SOTS 2nd Hour: U.S. Commerce Secretary, Evercore Vice Chair, & Microsoft Pushes Back 12/3/25

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Sara Eisen (1:00)

Good Wednesday morning. Welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and Michael Santoli. We are live at Post 9 of the New York Stock Exchange. David Faber has the morning off. Got a big interview coming up in just a moment. Commerce Secretary Howard Lutnick joins us to talk tariffs, the economy, the Trump administration's latest investment news and much more. Plus Evercore's Krishna Guha will be with us to dissect today's weaker jobs number and how it could impact next week's Fed decision. And Microsoft under some pressure right now as the report just out raises concerns about demand for its AI agents. More on that story straight ahead.

Carl Quintanilla (1:34)

Working our way through some services data. Let's get back to Rick Santoli with ISM. Hey Rick.

Rick Santoli (1:39)

Yes, these are ISM PMIs as you mentioned Carl. They have no mid-month reads so these are fresh November reads. A mixed bag here. 52.6 the headline. Better than expectations. Sequentially higher than our last look at 52.4. And it's the best number since Feb of this year. And if you look at prices paid, and we'd rather have this go down, well it is less than expectations. We're looking for 68 plus. Comes in at 65.4. Much lower than 70 in the rear-view mirror. That's the lightest on prices paid since April of this year. New orders. 52.9.

Now, here's a bit of a mixed bag. Yes, it's above 50, but it's definitely below last month at 56.2. This would be the weakest since SEP of this year. And finally, on the employment front, on a week where we're supposed to get the big jobs report, but we're not going to get it, 48.9 once again. It's under 50 That's not good. But it is sequentially higher than our last look at 48.2. It's the best since May of this year. If you sum it all up, basically it really is kind of a mixed bag in services. Some good news. The good news here maybe is price is paid moving a bit down. We're hovering right now right around 406.5 in a ten year. That's down about three basis points. Same for a two year down about three basis points. Watch the yield curve. It's hovering at 58 plus near three month wide. Sara, back to you.

Sara Eisen (3:11)

Okay, Rick. Thank you, Rick Santoli. A number of big headlines on the trade front this week. The US and the UK announcing a deal to secure zero tariffs on British pharma products. In the meantime, the general tariff rate on imports from South Korea, including autos, drops to 15% retroactive to November 1st. Let's bring in US Commerce Secretary Howard Lutnick at the center of all of these discussions. Welcome, Mr. Secretary. It's good to have you.

Howard Lutnick (3:36)

Great to see you.

Sara Eisen (3:37)

So before we get into some of these trade negotiations and deals, I do want to ask you about the recent economic data, because today we learned that the private sector is losing jobs, small business getting hit really hard, negative number in front of ADP, and one of the reasons that they cite is tariffs. So do you worry about some of the economic fallout here as these tariffs really take hold?

Howard Lutnick (4:01)

No, no, it's not tariffs. Remember, you had the Democratic shutdown, right? And what do you think happens to small business, the people who do business with the US government, they know they're not getting paid, so they sort of slow down their projects. So you saw a little bit even of construction of small business down. So the Democratic shutdown hurt the numbers. And then remember, as you deport people, that's going to suppress private job numbers of small businesses. But they'll rebalance and they'll regrow. So I think this is just a near-term event, and you'll see as the numbers come through over the next couple of months, you'll see that all pass. And next year, the numbers are going to be fantastic. I think because the jobs of building in America, you know, as Donald Trump talks about, the huge, President Trump talks about, the huge construction projects coming to America, I think you're going to see GDP next year, superb, over 4%.