SOTS 2nd Hour: Stocks Near Fresh Highs, The Fate of Intel, and Let's Grok & Roll 2/18/25

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David Faber (1:02)

Good Tuesday morning. Welcome to another hour of Squawk on the Street. I'm David Faber with Seema Mody and Mike Santoli. We're live from Postline of the New York Stock Exchange. Carl and Sarah both have the morning off. Let's give you a quick look at the markets. We are up. I think that was the new record we hit on the S&P. Backed off a bit, but as you can see, he's still in positive territory. Treasury is hanging in there right at 4.5% for the tenure.

Seema Mody (1:23)

We're 30 minutes into the trading session. Here are three big movers we are watching. A mixed morning for Chinese related stocks. After news that China's president Xi Jinping met with a number of his country's top entrepreneurs, including Alibaba co-founder Jack Ma, the latest from Beijing later this hour, plus Southwest. Take a look at that stock announcing plans to cut 15% of its corporate workforce or about 1,750 jobs. The first mass layoff in the airline's 53-year history shares down about 1.2%.

And we are keeping a very close eye on Meta in the red, but coming off 20 consecutive days of gains, the longest daily winning streak for any stock in the S&P 500 since 2020 The stock now up about 25% this year.

Michael Santoli (2:07)

We have some housing data just crossing the tape. Diana Ola has it for us. Good morning, Diana.

Diana Olick (2:15)

In February dropped sharply down 5 points to 42 on the NAHB Housing Market Index. The street was looking for a one point drop and that is the lowest level in five months. Last February it was at 48 Anything below 50 is considered negative and sentiment had been rising. But builders cite concerns over tariffs, elevated mortgage rates and high housing costs. Of the index's three components, current sales conditions fell four points to 46

Sales expectations in the next six months dropped 13 points to 46 and buyer traffic dropped three points to 29 That future sales component is the lowest since December of 2023 Now, NAHB's Chairman Carl Harris said in the release, while builders hold out hope for pro development policies, particularly for regulatory reform, policy uncertainty and cost factors created a reset for 2025 expectations in the most recent HMI. Now, the builders also noted 32 percent of appliances and 30 percent of softwood lumber come from international trade. The builders did note that responses collected before the pause in tariffs were even lower, but even after that they were still quite low, David, because that was just February 3rd, as you remember, the beginning of the month.

David Faber (3:29)

Yeah, I do. Diana, thank you. Diana, Olek, NASDAQ is coming off a fresh all-time high as a Friday, and it's inches from another all-time high this morning. Mike Santoli is here to set us up for the week, so to speak. Certainly me as well. I was away for a bit.

Michael Santoli (3:45)

Yeah, that's right.

David Faber (3:46)

It's always good. Mike, tell me what's top of mind for you as this week begins.

Michael Santoli (3:50)

It's been remarkably steady in the sense that the market's been able in the S&P 500 hovering around this 6100 area. In other words, hovering near new highs, hanging around the net even as you had a lot of noise. There was an upside surprise to CPI last week. That little bit of a mini panic did dissipate by the end of the week. The bond market didn't really extrapolate from there. When you've had this two or three months sideways period, where you seem like you've absorbed a lot of the noise, I think people give the market the benefit of the doubt, but you really do want to see it be able to break out for real. You don't want to over-anticipate the fact that it's going to go higher. The housing numbers seem to actually take a little bit of starch out of this market because I think it gets to one of the sensitivities, which is we haven't really seen if the economy can handle mortgage rates at this level and all the other flux that's going on. I think you say it's been a great start to the year. You're up like 4 percent in the S&P 500 Rest of the world is doing even better than that. You're benefiting from the initial conditions and the fact that 78 percent of companies are beating estimates, and fourth quarter earnings are up 16 percent. Absent that, you might have a little more of a struggle to deal with the kind of tariff flux that we have in front of us. It's been a quiet little stretch, though, so we haven't had to deal with that very directly in the last couple of days.