SOTS 2nd Hour: Shutdown Impact w/Apollo's Chief Economist, Fresh Jobs Data, & Movers to Know (Nike, Pfizer & more) 10/1/25

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Sara Eisen (1:01)

Good Wednesday morning. Welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and David Faber. We are live at Pose 9 of the New York Stock Exchange. Take a look at stocks right now. Lower, across the board, nothing dramatic, but the S&P 500 now down four-tenths of one percent, the Nasdaq comp down a little more half a percent after. So now performance yesterday on technology and the Dow closing at a record high. It's down 100 points. Pockets of green in the market, health care and utilities. So the defensive groups, communication services, financials and industrials, the cyclicals on this shutdown may be under the most pressure here. Treasuries, take a look. We're seeing some buying. Ten-year yield a little softer. That's been the trend so far this week. It's below 4.1 percent. It goes to 409 percent. We'll talk about ADP, private sector job growth. Pretty disappointing this morning. Today, enter the shutdown. House Speaker Mike Johnson expected to speak on Capitol Hill. In just moments about the latest on negotiations between Democrats and Republicans, we will take you there live. Plus, Apollo's Torsten Slok will be here to talk about whether or not the government stoppage matters to the market, to the economy, and to your money. Nike shares jumping this morning after surprise sales growth, but still lagging sharply on the year. We'll talk about whether this turnaround is for real, and how far along it is, up almost 4%.

Carl Quintanilla (2:19)

It's been a busy morning of private economic data. Getting some more, let's get to Rick Santelli. Hey, Rick.

Rick Santelli (2:25)

Yes, Carl, these are ISM manufacturing PMI September Final Reads, and we see sub-50 on the headline, 49.1, largely expected. 49.1 would be the lightest going back to, well, going back to March, March of this year, when it was 49 even. If we look at prices paid, and of course, we'd rather have this go down and reflect less inflationary pressures comes in, it's 61.9, sequentially lower than 63.7. 61.9 would be the lightest of the year outside of January, so the second lightest number of the year. That is indeed good news. 48.9 on new orders, it is sub-50, and it is less than expectations, and sequentially lower than 51.4 in the rear view mirror.

48.9, how does it stack up? That would be the lightest going back to July, when it was 47.1. And finally, employment, after a very weak ADP, and questionable whether we get the big jobs report on Friday, comes in 45.3, better than expected, obviously in contraction territory, also higher than last month's 43.8. 45.3 would be the best level, going back to May of this year, when it was 46.8. Construction spending is due to be released now, but the shutdown is delaying that release, like many data points that may be affected by the shutdown. To summarize, interest rates are moving down rather robustly through that weak ADP, which is magnified, because we most likely aren't going to get the jobs number on Friday. Sara, back to you.

Sara Eisen (4:04)

Okay, thank you, Rick. Rick Santelli. Yep, ADPs turn time to shine to substitute in a way for the jobs report. And let's just review what we got, because as Rick said, very disappointing. It was a weak number. So this is private sector jobs. Total comes in negative, 32,000. And that was a surprise because economists were looking for an increase of 51,000. It's the biggest monthly drop since March 2023 Also, the revision was not good. August was revised down sharply. The month now showing, as you can see, or actually, can't see, but August goes down to negative 3,000 compared to the initial rate of 54,000. There's the August revision. So two weak months in a row. If you look, private sector payrolls have now dropped in three of the last four months, according to ADP. And if you look beneath the surface, you can see where the job losses were. Small and medium sized businesses saw bigger declines than large businesses, which actually saw job growth. But guys, if you take the report and you compare it, some people say, oh, it's not really correlated with the government jobs report. Well the reason I think that people are paying attention to it today is, first of all, we're not going to likely get that government jobs report on Friday, but also look at the correlation. The direction is in the right mode.