SOTS 2nd Hour: Retail Sales Fall, Fed Day 1, and Live: OKLO CEO 6/17/25

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Sara Eisen (0:47)

Good Tuesday morning. Welcome to 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. Stocks are giving some back today. S&P is down a quarter of 1 percent, not as much as we gained yesterday. Energy is the only sector positive right now. It's popping one and a half percent as oil rises. Healthcare under the most pressure, communication services and consumer staples bringing up the rear. But you do have some winners out there. Jabil on earnings, Lenar on earnings. Some of the chip names are also higher as well. Take a look at Treasuries. Got retail sales, which we'll talk about. Got import prices, industrial production. There's a bid today with yields a little bit lower. The tenure, 4.43%. This is the head of the Federal Reserve. Big meeting out tomorrow. Coming up this hour, we're going to talk to the CEO of nuclear technology company OKLO, whose shares are jumping again today. They've climbed more than 75% just in the past month after a deal with the Air Force and a $400 million capital raise. Plus, an AI feud spills out into the open as Microsoft and OpenAI reportedly spar over the future of their game-changing partnership.

New details ahead.

Carl Quintanilla (1:53)

First, though, let's get some breaking economic data just crossing the tape and get to Rick Santelli. Morning, Rick.

Rick Santelli (1:59)

Yes, morning, Carol. April, business inventory is expected to be unchanged, arrived exactly as expected, unchanged. And here's what's fascinating. If you look at January, up 4 tenths. You look at February, up 2 tenths. You look at last month, up 1 tenth, now unchanged. And this is the first month of the second quarter. And we see that the inventory build is coming the other way because of pulling forward. So it does make sense. And of course, this number at zero isn't going to really contribute much to GDP, although we have seen some other inventory numbers that might. And in addition to this inventory number, we also have National Association of Home Builders Housing Market Index for June. And for that, we head east to Diana Oleg. Diana?

Diana Olick (2:47)

Well, Rick, home builder sentiment in June dropped two points from May to 32 on the NIHB index. The Street was actually looking for a slight improvement. This index has only seen a lower reading twice since the Great Recession back in 2012 And that was in December of 2022 when mortgage rates first shot up from those pandemic record lows and in April 2020 at the very start of the pandemic. Now, the builders cite high mortgage rates, tariffs and overall economic uncertainty of the index's three components. Current sales conditions fell two points to 35 Sales expectations in the next six months dropped two points to 40 And buyer traffic fell two points to 21 That is the lowest reading on that since the end of 2023 As a result, builders are cutting prices. 37% in the June survey said they did. That's the highest share since NIHB started tracking this three years ago. It's up from 34% in May and 29% in April. The average price reduction, 5%.

NIHB's chief economist, Rob Dietz, said given current market conditions, NIHB is forecasting a decline in single family starts for 2025 Regionally, on a three-month moving average, the South and West were the weakest. And of course, that is, Sara, where we build the most homes, usually.

Sara Eisen (4:00)

I wonder how you put that up against what we got from Lennar today, the home builder, which, as I mentioned, has actually been a winner, even though some of it was soft and they talked about the challenges in the market, like affordability.

Diana Olick (4:11)

Yeah, exactly, but they also lowered prices. You saw the average home price on closings down nearly 9% for Lennar, and that's what we're seeing from the builders, as well as cutting prices and begs the questions, are they even able to buy down those mortgage rates? Ivy Zellman said last Friday on our air that even when you buy down those rates, a lot of consumers still can't even qualify at the lower rates. So Lennar is seeing that weakness in demand because of affordability.