SOTS 2nd Hour: Bull market anniversary, Nike’s New Era, & Smart Money’s Smart Tech 10/14/24

Sara Eisen (0:06)

Good Monday 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 kicking off the week in the green. S&P 500 up 6 tenths of 1%.

The Dow is lagging down 50 points, but the NASDAQ is up 1%. So clearly the picture is technology in the winning spot to start the week. Information technology, communication services, utilities, consumer discretionary and financials, all positive right now. Energy is the worst performing sector. And if you look at where the strength is, NVIDIA is strong. Some of the chip names, ARM, for instance, Applied Materials, they're all helping the NASDAQ in particular. Energy is trading. So we'll show you that because the bond market is closed today for Columbus Day. WTI crude down 1.3%, Brent crude just below $78 a barrel. We're 30 minutes here into trading. Here are three big movers we're watching. Caterpillar, one of the biggest laggards this morning. morgan Stanley downgrades the name to sell on what they call mounting risks to CAT's construction-related business. And the stock is down 2.5%.

Boeing's under pressure after announcing plans to cut 10% of its workforce. That's about 17,000 people. Remember the planemaker also warning that it's looking at much bigger third quarter losses, weaker sales than what Wall Street is expecting. It's also pushing back the launch of its new wide body airplane, the 777X until 2026 This all as the machinists are on strike, which is now entering its fifth week. Also watching NVIDIA, I mentioned it's higher today about 3% from, also 3% from another all-time high and also up more than 3%. Two firms on the street reiterating their buy ratings on that stock. Shares have rallied more than 170% so far this year. As for the overall macro picture this morning, we did just get in the last hour some comments from Minneapolis Fed President Neil Kashgari, not a voter this year, but did say that more cuts are justified as we enter the week wondering if, I don't know, maybe they're going to pause, not according to Kashgari. As of right now, it appears likely that the further modest reductions in our policy rate will be appropriate in the coming quarters to achieve both sides of our mandate. Ultimately, the path ahead for policy will be driven by the actual economic inflation and labor market data, which is why we pay such close attention to it every single day. But it looks like he's in favor of more cuts. As for what we're going to watch on that front this week, it's really going to be about earnings, which will give us a good snapshot into what's happening on the economy. Of course, the commentary from the banks, Bank of America, Tomorrow and Goldman Sachs. Also comments from Procter & Gamble later in the week, Johnson & Johnson. We'll get we'll start to get some more diversified views of the economy. American Express on the consumer on Friday. And then China continues to be front and center. You know, the Chinese stock market went up overnight, guys, and there was this highly anticipated announcement from the Finance Ministry over the weekend. Most of the notes I'm reading this morning say that it was disappointing and that it didn't point to direct fiscal stimulus to stimulate the consumer and didn't give a number on it. However, David, it was enough to get markets rallying and some folks excited because there were some measures announced, for instance, when it comes to alleviating some of the property sector and local government issues, for instance. They hinted at room for issuing more sovereign bonds to relieve the debt burden of local government. So the deleveraging, sort of that's necessary. People like that. And so markets don't have that.

David Faber (3:35)

Not enough to get to the key bellwethers we keep an eye on here going, which is Alibaba and Pinduoduo, both of which are down. Not sharply, as you take a look. But PDD down about 2 percent, Baba down less than a percent. This follows losses later last week. Obviously, huge gains for a couple of weeks there. We had Eunice Yoon join us earlier on the program, a reporter in Beijing. It's all about specifics, Sara, and they are still lacking in specifics.

Sara Eisen (4:05)

Specifics and stimulus aim directly at consumption, which could be why Alibaba is not loving the news. But it was enough to get Goldman Sachs to upgrade forecasts for 2024 and 2025 on China from a lower base.

Carl Quintanilla (4:19)

Not a lot. 4.9 for this year is not a huge GDP number for their historical targets. We'll see what we get on Friday.