SOTS 2nd Hour: The Nvidia Breakdown, Health of Housing, and Sotheby's $6M Banana 11/21/24

Carl Quintanilla (0:00)

Good Thursday morning. Welcome to another hour of Squawk on the Street. I'm Carl Quintanilla with David Faber. Courtney Reagan is here at Post 9 of the New York Stock Exchange. Sarah Eisen has the morning off. A little bit of squirrely action to start this Thursday. S&P has already been in and out of the red a few times. Right now, down about a tenth of a percent. Dow with a gain of about a tenth as well. Busy morning, of course, as we react to Nvidia earnings, deer, snow, and a bunch more.

Courtney Reagan (0:24)

Yeah, it's a fun morning to get to be here. We're 30 minutes into the trading session. Here are three movers that we're watching among others. But Nvidia, of course, is front and center. Shares are racing all pre-market losses after another record quarter. We'll break down the numbers and what it means for the broader market in just a moment. Results out of China names Baidu and Pinduoduo. Baidu posting better than expected results, but revenue down 3% year over year. Well, PDD missed revenue estimates on weak consumer spending. Bull stocks, as you can see here in the red. PDD down almost 9%.

Baidu down by more than 6 And another day, another new all-time high for Bitcoin with crypto-related names riding this rally. Micro-strategy now nearly doubling on the month. More on the crypto trade, of course, is coming up.

David Faber (1:05)

All right, we've got some economic data, though, that's just crossing the tape. We'll get to Rick Santelli and Diana Olek. Let's start with Rick.

Rick Santelli (1:13)

Thanks, David. Yes, this is the leading economic indicators for the month of October. Down 4 tenths of a percent, a little more negative than we were anticipating. It follows a down 3 tenths that originally was released at down half a percent. What's notable here is that this is the 32nd consecutive month without a positive integer. The last positive number was all the way back in Feb of 22 This is the weakest month over month change with respect to leading indicators going back to April of this year. And we do want to point out something. In Philly Fed this morning, there was a special question. What do you see the inflation rate over the next four quarters? The response, 3 percent. Last time they asked in August, it was 2.8 percent. We also have more data coming out, existing home sales for the month of October. And for that, we go to Diana Oehlert. Diana?

Diana Oehlert (2:05)

Well, Rick, those sales in October rose 3.4 percent to a seasonally adjusted annualized rate of 3.96 million units. That's month to month sales up 2.9 percent from October of last year, the first annual increase in over three years. Now, this count is based on signed contracts. So, deals inked in August and September when the average on the 30-year fix actually came down sharply, bottoming at 6.11 percent in mid-September, according to Mortgage News Daily. The supply of homes for sale was up just over 19 percent year over year, but inventory is still at a 4.2 month supply at the current sales pace. So, on the leaner side, tight supply continues to pressure prices. $407,200 was the median price of an existing home up 4 percent from October of last year. The share of all cash sales pulled back to 27 percent, still historically high, but lower mortgage rates may have caused that slight drop. First time buyers also at 27 percent, that's very low. Historically, they make up 40 percent. Mortgage rates today are much higher, 7.05 percent on the third year. But a new report this morning from Redfin showed a surge in the number of people contacting its agents in just the last week. It's so-called demand index up 17 percent year over year to the highest level since August of last year. That surge, they say, started after the election. Carl, so a lot of people on the sidelines coming off.

Carl Quintanilla (3:28)

Diana, Rick, thank you guys. Appreciate it. Important numbers today. Meanwhile, watch NVIDIA. Shares a bit volatile as we said this morning. The AI chip maker sales nearly doubled, though their Q4 guide was a key sticking point for some. Here to help us break down that action, what it means for the broader market this morning is Senior Markets commentator Mike Santoli alongside the head of technology research, Emilius Ben Reitzis. Ben has a buy rating and just raised his target to 195 Mike, start us off though. We talked about what's left in the way of catalysts this weekend, really going into year end.

Mike Santoli (4:00)

Not a lot of identifiable ones after Nvidia. So it's done a couple of things. It's cleared away that kind of focal point of potential movement in one direction or the other. It also really punctuates the earning season. Obviously, it's on the fiscal year and it really brings us to a point of saying, okay, three quarters of companies beat, you got 6% growth, more or less in line. I don't think any of the fundamental assumptions have been challenged, so therefore you can kind of roll forward the standard bullishness that earnings are going to be up next year. The Fed's going to cut a little bit. Interesting though, that the broad market has really been stuck in this spot here for a couple of weeks. It's been just sort of like shifting weight from one leg to the other, waiting for some clarity. As treasury yields have come in today, you've got to bid there. It seemed like we were going to have a big buy the dip, banks and small caps up, and then we backed off. I think a lot of the erratic action in crypto and penny stocks and really just this adrenaline trade is all in this one corner of the market and it's keeping the VIX from calming down. VIX was down a point and a half earlier. It's now flat on the day. So it's a funny moment where we seem to be waiting for more things from the administration. But the fundamental story in an aggregate sense is fine.