SOTS 2nd Hour: The Black Friday Breakdown, plus Stocks & Streaming w/Al Michaels 11/29/24

Sara Eisen (0:00)

Good Friday morning. Welcome to another hour of Squawk on the Street. Happy Black Friday morning. I'm Sara Eisen with Carl Quintanilla and David Faber live as always from Post 9 of the New York Stock Exchange. Shortened trading day today, coming off of Thanksgiving holiday. Stock market closes at 1 p.m. Eastern time. And it looks like they're gonna close out with a gain for the week and the month. We've got pretty broad-based rally. Again, the S&P is up a third of 1%. Information technology bounces back. Some of these semis that have actually underperformed for the month, higher today. We're talking NVIDIA, Qualcomm, Lamb Research, they're at the top of the market. Consumer discretionary going strong. Tesla's up again. It's a big chunk of that one. Industrials, energy, real estate, health care, staples, utilities and communication services, all catching a bit. You've got financials and materials lower today. But again, they've been some big winners on the month. The bond market, as a reminder, closes at 2 p.m. today as well. We've got a rally in treasuries. The 10-year yield goes back to levels pre-election, below 4.2 on the 10-year. The 2-year yield below 4.2 as well. Market typically, stocks typically like those lower yields. Could be helpful here. 30 minutes into the trading session, here are three big movers we're watching. Retail, key focus as the sector's busiest five-day stretch of the year rolls along. It's got the Spider S&P Retail ETF, the XRT, on pace for its best month since February. Along with the S&P 500, we're going to talk top picks there in a moment. Coffee prices hitting new record highs this morning, up some 30% in November on pace for their best monthly gain since February 2014 Some concerns about drought in Brazil helping coffee futures shoot up. We're also continuing to watch Bitcoin lower on the week, but in the green today, still at 40% just since Trump was re-elected. Guys, today it's all about the consumer. It's Black Friday. We're wondering state of the consumer, which matters most to the economy.

I prepared a few charts to tell us how the consumer should be doing. Number one, and Carl, you mentioned this earlier, retail gas prices. We have seen lower gas prices. Remember, earlier in the year, and really throughout the last few years, it's been all about inflation, high gas prices, high food prices. Well, guess what? They've come down pretty significantly right now in terms of retail gas prices around $3 level. That's certainly helpful. I also prepared food at home, which is grocery price inflation. And if you look, we're getting much smaller increases month to month. So this is the month to month chart compounded. We're down to 0.1 percent gains on the month. That was what we saw in the October CPI report. And that's a really steady decrease. So it should start to make people feel a little better. Again, you've got the cumulative price shock of that. We're just paying 25, 30 percent more on prices versus the last few years. And that's potentially what was a big swing factor in the election as well. But as far as continuation of those price increases, that's come down a lot. I'll put in wages because that's been a good story as well. Should bode well for the consumer. We've seen steady, solid wage growth and real wage growth, growing faster than inflation. So that's good. I mean, even when we took a dip, we have rebounded from that. We'll get a new report next week on the jobs report for November and see where wages go. But they have been on this sort of steady climb up. And then just the S&P 500 for those that are exposed to the market, trading at a record high. Also should make consumers feel better, especially high income consumers that are exposed. And there's the look at all three of them. Overall, not a bad picture.

David Faber (3:34)

No, it's a pretty good picture. In fact, when you put them all together like that, it makes one wonder just how the Democrats managed to lose that election, given how strong everything is, Sara. In a real way, you know?

Sara Eisen (3:46)

And you've seen it in the sentiment indexes and the polls, that they just felt lousy despite some of these better fundamentals. And I think there is something to that cumulative impact of inflation. We remember in 2019, when beef prices were a lot lower.

David Faber (4:03)

No, and we've discussed that many times.

Sara Eisen (4:05)

And so, even if it's...

David Faber (4:06)

Four or five years is still, as I said the other day, you just go on a lunch somewhere nearby where I went and having sticker shock from a number that I remember a number of years ago. That does stick with you. But again, I mean, you just went through a very positive number of things, which obviously augurs well for the incoming administration, at least in terms of what they're inheriting.