SOTS 2nd Hour: Insured Losses, Apollo's Chief Economist, & An AI CEO's New Warning 1/27/26

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Thy ticket, Lady Jennifer of Coolidge.

X. Eyeé (0:33)

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David Faber (0:38)

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Sara James (0:42)

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Sara James (0:48)

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Sara Eisen (1:06)

Good Tuesday morning. Welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and David Faber. We are live, as always, from Post 9 of the New York Stock Exchange. Coming up on the show today, Apollo's Torsten Slok with us as the Fed meeting gets underway and speculation swirls about when that new Fed share announcement could come. Plus, as President Trump threatens higher tariffs on South Korea, we'll talk to the author of a study, Making the Rounds on Wall Street and Beyond, that says American buyers are bearing about 96% of the tariff costs. And health insurers are sinking this morning as the Trump administration proposes a flat rate increase for Medicare payments in 2027 We'll talk about whether that pullback is a buying opportunity.

Carl Quintanilla (1:46)

First up, let's get some conference board with Rick Santelli. Good morning, Rick.

Rick Santelli (1:50)

Good morning, Carl. Indeed, these are January consumer confidence. Remember, confidence, whether it's this data set or University of Michigan, really seem to have lost GPS with the equities. This is no exception. Headline expected to be over 90 Comes in at 84.5.

84.5. That would be the weakest going all the way back to 2014 The bright spot, last month we had a revision from 89.1 up to 94.2. Now, if we look at the present situation, 113.7.

113.7. That follows a big upward revision from 116 to 123, but it still represents the weakest since Feb of 21 And finally, expectations of what may lie ahead, 65.1. That would be the weakest since April of last year. And in the rearview mirror, another positive revision from 70.7 to 74.6. So very weak numbers, but very big revisions to our December numbers. Richmond Fed for January on the manufacturing side comes in at minus 6 Minus 6 Minus 6 actually is the best number since it was minus 4 in October of last year. Manufacturing not looking good in this series either. Now, let's switch gears to the service side. Also comes in at minus 6 for its January read. And that would be the weakest, well, since October when it was minus 1 So it's actually an improvement because the last two months have been significantly worse. And that's the service sector. Right now, the dollar index is hovering if it should close here at a four-year low, taken out last year, September's low close. And finally, we do have 70 billion five-year notes going up for auction at 1 o'clock Eastern. Sara, back to you.

Sara Eisen (3:42)

Okay, we'll watch that closely. Thank you, Rick. Rick Santelli. Trade, top of mind again. Tariffs are back. The president, President Trump, saying that South Korean tariffs will increase to 25% because of the delay in the ratification of their trade agreement that he had made. So I thought it was a good time to look back and see just how meaningful that will be both to South Korea's economy and potentially to the US economy, because they're a pretty large trading partner. And this does include, according to the president, cars, which is obviously a big export for South Korea. So if you look at their exports by country, we are number two. Their biggest export market is China. The US is the second biggest export market for South Korea.

As you can see, we're talking in the $100 billion range. So it's meaningful. And just to show you the imports by country, they get a lot of imports from us as well. But if the tariffs go from 15 to 25 percent, that could be painful for Americans that buy South Korean goods, and that it also could be painful for the South Korean economy. We saw the impact in the one, but interestingly, you just don't see as much of a tariff impact as you used to in the markets. The South Korean KOSPI, which is one of the best performing indexes last year, actually went up to a new high today, in part because SK Hynex, which is one of its big components, had to deal with Microsoft around AI. And that just shows you right now what kind of world we're in, where AI news trumps tariffs.