SOTS 2nd Hour: Intel Slumps, Software Scrutiny, & Winter Weather Market Impacts 1/23/26

SPEAKER_1 (0:00)

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SPEAKER_2 (0:28)

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Carl Quintanilla (0:57)

Good Friday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Contessa Brewer and Mike Santoli. Live at Postal 9 of the New York Stock Exchange, Sara and David are off today. Market's making a round trip in a volatile week of trading. We're going to talk to Wharton Professor Jeremy Siegel about two big positives he saw this week and one development he says is disappointing for investors. Intel shares giving up some big gains on the week after earnings last night. One analyst weighs in on why the street is so downbeat on this guide. And speaking of downbeat, software names have been crushed this year. As you know, as investors worry about the impact of AI, software investor Byron Deter tells us if he sees a buying opportunity.

Mike Santoli (1:35)

But first, consumer data. Just crossing, Rick Santoli has that for us. Hi Rick.

SPEAKER_5 (1:41)

Yes, these are Universal Michigan Summit January Finals. So in a couple of weeks, we'll get a more specific pinpointed number. 56.4 is our headline. We're expecting 54, a big beat. This will be the best level since August of last year. And if we look at current conditions, also, 55.4, a big beat versus 52 and change we're looking for. Also, sequentially higher best level since October of last year. What lies ahead are expectations. Same scenario, 57, two points higher than expected, two points higher in the rear view mirror, best since July of last year. Now, the inflation metrics. On the one-year inflation, 4 percent. That's down from 4.2 percent, and that would be the lowest level, going all the way back to January of last year, and finally, the five to ten-year inflation outlook. 3.3, light expectations, one-tenth lighter than our last look at 3.4, and that would be the lowest level since December of last year, when it was 3.2 percent. Leading economic indicators should be hitting the wires. I don't see them released. We're looking for both October and November. So, I'll shoot it back to you, Carl.

Carl Quintanilla (2:57)

Rick, appreciate that. Interesting numbers, a little bit of relief on the Michigan sentiment front as the markets might try to unwind some of the opening losses.

Mike Santoli (3:04)

Yeah, kind of hesitant this morning. Not quite a round trip, we should keep in mind. We're a little more than half a percent below where we closed last Friday. I think the job of the market yesterday and today was to demonstrate that what actually was bothering it was the obvious headline impact of, you know, the Greenland news and the Fed independence story and the Japanese yield move over the weekend. And it wasn't just in fact this kind of stuck phase that we've been in for a while, because even before that, S&P has been unable to break above those late October highs. It's still actually about where we're trading right now. Of course, what's been positive is the average stock doing so much better than the S&P 500 Everyone's embracing this broadening reflation rotation, whatever you want to call it. I do think there's a little wrinkle in that, which is yesterday.

Regional banks, which have been absolutely the strongest group in the market, as well as things like transports and some semis, they rolled over. So regional banks are like down 2% from yesterday's high. The question is, have the groups that have been carrying the weight getting a little tired at this point? And are we ripe, actually, for a little bit of a mean reversion to, hey, maybe we get some relief in big tech as we get earnings next week and software catches a bid? And will that be a real shift again? Or is it just gonna be a little bit of an interlude?

Contessa Brewer (4:21)

This outperformance of small caps, too, is getting a lot of attention.

Mike Santoli (4:24)

Absolutely. Totally part of that theme of people are assuming re-acceleration of the economy, somewhat easier fed, and then there's this bit of just everything that had been left behind in the Mag-7 dominance is getting caught up. Now, I've been pointing out here, Russell T-1000 has been the stronger version of the small caps, S&P 600 is the lower line there.