Investors Brace For Mega Earnings Week: $META, $MSFT, $AMZN and $AAPL Report
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On the Tape.

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Welcome to the Risk Reversal Podcast. I'm Dan Nathan, joined by Guy Adami. Guy, how are you? I'm doing well, but not as well as you. You were down in Florida and you were watching the Pearl Jam in concert. The FLA. Yes, I did with Danny Moses of the On The Tape franchise.

fame but here we are guy it is sunday night we got to talk a little bit about what happened last week i think we saw a lot of things kind of chill out a little bit on the trade front it seems like earnings took over a little bit so we're going to have plenty of earnings about 40 of the s p 500 reports this week but we also have meta and microsoft and amazon um and

Apple. And obviously the market's taking a cue from that a little bit. We end the week with the all important jobs report. I know that you are on the edge of your seat for that. Where do you want to start, Guy? If I just want to kind of put some context into where we are, the NASDAQ on the week was up six and a half percent. It was the first time, Guy, since April of

that the NASDAQ had three consecutive days up 2% or more. The S&P was up 4.5% of the week. That places it down about 6% on the year. The 10-year came down considerably at 4.24 now as we speak, down from 4.59 two weeks ago. The Dixie, which had broken those three-year lows early last week, is up 1.5%, but again, still contending with a difficult low.

level, but it was at a three-year low, like I said, and gold was down 1.5% of the week, but down 6% from Tuesday's all-time highs. Where do you want to start with what, I guess, your big takeaways for last week? Yeah, so let's mark to market a little bit, right? You just mentioned some of the moves we saw last week and where we are now. So if you look at the S&P 500, I believe we closed on Friday.

at about 55.25. And what's interesting about that level, first of all, it's a level that we've talked about a number of times on Market Call and on the different podcasts we do. And we've talked about it because it's a 50% retracement of the all-time high that we saw in the S&P, I believe, in February. And then that recent low of about 48.35 or so

we saw a few weeks ago or earlier in the month. So this level here basically retraces half of that move, which armchair technicians will view as somewhat important. And we had talked about again, the potential for us to be here. So now let's talk about what the market is getting excited about. Now, obviously there's, I guess, some excitement that maybe things are thawing out on the trade front and that remains to be seen on a lot of the weekend shows we've heard these trade deals are gonna happen a lot faster than people realize.

Is that just rhetoric or is there something there? You know, the Chinese really haven't said all that much. So technically now I think it's the bulls that need to prove themselves, not necessarily the bears. You know, the bears had their shot. The bulls have got us back to sort of halftime and now we'll see how it plays out. And,

It's a very important week to see how it plays out because, as you mentioned, we have a slew of earnings, not least of which Apple and Microsoft Wednesday and Thursday, respectively. Yeah, it's interesting that you mentioned that 55-25 era. And I just want to say one thing really clearly. A friend of mine listens to our pods, watches us on CNBC last week. I think it was on Thursday pinged me and being wise-ass-ish, if that is a term, and said I might mark...

the Monday bottom as the Dan Nathan bottom. Now he was watching us on fast money. It wasn't a particularly great day. I said, listen, you know, Guy and I have been doing these pods every day, twice a day for the last few weeks during this whole downdraft. And I know specifically you thought at some point early last week, we could get to maybe 5,500, 5,600, but that level gets exhausted. The other thing, and I just wanted to be clear that

Monday's Fast Money, I was definitely very negative. I didn't press the lows there. I didn't think that that was a level given the sentiment. We had a VIX above 30 still. We had gold at all-time highs. We had the Dixie making three-year lows. We had yields trading above 4.4%. It felt like

especially with the sentiment, it was gonna maybe have a short-term turn. I didn't get long, that's not what I'm saying. I still remain very bearish, but the technical points that you make, I think are really important. The last thing I'll say on the technicals is that all of those major big tech names that we're talking about that were in report this week, they're all below their 50 and their 200 day moving averages, okay?

That's not something we have seen in the Mag 7, I think, in more than two years. Okay. So a lot of things have changed in a very short period of time. None more important, in my opinion, than the technical setup there, Guy. Thoughts on that? Because, you know, you hear these things. I know you don't use these terms, but nothing good happens under the 200-day moving average. As you just said, things look really bleak online.

early last week. And quite frankly, other than the market performing, as you just said, the week that we had, nothing, in my opinion, not a lot has changed. So now earnings start to matter. And as much as people want to make this about tariffs and the rhetoric about trade war, and I do agree there's an importance to that, but I think more important is what's going on on the earnings front. And are companies going to be able to perform in this environment in a way that

justifies the valuation that the market's still trading at. So whether or not a trade deal is done, and I understand that if something were to happen, the knee-jerk reaction would be higher, but you're still talking about a market that's still challenged on a valuation front. You don't really have the valuation cushion that you would want at this point in the cycle. Quite frankly, I think things are still expensive. So I think earnings...

expectations are going to get ratcheted down. I think we've seen a bit of a reprieve, not only in the broader market as measured through the S&P 500, but also in the currency markets, you know, that precipitous drop off in the dollar has subsided for now. But if you read things over the last week or so, there are a lot of people that believe, you know, this is a bit of a respite in terms of the dollar in the broader market before we start to, you know,

basically reconvene and re-accelerate to the downside in both the dollar and I think the S&P 500. So I'm not going to underestimate the importance of this week and the data we have and the earnings that we have, but I'm hard pressed in this environment to come up with

a scenario where this market continues to accelerate to the upside in the form of the S&P 500? Yeah. So on the earnings, Frank Guy, and if we just want to kind of focus on some of the bigger names, you know, Google last week reported Thursday night after the close, I think there were a lot of folks who were kind of worried about maybe cloud growth, worried about just some of the headwinds as it relates to search from other platforms like OpenShift.

open AI and the like. And really folks wanted to get a sense of what their search overviews look like. That is the answers that an open AI or perplexing give you. And, you know, I was reading a note just a bit earlier by a gentleman named Brad Erickson over at RBC Capital. He was hitting some of the main bullets, you know, search grew 9.8% a year over year. AI overview commentary was arguably the best pushback to

The bear thesis, I'm just kind of reading the top lines here. Tariffs didn't kind of come up as a massive headwind one way or another. Margins expanded 230 basis points year over year. CapEx was unchanged, so they weren't really speaking to some need to kind of pull it back. Cloud growth was solid to in line, and then they had a dividend increase of 5% and they're re-upping their buyback. So you put all that together for just Google, right? And you say to yourself, well, that's a sigh of relief. And think about it three months later.

ago, the stock was trading at all-time highs, right? Expectations were kind of high back then. So now you had expectations low and the stock down a lot. The stock didn't trade that well on Friday. It closed up, what, less than 2% or so. I agree with you. You mentioned that, I think it was February 4th or thereabouts. I think Google made an all-time high of about 207. And the drop was pretty significant. We traded down to $140 and change.

like a lot of things around April 7th or thereabouts. Now, we have bounced. But to your point, given the quarter they reported, given how robust the market, the broader market was trading, and although the stock closed around 162 or so, which is

a nice bounce off of 140, I would have thought it would have traded a lot better. Now, we'll see what happens this week. You know, maybe it gets back on the horse with some of these other megatech names. But that to me was, I don't want to say feeble, but it was less than inspiring. Let's put it that way. It's interesting, like the vol, you know, we're talking about a VIX below 25 and you saw a name like Google where the implied move was probably six, seven percent or something like that in either direction. You know, the implied move, CC has this in our newsletter. If you go to riskreversal.com, sign up there, you can get it in your inbox. It drops

Sunday night's a little bit of a preview, but then Monday through Friday, it's a recap and looks ahead of some of the things we're focused on. It also has the market matrix on there. But CC, it is no doubt tonight, the S&P 2.5% implied move in either direction. QQQ, the NASDAQ 103%. TLT guy, about 2%. That's a big move expected for a TLT. And USO, which ETFs attracts oil, is 4%. So when you're thinking about at this point, guys, some of these big

earnings. And I just want to rip through a couple of them that are expected on Tuesday night after the close. SoFi, PayPal, Spotify. Interesting to me. UPS is one actually might give us an interesting read, at least as what we're seeing on the tariff front. After Hours, Verizon, Starbucks. And then we have Microsoft on Wednesday. We have Meta on Wednesday. We have Robinhood on Wednesday. Those are all after the close. And then Apple and

Amazon Thursday. So if we put all that together, at least the mega cap tech names, and we use Google as some sort of launching off point, I mean, our expectations have

High or low, in your opinion, now that we've gotten some results and some guidance and basically some commentary about the environment from Google, is there much to extrapolate? I guess Microsoft, we could look at cloud and we could look at Amazon AWS. That'll be important to Apple on the tariff front is massive. Maybe Microsoft's the least interesting to me, guys.

You know, I think Google probably raised the bar in terms of expectations, but I do think that expectations are probably still pretty low. I will tell you, I don't think people are all that excited about Google going into the number. And I think they surpassed

The expectations, probably again, low expectations. But as we just said four or five minutes ago, although the stock did trade higher, it was tepid at best. I'll talk about UPS real quick because this is a company, obviously, that has its finger on the pulse of economic activity and is a good barometer of what's going on. But I don't think a lot of people realize UPS made its all-time high in February 2018.

of 2022, and I think it was north of about $225 or so. Since then, the stock has been cut in half, which is pretty amazing if you think about the environment that we found ourselves in until recently, a market that basically did nothing but go higher and people sort of getting excited about an economy.

then one of the more economically sensitive names has not performed pretty well. And you're sitting here today, you're talking about a UPS is pretty close to levels that we last saw in sort of the March, April, March of 2020. I think we all remember what's going on there. So as much as UPS is a barometer, there are obviously a lot of UPS specific problems there. But

I'm clearly watching that. And outside of Apple, which God only knows what's going to happen there. But Starbucks, to me, there's a lot on the line for Starbucks because there obviously was a lot of excitement around the new CEO. You saw the way the stock traded in kind after the announcement. Starbucks has given a lot of it back, Dan, and probably rightly so. So let's see what Starbucks has to say as well. Yeah, it's funny. You know, Starbucks was a hard hit name, just like Apple.

in the sights of a trade war. And especially when you consider Starbucks, a big part of their growth was in places like China, or at least expected to be. And one of the reasons why the thing traded at the sort of premium that it did. Same thing for Apple too. So Meta is interesting to me, Guy, Tuesday after the close, largely because

You know, this was one that was such a darling coming into the year. It had that massive move higher for all of January. We had seen a lot of the Mag7 really kind of lose their upside momentum. But then when they went into their last earnings report,

it was a pretty good report. The stock started selling off with the rest of the NASDAQ, and then it really outperformed to the downside. And that's one of the things, you use this term all of a sudden, it's like passive's great on the way up, but when it turns active, and I think a lot of folks were selling what still had big gains, and that was one of the reasons why the stock got hit so hard. But then in the aftermath,

We start reading stories like they were reaching out to companies like, you know, Microsoft and Amazon to help pay for the llama, which is their open source, large language model, you know, because some of the costs for them are getting too high. And so you start hearing some of this sort of stuff, making you less confident about these bullish cases that it seemed universal just about two or three months ago.

And, you know, what's interesting, again, to use the word, so many of these companies, again, with multinational companies, typically get a tailwind in the form of a weaker U.S. dollar. I'm not certain that's the case right now. There was an interesting article in Bloomberg, unhedged and burned.

stock investors brace for more dollar pain. And you're talking about a US dollar trade that's been basically a go-to trade for the last 20 or 30 years, which has been turned around entirely. And I did a podcast with Danielle DiMartino Booth last week, and she talked about a lot of the investors and traders that she's talking to are just looking for any way possible to put on a trade

that has a short dollar bias. They're just looking for ways to be in a trade that's short the US dollar. Now, obviously, when everybody's on one side of the boat, you're going to get a knee-jerk reaction higher, which is sort of what we've seen over the last few trading sessions. But more and more people are writing about the weakness in the US dollar

which again, historically should sort of buoy a lot of these companies. I think we're sort of in a new bit of a paradigm right now with a weaker dollar potentially could mean weaker U.S. stocks as well. And we've seen glimpses of that over the last couple of weeks. But here's one stock that was not weak last week. That was Tesla. So they reported Tuesday after the close. I think you and I were on the set of fast money as it was coming out. I mean, the quarter was atrocious, right? And the stock was basically unchanged until the conference call

when Elon Musk said that he was only going to be spending come May one day a week in Washington. I think a lot of folks who are invested in the stock or a lot of folks who got really bearish on the stock, if you were on the sell side, coming into the report felt pretty good about that announcement. Then a

A couple days later, and I think this is the most interesting one, something leaks out that the Trump administration is basically going to weaken some of the regulations as it relates to self-driving and the reporting of casualties. So the stock ripped on Friday, right? And to me, I think that is a nice little...

quid pro quo, you know what I mean, for a lot of the work that he's done there. I don't think it should make anyone feel any safer that a company that has been working for 10 years, you know what I mean, to build full self-driving and has not been able to call it anything other than supervised full self-driving over the last few years is going to be able to take a more lenient stance towards reporting of things that are really important. Now, Elon Musk makes this point all the time.

And he's 100% correct that full self-driving cars

are probably safer right now than people driving the cars. Like I totally get that. But you know, if you feel like these regulations have been thwarting innovation, that's fine. But it's just interesting to me that that was such a valuable piece of information for the stock. And maybe guys, just that sentiment was so bad, but I'll just leave it at this. And I'd love to get your take both you and I, and we said it on fast money and we said in our pods, it is not a good press into the print because you want to talk about low expectations and

There it was, right? And they kind of surpassed them, but it was not the earnings that made the stock rally. No, I think we've actually done a decent job here. You know, we had talked about the potential for the stock to trade sort of down to 225-ish, 215, 225, which was sort of the low that we took off from. If you go back and look in the fall of last year, pre-election,

Tesla was a stock that had done nothing for the majority of the year, trading about 215, 220. Then obviously it was off to the races. We had talked about the prior quarter that was equally miserable. I think the stock at that time was trading around 385. They reported margins, which were very disappointing. They also talked about their free cash flow beat, which was on the back of

selling, I think, $600 million or so of Bitcoin. So that's how they won there. And I thought, and we talked about it on Fast Money that night, that that quarter should have the stock fundamentally in the low to mid 300s, and the stock proceeded to go to about 418. Now, fundamentals sort of did kick in after a period of time. Same thing here. We just traded down to and bounced a number of times

off that 215, 220 level. If you go back to basically early March, we probably traded down there three or four different times and held each time. So the bounce made sense, but it wasn't on fundamentals. I think you just sort of mapped that out pretty well. Now, the question people ask to ask themselves at 285 or wherever we're trading, is this we're going to get exhausted? Because by the way,

This is the exact level that we topped out in, I want to say late March of this year, sort of about 285 or 290. So I think we're still range bound. I don't see this stock.

exploding to the upside. If Elon Musk announces that he's leaving Doge and going to be full-time in Tesla, maybe you get some excitement on the back of that. But just in the fundamentals that we look at, the stock is challenged. Now, with all that said, we had somebody on, the futurist from ARK Investment came on Fast Money last week and told us that we were missing the boat. And I don't want to say that he called the auto business a lost leader, but basically what he's saying is

you know, when they get into autonomous driving, all this robo taxis, that's where the money's going to be made. And that's what people are excited about. So we'll see. You know, I think it stalls here at 285, 290. Yeah. No, he mentioned that basically the auto business is funding all of that. And I get it. I just feel like the auto business, I'm not sure it comes back anytime soon. Guy, one other name, and maybe we'll hit this on market call this week. NVIDIA has not really broken that downtrend that it's

been in, you know, over the last three or four months or so. And I think it's interesting as we get towards the end of this week and we hear from Microsoft and we hear from Amazon and we hear from Meadow, obviously we heard from Google last week, but those are four of the biggest customers. There was an article in the Wall Street Journal that I thought was really interesting. China's Huawei develops new AI chip seeking to match NVIDIA. Now, we had talked about this a little bit last week. I think this article kind of adds a

a few more things here. You know, really this has become a topic of interest since, you know, the deep seek in late January, but it basically saying that, you know, the Huawei and a lot of these other Chinese manufacturers have been forced to

to innovate, right? And they're not going to have access to our best technology in the light. And that doesn't mean that Trump or Biden or Trump earlier that they've made a mistake to try to restrict. You don't, I mean our best technology going over to China. We know that a lot of this technology is going to find their way into a military apparatus in the light, but it's interesting though, that the Nvidia thing.

it seems to be fading. There seems to be more interesting things going on right now. There's also an interesting article in Venture Beat. I know that's one that you read probably each week there, Guy. But it was an article comparing Google and their investment in their custom silicon, right? They kind of invented this chip called a TPU, a tensor processor. And, you know, it was talking about how ultimately their workloads are a lot cheaper than

than that on top of NVIDIA. And this is not too different than maybe what DeepSeek was able to do training their models. And so they even use the term the NVIDIA tax, paying the premium that you get for CUDA and the software, but then you become locked into that ecosystem and therefore you end up spending more at

the whim of NVIDIA versus, let's say, a Google and Google Cloud and Gemini on top of it, which is operating at a much more efficient cost structure within their own ecosystem. So I thought that was really interesting. Well, we...

You had talked about it for a long time. We've collectively talked about competition coming. It comes seemingly out of nowhere. The margins that NVIDIA enjoyed for so long are going to start to be challenged. And basically, we started to see signs of that

in January of this year. And now you're seeing more and more signs. By the way, this is a stock that was trading $153 early in January, traded all the way back down to the August low of about 90. And yes, we have bounced. I totally get it. But nowhere nearly as robustly as I think we probably should have. I think NVIDIA is a bit challenging environment. I think competition is coming. I think there is headline risk.

And as much as the CEO has promised that you're going to see a reacceleration of margins in the back half of this year, I think the market is starting to question whether or not that's really going to come to fruition. So I think in terms of the stock and in terms of

some of the performance we've seen over the last few years. Not to say that Nvidia can't make a new all-time high at some point, but I think the gains that you've seen, these 15, 20% moves over the course of five to seven trading days, I think those days are long gone in terms of Nvidia.

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Before we get to jobs, this kind of really annoyed me this morning. Treasury Secretary Scott Bessett was on one of the morning shows. And I feel like every time he opens his mouth, he annoys me. He does not instill a lot of confidence for a guy who's made billions of dollars trading the markets. And I know he's done it very successfully. And I'm sure he's done it very successfully.

You know, that has yielded hundreds of millions of dollars to him personally. But this morning he said, you know, all this talk about the worst April since the Great Depression. He's like, literally, he said nobody. He tweeted this out. No one's talking about how big the bounce was, you know. And this is a guy who told us two months ago.

They don't care about the stock market, that Trump doesn't care about the stock market. And it just leads me down a path where I just don't trust him. I just don't feel like, you know what I mean? He's been intellectually honest this whole time about the rollout of this trade policy. And, you know, as we get to the next phase of this, if things calm down, Republicans are going to try to push through an extension of the tax cuts right through a budget reconciliation process where they don't need a single Democrat to vote in favor.

favor of it. And I just find this whole period like, yeah, we might get a couple of weeks of calming out and maybe the president, they take away his cell phone and they don't let him tweet and all that sort of stuff. But it feels like once we get through earnings, we're going to be right back into a lot of this trade stuff, especially if deals don't materialize. Yeah. I'm not a big fan of the treasury secretary, that role specifically, commenting about the market. It's historically...

something that people typically avoid. You know, he obviously finds it necessary in this environment to comment. And, you know, nobody talks about the bounce. Well, because quite frankly, after the sell-off we've seen, I mean, the bounce was probably...

expected by most people. And it's really not necessarily the bounce that he should be talking about. It's, you know, what are we up against at this point? By the way, you know, we've talked about this. Some of the biggest percentage bounces in history, like we've seen, you know, a couple of days over the last couple of weeks, took place in the late 1920s and the mid 1930s for perspective. And I'm not suggesting we're on the precipice of those types of things. But my point is,

In the bear market, some of the most meaningful, vicious bounces happen in the environment that we find ourselves in. So I'm not all that excited about it either. April jobs reports can be reported Friday, May 2nd, before the opening. The final countdown will be playing for probably five minutes prior, Guy, on the CNBC.

squawking friends there talk to me like is this going to be important like is this going to be a market mover like do people care given like everything that we're hearing about you know trade everything we're hearing on the earnings front that sort of thing all the uncertainty again and again is this data point if we were to have a weaker number does it reinforce the fact that the fed is likely to have to cut rates sooner than expected or is that a good thing if that happens happens

Well, again, I'm hard pressed to figure out how this is going to be a surprise to the upside in terms of jobs. But, you know, I'm not privy to sort of the inner workings of the entire thing. But I think it's pretty clear to most people that there's deterioration in the job market, whether it manifests itself in this Friday's report or not. I don't even know if that's the point. But to answer your question specifically, if it's a lousy number, if, you know, unemployment rate ticks up and you don't see nearly

the job games that we've seen over the last couple of years, you're going to hear a lot in terms of the rhetoric about the Fed once again being late and get in the game, need to lower rates. So they're going to definitely, there's going to be an attempt to force their hand. Now,

Now, what will be to me sort of the dance they have to sort of do is, you know, at a certain point you start to, you know, your administration owns the economy and it's no longer the last guys or gals. So this is his rodeo. So how are you going to sort of walk that line between, you know, potentially bad number? And then the flip side of the coin is browbeating a Fed to lower rates to basically, you know,

gives support to, and I'm doing air quotes here, you know, a market that's really looking for support. But to your point,

i'm not so sure that that's the magic bullet right now fed rate cuts you know i don't know necessarily if that's going to do what market bulls wanted to do yeah and a lot of folks look at like jobs data they say well that's backward looking except for the fact that you know given what's going on here and the uncertainty in the c level suite you know it might make some sense to kind of trim where you can trim especially if you feel like you were getting a little fat on that regard

It is an important week. A lot of earnings. Definitely, it will be market moving. And in terms of the data, I think that jobs report is important and some inflation data sort of mixed in. So with an S&P, as we said earlier, that's retraced 50% of the move since basically from mid-February until early April, the market's at a bit of a crossroads here, folks. So

I'm not all that optimistic, but that's why we lace them up every day, Dan. That is true, Guy. All right, I'll see you out there on the playing field tomorrow. We'll be doing the market call Tuesday, Wednesday, Thursday at 11 a.m. Eastern. We've got a great slate for the Risk Verso podcast, so stick around for that. We'll see you all really soon.