SOTS 2nd Hour: EU Trade Deal Details & The Impact on Energy, Alcohol Stocks… Plus: This Week’s Earnings/Fed Playbook 7/28/25

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Carl Quintanilla (1:08)

Good Monday morning, welcome to Squawk on the Street. I'm Carl Quintanilla with Leslie Picker and David Faber here at Post 9 of the New York Stock Exchange. Sarah Eisen is off today. Markets looking at another all-time high for the S&P after putting five in a row together last week. We're watching treasuries as well, with the yield curve a little hotter, index-wise on stocks, tech and energy doing most of the lifting today. Coming up this hour, Rockefeller's Ruchir Sharma out with a new FT piece called What the World Got Wrong About Tariffs. He'll join us to discuss following news of this EU trade framework and a lot on the trade talks today with China. We'll get you set up for the busiest week of earnings season, with more than a fifth of the S&P and nearly a third of the Dow getting ready to report results.

David Faber (1:50)

All right, we're monitoring President Trump's bilateral with UK Prime Minister Stormer in Scotland. They're talking a lot about a lot of different things, trade to the Fed, of course, rates, something the president likes to come back to. In the meantime, Treasury Secretary Bessent is meeting with his Chinese counterparts in Stockholm, that kicking off a new round of trade talks after they did reach a deal over the weekend or a preliminary deal with the EU. Eamon Javers is tracking all of it for us and is live with the latest. Eamon.

Eamon Javers (2:21)

Hey, David, that's right. We're here in Stockholm. We are sort of officially now in the phase where we're waiting for the puff of white smoke coming out over the Rosenbad, which is just to my right here. That is sort of the equivalent of the White House here in Sweden. That is the prime minister's office. We saw the prime minister of Sweden coming out, greeting the delegations as they arrived earlier. We saw the Chinese motorcade arrive just a short time before the US motorcade arrived. Treasury Secretary Bessent is there. He's leading this trade negotiation along with Jameson Greer, the US trade representative. So much on the table here, as you guys have been talking about through the morning. The key question here is whether or not they can get an extension of the deal that they came to in London a month ago. That was a 90-day deal. That expires, we believe, on August 12th. And so the question is, can they kick that can down the road here and at least extend out the current agreements to the fall, to a point where we might be able to see a meeting between Xi Jinping and President Trump in person to sign a bigger deal. So expectations here, relatively low. Jameson Greer was out setting a bar pretty low earlier today on American TV, saying he didn't think necessarily it was even a guarantee they could get that extension of the deadline. So we'll wait and see. And as I say, we're waiting for the puff of white smoke from the building here to signal that they have a deal, David.

Jim Cramer (3:44)

Absent the extension of a deadline, Ayman, then what happens? Do they just kind of revert back to the levels that they had back in April?

Eamon Javers (3:55)

Yeah, I mean, the question is, you know, after that extension, what you would see is a snap back to the levels that happened before Geneva, right? And so you could have very, very high tariffs snap back into place. So obviously, it's in very few people's interests for that to happen. These negotiators here know that they want to get that extension and we'll see what else they can agree to, whether there's something around, you know, Chinese oil purchases, you know, they're buying Russian and Iranian oil. Could they offer something there? What about the TikTok deal that's been sort of hanging out there in abeyance for months now? You know, all of that's part of the mix. We don't know what's officially on the table. But certainly, if Donald Trump and Xi Jinping are going to meet at some point, all of the entire relationship is going to be on the table. That includes, you know, military issues, security issues, economic issues, diplomatic issues, cultural things. There are Americans who are being limited from leaving China right now. All of that presumably would be in the mix as well for that bigger deal. We don't expect breakthroughs on all those points here in Stockholm today and tomorrow though, guys.