Walmart. Who will be the traders pick in the big box Battle Royale . Im melissa lee, coming to you live from studio b at the nasdaq on the desk tonight tim seymour, karen finerman, dan nathan, and guy adami. We start with the fxi jumping 2 today to post its highe est clo since last august. Its up 35 from its january lows much of that strength coming in the last month look at how some individual names have done in that time pinduoduo gaining more than 20 . The s p, meantime, up less than 2 but these gains come ahead of the expected announcement of what could be massive tariffs against chinese e ve v makers the Biden Administration set to lay out the plan tomorrow. Lets get more on what we could expect from this announcement. Me megan . Melissa, President Biden is set to kwa droquad rupele tarif tomorrow nbc news is reporting that biden will also be raising tariffs on chinese solar panels and batteries. These tariffs are going to be most ly symbolic, especially on the ev front thats a but the goal is to protect the u. S. Market from a flood of imports, even as chinese production starts to increase. China has already threatened to retaliate here, but even if it imposes tariffs of its own, but economists say the impact should be fairly muted. This would be more of a gradual price effect over a longer period of time, as sheltered producers in the u. S. Then adjust their prices upward. Now, sources tell me that a host of other products are under consideration for tariffs, as well, and that will include Critical Minerals and semiconductors we expect tariffs to talk effect within weeks following the official announcement. Melissa . Megan, thanks so, what can we expect, especially as we are witnessing this massive guy . Its clearly campaign season. This is obviously somewhat bipartisan i would imagine, so. I get it, i get the rhetoric i dont think the market is pricing in the target that chinese will probably act in kind theyve already made comments about i think it was the Chinese Government telling their companies not to buy nvidia chips or something along those lines. With all that said, yes, it will continue, but how do you trade it and into the fall of last year, we said, look, the fxi looks like it wants to trade down to the october lows of 2022, 21. Well, guess what thats what happened we said from january on, you trade this from the long side. And alibabas taken a lot longer than i thought it traded 70 for a long time very quietly now, thats up some 23 . So, as counter intuitive as it may seem, you stay with these chinese stocks here. Would saying that the American Consumer would likely not be impacted by any sort of tariffs, is that under sort of estimating china at this point chinese stocks have discounted a lot of bad china. So, i think about the china macro and what people had expected of the geopolitics, and i think about china on china, as it relates to the chinese internet sector. Alibaba, which reports tomorrow, at what point are we worried about them on the export and tariff front were not. And it trades at 9 1 2 times, a third of their market cap in cash this is a company that, if theyre left alone, and, again, its not an extraordinary number, but their q1 numbers expect to show growth. Thats better than last quarter. And, again, and 9 1 2 times, i think you are paid to take some risk here. And so, my view is that tencent, they announced 43 growth, especially in the segment, the music segment, their online music segment, which is 115 million users so, there are companies that are continuing to grow, and i just think that the discount thats been put on not only chinese equities, but you know, were talking about china, but lets be clear, Global Equities as a whole have outperformed u. S. Equities for a long time its outperformed the u. S. Since the summer of 2023 i think china is very interesting. I think its priced to be interesting. And thats going to win out. So, i think tim is correct on the digital names, the kweb, i think theyre going to be really focused on the chinese consumer, right . So, theyre not exporting here but i would worry about u. S. Multinationals Giga Shanghai exports a lot of cars outside china they could be slapped with tariffs. I think it was on the q4 call, when elon musk mentioned that if we dont have aggressive on tariffs chinese evs, theyre going to take over the world and i think about that, i say, okay, well, careful what you wish for because again, i just think theyre right in the firing line for all of this, and again, i dont believe that u. S. Consumers any time soon are going to be gbuying a 23,000 chinese ev here in the u. S so, to me, its raeally protecting detroit not really focused on tesla. And apple has some of the same issues here. I dont think this gets any better here. Im sort of wondering if this is a very strategic thing. Were going to do a tariff on something that doesnt matter, because we want to look tough. Right and so, this is the who is they the Biden Administration. What i said who is they . And it was said by the administration, but i kind of feel like both sides were not that far removed from when there was the attack on israel that was ended up being more muted, not less of a deal than people thought, and the people were very scared about the response and that ended up being far more muted than people thought, and that was the end, everybody dropped it i dont know if this is Something Like that kind of famesfame gamesmanship, where, were not big ev buyers of chinese cars in america, so, what difference does this make are they going to respond in kind with something equal maybe were thinking about it too much along the lines of tit for tat. Maybe there are other ways of retaliation which arent, you know, you raise tariffs on evs, well raise tariffs on this. Or, well make it very difficult for a business like apple here maybe call for a National Boycott of a starbucks maybe i think what they the administration shouldnt get into things that will wind up being very inflationary. Thats not going to help thats never stopped them before well, thats true i mean, again, you go back to some of the trump tariffs and i just think that theres an element of this thats been playing out for a long time. Dan is right, he brought up, look at this, nvidia, this is nvidia, its the h20 chip, their way of finding their ways around the u. S. Driven export curbs, and what does this mean for Nvidia Nvidia basically went higher and near alltime highs, semis are within 3 , 4 of alltime highs. The comments that came out, these were verbal instructions to companies that have been given over the last four, five months or six months orzech moor seven months, but the chinese companies, the government has been trying to support for a long time. This goes on around the world. Its interesting our next guest says a trade war could come as soon as 2025 lets bring in leeland miller, the ceo of china beige book. As we were discussing here on set, the potential tariff increase on evs is quite meaningless, because they dont make a market here in the United States, but in terms of solar panels, you know, the issue here is, china exporting through another country. Do you think that these increased tariffs would go as far as to actually stop that trade from happening well, thats going to be the big tell, if any of this is serious. And its not just solar. If you look at the potential issue with chinese evs coming to the United States, its not likely they are going to be exported directly here the issue is whether theyre going to be produced in mexico, produced in vietnam, produced in a third country, and then they are going to avoid regular tariffs by coming in through the back door. The way to gauge how serious these are, beyond the obvious political overlay that this action has, is to see if theres provisions on transshipment and if they are doing things in order to set up a multiyear wall, or this is an announcement that just sort of its announced today and doesnt have much economic effects in the future walk us through what you think will be the retaliatory, you know, impacts here if its the most benign, its unveiled, nothing much is done to actually enforce, what will china do, versus setting up those walls that youre talking about and making sure that chinas not getting into the United States market through third parties . Yeah, i you know, the obviously, the benign response from china would be to do nothing, or virtually nothing on this theyll say they dont like it, but you know, if theyre looking at something which puts 100 tariffs on something that basically doesnt exist yet, youre not going to be hit with economic effects the question is whether you want to send a political signal that we dont like this so, you know, if there is not significant, you know, provisions around transshipment and other things, then i wouldnt expect the chinese response to be too much. They want to save their bullets down the line, they understand its a president ial Election Year if theres something more meaningful, then its possible that a u. S. Company could get hit in china its possible they could, you know, send signals through rare earth, supply chains and other things like that but look, china has fewer bullets than the u. S. Does they know its a campaign season, so, theyre going to really have to look at this and say, is this something we want to try to respond to leeland, one of the bullets might be, and it happened in august of 2015, the devaluation of their currency. I dont think its imminent, but what are the chances of that happening in the foreseeable future well, we think its pretty low, but look, you say that, no ones talking about it now, three, four weeks ago, thats all anybody was talking about in my world we were constantly having to talk about how its not what beijing is looking for we understand the yuan is weak understand that this rising dollar has caused havoc, you know, to the yuan, as well as the yen and other currencies so, there is pressure there. But its very much not in chinas interesting to do a yuan devaluation. Theyre in better shape than they were back in 2015, 2016, but look its not going to help anything to devalue, especially in an Election Year. It will cause more problems than it solved. We dont expect that to happen leeland, tim. Capital flight for china, especially during periods where the economys been a big deal. What are you hearing behind the scenes in terms of the apples of the world . What are u. S. Companies really fearful of we could talk about this all we want, we talk about it in a marked context, but what are you hearing about some of the most Important Companies in our space that do a lot of business there . Well, a lot of them like apple are stuck between a rock and a hard place, because they went allin on the china story years and years ago, and you couldnt tell them that they were putting all their eggs in a basket, they didnt want to hear it and now, what theyre seeing is, theres problems on the chinese side, you know, beijing wants doesnt want to use foreign tech, at least in the government world. Theres problems on the u. S. Side, theres worries over supply chains, and obviously geopolitics. But the companies isnt just create a factory in india or vietnam or somewhere else in Southeast Asia or mexico that does what the chinese factories do this is a very longterm transition, so, theyre very vulnerable in the mediumterm. There could be some cyclical good stories, but the structural story is pretty scary. You were talking before about how few bullets china actually has. Isnt that one of the major bullets, the fact that apple cannot snap its fingers and just create a factory elsewhere, that it is still dependent on china and so is the case for a lot of other american companies, that that is sort of the bullet that may not exist in the form of aer the riff, but can exist in the form of just making business very difficult todo there . That is exactly right and about a decade ago, we made this, you know, we pushed very hard for companies, Certain Companies in particular, to understand that just because theyre very friendly with beijing right now doesnt mean it wasnt going to get worse and even though beijing may not want to punish some of these companies, which are as close to a friend in washington, d. C. As they have, at the end of the day, theyre going to have limited amount of bullets. If tensions rise past a certain level, they have no choice than to act against the foreign firms in china, even if theyve been traditionally friendly with them, because they have to cause some sort of policy chaos to push back against the u. S. Leeland, thank you. Thanks for having me. So, should we put a further discount on a starbucks on apple because of the china issue, as we enter this political season well, this isnt the first time weve thought about this, and id like to think we thought about this a lot and if you look at apple, apple, at least, you look at the trading range and certainly more importantly the relative performance of apple tothe index, apples outperformed the index by 5 since september. So, were talking about 6 to 7 of the s p thats trading well with a lot of bad china news around it. So, this is kind of what markets do, right . And the starbucks, which has put china also at the top of its kind of key growth markets, their issues are not really china here they are other places. When you think about this on a day that we saw headline this morning that china is prepared to sell 50year bonds, there was a long read, i think the New York Times talking about demographics in countries like china, south korea, in the u. S. We have issues chinas got a lot of problems. They have longterm problems, when you think about this. And it doesnt seem that investable i said it. Investable on a relative basis, it doesnt look that interesting, essentially by an economy thats totally muffed everything. And our multinationals are having a tough time over there gdp at 5 , Something Like that, that doesnt really compensate for the sort of risk that are out there that were speaking to so, to me, i dont find it that interesting. Other than the Digital Companies that can leverage off of these hundreds of millions of dollars of, you know what i mean, like, of their own citizens. So, if you believe in a china story, is it you no longer invest in a starbucks or the mcdonalds or the companies that say, china is our growth market, you invest in china. Weve gotten to that point where you go back into the chinese stock market, yes . I believe so. And i understand the investable part but its tradeable as hell and its been tradeable if you see the chart of alibaba, with that said, at least seven, if not ten times along the way, youve seen 25 to 50 bounces in the stock and i think were on sort of the verge of one of those right now. From a valuation perspective, its very, very attractive i just dont know what to put on what is the discount one should have for this, you never know whats going to happen . For china stocks or for chinas own stocks. Remember ali pay, where, you know, and that, who did that snurt that hurt alibaba. That wasnt a u. S. Thing right so, i dont know what the right multiple, the right discount is. Im not in it and thats been wrong the last couple months. Coming up, details from openais Spring Update theyre not the only ones announcing new developments in the a. I. Space what more to watch for tomorrow. Plus, Airlines Taking off, as wall street gets bullish on travel the tailwinds driving this trade, when fast money returns. This is fast money with melissa lee right here on n cnb. You founded your Kayak Company because you love the ocean not spreadsheets. You need to hire. I need indeed. Indeed you do. Indeed instant match instantly delivers quality candidates matching your job description. Visit indeed. Com hire the all new godaddy airo helps you get your Business Online in minutes with the power of ai. With a perfect name, a great logo, and a beautiful website. Just start with a domain, a few clicks, and youre in business. Make now the future at godaddy. Com airo and theyre all coming . Those who are still and ywith us, yes. Ness. Grandpa whats this . Your wings. Light em up gentlemen, its a beautiful. Day to fly. Welcome back to fast money. Openai launching a new flagship model during its Spring Update today. Steve kovach watched the announcement and is here right now with all the details yeah, openai actually front running googles big developer conference which is happening tomorrow with an announcement of its own. Revealed its latest a. I. Model called gpt 4. 0, which is capable of having natural conversations with you just talk to it like you would a friend or a coworker you can even interrupt it and ask it to speak in a different tone, do live translations, and so much more it is also multimodal. Thats a term youre going to hear a lot it can process images, text, or voice. Its going to be rolling out over the coming weeks and the companys cto teased theres even more coming with a, quote, next big thing to be revealed soon Ceo Sam Altman was not part of the event, but he did publish a blog post, calling gpt 4. 0 the best computer interface ive ever used. Altman called openai a business, and will, quote, find plenty of things to charge for now, remember, openai structured as a Nonprofit Organization and has been sued by elon musk for allegedly abandoning its original mission and focusing on profit instead well see how that shakes out in the meantime, expecting google, which has had multiple stumbles trying to launch its gemini a. I. System, to show off similar a. I. Features at its Developers Conference tomorrow. In fact, coinciding with that openai event today, they shared this video on x that appeared to be a demo of that update mel . How finished is this product, steve . How long has it been in beta has it been actually tested for quite some time . So, this is really ready to hit the ground running its launching now. Its being used so much right now, melissa, the servers at openai are kind of struggling with all t