SOTS 2nd Hour: Nvidia Chips Overheating? Tesla’s Road Ahead, Exclusive: Glenview Capital’s Larry Robbins 11/18/24

Sara Eisen (0:00)

Good Monday morning. Welcome to another hour of Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and David Faber. Live as always from Post 9 of the New York Stock Exchange. Take a look at stocks. After down week, we're a little unchanged right now in the S&P 500 NASDAQ is firmer. Again, in the last week, we had a pretty broad big sell-off, especially in the NASDAQ. Technology is lower as in sector, industrials, healthcare, real estate. They're all weaker, but consumer discretionary starts off in the green for the week. Tesla is a big part of that, up another 7%. Some of the restaurant stocks as well bouncing back. Consumer staple, maybe because RFK was pictured with the McDonald's, buy the stocks again. Consumer staples, energy, materials, communication services, all higher in this morning's trade. Take a look at how we're starting off the week in the bond market. Again, the trend has been higher treasury yields, and that continues today. We're bumping up against that 4.5 level on the 10-year. 4.461 is where we are right now. The two-year higher as well, 4.3%.

We are 30 minutes here into the trading session. Here are some movers we're watching. I mentioned Tesla. Shares getting another pop on reports President-elect Trump's transition team wants to relax rules on self-driving vehicles in the US, but Uber shares are dropping. More on that coming up. Nvidia under pressure after report in The Information said the company's new Blackwell AI chips have been overheating when connected together in servers. We're going to get the streets taken a moment on that. And then CBS shares are higher, adding four new members to its board after discussions with hedge fund Glenview Capital. Glenview CEO Larry Robbins will join David exclusively this hour to talk about the board appointments in the future of the big pharma chain.

Carl Quintanilla (1:38)

Let's get some NAHB with Diana Oluk.

Larry Robbins (1:40)

Hey Diana.

Diana Olick (1:42)

Carl, yeah, Home Builders sentiment in November rose three points from October to 46 on the NAHB sentiment index. Anything under 50 is considered negative, but it is a vast improvement over last November's reading of 34 Current sales conditions rose two points of 49 Sales expectations in the next six months increased seven points to 64, and buyer traffic rose three points to 32 Now, the builders cited the Republican sweep in the election and potential deregulation. President-elect Trump had promised to open federal lands for home builders. Builders desperately need more land, and that is why M&A in the home builder space is having a record year in dollar volume and close to a record in the number of deals. Builders simply need more land and operations as they used to account for one in six homes for sale. Now, it is one in three.

SPEAKER_5 (2:33)

The big guys want to get bigger. They want to get into more markets, more price points, more types of product. And as they're doing that, they're finding the most efficient way is through acquisitions.

Diana Olick (2:44)

Waylon, one of the biggest investment bankers in the space, notes the big builders have gone from a 30 percent market share five years ago to 50 percent today. Half of the deals she says done this year are with Japanese buyers, who she says are extremely efficient. They build the house in 3D models first and much of the structure in a factory that reduces 20 to 30 percent of waste and speeds delivery times. US names with big acquisitions this year, Taylor Morrison, Lennar, and Maritaj. Sara? Hi.

Sara Eisen (3:12)

Good to see the sentiment up though. Thank you, Diana, Diana Olek. As far as what else we're going to get this week, it's a big earnings week especially for some blue chip companies on the consumer. For instance, Walmart out with earnings tomorrow, Target's going to be after that, Lowe's the home improvement, and then of course Nvidia earnings is the big one as well on Wednesday after the bell. TJX is another retail favorite from analysts and Gap as well as how to come back story. As far as the data, it's light, we'll get a lot of Fed speak, get some housing starts and building permits, see the state of the housing market, of course manufacturing on Friday is going to be key. When we talk about these higher treasury yields that we've seen, rising yields in the last few weeks, maybe one reason the stock market got spooked last week, it's really easy to correlate it with the city economic surprise chart which is at a seven-month high. What is that chart? Well, city economic surprises measure the beats. In other words, economic data coming in better than expectations. Look at how closely those two are linked with the 10-year treasury yield, higher yields, better economic growth, that's the story, better than expected growth. The question is, to those higher treasury, and we've seen a jump from what? Three, four, to Arlaway, almost up to four, five in the past few weeks. Does that hurt the economy?