SOTS 2nd Hour: New Nasdaq Highs, Bank CEOs Defend Powell, Plus: CEOs of Pepsico, Fifth Third Talk Results 7/17/25

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Sara Eisen (1:02)

Good Thursday morning. Welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla. David Faber has the morning off. We are live at post nine of the New York Stock Exchange.

Carl Quintanilla (1:10)

Stocks are a little bit higher.

Sara Eisen (1:11)

We're up a quarter of 1% on the S&P 500 Nasdaq continues to push higher. We're headed for now more than 1% up week on the Nasdaq composite. Industrials lead the charge today, along with technology, consumer staples. We got a mix and we have some good earnings and that's what's fueling the trade. Pepsi is helping the staples, for instance. Financials are having another up day after earnings. Utilities, consumer discretionary, all positive right now. As the market continues this upswing, take a look at treasury prices right now. As we can see, it's a mixed picture. We are getting some buying, especially at the long end of the curve, which we've been watching that 30-year yield right up against 5%. Two-year yield slightly firmer, 3.8%. Better retail sales, we'll talk about it.

Better jobless claims as well. Also ahead this hour, Goldman Sachs Chief US. Economist, David Merical joins us with the firm's latest thinking on tariffs, inflation, and of course, the president's feud with the Fed chair. Plus, the read on the regionals. We will speak with the CEO of Fifth Third Bancorp, fresh off earnings, about his view on the consumer, and much more. And speaking of earnings, we're looking ahead to Netflix, due out with their results after the bell. Top analyst Laura Martin tells us what she's watching from that report.

Carl Quintanilla (2:20)

It's been an important day for economic data, and we're getting a little bit more. Let's get back to Rick Santelli. Morning, Rick.

Rick Santelli (2:26)

Good morning, Carl. Yes, business inventories for the month of May, and inventories have been much more scrutinized of late due to tariff issues. And, well, they may be affecting this. Unchanged for the second consecutive month. So we see that April and May unchanged. But if you look at January, February, March, up four tenths, up two tenths, up one tenth, you get the feeling of course that we push so much ahead. Inventory is built on the business side. Now they're starting to wean down. The question is, are they sitting somewhere? Is there plenty of inventory? Are we going to whittle it down with sales? So we want to pay particularly close attention here. And I know Sara pointed out 30 year bond and 5%.

But there's an awful lot of eyeballs that just watch us get very close to the big psychological level of 10s at four and a half percent and then back away. There's more data out. As a matter of fact, National Association of Home Builders Sentiment Index also hitting the wires. And for that, we head east to Diana Olick. Diana?

Diana Olick (3:26)

Well, Rick, Home Builders Sentiment in July rose 1.233 on the NIHB index. That is right along expectations. But anything below 50 is considered negative and the index stood at 41 last July. It has been negative now for 15 straight months. The slight boost came from the recently passed Budget Act, which provided for some tax relief for households, home builders and small businesses. But the builders still cite poor affordability conditions, particularly from elevated interest rates as a major headwind. That's why 38 percent of builders said they cut prices in July. That's the highest share since NIHB began tracking this in 2022 Just 29 percent were cutting back in April. Now, if the index is three components, current sales conditions rose one point to 36 Sales expectations in the next six months increased three points to 43 And buyer traffic saw a one point drop to 20, which is the lowest reading since the end of 2022 Regionally, builder sentiment was strongest in the Northeast, where it rose one point flat in the Midwest and dropped further in the South and West, where it is weakest. Sara, back to you.