SOTS 2nd Hour: 6/26/25

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Sara Eisen (0:47)

Good Thursday morning. Welcome to Squawk on the Street. I'm Sara Eisen with David Faber. Today, we are live at Post 9 from the New York Stock Exchange. Carl has the morning off. Take a look at stocks. Probably close to record highs here for the S&P 500 6147 is the record high. Haven't hit it since February, so you can see we're just a few points away. Higher today by almost half a percent. Every sector is strong except for real estate. Again, lagging. It lagged yesterday. Materials are one of the best performers today, along with communication services and technology, which continues to just fuel this record-setting rally. The NASDAQ is up a half a percent. You do have some of the notable winners, like a Netflix and a Palantir, continuing to push this market higher. As for treasuries, better jobless claims, better durable goods numbers, there's buying right now. The 10-year yield a little bit lower, 4.267 two-year yield, 3.7%.

Ahead this hour, we're going to talk about NVIDIA's push to record highs with the CEO of NVIDIA partner and AI Quantum player Sandbox AQ. Plus, Compass CEO Robert Refkin, here to weigh in on the housing market and how New York's mayoral race and the rise of Zoran Mamdani could impact real estate in the city.

David Faber (2:00)

First, though, let's get some fresh housing data just crossing. Diana Oleg has that for us. Diana.

Diana Olick (2:05)

Well, David, pending home sales in May rose 1.8% from April and were 1.1% higher than May of last year, that according to the realtors. This is a small beat. The street was actually looking for basically flat. Now, this count is based on signed contracts. So people out shopping in May, when mortgage rates were climbing and briefly went over 7% on the 30-year fix. Regionally, sales were strongest month to month in the Northeast and West. But compared with last year, sales were down everywhere except in the South and Midwest. Midwest is the cheapest, of course. South is where they have the most for sales. So, okay, why the tiny gain with rising rates in overall sales? It's likely due to all more supply. There are 31.5% more homes for sale now than there were at this time last year. But just for perspective, the pending home sales index, while slightly higher than it was a year ago, is hovering around the lowest level in 24 years. It's just a few points higher than it was in April 2020 during the pandemic shutdown, that one month drop. Now, yesterday, we got the report on new home sales, which is also based on signed contracts, and it tanked well over 13% for the month.

New homes are more expensive comparatively, and there are very few new builds at the entry level price point. So really, Sara, it is just all about affordability and lack thereof in today's market.

Sara Eisen (3:25)

Okay, Diana, thank you. Diana Olek. I mentioned real estate underperforming, also watching some of these specifically New York exposed real estate stocks, which have really been on the move over the last two days. Lower yesterday, after the results of the New York primary election, and Four Mayor showed Mamdani with a decisive win, they're coming back a little bit today, but some of the banks that are also exposed to the New York real estate sector. Look, David, this is a big deal, not just you can say it matters for you guys in New York City. New York City is a more, and the metro area that serves New York City is a more than $2 trillion economy, which basically puts it the size of the economy of Brazil. And it's almost 9% of US GDP. Obviously, the biggest city that contributes to US GDP, LA, Chicago, they don't even come close. So this is a US economic problem as well. If we are talking about, first of all, we have a few months away till this mayor election. But if we're talking about Mamdani, a socialist who has run on things like higher taxes, anti-business, free buses, free groceries, free child care, freezing rents, we have to figure out how much he can actually do.