SOTS 2nd Hour: The Rally Rolls On, Bitcoin Blasts Off, and Elliott’s Big Industrial Play 11/12/24

Sara Eisen (0:00)

Good morning and welcome to another hour of Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and David Faber. We are live at Post 9, as always, at the New York Stock Exchange. Take a look at stocks. We're holding our gains, not doing a whole lot on the S&P 500, but again, holding near these record levels. The NASDAQ is what's working better today. It's up a little more than a tenth of 1 percent. The Dow, after a big win yesterday, is giving a little back. What's working inside the markets, Communication Services, best performing group right now, thanks to Live Nation in part, which is up 4 percent. Meta, Netflix, News Corp, all higher. You've got energy, technology, consumer staples, and financials all up. Materials, utilities, and real estate are your worst performing sectors inside the S&P right now. You've also got the bond market open. Remember, it was closed for Veterans Day yesterday, and we are seeing firmer treasury yields. So that trend resumes, the tenure at 4.36 percent, the two-year at 4.3 percent. We're 30 minutes here in a trading. Here are three big movers we're watching. Shares of Honeywell rallying, but off-session highs, activist investor Elliot Management taking a big stake in the company. More on that coming up. Home Depot shares giving up some earlier gains, still in the green though, a percent. We're going to have comments from the company CFO about the latest earnings in just a moment. And then I mentioned Live Nation. It is a top gainer in the S&P despite mixed results. Profits rising almost 40 percent from a year ago. But revenue missing estimates and the company didn't provide guidance for the rest of the year. However, Live Nation did say it has already sold a record of more than 20 million tickets for concerts in 2025 That outlook certainly helping the mood. Guys, as far as the economic data, a little bit later today gets heavier later on in the week with CPI, PPI and retail sales. But I did want to note small business sentiment, which did come out the NFIB because we got a nice tick up in small business sentiment. It looks like it's sort of from a low base, but actually we had the highest level since February 2022 So small businesses getting a little bit more optimistic. It was ahead of the election. This was in October. So 93.7 was the number versus 91 in September and 92 was the consensus. So that was a little bit better.

Carl Quintanilla (2:10)

Yeah, 34 months though below 50 And I don't know if we I think we had built for the 9 a.m. a chart of NFIB uncertainty. They have their own uncertainty index, which is skyrocketed in the last couple of weeks.

Sara Eisen (2:22)

Yeah. And well, what I did instead was the most important problems for small businesses. And inflation is still a winner in terms of how high the problem is compared to poor sales. And I just think that's interesting given the Fed has shifted to the employment side of the mandate instead of the inflation side of the mandate when small business are still worried and dealing with inflation. But yes, to your overall point, and you saw this in the quote as well in the release things, they still feel a lot of uncertainty. I do wonder if that will change after the election, which just with the optimism in the markets, the small business survey usually does lean for Republican in terms of its views on the economy, which is why it's been so depressed, I think, for the last few years. But that'll be notable to watch. But the inflation risk also stood out to me in the Bank of America fund manager survey. Did you see this? So they do a survey, and they kind of did it for November pre and post election. But as far as the biggest tail risks for the economy, global economy, and global inflation expectations are still right up there. I think we have that bar chart. Global inflation accelerating in November was higher than October and was higher post-election. So that's what that tells you. Also, it beat out the geopolitical conflict where fears receded a little bit from November to October as the top tail risk for the global markets. I would also just say, you know, they looked at this post-election thing. So global inflation expectations flipped from a negative 44 in October to 10% post-election. First time since August 2021 that investors forecast higher inflation in the next 12 months. So we've got to be aware of this risk that is building in investors' minds. We're aware. Yes.