SOTS 2nd Hour: The Disney Breakdown: Plus CFO Hugh Johnston, Pharma Risks Loom, and Taylor Morrison CEO 5/7/25

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Carl Quintanilla (0:59)

Good Wednesday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with David Faber here at Post 9 of the New York Stock Exchange alongside Sara Eisen, live from our LA Bureau today. For a big interview this afternoon on Closing Bell, Overtime Citadel's Chief Ken Griffin at 4 p.m. Eastern Time. Meanwhile, some early session highs. Dow is up 231 S&P back to 5630 or so as the Bulls take heart on news that the Treasury Secretary is going to Geneva for some early talks with the Chinese. It is Fed Day, 10 years south of 43 VIX pretty steady at 24

Sara Eisen (1:31)

Yes, de-escalation continues and that provides hope. We are 30 minutes here into the trading session. Here are three big movers we're watching. Disney is a top gainer in the Dow and S&P, beating on the top and bottom lines, raising guidance and announcing plans for a new park and resort in Abu Dhabi. We've got much more on the expansion plan. Disney CFO Hugh Johnston will join us to break down the latest earnings and outlook this hour. Uber missing revenue expectations despite trips being up 18% from last year. CEO Dara Kusra Shahi telling CNBC earlier this morning, growth remains, quote, very healthy. And then Novo Nordisk gaining despite weaker numbers. Sales coming in lower than expected. The company cutting forecasts.

But that said, executives do expect sales of its blockbuster weight loss drug, Wegovi, to improve in the second half. The stock has also been under a lot of pressure into these results. But guys, it is Fed Day, so we're talking about the economy. Nobody expects the Fed to do anything. The question is, what Fed Chair Jay Powell will say? Will he be dovish? Will he be hawkish? Will he just remain wait and see? You can make an argument for all of those cases. Since I'm here in LA today, I just got some sort of local data that I thought was interesting, as far as how the tariffs are starting to impact the two busiest ports in our nation. That's Port of LA and Port of Long Beach right here. So in the week of May 4th, guys, 44% drop in docked vessels compared to last year. So they're starting to bite. That means less goods, toys, sneakers, apparel coming in from China and potentially other parts of the world into the United States. Heading into a very busy period, July is sort of peak when all the retailers are gearing up for the holiday inventories and stocking holiday shelves and getting all that product. So big drop from last year. But overall, the question is, which is a bigger problem? For the Fed, for the markets, is it inflation or is it a drop in economic activity? We have been at the Milken Conference here in LA. That's why we're all here talking to some heavyweights in global finance. Howard Marks, everyone always pays attention to what he says about the environment. He's from Oak Tree, a long time founder and chair. Here's what he says about how the tariffs will hit the economy. Listen.

Howard Marks (3:52)

There seems to be little doubt that tariffs, if they're substantial, will produce increased prices, tougher times for consumers, likely, or possibly leading to a recession. And those problems will arise in the short term. So it's hard for me to believe that everything is just as good as it was, let's say six weeks or three months ago.

Sara Eisen (4:23)

And Carl and David, that was in response to a question about the equity market, which is fully recovered from the so-called Liberation Day losses. Howard Mark seems pretty skeptical that everything is as good as it was, given the dual risks that we face on higher inflation and weaker growth, which nobody knows which one's going to be a bigger one to materialize and how.