SOTS 2nd Hour: Iran Latest & Energy Implications, Moody's Chief Economist, & More Private Credit Concerns 4/9/26

SPEAKER_1 (0:00)

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SPEAKER_2 (0:28)

She loves it hot. He loves it cold.

Carl Quintanilla (0:48)

Good Thursday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Leslie Picker, David Faber here at Post 9 of the New York Stock Exchange. Sara Eisen has the morning off. Coming up this hour, the latest on the Iran War and the ceasefire as oil resumes its march higher, back above 100 amid confusion about what exactly is included in this deal. We'll talk to the head of Nordic American Tankers, currently has ships in the Middle East, about Iran's plan to collect tolls in these Strait of Hormuz. Amazon's boss, Andy Jassy, out with an annual letter this morning. Some big numbers around the company's opportunity in custom chips. We'll explain.

David Faber (1:23)

First, though, let's get some more breaking economic data. It just crossed, and Rick Santelli has that for us. Good morning, Rick.

Rick Santelli (1:30)

Good morning, David. Yes, wholesale inventories. This is a February final read. So we take the down half one percent number. That was our final read in January, and that now becomes up eight tenths, up eight tenths. That is a hot read. Matter of fact, that would be the biggest inventory jump going all the way back to Jan of 25 And it doesn't end there. If we look at our February on trade sales, three, four times what we were expecting, up 2.7% best since March of 22 And if we look at the up 1.1 revision in the rear view mirror, that is really a hot number there. That would be up 1.1%.

So these are very, very strong numbers. And they do underscore that many believe we see our biggest moves in inventories and sales in January that really turned out to be Feb. But on our February numbers, we also at the end of the month, of course, have the conflict beginning. So many are going to look at this and notice it's going to change because whether it's inventories or sales, a lot of this could be affected by all the various products that are moving through in the Middle East. And we do see that yields on the long end or higher on the short end, they just slightly moved higher after being down on the session a bit. At 431 right now, we're a couple of basis points higher in a 10-year and 30-year bond is going to have an auction of 22 billion at one Eastern. Leslie, back to you.

Leslie Picker (3:05)

Yeah, definitely want to watch there, Rick. Thank you so much. Some relative calm for the major averages this morning after yesterday's rally sent the Dow to its best session in a year. Let's bring in Savita Subramanian, head of US. Equity and Quantitative Strategy at B of A Securities. Savita, after a big day like yesterday, I mean, I guess today's activity is somewhat expected, but how do you see positioning at this juncture in terms of, you know, having that bounce move further to the upside?

Savita Subramanian (3:33)

Yeah, absolutely. It's been a wild ride. So it's interesting because the S&P 500 has almost round tripped this year so far. And positioning has been pretty, pretty dramatic. So what we found is that investors have actually angled into energy where they were very underweight at the beginning of the year. That has been one of the best performing sectors this year. Now it's starting to give back a little bit. When you look at industrials, we're now at a point where I think industrials is trading at the highest multiple we've seen in decades. I mean, this is a wild market and there are a lot of cross currents that are telling you different things. So, for example, what I think is confusing to investors is if we're in this sort of defensive, wartime potential recessionary trade, why aren't health care and consumer staples and more defensive areas of the market doing well? I think that everything we're looking at right now points to a classic stagflationary market environment where you've got slowing in consumer in areas that generally hold up better, but you've got this monstrous rally in some of the inflation beneficiaries like industrials and energy. So that's our playbook right now. Where it gets a little bit more confusing is around financials. So you've had, not only do we have this geopolitical conflict, we also have what feels like a credit cycle or a mini credit cycle at least, and that's where you're seeing a lot of the pain in financials. I think today is a good time to add exposure to financials in general, cuz I don't think we're seeing the signs of a real broad spread credit cycle impacting the larger banks. But I do think that we're in a bit of a pause in terms of tightening in other areas of the market.