SOTS 2nd Hour: Economic Outlooks & Recession Odds 4/4/25

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Sara Eisen (0:59)

Good Friday morning, everyone. Welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla live from Post 9 of the New York Stock Exchange. David has the morning off. We've got another major sell off on Wall Street today. Day two reaction to the tariffs. China hitting back with tariffs of its own, 34 percent. S&P 500 is down almost 3 percent. So not quite as bad as yesterday, but still pretty ugly. Every sector is lower.

The sector is taking it the hardest right now. You've got energy down 5.6 percent. Financials down 4 percent. Industrials down 3.65 percent. The Nasdaq is down 2.8 percent. I mean, it is shaping up to be a pretty tough week. As we close out the week, we're looking at declines of 6 percent on the S&P, more than 7 percent for the Nasdaq as the markets digest this global trade shock after Liberation Day.

Carl Quintanilla (1:49)

About 30 minutes into the trading session. Here are some big movers. We're watching in this market sell off. Big tech, of course, we're watching closely, tanking it again. All Mag 7 names are getting crushed in the session. Apple coming off the worst day since 2020 We'll get more on the tech trade in a minute. Retail names again, underperforming. Nike is now down 30 percent so far this year. And as we said, we're a week away from the big bank earnings, all the financials getting slammed again. The second worst sector at the moment. We'll get more on the financials on the show.

Sara Eisen (2:19)

Let's bring in our senior markets commentator Mike Santoli, as we continue to watch the sell off. The angle I'm going to take today is some silver linings. I think there's been a lot of doom and gloom. We know there's a trade shock. We know it was worst case scenario. We know we're going to have to readjust the economic outlook. Having said that, there are some pieces of good news today. Let's start with jobs. I mean, it's not a normal reaction to a very good jobs report, but that's because you could look at it as a stale report. But it's new information. And the information is that the tariff anticipation was not weighing on the labor market heading into the month of March. The overall headline number comes in better than expected. The wage increase cooled down a little bit, which is good news if you were worried about inflation, for instance. We're still creating a lot of jobs. And if you look at where the jobs were, I mean, it was pretty broad. Healthcare services continues to be a big job grower. Social assistance, retail trade, transportation, warehousing. You know, federal workforce lost 4,000, but I don't know, with all the hand-wringing over Doge, that wasn't too bad. Local governments managed to add 23,000. So it just, the unemployment rate did take up to 4.2%, which you may be worried about, but it did for the right reasons. It's because more than 200,000 people entered the labor force. Also, that's pretty good news. And the overall number at 228,000 was a lot better than economists expected.

Now, is that going to hold up with all these tariffs?

Mike Santoli (3:48)

Probably not. Yeah, it just tells us the initial conditions of the labor market were pretty steady and pretty favorable heading into all this. Yeah.

Sara Eisen (3:54)

All right. So I'll throw more at you. The president wanted lower oil prices, lower bond yields, and a weaker dollar. And he's getting all of those big time. I mean, oil now is at the lowest since 2021 That's helpful for the economy. It's helpful at the gas pump. Interest rates have fallen sharply. We're seeing the 10-year yield now below 4%. We're at the lows of the year. And the US dollar, as Rick was just saying, it's significantly weaker. Is it happening for the wrong reasons? Yes. It's because there's a big markdown in growth anticipation for the US. But this will help cushion.