SOTS 2nd Hour: PCE Breakdown, Retail's "Big 5", and an Exclusive w/the CEO of American Express 11/27/24

Sara Eisen (0:04)

Good Wednesday 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. Ahead of a big data release, the Fed's preferred inflation number, PCE, will cross in just a moment due to tomorrow's Thanksgiving holiday. A reminder, markets are closed tomorrow for the holiday. We've got full team coverage for you. Rick Santelli in Chicago will have the numbers as they cross. Steve Leesman and Jeffrey's Chief Market Strategist, David Zervos, will join us with their reaction and with some context. First, though, let's check on the markets as we await that inflation number to cross. We've got a mixed picture, S&P down a tenth of one percent. You do have strength in real estate, financials, and healthcare. Weakness in technology, excuse me, and that's after some earnings releases, 10 percent move lower in HP more than that for Dell. That inflation data just crossing, let's go to Rick Santelli in Chicago. Hi, Rick.

Rick Santelli (0:57)

Yes, well, first, let's go through the three income and spending numbers. This is seven parter for October. On the income side, double expectations. Instead of up three tenths, we're getting up six tenths. Up six tenths equals where we were in March to find a higher one. You have to go to very beginning of the year in January up 1.4. So this is a solid number. If we look at spending, also as expected but solid, up four tenths of a percent, that follows up five tenths of a percent. These numbers have been strong. Now if we adjust for inflation and look at the real spending, it's up one tenth, up one tenth, and that follows up four tenths. Up four tenths was the second best of the year. Now, the inflation numbers, we have four of them. The first one of course is the price index month over month. And we're expecting up 0.2. It is up 0.2.

But remember, for the last several months prior, we've had lower numbers. If you look at where we were in May, we were 0, then one tenth, two tenths, one tenth in August. So you could see that's been a bit of an uptick. Now, let's take that same headline and go year over year. Expect it up 2.3. It comes in at 2.3. But that's not necessarily good news. In the rear of your mirror was 2.1. 2.1 was the best going back to February of 21 2.3 equals August. To find a higher one, you go to the July when it was 2.5. Now, let's look at the core numbers. Probably the most important two numbers we have. If we look at core month over month, it is coming in at 3 tenths as expected. Same as in the rear of your mirror. But once again, if you look at where we've been, we're 0.1 in May, we're 0.2 in June. So you could see this is also a bit of an uptick. And finally, year over year core. This has really been on the sticky side. Expecting 2.8, it comes in at 2.8. And just to put a face on it, we have not been below 2.63 all year. So these are a bit on the warm side. But as expected for the most part, yields kicking up just a smidge, about 426 in a 10 But remember, we're at 4.25 before all these numbers this morning, so really haven't seen a huge amount of movement. Now, we have pending home sales for October. But for that, we go to Diana Olick. Diana?

Diana Olick (3:20)

Ending home sales rose 2% in October, month to month, according to the Realtors. That's a beat. The street was looking for a slight drop. Sales were up 5.4% compared with October of last year, and this is the highest level on the index since March. This, even though mortgage rates rose sharply in October, starting near 6% and ending near 7%, this count is based on signed contracts, so people out shopping during the month and inking contracts on a home.

Sales rose in all regions of the country, even the south where we saw back to back hurricanes. Sales of newly built homes, which are also based on signed contracts, actually fell sharply in the south in October. Now, this bump in existing homes recently is likely because there's just much more supply on the market. Active listings up 29% year over year, according to realtor.com. And finally, my favorite stat, the lockbox indicator. This is a count of how many of those door key lockboxes are open to show a home. The realtors say those openings were up 7% year over year in October, which suggests much more demand moving ahead into the winter months. Sara.