11AM Hour: Bradley Tusk on Tech, Tesla Deliveries Beat Expectations & Heat Wave Impact on Power Prices 7/2/26

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Carl Quintanilla (1:04)

Good Thursday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Leslie Picker here at Post 9 of the New York Stock Exchange. Sara Eisen has the morning off. Today, so much for the World Cup bump. June jobs coming in about half of expectations. Is the report a blip or the start of a trend?

Leslie Picker (1:18)

Plus, OpenAI reportedly seeking to defuse growing political pressure and talking with the Trump Administration about a government stake in the company. Veteran startup investor Bradley Tusk is with us while he thinks the move could signal that management might think their, quote, valuation is complete nonsense.

Carl Quintanilla (1:35)

Thirty-five states facing a sweltering heat wave this weekend, prompting concerns about the grid. We'll explore the power price surge and just how high they may spike. Speaking to prices, watching the markets today, it was eventful once again in South Korea overnight with the Cosby down eight. Semi's continue to get challenged here.

Information technology and comm services, one of the few sectors that are red today, along with consumer discretionary. That jobs number on the weak side has given a little relief to yields, but not a lot. Ten year, four, four, six.

Leslie Picker (2:08)

We will start with Tesla deliveries this morning. Phil LeBeau has those details. Hey, Phil.

Phil LeBeau (2:15)

Hey, Leslie, when you take a look at the numbers for Tesla in the second quarter, far better than expected. When I say far better than expected, I don't know anybody who was expecting them to deliver more than 480,000 vehicles. The estimate from the analyst, the consensus was just over 406,000. That's an increase of 34% compared to the first quarter. So what's changed compared to the first quarter? Well, first of all, let's tell you that the full year delivery numbers, you're going to see the estimates go up from here because they've already delivered 838,000 vehicles for the year. This could be a chance for them to break two straight years with an increase of 1.7 million again compared to the last couple of years. And what did change when you take a look at shares of Tesla is that this is a company that saw increased demand in China as well as in Europe, perhaps the fuel prices being higher, gasoline prices being higher in Europe may have been a key factor there. We will get more color from the company on what it's seeing in the market when it reports its Q2 results on July 22nd. Shifting gears now to the end. This is the other story in the EV space getting attention this morning as the company easily beat expectations when it comes to Q2 deliveries, delivering 12,613. The guidance was for deliveries between 9 and 11,000. But the real news here, increasing the full year delivery guide, 3,000 vehicles, now to a range of between 65,000 and 70,000 on July 30th. Finally, we also got the Q2 sales numbers from Ford down 10.3%.

Remember, the market overall, when you compare those companies selling internal combustion engine vehicles, really a number of the automakers, GM included, had lower year-over-year comps, but Ford down 10.3%. The industry sales pace, however, for the month of June, guys, it's expected to come in at about 16.6, 16.6.

The estimates were closer to 16.1 or 16.2 million.

Carl Quintanilla (4:19)

Phil, thanks for that. A lot of news on the autospace today. That's our Phil LeBeau. Let's turn to this morning's lighter than expected jobs number. For that, we'll get to Steve Leesman. Happy Fourth, Steve.

Steve Liesman (4:29)

Hey, happy fourth, Carl. It's lighter, but also a mixed pay report, raises some new questions about both the strength and the weakness of the jobs market. Let's look at the numbers that everybody's puzzling over.

As Carl said, 57,000, just about half the estimate, and down from the 129 in the prior month, which was also revised down by 43,000. But the unemployment rate fell. I'll explain that in just a second. By a 10th to 4.2 percent, average hourly wage is pretty good, one modest 4.3 percent, and the year over year up to 3.5 percent, just about exactly where it was in the prior month. How do we get to this low unemployment? Well, the labor force fell. That's not a good sign. The employed in the household survey fell, 507,000, unemployed fell, that's okay, but this surge in the not in the labor force up 832,000, so people dropping out and helping the unemployment rate a little bit. Where were the jobs? Where they've been? Healthcare and social assistance up 47,000, private education up 22,000. That's all the job growth you need. One good sign was the temporary help number up 9,000. Sometimes that surges ahead of hiring, but retail was down an unexpected decline in leisure and hospitality, down 61,000 with declines in the combination of restaurants and bars. That was supposed to go up because of the World Cup, but it did not. The Fed likely to take these numbers, something with a bit of a grain of salt, I think, as there had been a continuing series of large down revisions and some of them up as well. Stephen Stanley from Santa Dere in fact writing, today's results may change the perception of Fed officials ever so slightly, but I would expect that most policymakers will continue to regard the labor market as stable and neither too hot nor too cold. Fed futures market today changed their view ever so slightly. You can see there compared to after the Fed meeting, 69% probability of temperature hike now down to 54%. So still the odds on bet rate hikes not for the next meeting and maybe not exactly for the meeting after that. All of this guy solidifies now that the new wars fed is just like the old Powell Fed on hold.