SOTS 2nd Hour: Trump-Xi Latest, Apple iPhone Sales Go Live: Stock Impact, & Rockefeller's Ruchir Sharma 9/19/25

SPEAKER_1 (0:01)

Want to quickly create and execute trading strategies to help keep up with the markets? With Fidelity Trading Dashboard, you can access live data, advanced charting, portfolio insights, and automated alerts, all on one screen. We streamlined the trading experience so you can build and place trades better. Your Fidelity Trading Dashboard is ready now for free. Visit fidelity.com/tradingdashboard.

Investing involves risk, including risk of loss. Fidelity Brokerage Services LLC, member NYSE SIPC.

SPEAKER_2 (0:32)

Huge savings on Dell AI PCs with Intel Core Ultra processors are here, and they are newly designed to help you do more faster. They can generate code, edit images, multitask without lag, draft emails, summarize documents, create live translations, and even extend your battery life. That's the power of Dell AI with Intel Inside. Upgrade today by visiting dell.com/aidashpc.

Sara Eisen (1:09)

Good morning, happy Friday, and welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and David Faber. We are live, as always, from Post 9 of the New York Stock Exchange. Today, the latest twist in the US-China relationship, we'll talk to Rockefeller's Ruchir Sharma about President Trump's conversation with China's Xi Jinping and what's at stake for investors. Plus, Apple CEO Tim Cook talking to CNBC this morning as the latest lineup of iPhones hit the stores.

Tim Cook (1:35)

Dubai is incredible. China was incredible. We are so happy with what we see. It's early going, but we're very happy.

Sara Eisen (1:43)

Much more from that interview, including some new commentary about the impact of tariffs. But guys, this is a big week on the Federal Reserve. We're going to talk to Stephen Myron next hour on Money Movers. Of course, he's the brand new Fed governor. It was just confirmed earlier this week. And the dissenter in favor of 50 basis point cuts. The biggest question for investors moving forward here for the Fed is one of the biggest. Will inflation behave itself in order to let the Federal Reserve keep cutting? We know they're a little concerned about the labor market. But in order to keep cutting, they need inflation not to rise sharply from here. I did take one sort of clue from what we got from Lennar, the home builder, reported earnings yesterday and average selling prices came down. Just listen to this quote from the co-CEO and chair of Lennar from the conference call, actually from the release. Our third quarter results reflect both the continued pressures of today's housing market and the consistency of Lennar's operating strategy. Achieving these results required additional incentives, resulting in a reduced average sales price of 383,000 reflecting the soft market conditions. As Diane Ollick has been telling us about these home builders are having trouble selling in this market, and so they're offering more incentives. As a result here, we did see a 9% drop in the average selling price for homes. Vital Knowledge, which does a macro note, actually wrote about this and said that it could suggest that inflation is coming down. In fact, part of that note this morning, they said average sales price and delivered homes in Lennar's quarter down 9%, single builder, can't be extrapolated to the entire housing market. But it does suggest there's more disinflationary or deflationary pressure in shelter than is currently captured by government statistics. Carl, we know shelter is key. It's about a third of the PCE, which gets reported next week. That's the big report to watch.

That's the Fed's preferred inflation measure. Comes out on Friday.

Carl Quintanilla (3:38)

That's true. The Fed chair did say that he thought on Wednesday the tariffs were adding about three to four tenths to core PCE, but it might get more than outweighed by things like this. I see B of A today, their core PCE tracker now 0.23 versus a prior 0.27. So that's moving in the right direction.

Sara Eisen (3:56)

It is. Because you can extrapolate. We got CPI and PPI last week. So all the economists plug in their models and take some of the inputs from that and make a forecast for PCE and it does look relatively benign. You gave the monthly numbers. So what the expectations are now is that core will remain at 2.9 percent. Now, that's not 2 percent where the Fed wants it to be, but it remained the same as the month before. And then they do expect overall inflation to move up a little bit around 2.7 percent. It was 2.6 percent. It's not 2 percent, but it's not 3 percent. It's around 3 percent, but it's not moving sharply higher in the way that you might have thought tariffs would make it move. And I think that's the point for the Federal Reserve. Let's see what the data shows on Friday.