SOTS 2nd Hour: Holiday Retail, Commercial Real Estate & Qualcomm vs. Arm Trial 12/16/24

SPEAKER_1 (0:00)

At PGEUM, our global perspective today unlocks investment opportunities tomorrow. Our 1,400 investment professionals provide global expertise and local insights to help you navigate the complexities of a changing world. We offer a diverse range of active strategies across public and private markets to help you identify opportunities and achieve your long-term goals. PGEUM, our investments shape tomorrow, today.

SPEAKER_2 (0:29)

Support for this program is provided by Chevron. The Anchor offshore platform is utilizing breakthrough technology to enable us to produce oil and natural gas in the US. Gulf of Mexico at pressures up to 20,000 psi, a new industry benchmark. Anchor is part of Chevron's plan to produce 300,000 net barrels of oil equivalent per day by 2026 in the US. Gulf of Mexico, home to some of our lowest carbon intensity producing operations. That's energy in progress. Visit chevron.com/anchor.

Carl Quintanilla (1:00)

Good Monday morning.

Sara Eisen (1:01)

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. Stock's kicking off the week in the green. Last full trading week of the year without the holidays. We've got the S&P up a third of 1 percent, NASDAQ up six-tenths of 1 percent, tech is leading again. It's been a big tech rally continued. Up 63 points right now on the Dow. So broad-based rally ahead of a big week where we have the Federal Reserve right in the middle. We'll talk about it in a second. Take a look at treasuries right now and how we are starting. Remember this trend we've seen, firming treasury yields. They've been higher over the last week, giving a little lower this morning, the 10-year 3.4.385 percent. So there's some buying of treasuries into this week, data-heavy week as well. We're 30 minutes here into the trading session. Here are some movers we're watching. Bitcoin hitting a new record high, topping $106,000.

Overnight, crypto-related stocks pushing higher as well. MicroStrategy, among them, the company being added to the NASDAQ 100 The stock has surged almost 550 percent this year. We're going to talk to Michael Saylor, the CEO next hour. Then shares of Broadcom continue their big rally up 8 percent right now. That's on top of Friday's 24 percent surge. The stock getting a number of price target hikes this morning on the back of its profit beat and raised guidance. And Broadcom is now the eighth US company to top $1 trillion in market cap. Guys, I mentioned the Fed. That's really what it's all about this week. Although we do get a big report on Friday, which is the Fed's preferred measure, the PCE data on inflation. We'll get some big earnings as well this week. Micron, Nike, they're always kind of early and out of cycle to report. So, good tells on the consumer and on chip demand. As far as the Fed, though, I don't think there's a lot of mystery going into this week. The market is priced for more than 90% odds at the Fed cuts rates. But it's an interesting situation because it's not an obvious case about the Fed cutting rates and what they might do next year. The other interesting factor is we're going to get the dots this week, which is the projections of how many rate cuts there will be into the next few years from the different members of the Fed. Article that everyone's talking about this morning from the Wall Street Journal's Nick Timmeros, who covers the Fed, the Fed's game plan on interest rates, keeps shifting. He does say in the article basically that the Fed is on track to cut interest rates, but also notes that some officials are concerned about inflation and the potential for cutting too far and that it's going to be a little bit of a harder case to make, which is something we've been talking about here.

The latest inflation rates, especially CPI, I would say, showing that, look, the trek down from 3% to 2%, that last mile inflation is proving stubborn and sticky. And at the same time, the jobs market, which the Fed has been very worried about, while, yes, has lost momentum in terms of job creation, is very strong still and speaks to a tight labor market. So the case for cutting is not as obvious and clear. So maybe the dots won't show as many cuts as they previously did. I think the medium was at four cuts next year for the dots previously, and now the market's at half of that, basically.

David Faber (4:15)

Well, certainly the Goldman dots are fewer in number. They take away January. So they're left, I think, for the next year with March, June and September for cuts.