10AM Hour: Geopolitical Risks for the Market, AI Rebound Coming? Fifth Third CEO on Earnings 10/19/26

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Sara Eisen (1:00)

Good Monday morning. Welcome to Squawk on the Street. I'm Sara Eisen with David Faber. We are live as always from Post 9 of the New York Stock Exchange. Carl Quintanilla has the day off. Tech attempting to rebound today as the NASDAQ 100 comes off its worst week since the tariff tantrum back in 2025

We'll talk to an analyst about the names and the sector that he says to buy on the dip. Plus, geopolitics and sharp focus this morning made new developments around Iran and Russia, and growing unrest in France. We'll get to all of that and the impact on the oil market and beyond. And in a huge week for earnings, we'll talk to the CEO of Fifth Third Bank, Fresh Off Results this morning, for his read on the consumer and the rape story.

David Faber (1:38)

First, let's get Home Builders Sentiment. That data just crossing down, Olek has that for us by Anna.

Diana Olek (1:45)

That's right. Good morning. Home Builders Sentiment dropped three points in October to 29, according to the NAHB. That is the lowest level since June of 2012, and it's a miss. The street was looking for 31 Anything below 50 is considered negative. Sentiment stood at 37 last October. Now, this is all about rising mortgage rates. The average rate on the 30-year fix began moving higher in September, and it just kept going. The builders also noted higher gas prices and inflation as weakening buyer traffic, not to mention driving up their own costs, especially on building materials and diesel fuel. Of the index's three components, buyer traffic fell five points to just 18, current sales conditions fell two points to 33, and sales expectations in the next six months dropped five points to 32 In addition, 43% of builders cut prices in October. That's the highest share during the 2020 to 2026 period. 65% reported using sales incentives. Also, the chairman of the NIHB in the release noted, nationwide, more than one third of builders reported immigration enforcement activity in their market areas during the past month, causing construction delays and discouraging legal workers from reporting to work. So, not a great report, Sara.

Sara Eisen (3:02)

Yeah, but also not so surprising with these rising mortgage rates. Thank you, Diana. Not at all. Yeah, Diana Olek.

I'm focused on France today because of the sometimes violent protests that we saw in the video over the weekend going on around Paris, around other major cities in France. Hard not to be focused on that. And this morning, it's showing up in the market. French government bond yields are up sharply. And I think, David, it highlights the fact that the protests and the demonstrations underscore how hard it is going to be for any government to cut back on public spending at a time where they need to because debt has ballooned. Here's a look at the yield problem for France. In Germany, I compare it to, because that's kind of the benchmark. In Europe, the sort of safe haven. And you can see, yields have really taken off. The fact that yields are higher makes it more expensive for the government to borrow at a time where already debt has grown so big. And so that's why people are worried about this debt spiral, where they might have to actually borrow to help finance their debt. Here's the problem. Here's the government debt to GDP in France. It's about 120 percent. And that's high. And it's problematic because the country doesn't have a lot of growth and it has borrowed a lot. Just take a look at the deficits, the government deficit of France relative to its GDP compared to some of the other European countries. Italy, remember Italy was such a basket case with its deficit. France is worse right now as a percent to GDP.