SOTS 2nd Hour: Tariffs Countdown, Crypto Reserve Details, Big Tech’s “Last Safe Haven” 03/03/25

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David Faber (0:59)

Market insight and analysis. You're listening to the opening bell of CNBC's Squawk on the Street.

Sara Eisen (1:11)

Good Monday morning again. Welcome to another hour of Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and David Faber, live at Post 9 from the New York Stock Exchange. We've turned south here. A little morning rally here at the Open has disappeared, with the S&P now down half a percent. So adding to those February losses as we start the month of March, and it is technology that is leading us lower. That's why the NASDAQ's down 8%.

Nvidia, Broadcom, Amazon, Microsoft, Apple, they're all weaker right now. It's being offset by a little bit of strength and Palantir and Costco inside the NASDAQ, for instance. But again, there's a bit of a rotation into defensives like consumer staples, healthcare. Those are your winning sectors today. Financials are up today. Real estate is up as well. As for treasuries, getting some manufacturing data, which we'll hit in just a moment. We are seeing a mixed picture. The 10-year yield has just gone lower. So it's reversed 4.2% and the 2-year yield holds above 4%. 30 minutes into the trading session. Here are some movers we're watching. Keeping our eye on the chips today. Moving on, reports that chip designers NVIDIA and Broadcom are running manufacturing tests with the company, which could lead to some big contracts. We're talking about Intel, that is, where they're running tests there. Intel higher, the other two lower. Tesla higher after coming off its worst month in more than two years. Morgan Stanley's Adam Jonas, reinstating the stock as a top pick in the US autospace $430 price target. And we are tracking the fallout from President Trump's plan for a crypto reserve. A lot of movement in this space. We'll tell you all about it. But obviously the crypto related stocks, they were moving higher. Coinbase is a little bit higher. Robinhood lower. Bitcoin surged again yesterday, giving some back today.

Carl Quintanilla (2:51)

Some of this air pocket might be explained by ISM and just crossing the tape. Let's get to Rick Santelli. Hey Rick.

Rick Santelli (2:58)

Yes, definitely. There's some weakness creeping in. Let's start out with construction spending. Our January number, expecting down a tenth, we end up with double, down two tenths. Down two tenths will be the weakest in SEPA 24 in terms of month over month change. Now let's get to the money numbers, shall we? ISM, these are the manufacturing PMIs. Expecting 50.7, it comes in manufacturing light. 50.3, that is the weakest level. Well, consider this. There is a positive here. 50.3, last look was 50.9.

So, we have January and February. Now both back to back over 50, that is the good news. First time that's happened since SEPA and OCH of 22 Here's where it starts to get a bit dicey. Prices paid, 62.4, well above expectations. Well above 54.9 in the rear view mirror. That's the highest prices paid since June of 22 But that doesn't explain yields going down. Yields are drifting south. They are ignoring prices paid. Weakness in new orders, 48.6, weakest since OCH of last year. And employment, on the week of employment weakening, probably what is moving the market here, 47.6, the weakest since DICE of 24, which isn't that long ago. But the fact of the matter is, we had one reading above 50, 50.3 in JAN, first since SEPA 23, highest since SEPA 23, and now we reverse back down. We see that we're hovering at 420, 420 would be down two basis points on this session. Sara, back to you.

Sara Eisen (4:37)

Kind of feeds into the stack inflationary worries a little bit, with the higher prices and the weaker new orders and in jobs. Thank you, Rick, Rick Santelli. And we are gonna get jobs at the end of this week. This is a big week in terms of potential catalysts beyond today's numbers on manufacturing that Rick just reported. We're going to get the ADP Employment Report, that's the Private Sector Read, and then Friday is the Big Jobs Report. There's an ECB decision coming this week where they are widely expected to cut rates and they got some better inflation data that would lead them to that point. And then the beige book, of course, the Fed pays attention to what the districts are saying around the economy. The president will address Congress, said he's gonna be not hold back on that, so eagerly awaiting his speech. And then the tariffs are expected on Canada and Mexico tomorrow unless there's some sort of a deal that President Trump can work out. By the way, on jobs, when there's a lot more focus on jobs, because we are getting some signs that the job market is weakening further. What Rick just reported inside the ISM survey, the jobless claims number last week was very elevated, for instance. So we'll see, and it matters because if we do see some more pronounced weakness in jobs, that's what causes the Fed to pivot away from its on hold stance. They said they were watching out for weakness in jobs. They want to preserve the jobs market, so that could lead them to cut sooner rather than later. We're about two and a half cuts priced in for all 2025, which is a little bit more than where we were early February. So there's a lot riding on this jobs report, as always, but even more so. Also, there's this idea of the Fed put and then there's the Trump put. Is he going to get worried about the economy and maybe hold back a little bit on some of these tariff policies?