SOTS 10AM: The Bull Case for Stocks Into Year-End, Why AI is Helping Avoid a Recession, Ares CEO on Alternatives 11/3/25

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Sara Eisen (0:45)

Good Monday morning. Welcome to Squawk on the Street. I'm Sara Eisen here with Carl Quintanilla and David Faber. We are live at post 9 of the New York Stock Exchange. Coming up this hour, Ares Management CEO Michael Arougheti joins us on the back of Solid Earnings, which saw the alternative investment manager's AUM, Asset Center Management, rise 28% from last year, sitting at more than half a trillion dollars. Plus, a major acquisition in the consumer space, Kimberly-Clark says it's buying the Tylenol maker, Kenvue, in a roughly $40 billion agreement. We've got the latest on that blockbuster deal. And Cantor Fitzgerald's chief strategist will join us to make the case for a rally in bonds, bitcoin and stocks. All into your end. And why he says gold surge could be over.

Carl Quintanilla (1:28)

First though, getting some ISM manufacturing numbers. Let's get back to Rick Santelli. Hi again, Rick.

Rick Santelli (1:33)

Hi, Carl. Indeed, these are October reads for ISM. For the manufacturing side, there is no mid-month read. On the headline manufacturing, expecting a number close, but below 50, 49 and change ends up coming in light. 48.7. That equals where we were in August to find a lower number. You are going to July. We haven't had a positive number there since the first couple of months of the year, January and February, meaning over 50 If you look at prices paid, this is good news. It comes in light, but light in this instance is a positive. 58.0. That follows 61.9. 58 would be the second lowest to the year outside of January when it was 54.9. On the new orders front, 49.4, sequentially higher than 48.9. 49.4 would be the strongest number going back to, well, just August when we were over 50 This would represent 1, 2, 3, 4, 5, 6 readings below 50 So it's a real mixed bag on new orders. And finally, on the employment front, we would have had the jobs numbers, of course, but yet we're not getting them because of the government closure. This comes in light at 46.0, but it is sequentially higher than last month at 45.3. 46 is actually the best, going back to May, when it was 46.8, to show how weak that is. The only number above 50 in expansion territory was the first month of the year, which was 50.3.

If we look at the rates, they're starting to come down a bit. We're basically unchanged on a 10-year. Sara, back to you.

Sara Eisen (3:11)

Yes, these were paying very close attention to all of these private sector reads on the economy. Rick, thank you very much. We will get more of them this week, beyond what Rick just reported. Yes, we're in the government shutdown, potentially a record one. We'll know more this week, and we won't get the big jobs report on Friday, or the jolts, which we love. But we will get some important data this week. First of all, when you look at bond trading, we'll get the refunding announcements starting today when it comes to bonds. We'll get ADP data this week, so private sector jobs reach, which will take on more importance. We'll get consumer sentiment from the University of Michigan. The Supreme Court is going to start hearing the oral arguments and the challenge to President Trump's tariffs on Wednesday. That could take a few weeks, though, to get a ruling on that. But there will be some data to digest. One point that I was looking at, in terms of just the market's feeling that it's kind of status quo, strong consumer spending, even though weaker job growth, the Bank of America Institute put out a read on the luxury spending sector. And it's very strong. I mean, we've been hitting this theme, right? Paying on the low income, gain on the high income and spending. Look at what's happened in recent months. I mean, pretty sluggish in the last few years. But then really strong. September was a turning point, Bank of America says. Spending growth per household, and this is luxury, turning positive in September, up 1 percent. And then in October, up 8 percent year on year. So it's really the luxury consumer, the consumer that has exposure to the record setting stock market and Bitcoin and that, that's powering this economic performance that we've seen and this idea that the consumer remains pretty strong with the lack of, of course, the caveat is lack of government data there. Right.