurance.

I

We know it's not just what's inside your home that matters. It's who you share it with. That's why we work even harder to protect it. Visit amica.com and get a quote today.

C

It's smart to always have a few financial goals and a really smart one. You can set earning cash back on what you buy every day. And with Discover you can get this. Discover automatically matches all the cash back you've earned at the end of your first year. Seriously, all of it. And we trust you to make smart decisions. After all, you listen to this show. See terms@discover.com credit card.

B

Alright, let's talk airlines. Delta stock a bit lower today even after earnings appeared to beat the street. So what happened? Well, Co Ed Bastian telling CNBC remains confident Delta can pass on the rising cost of jet fuel to customers. We will recover all of it at today's fuel levels in the third quarter. In fact, we also affirmed our full year guide. So despite the fact that fuel prices for the year are forecasted to be up $4 billion for Delta, we affirmed our guidance in terms of the proper range that we set at the start of the year. And Joe Zeitle, I want to be clear, I mean stock fell a little bit today. It's up 26% this year. I don't know how much you fly. I fly all the time. I am shocked A at how full every plane is and B, how expensive every ticket is. Yeah, somebody's making money.

A

There is so much to dig into from Delta's earnings report. Okay. And I'm a macro guy. I look at this from a macro lens and when I think about the demand, I think about what's the overall health of the consumer, particularly the, you know, higher income consumers when they, when they will basically pay any price whatsoever to fly. So on the demand side, this reaffirms the idea that this is a pretty robust economy and that the top 10% of household income which is responsible for the, you know, majority of, of sort of spend in the United States, they continue to spend, they continue to be confident in their outlooks. Households in the United States spend out of, you know, job security and net worth. And we know the net worth continues to increase every day. But the second thing that I wanted to dig into here is what we just heard about fuel costs and particularly how Delta thinks they are going to pass along 100% of that fuel cost. This is another side of the inflationary story.

B

And you think you can keep going. I mean, I know people can hate the K shaped economy. The wealthy keep spending. I get it. We're not debating socioeconomic issues. But that top 10%, there's no sign of a slowdown.

A

If we think about the economy just and you think about it in the most dispassionate at wages, you look at the numbers, the top 10% of household incomes responsible for over half of spending out there. And so when you think about this K shaped economy, they continue to be employed, the unemployment rates 4.2%, the job prospects looks pretty good. Their net worth continues to increase every single day. That is a recipe for continued spending.

J

Right?

A

This is an economy that I think continues to chug along, albeit with higher prices. Because the other thing that we heard from that Delta earnings report was how they have the pricing power. And that has frustrated the people out there who'd been penciling in lower and lower inflation all year long. It's just not happening.

B

Yeah, it is shocking. Everybody out there watching and listening who's booked an airline ticket lately knows exactly what Joe is talking about. All right, there is a lot more fast money to come. Here's what's ahead.

K

A crude awakening. Oil prices barrel higher for the week. Is there more fuel in this rally? And how should you play the move from here? Plus, bangs on the clock what to expect with the biggest of the big report next week and how uncertainty over rates could impact results. You're watching Fast Money live from the NASDAQ market site in Times Square. We're back right after this. Now is your time to get into a new Dr. Horton home by Taking advantage of its national Red tag sales event going on right now through Sunday August 2nd. Stop by any of its participating communities and find select red tag homes at Incredible Pricing. So whether you're buying your first home or looking for an upgrade, you don't want to miss the red tag sales event going on right now. Discover the Dr. Horton Difference at drhorton.com Dr. Horton America's Builder and equal Housing opportunity Builder.

B

Good morning students. Soccer teaches us teamwork, leadership, geometry, art, physics and a lifetime of lessons we can take with us long after we leave the field. That's why bank of America and US Soccer are committed to helping bring soccer to every school.

C

Soccer is officially in session.

B

Raise your hand to help bring soccer to schools@bofa.com soccerchools it's smart to always

C

have a few financial goals and a really smart one. You can set earning cash back on what you buy every day. And with Discover you can get this. Discover automatically matches all the cash back you've earned at the end of your first year. Seriously, all of it. And we trust you to make smart decisions. After all, you listen to this show see terms@discover.com credit card welcome or welcome back.

B

Oil prices down today but still breaking a four week losing streak rising the most in a week since mid May. So just over one month and that move in oil helping oil and gas stocks, Phillips 66, Marathon Petroleum, Valero, All Gaia Domi.

D

Yes sir.

B

At new record highs. And I know you have loved, loved many of these refineries.

E

Love you Brian.

B

For a long time.

E

Yes, that's a line out of a movie if you recall.

B

I do not.

E

Well, we will talk about it off air. Here's the problem with Valero. If there is a problem and we've been talking as you said, collectively, Marathon Petroleum, psx, Valero, all time highs today reversed a little bit lower. Nothing to be concerned about. The problem is going to come in the form of earnings on I believe July 30th. Valero, why do I say that? The earnings are going to be fantastic. The political pressure they're going to be under vis a vis those earnings is going to be astronomical. If you think about the way the world works right now, look at these refiners, look at the people that make the gasoline. Look at the earnings they have, look at the revenues they have. They're going to be under the microscope. So this is my suggestion. You own these stocks in earnings and you take something off the table right by before.

B

Why do you think they're going to be fantastic in your.

E

Oh, you know, the crack spreads, Brian, you speak about it all the time. I didn't think I could use that phrase, but it's all about the crack spread.

B

Bono and I said,

G

listen, I think we're in a situation where, you know, you also have the IEA revision, clearly. I think the refiners and guys spoken pretty frankly about, like, how you can play that. I also think if you look at the fully integrated, the big companies, ExxonMobils or Chevrons of the world, Tim speaks about all the time with the capital discipline and also the capital return there. So if you don't have a view on frac spreads going forward and you don't want to get into the weeds and you just want to own much more of the vertical, I think that's another way that you can play that.

B

Yeah, I mean, listen, Mike, we always focus on the price of oil and on Power Lunch today, Cheap Plug, we had Jeff Curry on. He made the great point. Listen, we could show the price of oil, it's one thing, but the price of the products, the refined products, all the stuff that comes into and is extracted from oil, those prices are at record highs. And I think that kind of goes to Guy's point that don't just look at the price of a barrel of crude, look at everything else. And all of that probably falls right to Valero's bottom line.

D

Well, first of all, we are in a sweet spot in terms of timing right here, as we are at the beginning of the summer. Typically, you're going to start seeing that the spread between gasoline and crude is going to be a little bit wider on demand at that point. Plus, we had a lot taken out of the supply chain. You know, the logistical supply chain for crude is, is big and it is complex. And we had material disruption there that is going to be supportive of a larger crack spread for sure. Right now the options market's implying that crude could move about 17.5% higher or lower. That's the anticipated range between now and the end of September. And I think you can kind of play around those edges to, to buy and sell it, because I don't think we're going to retest the highs that we got right after the closing of the Strait of Hormuz. But we have a lot of work to make up to basically to refill that logistics supply chain I was referring to.

B

Yeah, but so many ships have been going out of the Arabian Gulf through the Strait. We know very few ships going in because you kind of like you get Trapped in there like a roach motel. We've seen that happen. The market though, seems to want to push the price of oil down. Mike, I'm not the chart master or the options expert, you are. But when I look out at the curve and I look at the price action, we're at 71 bucks, we're not at 91 bucks. And I'm thinking, man, even with everything going on, this feels like a market that just wants to drag oil down.

D

Well, I think there's a couple of things going on there. For one thing, we are going to see a little bit of compression on the demand side. So if you look at the forecasts for crude demand, we're probably looking at these aren't big declines on a percentage basis. You know, when people start talking about a million barrel a day lower crude demand, that's only 1% of global demand. We use about 100 million barrels a day worldwide. But you know, the fact is that we also know that probably more crude actually escaped the Gulf than we thought. You know, there were a lot of ships turning off their ass, it turns out. So maybe there was a little bit more oil going through that channel than we thought.

B

Yeah.

D

And so, you know, you put all those things together, plus of course, we're meeting all of our own demand here in the States.

B

Joe.

A

Yeah. And I think it's a mistake for the market to try to push oil prices down. We have an economy that is still doing fundamentally well. Well, I think growth is going to be pretty decent for the rest of this year. We are running hot and we've got all this capex that is commodity intensive, energy intensive.

B

Mike's point. China's demand has been terrible.

A

I think, I think what we're going to see is this under investment, secular underinvestment. I think what that's going to do is, is put a floor out there on oil prices. I think it's going to put floor out there.

B

I would want to bet around here,

A

I would think around here we're around 70, $71 a barrel. Pre, you know, in February we were at 60. I don't think we go back to those levels. I think 70 or higher. And I think what we're going to see over the course of the next six to 12 months and beyond is how secularly underinvested we were in the energy complex.

J

Yeah.

B

And I'm just going to say this guys just, I'm going to sort of editorialize here. We're starting to see other newspapers parrot what I've been reporting for three months, which is there's a power vacuum in Iran. I've been reporting this for three months that there's nobody really in charge. I wouldn't be there's a chance of a civil war in Iran. I'm just, it's not a zero percent chance. And if we see Iranian oil come off the market, if NIOC National Iranian oil company goes on strike, I think we get your hundred dollar. I'm not saying we will, but then we get the $100 barrel scenario.

A

At the very least, a geopolitical premium on that barrel of oil.

B

We're at 7150 now. The market hasn't. We'll see what happens. Joe, thank you. All right. Coming up, betting on banks. Why your next guest expects strong results. Earnings kick off next week and the names at the top of his buy list stick around. All right. Welcome back to FAST money. The banks, they kick off their earnings next week. Goldman Sachs, Citigroup, Wells Fargo, bank of America, J.P. morgan. That's like all the banks they report on Tuesday. And the money setter banks, stocks climbing over the last month.

F

Month.

B

Bank of America and JP Morgan the biggest winners, jumping about 10%. Big move. So if you missed it, what now let's bring in Chris McGrady. He is the head of U.S. bank research at KBW, a Stifel company. Chris, good to have you on with a 10% move. Can your clients, can investors still make money in these stocks?

L

They can, but it's a little bit more difficult given momentum.

G

Right.

L

We've had a big run into earnings. But if you take a step back, this is a great fundamental backdrop for the banks. Earnings estimates for the banks are up about 15% over the past year. Stocks are up 30. So the money center banks we believe is still the place to be. But we also acknowledge there's a lot of momentum in these stocks right now.

E

Citibank's a name we've talked about. And what I've said, Chris, is if JP Morgan deserves three times tangible book, which is debatable, Citibank has to be at least half of that, if not more. And that would put it at $150. I think the job Jane Frazier does is underestimated. Thoughts on Citi Top notch.

L

The investor day was a home run in May. Right. We talked about this last time. You said can it get to 2 times? And the stock was around 1.2 times tangible. We're here sitting at 1.4. There's no reason why this multiple can't continue to expand. They've told the street, they're going to be at 10 to 11% return on equity this year. That's going to go to 13, 14, 15. We like predictable transparent time based improvement stories. And Citi's one of those stories.

B

What other stories do you love right now Obviously like Citi. We know that the guy's point. What are some of the other names that you really like? So there's.

L

There's two real themes for the quarter.

B

Right.

L

The capital markets. That's the worst kept secret. How great the results are going to be. It's going to be a beat and raise blowout quarter from trading and from investment banking. The second theme is deposits higher for longer makes it a little harder for the banks to make money. Bank of America, we like, we love bank of America here. The stock is breaking out. The stock is rerating. It's gone from a discount to wells to a premium. And what they did in April I think was really, really important. Coming out of their investor day in November they raised the net interest income guide after one quarter of the year. That's a huge statement and I think that'll be hard to follow. But bank of America is a great stock.

A

Chris, this is one of my favorite sectors and so I'm glad you're on with us right now. My thesis is that the curve is going to continue to steepen. Talk about the impact of that steeper curve on the financials.

L

Steeper curve makes it really favorable for the traditional banks. Right. Short end, let down, high end higher make a lot of money. This is a great yield curve for the banks. However we think if the curve flattens that's something we got to watch for this higher for longer. The curves flattened about 20 basis points over the past few weeks as rate expectations been put in. Rate hikes. As long as that doesn't get thrown for a curveball. The net interest income story for the sector is pretty good.

E

Good.

L

And I think what's important now is loan growth picking up. You know.

B

But I guess the secret is we've been talking about the Fed and we've talked about all this stuff. Guess what? 10 year yield has been kind of stuck in a range for about two years. Which way if the 10 year yield broke out, let's say it goes under 4 or goes up close to 5. What happens to the stocks you cover?

L

5 I think introduces the credit conversation back into the narrative.

B

In a bad way.

L

In a bad way.

B

Higher, Higher rate we got to talk about.

L

We do.

B

Why is the car on fire?

L

Exactly. We haven't had Those credit conversations in the last three months, the market can focus on one thing at a time. Right now they're focused on capital markets and deposits. Credit is not part of the narrative, which makes me as an analyst for 20 years nervous. But higher, long and for credit, that will spark credit fears. But overall the curve is steep. Banks can make a lot of money.

E

Don't do that to Chris. It's not fair. You bring him down to Primrose Path with the cars on fire thing.

I

Thing.

E

And I'm not going to ask you to opine on individual names. Should we be concerned at how poorly these private equity names continue to trade?

L

It's, it's where the credit conversation comes into the banking system. Right? So the traditional banks have private credit exposure, but their participants, they don't have the outsized exposure that the pure play private credit banks, we've seen flare ups. We saw it last year with a couple idiosyncratic credit assets. We got through it.

B

Right.

L

The banks over the last 15 years, the underwriting is so much better. The capital levels are so much higher that they can withstand a bump or two.

B

Chris McGrath, KBW, a Stifel company. Are you going to sleep at all next week? I mean sleeping, you're dead. That's it.

E

So you hear that?

B

What?

E

You hear what he just said?

B

But I just want to. I want everyone to live a long, happy life.

E

Course you do.

B

Busy week for Chris McGrady and his team. Chris, thank you very much. All right, coming up, Metas meteoric move this week. The headlines propelling the stock higher and how your traders are approaching one of your favorite names. Meta next. All right, welcome back to Fast Money. Check out your chart. Not of the day of the week. Meta, Facebook's parent company, up 15% since Monday. And I know you're counting home. So Guy Dami amaze your friends tonight. That is the best week for Meta stock since February of 2024. A number of related headlines boosting shares, including a major update to its coding model, a custom semiconductor partnership with Broadcom Bono and I don't want to hear those things worth 15% because the market did it. The market's done it. Your take though on that move with those headlines.

G

I think what's more important is the fact that they've essentially added some optionality to their business and has reversed the narrative on what was being heavily scrutinized via Capex spin and questions around the ability to monetize that. So at 125, $130 billion a year, I think now you have the chance to monetize that. Now the knock on that is that you go from an ad business that operates at like 70% margins to a cloud business is probably mid-30s. Right. So there is some stuff down there. But in terms of the overall pie, I think that level of optionality and then you look at the, you know, the valuation vis a vis the other Max 7 complex. This thing was really trading significantly less than its peers. The reason why I think this can continue to run, although it's going to be a much more challenging road, is the fact that it has yet to recover its previous high water mark. So listen, I think it's a situation where a lot of the stars are aligning. I really think that optionality is the key driver and the catalyst that I keep my eye on.

E

We have a downtrend. I know Mike is probably looking at this from August of last year when it made an all time high. Today's move took us to the third point of this downtrend we've been in. Valuation compelling less than a market multiple probably trades at 19 times next year. As I report at the end of the month. Month you get a close above it looks like, I don't know, 680 or so. And I think this thing is broken out to make all time highs into earnings.

B

All right, Mike Koch, quickly, your name dropped.

D

Yeah, no, I'm with Guy. I mean if you extend that chart a little bit further. So you're going back to the beginning of the year. Go back a full year and you're going to see the trend I think that Guy is talking about. I actually have it trading a little cheaper even than his 19 times number. I think you want to own this one.

B

All right, good stuff. Coming up, tuning into Netflix out of their earnings next week. The stock has been an absolute dog. So what do you do now? Mike Co is going to tell you next. All right, welcome back to Fast Money. I guess it can get worse. Netflix stock down another 3% today. The wall Street Journal reporting the company is considering live TV and bundles live tv. Where have I heard that before? As a way to keep users engaged. Netflix set to report its results next week. So might co outside of, you know, maybe Netflix's pivot is cable tv. I don't know. What are the options market telling?

D

The options markets are telling us it could be a pretty choppy week next week. So right now the options markets implying that Netflix could move about 8% by the end of next week after they report earnings. That's more than the Six and a half percent that the company has averaged over the last eight reported quarters. Now some of the activity seems to be betting that they could somehow get out of this abysmal downtrend that the company's been in most recently. The July 80 calls that expire at the end of next week were the busiest contract. Leaving out those that expired today, over 20,000 of those traded for an average of about a dollar a contract. But I should also add that the largest single trade and contract terms was the 7-31-put. Somebody traded 13,785 of the 7-31-62 strike put. So seems like there's big moves in the offing for Netflix.

B

Yeah, and Bono. 20. I'm trying to find the bull case 22 times forward earnings. Ish. Some point does it get too cheap to ignore?

G

Things can get so bad that they become good in terms of what Mike laid out there. The elevated options price tells me if you want to play this particularly via options, you want to be looking at spreading this, I mean eight times versus a 6.5% historical move. You don't want to just be outlaying cash on an outright option spin chart

B

doesn't look that good, guys.

E

No, it does not.

B

I mean I'm not Carter Braxton worth, but I can tell you I'm looking at it.

E

You know Carter Braxton was signed a declaration of independence. Did you know that's one of 56 people that signed that? That's Carter's like great, great something Chart

B

doesn't look that good on Netflix.

E

68 was a prior all time high. If you go back to October of 2021 and that's when it cascaded lower from that point, that should be your support level. Brian Sullivan.

C

Good stuff.

B

All right, coming up next, it is your final trades, Final trade. Time to go around the horn. Bunwin Ice and kick it off please.

G

Yes, I'm gonna go with Citigroup. I, I understand that there's an argument to be made that the bar is high going into earnings, but Citigroup offers you a step down evaluation.

D

Mike Coe financials may be higher, but options premiums on xlf, that's the financial financials ETF are actually below average. So you can buy the August month and 56 strike calls for just a buck and a quarter. 2% of the value of XLF make a defined risk bullish bet going into earnings season.

B

Kicking off Tuesday, little double financials. Joe Zeidel, thanks for being with us.

C

Thank you.

A

We did not talk about global defense today, but Shield shld the ETF it is global defense 63% US 37% non US. You're talking about future proofing and I don't think there is going to be a decline on defense spending.

E

Love having you here. Can I offer you a mango hi chew before you leave?

B

No thank you.

E

Delta Airlines they actually offer mango hi Chus.

B

Fantastic. Appreciate you all and it was a great night folks. Thanks for watching or listening. Mad Money with Jim starts right now.

I

All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Fast Money participants consider reliable, but neither CNBC nor its affiliates andor subsidiaries warrant its completeness or accuracy and it should not be relied upon as such. To view the full Fast Money disclaimer, please visit cnbc.com fastmoneydisclaimer now is your

K

time to get into a new Dr. Horton home by taking advantage of its national Red Tag sales event going on right now through Sunday, August 2nd. Stop by any of its participating communities and find select red tag homes at Incredible Pricing. So whether you're buying your first home or looking for an upgrade, you don't want to miss the Red Tag sales event going on right now. Discover the Dr. Horton Difference at DrHorton.com Dr. Horton America's Builder and Equal Housing Opportunity Builder.