10AM Hour: Warsh Gets Sworn In, T. Rowe's Tech Picks, & Early SpaceX Investor Talks IPO 5/22/26

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Carl Quintanilla (1:06)

Good Friday morning, welcome to Squawk on the Street. I'm Carl Quintanilla with Leslie Picker and Mike Santoli, live at Post 9 of the New York Stock Exchange. David and Sara have the morning off. Coming up on today's show, S&P looking to close out its eighth straight week of gains. The longest winning streak since 2023, but one expert says to brace for some choppiness ahead.

Kevin Warsh will be sworn in next hour as the new Fed chair. Former Minneapolis Fed President Narayana Kocherlakota is with us, talk about the challenges he might face, and we'll talk to early SpaceX investor Justin Fischner-Wolffson about why he says it's no longer just a rocket company.

Michael Santoli (1:40)

But first, breaking economic data just crossing, Rick Santoli has it for us. Hi Rick.

Rick Santoli (1:46)

Hi Mike, and indeed not really good news here. These are University of Michigan Summit May final reads. They're adjusting the mid-month reads, and all of them are lower than expected and lower than our last look. Headline number moves from 48.2 to 44.8. That is another new all-time low going back to the 70s. And if we look at what's current conditions, same scenario, 45.8 new all-time low back to the 70s. If we look at expectations from 48.5 mid-month to 44.1, you guessed it, new all-time low going back to the 70s. On the inflation, also not good news because it's going up. The one-year inflation from 4.5 to 4.8, that would be the warmest going back to, wow, let me think here, that's going back a ways, 4.8. You're going back to the 80s there and 3.9 on the 5-10 year from 3.4.

Here's the issue, many believe, including myself, that there is definitely something going on here with regard to what's going on in the mid-east. It's not helping confidence, that's for sure. Normally, equity prices correlate very well with confidence and equity prices continue to flirt with history to the upside. The other issue is of course that politics is seeping in to some of these surveys. Real quickly here, we're basically unchanged on the day and week in two year.

Ten year yields are down slightly on the day and the week and make sure you check for early closes. Cash market for the bond market 2 o'clock eastern, the pits at 1 o'clock eastern, precious metals early closes, grains completely closed. So make sure you check scheduling at your preferred exchange. Carl and the gang, have a nice Memorial Day holiday and back to you.

Carl Quintanilla (3:45)

Thanks Rick. You too. That's our Rick Santoli. Do you have some more breaking news coming in from the Fed? Some new hawkish comments from Governor Waller speaking this morning in Germany. He says he's prepared to keep rates where they are while we wait to see the fallout from the Mideast conflict and that while hikes are not his base case, Waller says he can no longer rule them out down the road if expectations become unanchored. Waller will say the labor market appears to be stabilizing but inflation is not headed in the right direction and that he is concerned higher energy prices may have a lasting effect. It comes on the heels, as you said earlier Mike, of the minutes where the discussion really is. I think we're pricing in pretty much a full rate hike by March of next year.

Michael Santoli (4:26)

Yes, it builds toward that. It's maybe a 60 percent chance by December coming into this. Waller is the bell cow here of the committee. In other words, he seems to be able to migrate between hawkishness and dovishness, and therefore what he says when he's tacking in one direction is really taken a heart by the markets to a fair degree. You did see yields pop a bit on those comments. Now, it still hasn't broken containment. 411 on twos, 457 on tens, actually tens down a little bit, so a little bit of a flattening effect on the curve. More acknowledging where the market has come than anything else, but it does show you what the committee setup is, waiting for Warsh when he gets into the job.