SOTS 2nd Hour: A Disney Deep Dive, Let's (Not) Make a Deal, and An Exclusive from Liberty Media Day w/Chairman John Malone 11/14/24

Sara Eisen (0:00)

Good Thursday morning. Welcome to another hour of Squawk on the Street. I'm Sara Eisen with Carl Quintanilla. We are live from Post 9 of the New York Stock Exchange alongside David Faber, who is live today from Liberty Media's Investor Day this hour with some big interviews you won't want to miss. What do you have, David?

David Faber (0:15)

Oh, we're gonna be talking with Greg Maffei shortly. Of course, the man who's been running Liberty Media for the last 19 years, but announced yesterday that he will be stepping down from that position. So plenty to talk about with him. And then John Malone, both from an interview we did a couple of weeks ago, taped but also live because there have been so many changes just in these last couple of weeks. Not to mention we'll also have a brief chat as well with Jerry Bruckheimer. He's done a couple of movies you may have seen along the way, Sara.

Sara Eisen (0:46)

Looking forward to it. And I'm eager for you to ask about F1 as well, David. We're gonna see you later this hour. We'll turn to the markets right now. We are giving a little back this morning, the S&P 500 down a little more than a 10th of a percent. Financials are up though again. They've been very strong lately, having a nice day. Energy, technology, utilities, those sectors are all green. Consumer discretionary, healthcare, real estate, industrials, that's what's bringing up the rear in the market. We're now lower for the week, down about a third of one percent. NASDAQ comp today down about a quarter of a percent because you are seeing some of the weakness in the big tech names as well. But little as far as catalysts, we got the PPI report. Take a look at Treasury, some flattening of the curve right now where Treasuries have been trading. The 10-year yield 4.418, the two-year at 4.259 percent. So there is some buying today with lower Treasury yields. Again, backing off those high levels we saw post-election. We're 30 minutes here into the trading session. Here are three big movers we are watching. Disney shares rally after the company said that profit would jump over the next three years. We're going to break it all down for you in just a moment. Another day of volatility in the crypto-related stocks as Bitcoin fails to hold above 90,000, but still quite a climb. And then watching shares of Tapestry and Capri, the retailers today, calling off their more than $8 billion mega merger. We're going to take a closer look at what that means for the future of both of these stocks and these fashion houses. But let's start with the big number that we got today, Carl, on inflation, which is PPI. So this is the wholesale look at inflation. Yesterday, we got the consumer price inflation. On PPI, it's kind of a similar story. Pretty much in line, but still points to some stubbornness in getting down that last mile to 2%.

So there's the monthly figure. We got a 0.3% inflation.

Economists are writing this morning that it doesn't set us off trend. Here's the trend. You saw those big inflation spikes coming out of COVID, both on CPI and PPI, which is at the wholesale level. And you've seen the progress as they have come down, but we're not all the way down. And just to correct, so the final demand numbers on the month were 0.2% from a month earlier. So if you look year over year, we're at 2.4% on PPI, right? You want to get down to 2% core, which has been a little bit more stubborn if you take out food and energy at 3.1%. So you could look at these numbers, and here's PCE, which is what the Fed pays really close attention to. And some of the inputs for PPI will go into PCE, Carl, but you could look at this number and say progress has stalled as we've gotten to these lower levels. And so maybe the Fed should be or will be a little bit more cautious when it comes to the rate cuts. What does that mean for December? Well, the market still thinks we're going to get a cut in December, but the jobs report will be really important on that front. And the November inputs, the November data is going to be important as well because we'll see if we get another month in a row of sort of stubbornness and lack of progress on the inflation front, as Bank of America economists say today. Not a time to panic, but Fed should be cautious about it.

Carl Quintanilla (3:53)

Yep. A lot of base case, 25 basis points for December after yesterday's print. Some people point to the idea that some of the firmness in some categories was a little idiosyncratic. Used cars was a good example of that. And then others, like airfares, where we did get a little bit of a month on month pop, month on month pop, don't feed to PCE.