SOTS 2nd Hour: CPI Wrap-Up, Bank Earnings Breakdown, & the Road Ahead for LA Real Estate 1/15/25

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Jim Cramer (1:02)

It's Jim Cramer here. You're listening to the opening bell of CNBC's Squawk on the Street. Don't miss a minute of the action.

Sara Eisen (1:16)

Good Wednesday morning. Welcome to Squawk on the Street, Money Movers Next Hour. I'm Sara Eisen with Carl Quintanilla and David Faber here at Post9. Take a look at the markets right now. We are in celebratory mode after the more benign CPI report. The S&P 500 up 1.7%. NASDAQ's up 2% right now. We've got every sector higher. Financials are leading the charge up 2.3%.

Real estate also with a nice gain of about 2%. Why? Because rates are moving south. Interest rates in the market, that is. Yields coming down off of those very elevated levels. Bonds rallying off the better cues that the market is taking from this CPI report. Tenure yield 465 So a little bit of relief there for yields and equities as well.

Carl Quintanilla (2:05)

Keeping a close eye on the Supreme Court this morning as the justices debate whether to step in and block this potential TikTok ban from going into effect on Sunday. That SCOTUS decision could happen this hour. We're going to bring that to you immediately if we get more.

Sara Eisen (2:19)

We are 30 minutes here into the trading session. Here are three big movers we're watching. Big banks kicking off another busy earning season. JPMorgan, Goldman Sachs, Wells Fargo, Citi, all on the move. We're going to break down the numbers for you in just a moment, but they're all higher right now. More volatility in the quantum stocks. All gaining this morning as Microsoft calls 2025, the quote year to become quantum ready. And then watching BlackRock, big gainer on the SMP after reporting a record year of net inflows, taking their assets under management to a record $11.6 trillion.

Just gigantic. And now a big mix of public and private. But guys, the big story today is CPI, inflation. And the markets are celebrating this number as I mentioned. Why? Well, here's the good news. Core CPI, which takes out food and energy, was better than the economists expected. The core figures come in at 0.2% increase on the month. 0.3% was what we got last month. And 0.3% is what we expected. So we'd like to see that cooler number. That's good news. Also, after four consecutive monthly gains of 0.3%, it's good to see a 0.2% number. Also, another piece of good news here, super core, which the Fed looks at, it's services inflation. If you take out rent, which has been stubbornly high.

Also, some relief there, 0.2% versus the 0.3% prior. It's the first annual drop in core CPI since July. That's why the market is breathing a sigh of relief. Does it really change the trajectory for the Fed? Hard to know, right? We do expect this pause in January to go through the beginning of the year. Maybe it looks like they could cut in June instead of October. Market's still grappling with this idea of whether we'll get one cut or two cuts. But for a Fed that has been worried about the stubbornness and lack of progress and disinflation, this is pretty good news. The overall number actually was a little bit higher. We got an increase there, 0.4% on the month and 2.9%. But that was guys largely due to energy, which we knew energy prices were higher. And that made up a big percentage of the move. Surged 2.6% on the month. Gasoline, fuel, oil, propane, they all saw big monthly gains. In fact, the biggest of the year. But look, we're still seeing inflation on a monthly basis and used cars and trucks. New vehicles, up 0.5% on the month. Food prices are still rising. And these are the lowest gainers in terms of prices. Apparel and medical care service, still higher. So we're still dealing with inflationary pressures in this economy, but we want to see the direction of travel moving toward lower numbers. And the market got that in core CPI. And that's why you're seeing a relief rally, because we were starting to price in some worst case scenarios on the inflation front.