SOTS 2nd Hour: Palantir Slumps, CNBC Recession Odds and Milken: Day 2 with Ares CEO, Morgan Stanley Co-Pres. 5/6/25

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Carl Quintanilla (1:02)

Good Tuesday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla, live at Post Night of the New York Stock Exchange, alongside Sara Eisen and David Faber, both live in LA for another day of blockbuster coverage over at Milken Institute's annual conference. Coming up this hour, not one, but two big interviews, the CEO of Aries Management and Morgan Stanley Co-President Dan Simkowitz. Meantime, quick check on the market says we got some pretty negative breath this morning. Only one name on the Dow is green, Verizon. S&P down a full percent, NASDAQ down a little bit more, 10-year 435 Some of the big movers were watching Palantir is under pressure despite this beat on sales and raised guidance. Earnings coming in right in line. Shares trading at a forward price to earnings multiple near 200 still. Ford pulling its forecast for the year because of uncertainty over tariffs, saying they could cost the company about $1.5 billion. And a number of fresh report cards on the consumer front, Mattel, planning price increase is Plorox cutting forecasts on some weak demand. Marriott says travel spend remains healthy, but they did see a slowdown in March. Guys, let's send it out to you in LA.

Sara Eisen (2:07)

Thanks, Carl. Well, good morning from Milken Day 2, where we've had a lot of great conversations about what's happening in the macroeconomic economy. One thing that surprised me, David, so far from what I've heard is that people are relatively calm. I think in the financial world, in the CEO sector, if this were happening a few weeks ago, I think there would be a lot more worries and panic. But between the market recovering, the stock market, the bond market stabilizing, and so is the dollar, and some of the de-escalation moves that the administration has put in place, it's a different tone. There's certainly uncertainty and risk that people are aware of, but it's not a doom and gloom kind of crowd or even necessarily a recession.

Yesterday, I spoke to Jane Fraser, the CEO of Citigroup, and asked her for an update on what she's seeing from the consumer as far as card spending. Listen to this.

Jane Fraser (2:59)

There's nothing there that is a cause for alarm. The consumer is still showing themself resilient and discerning. Similarly, on the corporate side, there are no real signs in the hard data in April.

Sara Eisen (3:16)

In April, so that was a real time look at caution that you could see in the consumer or in corporate spending. And she just said, you're not seeing it. The hard data was the key because hard data means actual spending and actual economic activity. The soft data are the surveys and those confidence outlooks. And those have weakened and that and there's no denying that. You know, Katie Huberty of Morgan Stanley, who is the head of research, put together a really nice look at some of the confidence surveys on financial situations, US economy, University of Michigan consumer sentiment. They're all going one way, which is south and they've taken a sharp turn. Will that result in lower consumer spending?

We don't know yet. And Jane Fraser doesn't know she's not seeing it yet. I don't think anybody's really seeing that fall off a cliff like they are on the confidence. That's one of the biggest questions I think the Fed's going to have to debate as they kick off this meeting.