SOTS 2nd Hour: United Health Slumps, Dick’s Buys Foot Locker, and Live: Walmart CFO 5/15/25

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Sara Eisen (1:09)

Good Thursday morning. Welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla, David Faber, live as always from Post 9 of the New York Stock Exchange. Stocks are under a little pressure right now. S&P's down a quarter of 1%.

It's split. What's working today is utilities, real estate, consumer staples. That's defensive. But financials and industrials are also higher. Consumer discretionary, biggest loser right now on the overall average. There's the NASDAQ. It's down more than the rest because tech is underperforming. But week to date, we're still looking at some nice gains. Almost 4% for the S&P, 6% for the NASDAQ. Take a look at Treasuries. We're going to talk about this, but the sell-off in Treasuries lately has gotten a lot of attention. It's reversing a little bit today. So getting some buying, the 10-year yield, 4.485. Coming up this hour, Walmart out with earnings this morning. CFO John David Rainey saying tariff-related price hikes could start later this month. He will be joining us on the show in just a moment. Also, look at United Health Care tanking again. Now down more than 30% just this week. We're down more than 16% right now. One analyst says the company is at risk of getting booted from the Dow. We'll hear that case in just a moment.

Carl Quintanilla (2:16)

Let's get some more data. Very busy morning on the tape. Rick Santelli's got some, I think, some housing and some inventories, Rick.

Rick Santelli (2:23)

Yes, business inventories. This is a March number, Carl. Expecting a build of two-tenths of a percent comes in at half that speed, building up one-tenth of a percent. That would be the smallest business inventory build of the year. And it's reverse countdown.

3.3.2.1 are January, February, March. December of last year was down three-tenths. So we have been building, but at a slower pace each month. Now we have a May read on National Association of Home Builders Housing Market Index. And for that, we had to Diana Olick. Diana?

Diana Olick (2:58)

Well, Rick, builder sentiment in May fell sharply, down six points to 34 on the NAHB's index. This is the lowest since the index hit 31 in December of 2022, which was when mortgage rates first went over 7% post pandemic. The street was looking for flat. Builders cite growing uncertainties stemming from elevated interest rates, tariff concerns, building material cost uncertainty and the cloudy economic outlook. They do note though that 90% of the responses were taken before the May 12th announcement that the US and China agreed to slash tariffs for 90 days to allow trade talks to continue. Now of the index's three components, current sales conditions fell eight points to 37 Sales expectations in the next six months dropped one point to 42 and buyer traffic dropped two points to just 23

Now 78% of builders reported difficulties pricing their homes due to uncertainty around material costs. 34% of builders cut home prices in May. That's up from 29% in April and the highest level since December 2023 Regionally on a three month moving average, the West and the South saw the weakest sentiment. Those regions are of course where we build the most homes. And these numbers are important guys because tomorrow morning we get the monthly read on housing starts and this will likely be reflected in that. Back to you.

Sara Eisen (4:16)

Okay, Diana, thank you very much. On top of some other data today, retail sales, let's just pause and talk about that and what it says about the consumer, which is was not great for the month of April. The overall headline number, retail sales only grew 0.1%.