Final Week of 1H, Russia Revolt Fallout, Deals Galore, Another Tesla Downgrade 6/26/23

SPEAKER_1 (0:01)

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David Faber (0:31)

Market insight and analysis. You're listening to the opening bell of CNBC's Squawk on the Street.

Good Monday morning.

Carl Quintanilla (0:38)

Welcome to Squawk on the Street. I'm Carl Quintanilla with David Faber, Sara Eisen here at Post 9 of the New York Stock Exchange. Cramer has the morning off. Futures modestly softer here after the revolt in Russia over the weekend. A lot of questions and debate about the impact on stocks and commodities. Busy week for data.

S&P coming off the first weekly loss since March. Our roadmap begins with the final week of the month, quarter and a half, watching the macro market risks after that failed weekend mutiny and insurrection in Russia.

David Faber (1:05)

Plus, here's a Tesla. They're down ahead of the open. Goldman downgrades the stock, citing a difficult pricing environment for EVs.

Sara Eisen (1:12)

And a tug of war over Alphabet. Downgraded at UBS, seeing AI risks ahead. Well, a new B of A survey suggests a Google search boost from AI tools.

Carl Quintanilla (1:23)

We begin with the markets entering the final week of the month, the quarter and a half, as we said. Interesting guys, some things working arguably against the bulls to start the week. Not a lot of earnings data. We'll get some buyback blackout windows.

And we've had a run. JP Morgan this morning asks whether or not we go back 5% to some moving averages, 10%, 20 They think five is more likely. Put you in somewhere in the neighborhood of low 4,200.

Sara Eisen (1:47)

It's just a garden variety pullback there. Yeah, I mean, positioning and sentiment, positioning was light, sentiment was negative, have served as big catalysts. And some of the trading notes this morning, including from Goldman Sachs, fixed income notes, saying that they're not as much powerful tailwinds as they have been over the past few months of the year, no longer the case. They also, and just keep an eye on this, it's what happens toward the end of the quarter in the month, some rebalancing. And it's significant this go around from pensions.

In other words, money flowing out of stocks into treasuries to try to square up. So we could see some of that action. Goldman Sachs model estimate 27 billion of US equities to sell for month and quarter end from pensions. So that could happen. But fundamentally, it's kind of a light data week. We get the PCE def later on Friday. That's the biggie.

And then the central bankers will speak on Wednesday in Cintra, Portugal, which is the big ECB forum. With you. Which I'm honored to be moderating, yes.

David Faber (2:41)

Wait, wait, wait, sorry. Who's doing that, Sara?

Sara Eisen (2:43)

I'm doing it too.

David Faber (2:44)

Oh, you're, oh, wait, you. Yeah, it's a very big privilege for me. It is, listen, we can't, you know, we can kid about it, promoting it, but it should be promoted endlessly because it's such an important sit down.

And as you've made the point, you're not all fully aligned here in terms of what they're doing, right?

Sara Eisen (3:03)

Certainly on the speed. They all kind of lean hawkish, except for BOJ. BOJ and China are in a league of their own over there. But the other three are focused on fighting inflation, which is coming down too slowly for them, but they're going in different speeds. Like Bank of England surprising with a double and ECB being more hawkish in the commentary than Powell. And Powell sort of soft promising, or at least saying that it's a good guess that we're gonna have two more rate hikes on the dots. You know, a lot of the strategists are writing about it this morning, this conversation and what they're looking for. Just for some flavor guys from the BMO note this morning, the trading note, Powell speaks on Wednesday with the heads of the ECB, BOE and BOJ on a policy panel that is likely, they say, to outline the progress made globally in reestablishing price stability and the need to continue such efforts.

That's the whole game, right? And another, Dave Lutz also writes about it at the top of his notes. We wanna see how much more they're looking to squeeze borrowers.