SOTS 2nd Hour: Meta Expectations, Fed in Focus, and the View From The C-Suite – w/GSK & Hershey CEOs 7/30/25

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Sara Eisen (0:47)

Good Wednesday morning. Welcome to Squawk on the Street. I'm Sara Eisen with David Faber. Live as always from Post Night of the New York Stock Exchange, Carl has the morning off. Stocks are higher here in the early going, got a better GDP number, a lot of data to talk through. S&P up a tenth of a percent, but it is being led by utilities and healthcare, typically defensive stocks. Financials are strong, technology is up, that's why the NASDAQ is up two tenths of one percent. We got energy, materials, industrials bringing up the rear. As for treasuries, after all this data, take a look. We are selling higher yields, 10-year yield, 4.37, nothing extreme, still in the range. The two-year yield, 3.9 percent, ahead of the Fed this afternoon.

We've got a big hour coming your way. Hershey CEO Michelle Buck joins us on the back of earnings, her last interview in the role with a look at the consumer demand, inflation and more. Plus, we will talk to the CEO of British Pharma giant GSK, GlaxoSmithKline, also out with earnings about the potential impact of pharma tariffs and much more. And as mentioned, it's Fed Decision Day and today's decision could come with a number of dissents. Former Kansas City Fed President Esther George will be with us to discuss.

David Faber (1:55)

First, though, let's get pending home sales. They just crossed. Diana Olek has the numbers for us. Diana?

Diana Olick (2:01)

Well, David, pending home sales in June dropped 0.8% from May and were down 2.8% from June of last year. That's basically in line with expectations, just a teensy bit lower. These counts are based on signed contracts for existing homes. So people out shopping in June when the average rate on the 30-year fix dipped slightly and briefly. The homebuilders noted that in recent earnings that this brought in more buyers. Of course, the buildings also builders also buy down rates. Home sellers do not and rates popped back up again in July. Now sales were down despite a nearly 29% gain in active listings, according to realtor.com. Some of that gain is because homes are just sitting and not selling. There was actually a pullback in new listings in June. Regionally, sales dropped everywhere except in the Northeast. Strange because home price growth has been strongest in the Northeast. And just to note, mortgage applications to buy a home dropped last week and are down 5% over the past four weeks. Sara?

Sara Eisen (2:58)

Okay, Diana, thank you very much. Big story today is the Fed this afternoon after the economic data that we got today. So GDP comes out better than expected, 3%. Complete reversal over the first quarter where it's all trade distorted. And this one too, you know, exports subtract from GDP. There was a big, everyone was loading up in the first quarter and they fell this quarter. And that's why GDP was better. Overall consumption at 1.4, good. That's the strength of the consumer, but tamer than what we're used to. What I really pulled out of this, David, because I think this is going to be the debate inside the Fed right now and in the market is how are the tariffs impacting inflation? So we got a PCE, a core PCE number inside this GDP print that showed 2.5%. It was a little hotter than expected, but it still, as you can see, a step down from where we were 3.5% in the first quarter. Correct. The quarter before.

And we'll get a more precise reading tomorrow with the June PCE number, so the monthly data. This was the quarterly data. But we're watching it because this is the debate inside the Fed. This is why we might see two dissenters, with Bowman and with Waller, who have said they've been in favor of a cut as soon as today. Because they feel, first of all, that inflation is not as bad as expected. And if we do see it, it's going to be a one-off, where I think more people on the committee, including the Fed chair, are worried about tariffs being more inflationary. And the jury is still out. I mean, so far so good. But we just, we don't know.