SOTS 2nd Hour: Food Fallout, New Boeing CEO’s First Earnings, Exclusive: Coke CEO 10/23/24

Diana Olick (0:01)

Back to Squawk on the Street, I'm Diana Olick with breaking news from the National Association of Realtors. Existing home sales in September fell 1% month to month to a seasonally adjusted annualized rate of 3.84 million units. That's right along expectations, but it is the lowest level since October of 2010 Sales down 3.5% from September of last year, and sales fell in all regions except the West. Now, this count is based on closing, so contracts signed likely in July and August. Mortgage rates started July close to 7% on the 30-year fix, then fell slowly through August to just below 6.5. Rates are now a full percentage point lower than they were a year ago. Inventory rose 1.5% from August to 1.39 million homes for sale. That's a 4.3-month supply. The pressure continues on prices. The median price of an existing home sold in September, $404,500.

That's up 3% year over year, and the 15th consecutive month of annual price gains. And that's why cash is king. 30% of sales, which is unusually high. Homes are sitting longer, an average 28 days, compared with just 21 days a year ago. And first-time buyers really fell out, just 26% of September sales. That matches the all-time low from August. Sara?

Sara Eisen (1:15)

Okay, Diana, thank you very much on existing home sales. And good Wednesday morning, everyone. welcome to another hour of Squawk on the Street. I'm Sara Eisen, here with Carl Quintanilla and David Faber, live at Post 9 of the New York Stock Exchange. Stocks are under a little pressure this morning. S&P is down four-tenths of 1%.

The strength is in utilities, real estate, industrials, and materials. Energy just popped into the green as well. Everything else is weaker. You've got tech under pressure. That's why the overall index is lower. Same with the NASDAQ. Right now, it's pulling back. So we are actually now tracking for a loss on the week, would be the first time if we continue through Friday in the last seven weeks or so. But part of the reason is we're seeing higher treasury yields. That's been a constant theme. Look at the 10-year yield. We're hovering around 4.2% above there. So now we're looking at the highest yield since back in July, two-year yield above 4%. We're 30 minutes here into the trading session. Here are three big movers we are watching at this hour. Shares of McDonald's dropping, weighing on the Dow right now. The CDC saying an E coli outbreak was linked to the fast food chain's quarter pounder burgers and has led to 10 hospitalizations and one death. More on that in just a moment.

Starbucks shares also sliding after pre-reporting results. Sales falling for the third straight quarter fueled by a 10% drop in traffic at its North American stores. Starbucks also pulling guidance for fiscal 2025 We're gonna have more on both consumer names later in the show. Also Coca-Cola shares under a little pressure. Earnings topped estimates, higher prices helping to offset sluggish demand for beverages down 2.4% right now. The CEO James Quincey will join us exclusively in just a few seconds to talk about the company's outlook. But guys, the overall picture today is one of these rising treasury yields, which is happening because the data has come in better and strong. It's happening, a lot of people think, because also with a view toward the election, higher deficits, higher fiscal spending, all of that could be inflationary, could also put pressure on treasuries in the long run. Certainly if we have more debt problems. I'm paying attention to some of the macro commentary that we're getting from companies today about what they're saying about demand. And it's again, a mixed picture depending on where you sit in this economy. Winnebago CEO, for instance, not so hot. Performance fell short of our expectations, primarily reflecting the sluggish retail demand environment. L'Oreal CEO, good global snapshot. Our business remains pretty good in North America, Europe and emerging markets despite the summer slowdown. Wreck-It Bank, sir, which makes, I don't know, Lysol, Musinex, which I take a lot, and Baby Formula. We're seeing continued good volume growth across many of our health and hygiene brands and geographies. And then this just in from the Hilton CEO who just got off the conference call, Chris Nacetta, on how he describes travel demand.

Chris Nacella (4:03)

I think the word resiliency I used to describe our business, I think that word is getting used a lot to describe the economy. And I think, you know, there is a very broad consensus view that the economy will continue to be, you know, it obviously has been slowing, because that's what the Fed has been trying to do here in the US and to a degree in other parts of the world, but focused on the US. But, you know, it remains strong, resilient and showing positive growth.