SOTS 2nd Hour: Micron Takeaways, Alibaba Spending Plans, & A New Nvidia Challenger... PLUS: PGA of America CEO Talks Ryder Cup 9/24/25

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Carl Quintanilla (1:01)

Good Wednesday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with David Faber. Leslie Picker is in for Sara, who has the day off here at the New York Stock Exchange. Market's not changed too much after that pause in this ongoing tech rally yesterday. Energy's leading today about one and a half percent. Yield's still a little sticky. Tenure 414 or so, long bond four and three quarters. Coming up on today's show, the startup trying to take on Nvidia. We'll talk to the CEO of Groq with a Q, the AI chip startup that just raised money at a nearly $7 billion valuation. Alibaba shares are spiking again today, more than doubling this year. We'll tell you what's behind today's move. And we'll head out to the Ryder Cup in Farmingdale, New York for a conversation about the big money in golf with the CEO of the PGA of America.

David Faber (1:42)

But first, new home sales just crossing. Diana Olek has those numbers for us. Diana.

Diana Olick (1:47)

David, a massive beat on new home sales. 800,000 seasonally adjusted annualized rate in August. The street was looking for 650 This is up 20.5% from July and up 15.4% from August of 2024 Now we've been talking about mortgage rates, of course, forever and they didn't come down in August. These numbers are based on signed contracts. So people out shopping in August, when the 30 year fix had not started its steep drop that we saw in September, so it was well over 6.5% in the high 6% range. Now we're down at the 6.3% range. So this is a surprise. But again, we've been talking about the builders, their incentives, Lennar's earnings last week. They said they're doing price cuts. They're doing all kinds of mortgage rate buy downs and other incentives. Let's look at the price today. The price of a new home sold was $413,500.

This is 4.7% above July. And it is above 1.9% above August 2024 So price is going up on this. It's really interesting that this is happening. I guess people getting back into that market before the fall season, which is usually kind of the second most busy as opposed to the spring season. But it is a real surprise to see prices go up as well as sales go up. Inventories, though, we're looking at a 7.4-month supply. We had been at a 9-month supply in July. So, inventories coming down, builders obviously making the push to get people in the door. But builder sentiment, again, wasn't so great in September. So, these numbers are really quite something. Again, 800,000 up 20% month-to-month. Back to you.

Leslie Picker (3:26)

Yeah. Diane, a lot of cross currents there. Thanks for breaking that down for us. Let's turn to the broader market now with stocks trading right around record levels. Joining us here on set is Gabriella Santos, Chief Market Strategist for the Americas at JP Morgan Asset Management. You're looking at a lot of the cross-asset moves, and you say that the focus has now been more by monetary policy versus the fiscal and trade and other immigration policies coming out of Washington. How do you expect stocks and bonds to perform with monetary policy at front and center right now?

Gabriella Santos (4:00)

I do think after a very policy heavy first half of the year, driving every single daily minute by minute move in the markets, it's a much healthier place to be, a better understanding of equilibrium of policy. And so something that's less of an acute issue, more of a chronic issue for markets. And now the leading narrative has been the return of Fed rate cuts. Now traditionally you do tend to see both stocks and bonds do well when the Fed cuts rates, especially if there's no recession. But there is a caveat we would add, and we've been making with clients, which is we don't want to fight the Fed, but we also don't want to swim too closely with the Fed. There are important nuances here of this particular Fed rate cutting cycle. That's important to take into account in terms of soggy growth, elevated valuations, curve steepening, weaker dollar, so we can't exactly do a carbon copy paste of other Fed cut cycles.