SOTS 2nd Hour: PepsiCo CEO Reacts to Earnings, PayPal Names New CEO, Private Credit Pulls Back 2/3/26

SPEAKER_1 (0:00)

Comcast Business helps retailers become seamlessly restocking, frictionless paying, favorite shopping destinations. It's how nationwide restaurants become touchscreen ordering, quick serving eateries, and how hospitals become the patient scanning, data managing, healthcare facilities that we all depend on. With leading networking and connectivity, advanced cybersecurity and expert partnership, Comcast Business is powering the engine of modern business, powering possibilities, restrictions apply.

SPEAKER_2 (0:28)

This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions, and key results and statistics that may impact your trading. Download the latest episode and subscribe at schwab.com/marketupdatepodcast or find Schwab Market Update wherever you get your podcasts.

Sara Eisen (1:04)

Good Tuesday morning. Welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and David Faber. We are live from Post9, as always, at the New York Stock Exchange. Coming up this hour, first on CNBC Interview with the CEO of PepsiCo, Ramon LaGuarda, as the company tops Wall Street expectations and announces plans to lower prices. Plus, Palantir shares, heading higher after solid earnings, gaining background on the year. Longtime tech expert Patrick Moorhead tells us why he thinks the quarter, quote, validates the AI bull case. And speaking of AI, Elon Musk says he is combining SpaceX with his artificial intelligence startup XAI in a record-breaking deal. We'll talk about the strategy behind the merger.

Carl Quintanilla (1:42)

Let's get to the markets this morning. Dow Industrials did hit an all-time high this morning. First time in a few weeks. Joining us here at Post9 this morning is Bespoke Investment Group co-founder Paul Hickey, talking about all kinds of interesting divergences lately. Paul, good to see you again.

Paul Hickey (1:56)

Good to see you.

Carl Quintanilla (1:57)

I mean, we should mention what's happening with tech. I mean, it's European techs getting taken apart, biggest laggards on the Dow are IBM, Salesforce, Microsoft. What do you think this trade does?

Paul Hickey (2:07)

So, I mean, I think what we're seeing is it's a reflection of the broadening out trade. So, we saw in the month of January, seven sectors outperformed the S&P 500 And the reason they were able to do that, and the S&P was only up one and a half percent, was because tech was flat. So, you saw this situation where money is coming out of tech, and it's going into the more cyclical sectors of the economy. And that's a reflection of what we're seeing in the strong economic data that we've seen. And it's just investors are broadening out their horizons and tech and questioning some of the valuations in the space.

Carl Quintanilla (2:41)

So, does that continue?

Paul Hickey (2:42)

I think it will continue. You know, we've been, you know, big proponents of the broadening out trade for a while, probably early on it. But, you know, in tech, we still like tech, but some of the mega cap areas were less attracted to. So, just smaller names in the area. And companies that haven't been getting so much focus don't play such a large role in the index funds.

Carl Quintanilla (3:04)

You talk about re-acceleration. It's happening at a time where there's still questions about manufacturing. Big piece in the journal today about the manufacturing renaissance now going in reverse. Construction there is lower. We know we've lost employment. Is it going to be about making things or is it something else?

Paul Hickey (3:19)

You know, well, I think, I mean, the Wall Street Journal article, then, you know, you have the ISM manufacturing second biggest increase in 13 years, I think, yesterday. So I think the economy, the manufacturing economy is, the US economy is much more services-oriented anyway. But we're starting to see durable goods was strong last week. You know, the hiring picture isn't great, but it's not falling off a cliff either. Jobless claims are still extraordinarily low based on relative to history. When you have jobless initial claims, just over 200,000, those are attractive numbers, and those aren't numbers that you normally associate with a worrying economy.

Sara Eisen (3:56)

You know, it's been on a wild ride is precious metals. Silver's up 14% today, bouncing back from basically getting smashed over the last few sessions. Gold's up another 6%. What's causing such big moves here on any given day?

Paul Hickey (4:08)

You know, I think these precious metals have gotten caught up in the whole memeification trade. You know, you have a lot of retail flow going into this. When you saw last Friday, you saw the Silver ETF bottom right around the time they did the fixing. For the net access values of the ETFs. So I think there's a lot of retail money in there. Last fall, when we were talking about the rally in gold as being more of a dollar debasement trade, and while there was validity to some of that, I think now it's just gotten way ahead of itself. You don't tend to see these kind of moves.