SOTS 2nd Hour: Markets Rebound, IMF Cuts Estimates, and ECB President Lagarde 4/22/25

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Carl Quintanilla (1:06)

Good Tuesday morning, welcome to Squawk on the Street. I'm Carl Quintanilla with David Faber, live at Post 9 at the New York Stock Exchange. Sara Eisen's live in DC this hour. A huge interview you don't want to miss. ECB President Lagarde's with Sara in just a moment. Meantime, get a quick check on the markets here. SMP's up about 77 points. Dow up 580, watching Treasuries as well, still south of 4-4. About 30 minutes into the trading session, some earnings movers were watching. Industrial names, GE Aerospace and 3M gaining. 3M warning, the tariffs could drag on full year earnings by as much as 40 cents, while GE maintained their guide plans for cost cuts and possible price hikes ahead. A number of results out of the defense names, Lockheed Martin, Northrop Grumman, RTX, all on the move. Stocks with consumer exposure like Kimberly Clark, Genuine Parts reporting net sales and same store sales declines respectively. Never got a fresh read on housing. Pulte, the latest name to warn of quote, affordability challenges tied to high selling prices and monthly payments. That said, it was a top and a bottom line beat.

Sara, tell us about DC today.

Sara Eisen (2:06)

Okay. So I'm here because it is the kickoff to the IMF World Bank Meetings, and this is when all the finance ministers from around the world and all the central bank chiefs from around the world come to Washington. And usually they talk about how to revive growth. This time around, there's a crisis on trade. And so there will be bilateral discussions. Some of these foreign ministers, finance ministers, are hoping to make trade deals or get discussions going with the White House. And others are talking about how to cushion their economies. So with that in mind, the backdrop here is the US versus the rest of the world. And I just thought I'd show this chart, which I think encapsulates what's happening right now. This is the April chart of the S&P 500, our market in orange, versus the rest of the world. The US is underperforming. And there's some interesting stats on this. Bespoke, for instance, took a look. At the US., it's the second worst performing of 45 different country ETFs since President Trump's term began in January. It's down 14% versus the average country, which is up.

It's underperforming Germany, for instance. Something we'll talk about with ECB President Lagarde. So, President Trump launches all the tariffs, the US underperforms. I think David and Carl, part of the explanation here is that going into so-called Liberation Day, the US had been outperforming. I mean, the US exceptionalism trade was alive and well. US equity markets, by so many measures, were extremely expensive. So, some of that is just the unraveling of that. But it is something to talk about when it comes to who has economic leverage and how much pain the market is judging. The IMF, for its part today, out this morning with a new global growth forecast. No surprise, it slashes its global growth forecast from in the low threes percent down to the twos. And then here's what it says for the US. US is only going to grow now 1.8 percent this year, which was a cut of about 1 percent. Importantly, though, not a recession. So we're going to talk about the IMF chief next hour about what goes into all that and how they're thinking about the damage here.

David Faber (4:09)

You know, Sara, you mentioned exceptionalism and we've talked about the reversal in capital flows. I think it's obviously an important topic and what happened to the dollar or what has been happening to the dollar, not to mention gold. You know, David Solomon, who runs Goldman Sachs, was asked about it on Squawk Box this morning. I thought his answer was interesting in terms of, you know, how long exceptionalism will last and what we're seeing in terms of the reversal of some of these flows. Let's take a list and talk about it on the other side.