SOTS 2nd Hour: Nvidia's China Concessions, Fedspectations, & K-Shaped Economy Concerns 12/9/25

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Sara Eisen (0:45)

Good Tuesday morning. Welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and David Faber. We are live from Post 9 of the New York Stock Exchange. The Fed meeting getting under way today as Wall Street waits for rate decision and guidance from a divided Fed. We'll talk to Goldman Sachs credit expert, Johnny Fine, about what he's expecting. Plus, Nvidia back in focus as President Trump says the company can sell some of its AI chips to China, but does China want them? We'll discuss with the top analyst and the majority of Elon Musk's wealth now comes from SpaceX. We'll talk about why that news could be a red flag for Tesla shareholders.

Carl Quintanilla (1:18)

Let's get some breaking economic data in Joltz with Rick Santelli. Hey, Rick.

Rick Santelli (1:23)

Hi, indeed, Carl. This is October read for Joltz. 7,670,000. That's not a bad number. 7,670 actually would be the strongest number going back to, well, going back to May when we were at 7.7 million and change. So that's pretty decent. And considering that the expectation was for a number around 7.1 million, so it's definitely better than expected. We're also getting leading economic indicators, which have been leading us in a negative bill lately. This is September read coming in exactly at matching expectations at down three-tenths of percent. Last month upgraded from minus half a percent to minus three-tenths. And believe it or not, minus three-tenths is actually the best number going back to July when it was up one-tenth, because we really have been mostly negative. We've had one non-negative reading all year, and that was the up one-tenth in July. We also had a zero reading. So this is the seventh negative reading of 2025 Interest rates have been going up, not only here, but around the globe, Japan, UK, Europe, and indeed, we're now hovering at 417 If you recall, yesterday's high yield was right around 419

We want to pay very close attention to that. Maybe the biggest feature of all today, outside of the fact that interest rates are going up, we do have a 10-year auction at OneEastern for $39 billion, but the notion of we have a Fed ease and all interest rates are doing is moving a bit higher in the curve, still snuggling up on two-tenths towards 60 basis points. Sara, back to you.

Sara Eisen (3:07)

Yeah, that's not exactly what they'd want to see when they're cutting interest rates. Thank you, Rick. Rick Santelli with the spike up in rates there on the better than expected job openings data. Also got some alt data to share with you on consumer spending. This comes from Consumer Edge, which I always follow because they look at point of sale credit card data from stores, from stores, from restaurants, all that. They have pre-Thanksgiving holiday shopping in yellow and Black Friday through Cyber Monday in blue, and they look at it by income group. We've heard a lot about the K-shaped economy from companies and from executives, but here it is in the data that they are seeing in the actual spending. So if you look pre-Thanksgiving, clearly that trend was very much in place where we saw the dip in spending from the lower income cohort. It's continued throughout this holiday shopping season where pre-Thanksgiving shopping and also Black Friday to Cyber Monday spending at the lower income has been soft or actually declining. Very different story if you make for family household of more than $100,000. As you can see, strong growth there. And just some interesting tidbits from the data of where the growth is and where the spending is happening. Off price department stores, TJ Maxx was cited as one, TJX. Discount in dollar stores, all three dollar stores were cited in that data. Saw growth footwear up 4%.

Active and athleisure was very strong. Some of the places that weren't seeing as much growth during this holiday spending were the luxury department stores. Think Neiman Marcus, Saks Fifth Avenue, the plus size stores like Elaine Bryant, which might speak to the GLP-1 impact. That's been a long time decline over the last few months. So the spending is happening in interestingly, cosmetics, footwear, athleisure. And again, at the high income, it really jibes with what we heard from Walmart CEO earlier on Squawk Box today, Doug MacMillan joining, and he reemphasized what they said on earnings, which is people with higher income levels are shopping with us more often and have been for a while, but there's pressure for those at the lower income levels. That's the story of the consumer right now.