SOTS 2nd Hour: A Fresh Read on Retail, Trump Transition Latest, and an Exclusive w/Tapestry’s CEO 11/15/24

Sara Eisen (0:06)

Good Friday 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. Stocks are pulling back today. The S&P 500 down about 8 tenths of 1%.

Most sectors are red. Technology, though, is mostly weighing on the major averages. Down 1.5% information technology. Three sectors green right now, energy, financials and utilities. Financials continuing their run, actually having a good week up more than 1%, despite a market that is down 1.6%. That's the S&P tally so far for the week, and the NASDAQ down 2.3%. So we are seeing this pullback, part of it on higher yields, higher rates, so recalibrating the recalibration of the Fed and what they're going to do next. Take a look at the treasuries right now. We did get some data, which we'll talk about, but higher yields, 4.485. So we're bumping up against that 4.5 level and the two-year yield at 4.36%. We're 30 minutes here into the trading session. Here are three big movers we're watching. Shares of Domino's Pizza and Pool Corp higher after Berkshire Hathaway discloses new stakes in both companies. We're going to have more on what the big money investors are buying and selling in the market later on in the show. Vaccine makers are under pressure again after President-elect Trump picked RFK Jr. to lead Health and Human Services. More on what that appointment would actually mean for Big Pharma coming up. And then Alibaba is moving lower after missing revenue estimates, but profit jumping almost 60% thanks to growth in the cloud business.

Carl Quintanilla (1:38)

A lot of data today and FedSpeak. Let's get some inventories with Rick Santelli. Morning again, Rick.

Rick Santelli (1:43)

Yes, morning, Carl and Dean. Now, this is September business inventories, which means it's the last month of the third quarter, and we're expecting a number up 2 tenths, comes in a bit light up 1 tenth. That's actually the weakest inventory build on a monthly basis, going all the way back to March, when it was a negative 1 10 So this won't be kicking in any additional horsepower to the GDP number, and it does underscore that we want to pay close attention for inventories to see how many widgets we're making, what it does for GDP, but maybe ultimately the best litmus test is if there's buyers for all the inventory. We've had a huge jump, as Sara pointed out, in rates. Pre-data this morning, pre-830 Eastern, we're at 431 on a two, it's now at 435, up 10 on the week, unchanged on the day. Pre-data, the 10s were at 443, they're currently at 448, they touched 4.5, they're up four on the day, and get this, they're up nearly 20 basis points on the week. Sara, back to you.

Sara Eisen (2:43)

Yeah, it's a big jump. Thank you, Rick. Rick Santelli. To hit retail sales today, this is obviously an important one, and we did get a 0.4% jump month over month.

I mean, remember, it's unadjusted for inflation, but it still paints a picture of a pretty resilient and healthy consumer, also upwardly revised 0.8% gain in September. So it was less than September, but September was better, and October is not so bad. Eight of the 13 categories that breaks down into retail sales, posted increases, electronics and appliance stores, very strong in the month with a more than 2% rise. Motor vehicle and parts dealers, so jump in autos as well, food services and drinking. This is the only services part of the entire retail sales. Everything else is goods, so people watch it closely because that's been a hot part of the economy, still going strong, building materials. This is again, just the monthly jumps. As far as where the spending is not happening, that actually saw declines, the miscellaneous store, retail, furniture and home, no surprise there. Heard from Home Depot CEO on Squawk today, that's been a weak spot. Health and personal care and sporting goods and hobby stores. So if you add it all up, a lot of people look at the control group, which feeds into the government calculation of GDP in terms of spending. That actually decreased 0.1% for October. So that is a notable step down. And we'll see that in terms of the GDP expectations. But overall, nothing really to worry about as far as the consumer and as far as the Fed, which we know is trying to walk this fine line between squashing inflation once and for all and bringing it down to the 2% target without wrecking the economy. Don't think there's anything in here that would sway them one way or another. We did hear from Fed Chair Powell yesterday speaking at this event, which really moved the market as far as his more willingness to sound like he may be moving toward a pause. Listen for yourself.