SOTS 2nd Hour: A Chip On Your Shoulder, Retail Records, and A Tesla Bear-Turns-Bull 12/2/24

Sara Eisen (0:00)

Good Monday morning. Welcome to another hour of Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and David Faber, live as always from Post 9 of the New York Stock Exchange. Stock's kicking off December with a mixed picture. S&P's up a little bit. That's because consumer discretionary technology and communication services are the sectors that are propelling it higher. That's why the Nasdaq is starting strong, up three quarters of 1%, and why the Dow is lagging, because most of your cyclical groups are actually under pressure today. We're talking about energy, industrials, financials, staples, health care. All those sectors are a little bit lower. TechOut performs to start it off. As you can see, Super Micro is a part of that story. A lot of the chip stocks, Tesla is higher today. Lululemon is higher ahead of earnings. Intel is higher after the transition of the CEO announcement. We'll talk a lot about that, but that's why you have such a mixed picture today. As for treasuries, let's show you how they're kicking off the week. There's been a lot of buying in treasuries lately. That reverses some selling today with yields a little bit higher. The 10-year yield 4.23 percent, two-year yield 4.2 after we got on Friday to the lowest level on the 10-year since before the election. We're 30 minutes here into the trading session. Here are three big movers we're watching. Mentioned Intel, CEO officially out. Shares are rallying. We're going to get the streets reaction to the news and discuss what comes next for the struggling chipmaker in just a few minutes. Retail front and center after sales estimates from Adobe, MasterCard, Shopify, and more come in, and all positive for the holiday shopping weekend. Today, a big day for online shopping. We're going to take a look at what is at stake. Then long-time Tesla bearer Roth Capital finally upgrades the stock to buy. We're going to speak with the analyst behind the call in just a moment. Meanwhile, Stiefel raises its price target on Tesla by more than $100 to $411 per share. A lot of capitulation today on that one.

Carl Quintanilla (1:47)

Let's get some ISMs and construction spending with Rick Santelli. Hey, Rick.

Rick Santelli (1:52)

Hi, Carl and Dean. Construction spending for the month of October, expected to be up a couple of tenths of a percent, is coming in double expectations, up four tenths of a percent. And that follows at least right now an unrevised up one tenth last month. This makes this number the best month-over-month positive change going to April of this year. Now, ISM manufacturing for the month of November 48.4.

Interesting number. It is better than anticipated, sequentially higher, the best since June, but still the eighth consecutive number under 50 If we look at prices paid, it is over 50 at 50.3. It is much lower than expectations, which in prices paid is a good thing. 50.3 is the lightest level. Well, just going back to September when it was 48.3, and that's quite important is that we've seen some lower numbers, but it is still moving in the right direction with respect to where it was last month at 54.8. New orders, 50.4, 50.4. That now breaks the seven consecutive readings under 50, obviously being over 50 50.4 is the best read going back to March when it was 51.4. And finally, employment, which is important because of course at the end of this week, we'll be getting the big jobs report. 48.1, better than expectations, like all the other numbers, sequentially higher, all except prices paid. And this one at 48.1, well, it is now the sixth consecutive read under 50, but it is the best read since it was over 50, and that was in May when it was 51.1. We see interest rates have reversed some of the Friday drops that we saw that Sara was referencing. We're up about a half a dozen basis points on twos and tens. Sara, back to you.

Sara Eisen (3:44)

All right, kicking off the week with some good economic data. Thank you, Rick Santelli. As far as what else is coming this week, we got the jobs report on Friday, as Rick just mentioned. We'll get some of the ADP private sector reads. Before that, the read on services, which has been the strong part of the economy, coming later this week. A ton of Fed speak as well this week, and some important consumer earnings. Kroger comes at the end of the week. Lululemon, Campbell's, Hewlett-Packard Enterprise, the beige book, which is always good color from what the Fed districts are seeing across the country in terms of inflation and access to lending and the economy. We know the Fed pays really close attention to that. But guys, the biggest story in my world over the weekend is the true social post that we got from President-elect Trump threatening the Bricks about the US dollar. I'm going to go really deep on this. So here's what the President-elect says. The idea that the Brick countries are trying to move away from the dollar while we stand by and watch is over. We require a commitment from these countries that they will neither create a new Bricks currency nor back any other currency to replace the mighty US dollar or here's where the tariff threat comes, they will face 100% tariffs and should expect to say goodbye to selling into the wonderful US economy. So there are some questions still about how that would actually work.