SOTS 2ND Hour: Las Vegas Cybertruck Explosion, Tesla Delivery Miss, ETF's Record Year 01/02/25

SPEAKER_1 (0:00)

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SPEAKER_2 (0:16)

It's CNBC's Big January with CES from Las Vegas, Biotech and Pharma at JPM Healthcare, the World Economic Forum in Davos, and the first Fed decision of the year. Start the year ahead of the game, CNBC.

Sara Eisen (0:37)

Good Thursday morning, happy New Year. Welcome to another hour of Squawk on the Street. I'm Sara Eisen with David Faber and Mike Santoli, live at Post 9 of the New York Stock Exchange. Carl has the morning off. Starting off the New Year with green on the screen, the S&P's up three quarters of 1%.

This comes off of a string of losses into the holiday. Nasdaq's up a tenths of a percent, so the rally resumes. Will it be enough to get a Santa Claus rally? We're still in the zone. We've got today and tomorrow to get it done, but going into today, we were down 1% in that period. Let's see what happens, because we're clawing back a lot of these gains. Treasuries just quickly want to show you what's happening here. It's been a story of higher yields, which has maybe stood in the way of the equity rally. It goes the other way today, the 10-year year of 455 So there's buying across the curve, the two-year yield below four and a quarter. We're 30 minutes into the trading session. Here are some big movers we're watching. Tesla shares falling on the back of its latest delivery numbers. This knocked out down more than 20% from its post-election high, much more in Tesla in just a few moments. Fellow Mag 7 member Apple also trading down. Tech giant offering rare discounts on its latest iPhone models in China as it tries to defend its market share against rising competition from the domestic rivals there, like Huawei. And then Bitcoin kicking off 2025 in the green alongside related names like MicroStrategy and Coinbase, more on the crypto trade later this hour.

David Faber (2:00)

For now, though, let's get some economic data that just crossed the tape and Rick Santelli has that for us. Rick.

Rick Santelli (2:06)

Yes, construction spending. This is a November number. We're expecting a number up three-tenths, a positive number, comes in zero unchanged. And last month's up four-tenths gets upgraded by one-tenth to up half a one percent. How does unchanged fit in? Well, unchanged equals where we were in July to find a lower number. You go to June of 24 when it was minus 1.1. So, we have seen construction come back from some of those June lows, seems to be slowing just a bit, at least based on this data. In terms of ISM manufacturing that's supposed to hit the wires, I do not see it yet. We will come back and let you know when we do get those data points. Sara, back to you.

Sara Eisen (2:46)

Okay, Rick, thank you very much. I'll just throw some other data points at you, what we got today, which jobless claims more signs of stability and good news in the job market. The number of Americans filing for initial jobless claims actually fell 9,000 last week, 211,000. That puts it at a multi-month low and speaks to the fact that businesses, employers are holding on to their people. Continuing claims, I also wanted to highlight, which is a gauge for people that are continuing to be on these unemployment claims, benefits. It's been an elevated number. It's caused a little bit of consternation in recent weeks, but guess what? We saw that go down to 52,000 to 1.844 million. Another, I would say, good sign in the debate about whether the labor market is deteriorating and whether the economy is cooling off and whether the Fed needs to keep cutting interest rates. You just don't see it in these jobless claims. You continue to see, Mike, a picture of an economy that is growing. Two to three percent right now is where we're tracking for the fourth quarter and the labor market that is holding up.

Mike Santoli (3:51)

It is holding up. Obviously around the holidays can be a little bit of noise in the data, but it's absolutely encouraging, especially given the market action in December, which definitely registered some concern in terms of the kinds of stocks that did well and didn't do well, that in fact the economy might struggle to handle higher bond yields, where they are right now, and maybe less Fed easing into this year. So I think that it's certainly a net positive. Also, I point out that the overall equity index got a bit of a lift on that beat for PMI manufacturing, even though maybe not a core thing. I think the market is definitely craving confirmation that the economy hangs in there. And by the way, industrials and banks in December, they're like 8% or 9% off their highs. I mean, there really was a big gut check in the cyclical trade as yields went higher, and I think you have a little bit of relief on that score right now. Just more broadly, I would also point out, we had the makings for a little bit of a relief trade higher. The majority of stocks, very weak last month, market looking oversold, the median stock in the S&P is down 6.5% in December. Obviously, you get new money flows. A little bit of that buy the laggards and sell the winners effect at the open, as we saw on Tuesday, but right now, it looks like a pretty broad rally.