SOTS 2nd Hour: Amazon’s Weak Forecast, Betting on the Big Game, Live: Pinterest CEO 2/7/25

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SPEAKER_3 (0:59)

You're listening to Squawk on the Street, the opening bell in progress.

Carl Quintanilla (1:04)

Meantime, though, market managing to hold its own here. You know it's doing quite well, financials. David, we're going to get some financials conferences next week. But can't turn a blind eye to what Goldman and certainly JP Morgan have done in the last few sessions.

David Faber (1:19)

No, they've had a very strong start to the year. The stocks have, of course, coming off what was a very strong earning season. I will say, and you know this figures more prominently for certain firms and others, you know, first month of the year, M&A, not what had been, at least there was so much enthusiasm for what an incoming Trump administration would mean for mergers and acquisitions. We have not yet seen it, certainly in January as we head into February. That enthusiasm perhaps waning a bit, but I think we'll have to wait and see what comes from DREG and from obviously lesser enforcement perhaps of the antitrust laws.

Carl Quintanilla (1:55)

Meantime, getting some economic data, crossing the tape, Rick Santelli's got it. Hey Rick.

Rick Santelli (2:00)

Yeah, Carl, watch equities. We were just talking about they were making new highs. They reversed a little bit. Interest rates, they might move up here. Some big surprises in our December final read on inventories, but I'm sorry, on our preliminary February read on Michigan. 67.8 is the headline. Way lower than the 71, almost 72 we were looking for. 67.8, that will be the weakest level going all the way back to November of 23 Now, if we look at current conditions, also significantly lower. 68.7, this follows 74 and I understand it's a preliminary. 68.7, that will be the weakest going back to, well, November of last year. And then, finally, if we look at expectations, what lies ahead? 67.3, well below 69.3. And here's where it even gets crazier. One-year inflation moved from, get this, 3.3% to 4.3%.

I'm staring at it and thinking maybe I picked it off wrong off the wires, but 4.3, that would be the highest surveyed inflation on the one-year front in this report, going back to November of 23 And if you look at the 5- to 10-year inflation, it came in roughly as expected, but one-tenth hotter, instead of 3.2, where we've been spending some time, moved up to 3.3. To find a higher number, you're going all the way back to June of 08, when it was 3.4. We've basically gone from 3.2 to 3.4 with regard to history. Now, very quickly, these final on inventories wholesale remains down 5 tenths, down half to 1 percent. And on the trade sales, this is a fresh December number, 1 percent. 1 percent is pretty strong. We haven't had a wholesale inventory up at that level since July of 24 But you watch interest rates here and pay particularly close attention to 4.5 percent on that tenure, especially on a closing yield basis. Sara, back to you.

Sara Eisen (4:04)

That's not a good pairing, Rick. Lower confidence and significantly higher inflation expectations.

Rick Santelli (4:11)

Yeah, definitely not what we were looking for. And my guess is that should put some extra steepness in the yield curve at some point here, and that's what I'd pay closest attention to.

Sara Eisen (4:21)

Okay. Thank you, Rick Santelli. Watching the market here, S&P dipping negative. We're about 30 minutes into the trading session. Here are three big movers we're watching. Amazon is under pressure, the company giving a disappointing forecast, expecting revenue growth between 5% and 9% in the first quarter, which would be the weakest growth on record. But Q4 revenue did overtake Walmart, interestingly, for the first time ever. Stocks down 3.5% off the lows that we saw after hours yesterday. Expedia shares soaring on strong results. The travel site also reinstating its quarterly dividend, and Pinterest also rallying double digits here. The company reporting its first billion dollar quarter and says monthly active users hit a new record high. The CEO, Bill Ready, joins us exclusively in just a few minutes to give us his outlook for the company and tell us about what's working right now. So those confidence numbers are kind of a damper because consumer confidence had been looking up actually since the election. We know that that's always a little bit politically tinge, but I think also the inflation jump in terms of expectations is something worth watching. We know the Fed watches it. Previously, in the last inflation spike, Fed Chair Powell did mention you miss inflation expectations at one point. Now, obviously, it's the market expectations and overall inflation expectations have been in check. There hasn't been anything worrisome, but let's pay attention to that.