SOTS 2nd Hour: Software Slump, & Washington's Affordability Push - Energy & The Autos w/Transportation Sec. Duffy 1/16/26

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Sara Eisen (0:50)

Good Friday morning, welcome to Squawk on the Street. I'm Sara Eisen with David Faber. We are live as always from Post 9 of the New York Stock Exchange. Carl has the morning off today. A can't miss interview with three principal players from the Trump administration working on auto affordability right now. Transportation Secretary, Sean Duffy, EPA Administrator, Lee Zeldin, and US Trade Representative, Jamieson Greer. Plus, software stocks wrapping up a rough week of trading as fears grow about the impact of AI on their legacy business. We'll talk to an analyst who says he hasn't seen investor sentiment this negative on software in a decade.

David Faber (1:23)

First, though, let's get some housing data just crossing and Rick Santelli has it for us. Rick.

Rick Santelli (1:28)

Yes, David, this is National Association Home Builders Housing Market Index. Above 50, things are pretty good. Below 50, things are less good. Maybe on the poor side. This number comes in below 40 37 37, we were expecting 40 In the rear view mirror, we have 39 37 would equal where we were in October of last year. To find a lower number, you'd have to go to September when it was 32 In addition, this is the 21st number that has a thumbs down, under 50 21st. Obviously, that means all last year didn't have anything above 50 The last above 50 was May and April of 2024 So, in 2025, nothing above 50 When was the last time we had that? 2012 So, hopefully, 2026 will be a better year, but being a January number, we're certainly not starting off very strong. Sara, back to you.

Sara Eisen (2:26)

Okay, thank you, Rick. Rick Santelli. The topic du jour is affordability. On Wall Street, at the White House, we know that the president has been rolling out all sorts of initiatives to try to address high housing prices, for instance. We know that there's more coming in Davos. They've teased next week in his big speech around 401Ks, perhaps more around housing. One area that I think we should zoom in on, haven't heard as much about it, but I think the White House should pay attention to it, is the food at home, what people are paying at the grocery on inflation. Yes, we got an overall CPI number this week that was pretty benign for December. It was less than expected. But what happened with food, as you can see the little tick up, the gap there is because the government shut down, we didn't get data then, but it's going up. And we had a 2.4% increase from the prior year. We got a 0.7% increase from the prior month on food inflation. And that was the highest we've seen in a while. It was because of a number of different categories, cereal and bakery products were up, meat, poultry, fish and eggs up 4%.

That was a really big jump on December for the year. This is year over year numbers. Dairy was the one weak spot, but fruits and vegetables, non-alcoholic beverages, all food at home. It was the highest monthly increase overall since 2022, David. And I think it speaks to the fact that whether it's commodity inflation, whether it's transportation costs, input costs, all keeping food prices high, that's gonna be a tough one when it comes to affordability. And we know it's a big share of wallet. I mean, oil prices and food prices, that's what people spend money on, especially at the low income.

David Faber (4:03)

I mean, the affordability efforts so far that we kind of heard from the interest rates and obviously trying to get housing prices down or make it more affordable as a result of interest rates perhaps coming down. Powers clearly, electricity prices clearly have been an important component of people's budgets that's gone up a lot. Insurance is another area. I haven't heard them make an effort there as much yet, but they are focused on it. I'm not sure what you can do here.