SOTS 2nd Hour: The Jobs Breakdown w/Chicago Fed President Goolsbee, Plus: Constellation Energy CEO 1/10/25

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Sara Eisen (1:05)

Good Friday morning, and welcome to another hour of Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and David Faber live, as always, from Post 9 of the New York Stock Exchange. Stocks are under pressure today. We've got a more than 1% sell-off across the board. 1.4% for the S&P 500 Nasdaq's down, getting hit especially hard. 1.8%, adding to its losses for the week. Now down 2.5% week to date. It's those tech stocks in particular that do not like the rising treasury yields we just showed you for a second, but take another look here. Bond selling off, treasury yields higher on a very strong jobs number. That's the reaction, 4.76 on the 10-year yield, two-year yield, 4.35%. You do have some pockets of green in the overall market. Energy and utilities are higher, but everybody else is lower. And as I said, Carl, technology getting hit the hardest, financials, real estate, communication services, right down there with it.

Carl Quintanilla (1:57)

Yeah, Street doesn't like this, a UMich number either, which we'll get to in a moment. We're keeping a close eye meantime on the deadly wildfires in Los Angeles. At least 10 people are dead. 180,000 have been told to evacuate. The Palisades fires burned through more than 30 square miles and has destroyed thousands of structures. We're gonna be live on the ground this hour with the very latest and some new estimates on the possible cost of that devastation.

Sara Eisen (2:23)

But we do have some economic data just crossing the tape, consumer confidence. Rick Santelli has it for us. Hi, Rick.

Rick Santelli (2:29)

Yes, and there are surprises that Carl hinted at. Let's look at the headline number on Sentiment. These are January preliminary. In a couple weeks, we'll see the final read show up. 73.2, a little less than expected, sequentially less than 74, which was the December final read. Here's where it starts to get interesting. Current conditions, though, zoomed up. 77.9, bested expectations, well above 75.1 in the rear view mirror. 77.9 would be the best going back to March of last year when it was well over 80 And finally, what lies ahead? Expectations, light at 70.2, following 73.3. 70.2 is the lightest going back to July of last year. And here's where it gets exciting. One-year inflation, boy, this is a big jump. From 2.8 expected, 2.8 last up to 3.3 percent. 3.3 equals where we were in May of last year. To find a higher number, you're going to November of 23, when it was well over 4 percent. On the 5-10 year outlook, it zoomed as well. We were looking for a number around 3 Last look was 3 We had a lot of readings last year in the 3 percent range. Now it comes in at 3.3. 3.3 would be the warmest going all the way back, and I do have to go back a bit here, all the way back to June of 08, when it was 3.4.

So the inflation data imbedded in this report just seems to cement the nervousness we experienced this morning when we had a hot Jobs Report, which most likely isn't going to take any pressure off sticky inflation, and of course we are pricing out interest rate cuts. As we sit right now, we are at 4.97 in a 30 year bond that's up 4 on the day. It's high water mark, 5 percent. Sara, back to you.

Sara Eisen (4:25)

Yeah, just all of it. Bond negative this morning. Thank you very much, Rick Santelli. Let's talk about jobs for a moment because this was kind of a blowout report. 256,000 jobs added for the month of December versus 165, some had 155 on expectations. And the private sector in particular, very strong, which is just notable because the government has been doing a lot of the work in the last few months in terms of job additions. So private sector added 223,000 to that. It is a strong read and I think speaks to the confidence factor. Rick mentioned consumers on current conditions looking up businesses too. In terms of hiring expectations, I feel a little vindicated highlighting some of these business surveys in recent days about how businesses small and large are just feeling good about the outlook. What do they do in that kind of environment? They hire. And that's what we are seeing. For those that were worried about a softening economy and a softening labor market, you just don't see it in reports like this.