10AM Hour: AI’s Spending Surge, Oil Slides, and the SpaceX Ownership Question 6/9/26

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That's trading.

Sara Eisen (0:57)

Good Tuesday morning. Welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla live at Post9. It's always from the New York Stock Exchange. David Faber's on assignment. Coming up this hour, OpenAI officially filing for an IPO, joining the ranks of high-profile tech companies, getting ready to go public. We'll talk about the wide-ranging ripple effects of these new entrants with tech investor Dan Niles. Plus, Evercore's Julian Emanuel with us as stocks rebound, why he says the bull market has further room to run and why there's a chance to be made for the S&P to reach 9,000. And we'll get to some big moves in biotech today as GSK buys New Volant for more than $10 billion.

Carl Quintanilla (1:35)

Getting some existing home sales this morning. Let's go straight to Diana Ollick. Morning, Diana.

Diana Olick (1:39)

Carl, existing home sales in May rose 3.2% from April to a seasonally adjusted annualized rate of 4.1 million units, according to the Realtors. That's a beat. The Street was looking for barely a 1% gain. Sales also up 3.2% year over year, and this was the highest sales pace since December. Now, the count is based on closing, so contracts likely signed in April when mortgage rates did come down a bit, off that spike we saw at the start of the war with Iran in very early March. Inventory in May rose 3.3% month to month to 1.55 million units for sale, and is up a little less than 1% from a year ago. At the current sales pace, that's a four-and-a-half month supply.

Six months is considered balance between buyer and seller, so it's still tight, and that's why prices are still rising. The median price of an existing home sold in May, $429,300, up 1.3% from May of last year, and that is another record high price for May. Now, we did see a nice jump in first-time buyers. 35% of sales, up from 33% in April and just 30% a year ago, and that's the highest first-time buyer share since June of 2020 The Realtors' Chief Economist Lawrence Yun says, improved affordability is helping because mortgage rates are slightly lower than they were a year ago. Back to you guys.

Sara Eisen (2:54)

All right. Thank you very much, Diana Olek.

So with the OpenAI filing and all the talk around Anthropic, IPO coming and just the focus of the market, the obsession with AI, I did want to show you how this is all transforming the economy. There's some great charts put out by Wall Street around the impact of inflation and the impact on the economy. So let's start with inflation. So we have this chip inflation note from Katie Huberty of Morgan Stanley. And she looks at the impact basically of what's happening with the memory shortage, right? We see these very high memory prices reflected in the stocks of Sandisk and Micron. And the bottleneck there, she says, is pushing prices up more than sixfold on these memories, which will go into other industries that have to buy memory and have to buy these chips. And you can see some of the biggest, most affected industries, PC notebooks, for instance, are going to have the highest impact in terms of their cost. She also looks at gaming consoles, cameras and imaging, TVs, restaurant, retail tech hardware.

It's much broader than just the technology industry. Healthcare and medtech is going to see almost a 3% increase. And here are some of the biggest increases. And the point there is that it's going to lead to higher prices, potentially across these various product categories and across these various industries, or at least margin pressure on the companies that make them. So here's another look at an inflation chart from Wolf Research. And what they show basically is all the factors that are causing higher than targeted inflation. Right now, tariffs, the memory shortage, the Iran war and what's happening with energy prices. They say the one that's going to be most lasting in terms of the impact on inflation is the memory related inflation. That's going to be more persistent. DRAM, RAM shortages, adding 40 basis points to year over year PCE by the end of 2026 And that we're going to continue to feel the increased, Carl, of those higher prices through 2027, whereas they don't expect the same to be said for tariffs and for the Iran war.