10AM Hour: S&P Denies SpaceX Early Entry, Docusign CEO on Earnings, New York Giants Linebacker on NIL Deals 6/5/26

SPEAKER_1 (0:00)

Are you as confident as you should be when it comes to growing your business? Is your strategy ready to execute today?

If cash flows aren't where they need to be, growth could be at risk, especially in the eyes of your investors, board members and the business press. But when your business is operating in top shape, you've earned the right to grow. EY Parthenon can help you reimagine your business and execute a game plan for long-term growth. EY Parthenon, solutions that work in practice, not just on paper.

SPEAKER_2 (0:30)

This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions, and key results and statistics that may impact your trading. Download the latest episode and subscribe at schwab.com/marketupdatepodcast, or find Schwab Market Update wherever you get your podcasts.

Carl Quintanilla (1:03)

Good Friday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with David Faber, Leslie Picker, live at Post 9 at the New York Stock Exchange. Sara Eisen's on assignment. Coming up this hour, Goldman's Jan Hotzius will join us with his reaction to today's blowout jobs number as rates do tick higher. The CEO of DocuSign's with us as the software name adds to some pain on the year after earnings last night. And we'll talk to New York Giants, edge rusher Kayvon Thibodeaux and JPMorgan wealth CEO Kristen Lemkow. They've teamed up to tour NCAA schools, talk to students about COMP for NIL, which is a huge topic right now in American universities.

David Faber (1:39)

Yeah, so fascinating. Let's get straight to the market action though, following the jobs report, which more than doubled expectations.

National Economic Council Director Kevin Hassett, joining the show last hour saying the print opens the door for the Fed to cut rates.

Kevin Hassett (1:55)

What I'm saying is that this is not a Phillips curve jobs number. This is a supply side jobs number, which means you could have growth and low inflation. And so this is a story that suggests that the Fed shouldn't hike rates. It shouldn't at all and it'll have room as it watches the numbers to cut rates.

David Faber (2:13)

Let's bring in JPMorgan Asset Management Chief Global Strategist, David Kelley. David, thanks for being here on this important day. The market doesn't seem like that's the reaction, that they're getting rate cuts out of this. What do you think?

David Kelley (2:24)

Well, yeah, and the Fed's not going to cut rates on this. This is a genuinely strong report. I think the headline number for May is impressive at 172,000. But I think the really impressive part of it is the upper revisions, which say that the last three months, 181,000. The economy's got lots of momentum.

I agree with Kevin Hassett that we have seen moderate wage growth. This is really tailor-made for the stock market with slow wage growth. But we still got inflation running close to double the Fed's target. There's no real problem with momentum in the economy. So it's way, way early to talk about a Fed rate cut.

David Faber (3:03)

What about a hike? Because the markets now see a probability of about 70 percent for a rate hike at the October 28th meeting that of course is right before the midterm elections. I'm curious how you think about that, especially with Kevin Moore still being pretty new on the job, and whether or not you think there's a case to actually hike sooner given today's print and next week's CPI expectations, which I believe you see as 4.1 percent year over year growth.

David Kelley (3:29)

Yeah, I don't think the Fed is going to hike. I think the market needs to consult some political consultants here because it would be very dangerous, I think, for the Federal Reserve to further aggravate the relationship with the White House by hiking, particularly because inflation is going to come down next year.

Once we have some equilibrium in the Gulf and we see oil come out of the Strait of Hormuz again, then I think inflation will trend down. It will still, I think, be above 3 percent by December. And again, there is no reason for cutting rates at this point. But also there's no reason to hike rates because we're not going to get sticky inflation. The only way you can get inflation that sticks is if price increases cause wage increases. And the number that we got today for wage growth are tied with March, the second lowest since May of 2021 This is the second consecutive month in which real wages are down. So the economy has got momentum here, but American workers are still on the back foot. They're not capable for whatever reason of getting a wage increase. And without those wage increases, you're not going to get inflation with sticks and therefore no reason for the Fed to hike.