SOTS 2nd Hour: Apollo's Chief Economist, Fmr. Fed Vice Chair Talks Policy, & Exclusive: Oaktree's Howard Marks 10/13/25

SPEAKER_1 (0:00)

Now is your time to get into a new DR. Horton home by taking advantage of its national Red Tag sales event going on right now through October 19th. Stop by any of its participating communities and find select Red Tag homes at incredible pricing. So whether you're buying your first home or looking for an upgrade, you don't want to miss the Red Tag sales event going on right now. Discover the DR. Horton difference at drhorton.com. DR. Horton, America's builder and equal housing opportunity builder.

SPEAKER_2 (0:29)

Hey, Fidelity, what's it cost to invest with the Fidelity app?

SPEAKER_3 (0:34)

Start with as little as $1 with no account fees or trade commissions on US stocks and ETFs.

SPEAKER_2 (0:40)

Hmm, that's music to my ears.

SPEAKER_3 (0:43)

I can only talk.

SPEAKER_4 (0:46)

Investing involves risk, including risk of loss, zero account fees apply to retail brokerage accounts only. Zero dollar commission applies to online US equity trades and ETFs and retail Fidelity accounts. Sell order assessment fee not included. Some account types and securities excluded. Details at fidelity.com/commissions. Fidelity Brokerage Services LLC member NYSE SIPC.

Sara Eisen (1:00)

Good Monday morning again. Welcome to Squawk on the Street. I'm Sara Eisen with Mike Santoli. Today we are live from Post 9 of the New York Stock Exchange. Carl Quintanilla is off. David Faber will join us next hour with the new co-CEOs of Oracle. That stock rallying more than 5% on its Analyst Day. As for overall markets, there is relief today. The S&P is up 1.5%.

As President Trump says, it'll be okay on China. But a reversal in tone than we got on Friday, which spooked the market. But technology, communication services, materials leading this market right now, only staples are lower at the moment. Remember, bond markets close for Columbus Day. Today, Howard Marks joins us to discuss how he sees the current market environment. As he marks 35 years of writing his famous memos for Wall Street, he's known for predicting bubbles. Look at his take on whether we're seeing a bubble right now in AI or whether this time is different coming up. And as bank earnings set to kick off, KBW's Tommy Show will tell us what to expect from that space. But Mike, I wanted to start with a deep dive on China. Why? Because with all this talk and worry now about China trade and new tariffs, we did get some data overnight on Chinese imports and exports. And guess what? They were both a lot better than were expected. Chinese imports up 7.4 percent. Again, the street where the economists were looking for less than 2 percent. Exports up 8.4 percent. So China, as a trading nation, is actually doing just fine even without the US. The most stunning standout here in this release is the 27 percent drop in exports to the United States, which is not surprising, right? We put tariffs on. They're not going to sell as much to us. What is notable is that they're selling a lot more to the rest of the world, particularly Europe, which saw 16 percent rise in exports to Europe. But Africa, really interesting here at the end of the chart, saw a more than 55 percent increase in China exporting to Africa. Now, I only set that up because we're wondering who had the leverage, where do these trade negotiations go? I mean, the economic data is telling you that China is doing it without the US.

Michael Santoli (3:03)

Yeah, I mean, it's a managed disengagement, I think, for both sides, US and China, in terms of setting the terms for how we're going to kind of have this relationship, maybe grow less close over time. You know, I think exports to the US for China are like less than 3% of Chinese GDP. So they've kind of managed it down. Now, that's not nothing, if it goes to zero, you're going to feel it if you're China. But I do think it is interesting that in market terms, the market has sort of put the tariff situation in the fixed column. In other words, we kind of know what we're dealing with. We need to know, but now maybe there's some lagged effects we haven't yet accounted for and all the rest of it. And I also see it as it was a very timely and probably necessary immediate excuse for some kind of a pullback and a little bit of a gut check in a market that had gotten wound pretty tight. And now, was it enough? A little 3% pop lower. We just hit the 50-day moving average, barely not even on the S&P 500 We're bouncing, getting back about half, a little more than half of what was lost on Friday. So whether it disturbs this kind of perfect clockwork rally that we had because of a lot of the dynamics, or if this was the one-day dip that everybody was craving to buy before a fourth-quarter rally, that's what we have to figure out right now, I think.