SOTS 2nd Hour: Big Tech Gets Wrecked, A Quantum Slump, the State of Commercial Real Estate 1/8/2025

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Carl Quintanilla (0:32)

Good Wednesday morning, welcome to another hour of Squawk on the Street. I'm Carl Quintanilla with David Faber, live at Post 9 of the New York Stock Exchange, alongside Sara Eisen, live from Washington, DC., ahead of a big interview you do not want to miss at 11 Treasury Secretary Yellen talking all things deficit, fiscal spending, China, exit interview, and a lot more. Meantime, take a look at the markets. They got some softness in the major indices. Russell, though, down one and a half percent as the 10 year is partly to blame. His 473 before backing off just a bit. Busy day, we'll get a 30 year note auction and some Fed minutes this afternoon. Some wholesale trade data hitting the tape. Let's get to Rick Santelli for that. Hey, Rick.

Rick Santelli (1:12)

Yes, Carl. Now on inventories, these are a November final number. So minus two tens remains minus two tens. And that's, of course, a fourth quarter number. And inventories being lower can have a negative effect on GDP. If we look at trade sales, completely different story. Up six-tenths of a percent. That's the best or biggest increase in trade sales since February of this year. And being a November number, it's the second best number of 2024 Now, we do see a negative revision from minus one-tenth to minus three-tenths, but we want to pay attention. We want to really pay attention to inventory and trade sales behavior in front of what may be legislation that can affect not only that, but trade balances, trade deficits with various countries. You mentioned 473, yes. And in a 30-year, we reached the yield of 497 Remember, in a 30-year bond, we haven't traded over 5% since the end of 2023 And you're right, pay attention to that 22 billion reopened 30-year bond auction at 1 o'clock Eastern. Sara, back to you.

Sara Eisen (2:23)

Yeah, a lot of focus on those bond auctions this week. Thank you very much, Rick Santelli. Just want to mention some of the other data that we got today because more good news on the jobs front, at least when you look at jobless claims, which continues to paint a pretty strong picture of the labor market, one where we're not seeing layoffs piling up. In fact, quite the opposite. So what we got in the last week was a decline of 10,000 jobless claims, fewer Americans filing for unemployment claims, down to 201,000 in the week. So that moves the four week moving average, which sort of smooths out the weekly volatility into a declining mode to 213 It's the lowest since April 2024 And it's more evidence of a strengthening labor market and business confidence. Now, you could also look at ADP, which did come in weaker than expected. This is the private sector read on jobs. It's not a particularly great predictor for the government report that we're going to get on Friday, but we should note it because employment only rose by 122,000 last month. And that was the least in four months. And as you can see in the breakdown, mostly in the services producing jobs like health care, not as much in the goods producing, which only added 10,000 jobs. We're expecting a number around 150,000 for the month in terms of the monthly unemployment report that we get on Friday. And here's the breakdown, as you can see, of where the jobs were and where they weren't. Manufacturing, for instance, was a drag down 11,000 jobs. But overall, and I'll just say, Carl and David, if you add in yesterday's job openings data, which were very strong, and then look at what the Fed looks at, which is that ratio of job openings to the number of unemployed people, that actually moved a little bit higher. 1.13 job openings per unemployed. There's the chart. So, we're kind of back to pre-COVID levels there. And you can see we've come down as the labor market has cooled in a way that the Fed has expected. But that tick up certainly is something that I'm sure the Fed and economists will be talking about, about whether, you know, they don't have to worry as much about the labor market as they do, for instance, stick your inflation.