SOTS 2nd Hour: One Day More, Another Rate Decision Ahead, and Nuclear Stocks Lose Energy 11/4/24

Sara Eisen (0:00)

Take a look at stocks here. Head of a busy week, S&P 500, little changed right now. The Nasdaq is down about a tenth of 1% and Dow is down 84 points. We've got a lot to talk about. How about treasuries, which we did see a move overnight. So I'm seeing some buying with yields a little bit lower for a change. The 10-year note yield 4.27. There's going to be a lot of treasuries sold this week. Of course, the election and the Fed meeting. We're 30 minutes into the trading session. Here are three big movers we are watching.

Shares of Tesla down for a six-straight day. New delivery numbers out of China showing the EV maker sold just over 68,000 vehicles, and that is down more than 5% from last year. Big shakeup in the Dow 30 Nvidia and Sherwin Williams will be joining the exclusive group, Intel and Dow Inc. Getting the boot. More on why later this hour. And a tough trading day for the nuclear power-related names. Amazon's deal with Talon Energy rejected by federal regulators. There's more on the fallout coming up, but some big moves in all of those stocks.

Carl Quintanilla (1:01)

It will be a busy week for data. Let's get some durables here with Rick Santelli. Hi Rick.

Rick Santelli (1:06)

Hi Carl, yes. Good, happy morning. On Monday, we have factory orders and durable goods. Durable goods are actually final reads. We toss mid-month reads. Factory orders expected down half, 1%. Come in as expected. Down half a percent. That's the weakest level since down 3.3. And that was in June.

Last month, though, had a significantly larger revision. So I'm going to have to change what I just said. Last month now goes from minus 2 tenths to minus 8 tenths. So now that minus half a percent is comping to last month. If we look at factory orders takeout transportation, it improves rather markedly to up 1 tenth. So we can see where the big drag was. And if we look at the revision there, much smaller from minus 1 tenth to minus 2 tenths last month. Now durable goods, as I said, we are going to toss out minus 8 tenths, replace it with minus 7 tenths. And of course, that would be the lightest since August when it was down 8 tenths. And last month, of course, none of these numbers are very good with respect to what we're looking at down the road. And there has been some major slowing. If you take out transportation once again, this number goes dramatically up. It's up half a percent and it replaces up 4 tenths. If we look at Capital Good Orders, Non-Defense Ex-Aircraft, a proxy for capital spending, it improves from the mid-month rate of up half a percent to up 7 tenths of a percent. And that really is quite notable. That is the best reading of the year. And if we look at shipments instead of orders, a bit of a different story, down 1 tenth, but that does replace down 3 tenths. So there is some improvement there. The last time we had a positive number in this series, sometimes you have to go all the way back to April when it was up 3 tenths. So we see shipments on the weak side. Interest rates, well, interest rates are down today. Many suspect it's a delayed response to a very weak jobs report. Others of course are lifting the pages on a political explanation. Sara, back to you.

Sara Eisen (3:07)

Okay, thank you, Rick Santelli. Events of the week. So one looks more certain than the other and that's the Fed meeting. Obviously, we get the election first. And we are seeing, as Rick said, some moves in markets. I would just point out the dollar, the US dollar and treasury yields, which are both coming down a little bit. That's been a reversal of what we've seen. It's really been thought to be sort of a one way Trump trade, which has pushed yields a little higher, whether it's better growth prospects, higher inflation prospects, more deficit spending. All of that has helped yields really rebound since the last Fed meeting. That and stronger, stronger growth and better economic data that we've seen.

Then also the dollar has been a little bit firmer. Those back off as some of the polls show that Harris has a little momentum going in. But again, it's such a coin flip. It's hard to make a wager on these charts. Let's talk about something that there's a little more certainty of, and that's the Fed meeting. Because the market is now pricing in about 100 percent odds at the Fed cuts on Thursday at this meeting. I thought it might be useful to show the data that the Fed is going to be looking at. First of all, where are we on their inflation fight? That's been the core mission, and we continue to see more progress on that front. If you look at the PCE, which we did get recently, the PCE shows that we're down to 2.1 percent and 2.7 percent on core. There's the core prices, strip out food and energy, Fed pays attention. It's still a little elevated, but the trend is going in the right way for the Fed. Then if you look, guys, at some of the data between the February meeting, remember when they cut 50 and where we are now, it's not obvious what they should be doing if they're so data dependent meeting to meeting. So the unemployment rate, for instance, it was 4.2 percent. It's even better now. 4.1 percent. The payroll three-month average. Okay, so that's weakness. We've seen that. But then again, the last report was definitely impacted by the storms and the strikes, so they have to discount that a little bit. Wages actually firmer than where we were in September, 4 percent versus 3.8. Services, that part of the economy, stronger than where we were in September when they cut. So this is the acceleration we've seen in the economy lately. And then even consumer confidence, we picked that one out better. The bottom number is where we are now, top number is where we were then. So either the Fed is having a really quick desired results when it comes to the easing and the spillover in financial conditions and into the economy, or the economy is just in really good shape. And even though the market thinks we're going to get a cut now and a cut in December, it's not necessarily obvious. I mean, yes, inflation has progressed nicely, but, and they want to protect the jobs numbers in the picture there, but the economy is doing just fine.