2nd Hour: Countdown to the Fed, Salesforce CEO Marc Benioff, Housing Outlook for 2025 12/18/24

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Sara Eisen (1:37)

Good Wednesday morning, welcome to another hour of Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and David Faber live at Post 9 of the New York Stock Exchange. Stocks, little changed, happy Fed Day. The S&P 500 is a little bit higher. Financials, technology, healthcare, industrials, communication services and materials, all those sectors are up right now, but it's being offset by losses in consumer discretionary, energy, consumer staples. Tesla's down 2%.

That's a little bit of a different story than we've seen lately. Obviously, these big technology heavy weighters move the indexes. There's the NASDAQ. It is down just fractionally. Again, marching in place ahead of the Fed. Take a look at Treasuries right now. Story has been higher yields into the Fed, meaning the 10-year yield higher again, 4.39 percent, 30-year higher as well, but mixed across the curve. We're 30 minutes here into the trading session. Here are three movers we're watching. Shares of NVIDIA are rebounding this morning after being down four straight down days, and eight of the past nine trading sessions. Despite today's gains, the stock is still in correction territory, which means it is down more than 10 percent from recent highs. Shares of General Mills dropping after cutting its outlook for next year. The serial maker revived volumes by lowering prices across its products, but higher targeted promotional investments weighing on the forecast. Shares of Salesforce moving higher. The company unveiling its next generation AI platform and hiring 2,000 people to sell its AI software to clients. I did speak with Salesforce CEO Marc Benioff about this big news. That interview is coming up in just a few moments from now, including some new tidbits on what they're seeing as far as demand and orders. But guys, today is the Fed Day, so let's get into it. And there's not a lot of mystery about what the Fed is going to do. The market says 95% chance that the Fed cuts interest rates is gonna be the third one since they started cutting in September. The big question around today is the communication. And it's a little bit of a communication challenge for him. First of all, on justifying the rate cut, I feel like he has to do a little bit of a dance to justify a rate cut in this kind of economic environment. Similarly, David, to what he did back in September when they cut 50 Remember that was kind of a surprise that they went double to start off the rate cutting cycle and there was a little bit of a dance with the recalibration thing. So today, there's going to be that too. The other challenge he has is on expectations and how he interprets the better economic data and firmer inflation number, and whether he tries to pivot to an every other meeting kind of rate cut, or we'll see as we go, we could go more gradually, we could pause. Language like that, I think, is going to be really important because the market is now ahead of the Fed in terms of fewer cuts. Importantly, today, we're going to get the dots, which is the expectations from the different Fed members about what they think rates will look like in the years ahead. The dots last time around, those only come out every three months, show four cuts in 2025 Forecasts on Wall Street show three cuts in 2025 Fed funds futures, which trade, show two cuts in 2025 So who's right? Will the Fed move closer to where the market is pricing? Those are going to be some of the big questions that I'll be looking for and that others will be looking for. And then where's neutral? Where are they trying to get to? What's the destination, right? This economy is pretty strong in the face of a lot of rate hikes. Does that mean neutral goes higher?