SOTS 2nd Hour: Charles Schwab's Liz Ann Sonders, The Netflix Playbook, and A Golden Opportunity Or Red Flag? 10/20/25

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Sara Eisen (0:52)

Good Monday morning, welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and David Faber. We are live for you, as always, at Post-Nine of the New York Stock Exchange. Coming up this hour, as the S&P 500 comes off its best week since August, Liz Ann Sonders from Charles Schwab lays out one part of the market that could be a great opportunity still going forward. Plus, why gold and stocks are partying together? Rockefeller's Ruchir Sharma breaks down the rare correlation and why he says it could end in an unpleasant surprise.

And Mark Cuban telling CNBC that the Trump administration deserves credit for its efforts to reduce drug prices. We've got his exclusive comments next. But first, guys, we want to start with the data overnight from China because it was not so hot. Chinese GDP coming out at 4.8% below its 5% target and also the slowest level in about a year. Just shows some of the pressures that have been building on the Chinese economy. Something that Treasury Secretary Scott Besson actually said in an interview last week as to some of their motivation for why they're acting tougher when it comes to the trade situation. Just to break it down further, what you see is retail sales are weak. 3% was less than expected. The consumer has been sluggish in China. What's strong? Industrial production. Their export machine is still going and powering ahead up 6.5% on the year. And we saw in export data last week that they're finding new markets outside the US. Exports are plunging to the US, but they're booming in places like Africa and the rest of Asia and even Europe. They've been higher. So that's what's keeping their economy. But the really weak number was actually fixed investment for China, which saw a drop in that. And that's, you know, problematic for the world's second biggest economy. So it gives you a little bit sense of what's going on there beneath the surface, as we wonder about where these trade tensions lie at this point.

Carl Quintanilla (2:42)

Yeah, we were just talking to Jim about the symbolist note from last week out of JP Morgan, where he looks at just how little China relies on the US for their export markets now and how much we still rely on them for Rare Earths. So that this discussion about leverage continues and symbolist words, China may have more leverage than the White House appreciates.

Sara Eisen (3:01)

Well, they have leverage in the Rare Earths, but I did think it was really notable that there was news this morning from Xinhua, the state news agency, on that trade official getting fired. That was the trade official that, remember at our conference last week in Besant, America, Treasury Secretary Besant sort of unprompted when I asked him what was happening there with the Rare Earth restrictions, actually name dropped him and called him unhinged. Listen to this.

Scott Bessent (3:29)

The Chinese are trying to backfill the narrative, saying, well, the US did A, B and C, therefore, we had to do D, and that's not true. It is that there was a lower level trade person who was slightly unhinged here in August. I think his name is Lee Kuan Gong, and is threatening, saying that China would unleash chaos on the global system if the US went ahead with our docking fees for Chinese ships. And this is clearly something that they were planning all along. I think that things can de-escalate, that we don't want to have to escalate.

Sara Eisen (4:18)

Well, good news, and perhaps the Treasury Secretary succeeded in that report that this official, slightly unhinged one, is out now. So maybe things can proceed in a sort of more productive and constructive way when it comes to the US and China. Maybe that's helping the situation today. And certainly, I think the markets, David, have felt better about de-escalating ever since that Friday.

David Faber (4:41)

Although we still have 100% tariffs going to affect November 1st, at the same time the president has said that's unsustainable. Jensen Wong pointing out, he sold out zero, no chips in China at this point.