SOTS 10AM: Broadcom buckles, money in the banks, and a potential turnaround for a downward dog 12/12/25

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Sara Eisen (0:53)

Good Friday morning. Welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla. We are live as always from Post 9 of the New York Stock Exchange. David Faber is off today. Coming up this hour, Broadcom, the latest tech name to pull back this week on results. Following Oracle's steep decline, we'll talk about what the chip maker's numbers say about overall AI demand. Stock down 9%.

Plus, Bank Stocks pacing for another solid week of gains as a rally. Encyclical names helps push the markets to record highs. We're going to get some of the top picks in that sector. And Lululemon, higher in early trading, as CEO Calvin MacDonald announces his departure. We'll talk about what it all means for shareholders. Give you some of the backstory here after a big decline on the stock this year. But first off, Carl, we did have some consumer earnings and tariffs are still front and center. And we did get some color and commentary on how tariffs are impacting some of these consumer names that just thought I would highlight as we try to figure out when the peak impact of tariffs will be on inflation. So, from Costco's CFO, and everyone feels it at the grocery store. Here's the commentary. Overall inflation remained relatively consistent with recent quarters. Fresh and food and sundries saw higher inflation in commodities such as beef, seafood and coffee. But this was offset by lower inflation in eggs, cheese, butter and produce. In non-foods, we saw low single-digit inflation for third consecutive quarter primarily driven by gold and imported goods. Nothing really actually too alarming there because they are able to offset some of the higher categories like beef with some of the lower inflation places like eggs and cheese. As far as restoration hardware RH, we know that furniture has been hit hard because of tariffs. Gary Friedman is the market we've never seen before. Not a time to underestimate risk. Tariffs are disrupting supply chains, driving higher prices. There have been 16 different tariff announcements, he says, over the past 10 months that have resulted in significant resourcing, product delays out of stocks and driven multiple rounds of price negotiations and increases. Part of the problem there. So Carl, it really depends on where you sit, of where where tariffs are affecting you the most in terms of supply chain and passing it on to the consumer. And the question with RH and some of these others that are affected is do they have the pricing power to keep passing it on?

Carl Quintanilla (3:06)

Meantime, the Fed speak that we've gotten so far this morning, Gulsby, sort of saying, look, I'm not like that far out of consensus. I'm actually more constructive on 26 than the median dot. But he says, what would have been the harm in waiting until Q1 to cut again?

Sara Eisen (3:23)

I think that he's just less concerned about the labor market than probably a majority of those folks on the Fed and maybe a little more concerned about inflation, although clearly there's concern about inflation. Also, Schmidt, you know, the other dissenter put out an essay today explaining his dissent.

Carl Quintanilla (3:37)

He's more worried.

Sara Eisen (3:38)

I think he was a little more hawkish, but you know what? Neither of them gets votes next year on the plus side, but on the on the downside, maybe if you're expecting more cuts, it's a pretty hawkish crew coming in, at least Logan. I mentioned and Beth Hammack at Cleveland Fed. Those are two. It's funny. Those are two women that come from the capital markets business, and they're among two of the most hawkish. You know, they understand the rates market, and they're two of the most hawkish Fed members, which I think is just as we talked about yesterday with Gary Cohen.

Carl Quintanilla (4:05)

You're going to get away. The hawks coming in. Right? But maybe a wave of dovish leadership. And is that going to rise the number of dissents? We've already had the highest number of dissents this year since 2013