SOTS 2nd Hour: Former FCC Chairman, Zuckerberg vs. Apple, and Banking on Financials 1/13/25

SPEAKER_1 (0:00)

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Ajit Pai (0:28)

Global markets, up to the minute, front page news. Wake up to Frank Holland at Worldwide Exchange. Weekdays 5 a.m. Eastern CNBC. Live ambitiously.

Sara Eisen (0:45)

Good Monday morning. Welcome to another hour of Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and David Faber, live as always from Post 9 of the New York Stock Exchange. Stocks are under pressure here at the Open. We've got the Dow higher. That's thanks to UNH, which is adding 104 points on its own. Caterpillar, Home Depot, Goldman Sachs. But as you can see, the S&P 500 down half a percent. Why? Because technology is lower. It's such a big market weight. It's why the NASDAQ is down 1.24% here in the early going. Tech, communication services all weaker. Some of the usual suspects, the big winners of last year, Supermicro down 6.5%, Dell, Micron, Palantir, Nvidia, all weaker today. But there is strength in some of the cyclical groups. Energy is up strongly on the price of oil. Materials, healthcare, industrials, financials and real estate, they're all higher right now. Take a look at Treasuries. This has been one of the headwinds for stocks lately. We'll talk about global yields in a moment. But the 10 years elevated again, 477 The two-year yield is a little bit lower, so some buying on the short end and the long end, with the 30 year just below 5%.

I mentioned energy stocks outperforming up almost 2%. Oil rallies to its highest level since July today on a fresh wave of US sanctions on Russia's energy industry. We are 30 minutes here into the trading session. Here are three big movers we're watching. Nvidia I mentioned shares falling after the Biden Administration announced new restrictions on AI chips. Those new regulations will cap the number of AI chips that can be exported to most countries while maintaining a block on exports to China, Russia, Iran and North Korea. Nvidia calling the move misguided. Apple shares are under pressure on a new report showing iPhone sales fell 5% in the final quarter of 2024 and its global market share slipped. Details later this hour. Also, J&J buying drug maker intracellular therapies for more than $14 billion, boosting its presence in the market for neurological disorder treatments. Both stocks, interestingly, are higher.

Carl Quintanilla (2:44)

Keeping a close eye on the wildfires in Los Angeles this morning. The death toll now has risen to 24 over the weekend. Forecasters are again warning of dangerous weather with the return of these strong winds about midweek. California Governor Gavin Newsom says the state's wildfires could be the costliest disaster in US history and we will get a live report from the state on the ground in just a moment.

Sara Eisen (3:08)

Obviously watching that. We're also watching the economic data this week in the markets because we do have a few biggies. We'll get CPI and PPI, consumer price inflation, wholesale price inflation, retail sales. You know, CPI is important because we're back on inflation watch again with the economy doing better than everybody thought and the inflation number is a little bit stickier on the way back down. Obviously some big conferences, be on alert for company earnings, pre-announcements. This week we'll be at the National Retail Federation tomorrow. Jim's at the JP Morgan Health Care Conference and then big earnings, especially the banks. I will be listening for commentary from the bank CEOs on what they're seeing in the economy and what they're seeing inflation. You know, one of the reasons I have been sort of on this stubborn kick about inflation still being present and the economy being better than expected has been because of the bank CEOs. And when I was with them in October in Riyadh for that conference, they didn't expect two more rate cuts for the rest of the year. We got two more rate cuts the rest of the year. But I think that was a surprise to a lot of people who look at the economy. The global yield story is front and center. And it is being anchored by the US bond market, no question. This is the $28 trillion market. It's the biggest and deepest. But yields are up around the world. UK yields elevated. They've got some some deficit concerns. German yields elevated. Even Japan yields are elevated for themselves because of inflation concerns. But it really all guys does come back to the US. Last week, we got a chance to speak with Treasury Secretary Janet Yellen, of course, one of the foremost economists. She led the Fed as well. I asked her what what she thought was the message from the rising bond yields.