SOTS 2nd Hour: Trump Vs. Musk, Job Openings Hold Up, Banks Break Out 7/1/25

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Sara Eisen (1:02)

Good Tuesday morning. Welcome to Squawk on the Street. I'm Sara Eisen with David Faber and Wilfred Frost is here all week. We are live from Post 9 of the New York Stock Exchange. Carl has the morning off. Stocks are under a little bit of pressure. Down a little more than a tenth of a percent on the S&P. Nasdaq pulls back.

We are coming off of record highs though. The staples, materials and health care sectors are all higher. Everybody else is weaker today. Energy is down three quarters of a percent. Tech is under a little pressure. So a little bit of a pullback here near very high levels. As for Treasuries, we are about to get a lot of data. Manufacturing, job openings, mixed picture. There's some selling, 10 year, 2 year with hot firmer yields, but buying at the long end, 30 year yield, 477 Today, Musk versus Trump, part two. The feud between the president and the world's richest man reigniting as the big beautiful bill makes its way through Congress. We'll bring you the latest. Track the impact on Tesla shares, not pretty this morning. And a number of bank stocks breaking out to new highs as we kick off the second half of the year, including JP. Morgan, Goldman Sachs, Morgan Stanley. We'll talk about the next catalyst for those stocks. Coming this afternoon.

David Faber (2:08)

But first, economic data just crossed in the tape. Rick Santelli has that for us. Rick.

Rick Santelli (2:13)

Yes, now we're going to switch gears from S&P Global's PMIs of manufacturing to ISM. And the headline number better than expected. Expecting a number below 49, it comes in at 49 49 equals where we were in March of this year to find a higher number. You'd have to go to February. So basically, this is the highest level since February. And if we look at prices paid, so sequentially higher also on headline. Prices paid, we'd rather have that go down, but it is going up. And like the headline, it's sequentially higher than the rear view mirror. And it's 69.7, higher than we are expecting. That's the highest going back to April of this year. And prices paid being higher has a whiff of inflation attached to it. On the new orders front, 46.4. This is sequentially lower, weakest since March. Employment, on a big week where we are going to have two employment reports, sequentially lower, much lower than expected. We are looking for number over 47 We end up with 45 weakest numbers since March. Now, let's go to construction. This is a main number, minus three tenths of a percent. We are expecting a minus number. So that makes this the one, two, three, fourth consecutive negative read. We started out the year positive one-tenth, and we've been sliding. Doesn't look good on the construction front, although last month's minus four-tenths gets cut in half to minus two-tenths, but negative nonetheless. And finally, maybe the most important number of the morning, job opening, labor turnover. For me, always two months in arrears, we're looking for a number around 7.3 million. Much better, 7,769,000.

Much better than we were looking for, and that would be the highest pace of the year. You'd have to go to November of last year, when we're slightly over 8 million jobs. And in the rear view mirror, we actually had a subtle positive revision as well. That's going to keep interest rates a bit on the firm side, because of course, the Fed's just assuming that the labor market is going to continue on a glide path lower. This does negate some of that. Sara, back to you.

Sara Eisen (4:20)

Okay, Rick, that is very interesting again, because we were expecting a much lower number on job openings. This is Rick Santelli, better manufacturing as well, but still below 50 Guys, what I was going to focus on today is, so the Fed, Fed Chair Powell, who by the way, had just said that he can't say whether July is too soon to cut interest rates. He's speaking on this panel over in Europe at the ECB meeting. But the president is very clear, he wants the Fed to be cutting interest rates. And yesterday, you know, they rolled out this whole list of interest rates from around the globe. I think the better argument that the president should be making is, get ahead of economic weakness. Because yes, we just got a better job openings. But if you look at the trend here of what we've been seeing, job openings to unemployed people. We know this is something that the Fed share watches very closely. If you look at that chart, okay, it was very high coming out of COVID when employers were just scooping up jobs. They were voracious for people to come in and fill these jobs. So that was a high number. Lots of job openings for unemployed. It has steadily come down.