SOTS 2nd Hour: Trump Day 1, Beijing’s Tariff Preparations, & Davos Deep Dives w/the CEOs of Pepsi and Gap 1/21/25

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Jim Cramer (1:02)

It's Jim Cramer here. You're listening to the opening bell of CNBC Squawk on the Street. Don't miss a minute of the action.

Carl Quintanilla (1:17)

Good Tuesday morning, welcome to another hour of Squawk on the Street. I'm Carl Quintanilla with David Faber here at Post 9 of the New York Stock Exchange. Sara Eisen joins us from the World Economic Forum in Davos. She'll bring us the latest there in just a moment. Markets this morning, adding to some gains after a good week last week. Treasuries coming back to about a three week low. Three big movers we're watching this morning. 3M's a top gainer after beating top and the bottom line estimates, issuing some strong guidance. Two firms downgrade Apple today. Loop Capital to hold. Jeffries to underperform as both firms get bearish on iPhone demand. And then there's Bitcoin, hitting some record highs before Trump's inauguration. Holding 100K, we'll get some more on crypto coming up. Meantime, the president taking office with the most expensive stock market in history. The Journal Today highlights that American stocks 83% more expensive than when Bill Clinton first took the oath, 145% more than when Obama began his term, and four times Reagan's starting point, or even a third price year at the start of Trump's own first term. Let's talk about how to position from here. Joining us this morning, Lizanne Saunders, Charles Schwab, a chief investment strategist. Lizanne, good morning. Good to have you.

Liz Ann Sonders (2:25)

Nice to be here. How are you, Carl?

Carl Quintanilla (2:27)

It's an interesting morning for us because there is so much policy discussion, even as we're in the middle of getting some corporate commentary about the quarter. I wonder how much uncertainty you think that feeds into at least the rest of January.

Liz Ann Sonders (2:41)

Well, we may have alleviated some of the tariff related uncertainty in terms of what got announced on day one, but it was even later in the day on day one that the administration came out and said they're still planning going ahead with tariffs on imports from Canada and Mexico. So I think that's the one page from the 2018 playbook that is relevant this time, and is the uncertainty associated with just how and when these policy announcements get made. But it had helped allow for a turnaround in the equity market. You've generally been seeing the dollar trending lower, at least over the past eight days since the recent peak. And on a day like today, with yields down sub 4.6% on the 10 year, I think that's helping to give a lift to the Russell. But the uncertainty has not passed us for sure.

Carl Quintanilla (3:30)

Are you surprised at the way the market, or at least the bond market has taken tariff headlines or the lack of tariff headlines and processed them into lower yields?

Liz Ann Sonders (3:40)

Well, that's just a day's action. And I think we have to remember that although volatility has been subdued in the equity market, at least as measured by an index like the VIX, it has not been subdued in the fixed income side of things if you look at an index like MOVE.

So, I continue to think that we're going to see volatility in treasury yields tied to policy, as well as the actual incoming data, both on the inflation front and on the employment front. And I think that is a feeder into equity market behavior. We've got different thresholds that tend to cause problems for the overall market versus, say, just small caps, which do have that heightened sensitivity to MOVES and EALS because those smaller companies tend to have more variable rate debt. So I think these day-to-day gyrations are going to be with us for a while.