Q4 Kicks Off, Tesla Deliveries, Live: Kellanova CEO 10/2/23

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Carl Quintanilla (0:30)

Market Moving Insight and Analysis join Jim Cramer, David Faber and me, Carl Quintanilla, on the opening bell hour of CNBC Squawk on the Street.

Good Monday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with David Faber, Sara Eisen at Post 9 of the New York Stock Exchange. Cramer has the morning off.

We kick off the month of October in Q4 with a government shutdown averted for now. Tons of Fed speak this week. A lot of eco data. No real relief in rates. 10-year 464 and futures are red. Our roadmap begins with this new month of trading and the beginning of Q4. All major indices coming off their first negative quarter of the year.

David Faber (1:03)

We're also gonna keep an eye on a lot of the EV makers, Rivian, NIO and of course Tesla, all out with big delivery numbers that are of importance for us.

Sara Eisen (1:14)

We don't know how big.

Carl Quintanilla (1:15)

No.

Sara Eisen (1:16)

And Kellogg's stack spinoff, Kellanova, set to begin trading today here at the NYSE. We're gonna talk to the CEO in a CNBC exclusive later this hour.

Carl Quintanilla (1:25)

Let's begin with the markets. We've talked a lot about the pain we got through during Q3. A bunch of new notes this morning of top pick lists out of the major strategists. We'll see as we are, at least Sara, now guaranteed some data this week. We weren't sure on Friday.

Sara Eisen (1:41)

Yeah, and so the thinking is, okay, maybe the November rate hike is back on the table because the Fed won't be flying blind into the next meeting. We are gonna get the big jobs report on Friday. We'll get a Joltz report before that where we get to see if job openings continue to come down and then the CPI, the inflation report next week. And those will be the determinants. Now November is again looking like a coin flip on whether the Federal Reserve raises rates. But what's more interesting than that, Carl, is just the backdrop here of rising Treasury yields, the market rates rising, despite the fact that we're still only expecting maybe one more or no more rate hikes for the Fed. The higher for longer mentality has really seeped in to the bond market and to the stock market as well. And I think that that's what you saw in the performance of September.

And that's gonna be the big question of what happens in October.

David Faber (2:33)

Well, it was something we were discussing last week as we approach, I guess, highs in yield on the 10 year once again, that we saw at the beginning of last week, although we backed off a bit in yield. So what do we think, Sara? What are the key reasons here that we continue to see this gravitation towards higher rough rates?

Sara Eisen (2:49)

Well, what's really interesting is that it's coming in the face of softer economic data and falling stocks. And that doesn't usually happen. Usually treasuries insulate you, right, from falling stocks. They protect you, they're safe havens, and you see yields come down as the economy softens. So then we begin to wonder, long term, is the market thinking about higher inflation numbers?

Is the market thinking that the Fed is just going to stay high for a very long time, or are the fiscal concerns starting to creep in? I mean, I can't believe that I'm going to talk about this, but the risk premium for long term rates turned positive for the first time in 2021 It's something the New York Fed tracks.

It's a little wonky, but it basically is how much investors are demanding a premium to get paid for taking on the risk of holding long term debt.

And when it goes positive, it shows, first of all, we haven't been positive for most of the last decade or so since the financial crisis. So they want more, they want to be paid more for taking on the risk. And David, that could speak to the fiscal credibility that we have going in this country.

David Faber (3:52)

Well, we've talked about that a lot, and I assume we will in weeks and months ahead as well, given the enormous-