SOTS 2nd Hour: Navigating $110 Crude, The Case for EV Stocks, & DHS Developments 3/27/26

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Sara Eisen (0:42)

Good Friday morning again. Welcome to Squawk on the Street. I'm Sara Eisen with Michael Santoli. We are live from post-9 as always of the New York Stock Exchange. David and Carl are out today. Market's under pressure again in the early trading here. Coming up on today's show, we've got Bank of America's head of commodities with us as Brent Crude tops $110 a barrel. Let's talk about just how high these prices could go. Plus, do surging gas prices tied to the war make EVs actually more attractive? We're going to ask former Tesla president and current GM Board member Jon McNeill. And are predictions markets rife with insider trading? We've got new details on reports showing coordinating trading activity around major events, including the US strikes on Iran. First up, though, markets are under pressure here in early trading. We've got the S&P down almost a percent and the Nasdaq down one and a quarter percent. Staples in energy are looking best.

Michael Santoli (1:36)

Back to August levels, roughly speaking, late August in the S&P 500 We do have some breaking economic data, though. Rick Santoli has it for us. Hey, Rick.

Rick Santoli (1:45)

Yes, thank you, Mike. This is University of Michigan March final read. Now, let's put an asterisk here. On the original mid-month read, it most likely was survey period from about mid-February to around March 9th. And the final period doesn't really extend the date. It kind of fine-tunes it. So we probably caught about nine or ten days of the conflict, which started on February 28th. And on the mid-month reads, they pretty much said, the organization, that a lot of the readings already reflected some downgrades in terms of the levels because of what was already incorporated with the conflict. Having said that, there's a bit more deterioration. Our mid-month read on the headline was 55.5.

It now moves to 53.3. That will be the lowest of the year. Last time we found a lower number would be December of last year. On current conditions, mid-month read was 57.8. It moves down to 55.8. That'll be the lowest reading since January of this year. And if we look at expectations, mid-month read was 54.1, moves down to 51.7, the lowest since around Thanksgiving of last year. Now, let's go to the inflation reads. And one would suspect if you fine-tuned and you included a portion, a small portion of the conflict, we should see these go up. And indeed, they did. 3.4 mid-month read turns into 3.8. 3.8 would be the highest since 4% in January of this year. The 5- to 10-year read, and this would make sense, didn't really change. 3.2 was the mid-month read. 3.2 is where it remains. Interest rates, consider this. It couldn't have happened at a weirder time. The conflict started on the 28th to 27th, or cycle low yields.

3.38 in the 2-year. It's now at 395 on the 10-year. The 27th, it closed at 394 It's now at 444 So that really was a knee-jerk, huge, breakneck reaction to some very low yields when the conflict began. Sara, back to you.

Sara Eisen (3:57)

Okay, Rick Santoli, thank you very much. I think it just adds more fuel, Mike, to the... We're not going to do anything at the Fed. We're not going to be cutting. We're not going to be necessarily hiking. Although, year ahead, inflation expectations climbing, largest increase since April 2025 I mean, they'll take note of inflation expectations.

Michael Santoli (4:17)

It always mirrors gasoline prices on the one year. And then beyond that, it probably moderates.

Sara Eisen (4:22)

And that's probably what's behind the sentiment decline that we saw as well, just more color. Declines were seen across age and political party. And then consumers, according to University of Michigan, with middle and higher incomes and stock wealth, actually saw the big drops in sentiment because we saw gas prices, oil prices rise, and stock prices fall. Today what I prepared for you in the chart is just how much has changed because of the war and the way the market is pricing in the Fed. And we've been talking about how they've been, the Fed is on hold right now.