Squawk on the Street 11/24/23

SPEAKER_1 (0:00)

What's on the horizon for financial markets?

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David Faber (0:31)

Market insight and analysis. You're listening to the opening bell of CNBC's Squawk on the Street.

Carl Quintanilla (0:36)

Good Friday morning. Hope you had a great Thanksgiving. Welcome to Squawk on the Street. I'm Carl Quintanilla with David Faber, Sarah Eisen at the New York Stock Exchange. Cramer has the morning off. As Becky said, it is a shortened session for stocks today, but plenty to watch as the holiday season officially kicks off. US equities on pace for their fourth consecutive weekly gain and on pace for one of the best Novembers in 100 years. A roadmap's gonna begin with retail's big holiday hopes. Retailers kicking off the holiday shopping season with a cautious outlook. Meantime, Amazon facing strikes in the US and Europe on this Black Friday.

David Faber (1:08)

Plus, Nvidia shares a moving lower ahead of the open. The chip maker reportedly telling customers in China that it is the laying launch of a new artificial intelligence chip that it has designed to comply with US export rules.

Sara Eisen (1:20)

And Ceasefire, a tentative four-day agreement between Israel and Hamas appears to have taken hold, setting the ground for a staggered hostage and prisoner release.

Carl Quintanilla (1:31)

Let's begin in classic Black Friday fashion with an eye on retail. Investors watching what is typically one of the busiest shopping days of the year for signs of more cautious consumer spending going into the holiday season. I think page one of the time, Sarah, is retailers worry about holiday shoppers' mood.

And yet, NRF is expecting best turnout as we look at some live shots of malls since 2017

Sara Eisen (1:54)

2021 was the really strong year for holiday spending, according to the NRF. Those numbers were up 12.7%. 2020 spending was up 9%. And then 2022, it kind of moderated to 5.4%. So we'll see if we can get a number. The original expectation from the NRF was three to 4%. I feel like expectations have been lowered by the retailers themselves, who a number of them have warned about the holiday spending season. Even the retailers that came out and raised guidance, like an Abercrombie and Fitch, which are doing really well, didn't come in as high as the market expected when it came to that fourth quarter guidance. And so I think the setup is that people aren't expecting a very strong, they expect promotions to be pretty deep. We've already seen that.

The question is, are we still paying more than we were a year ago with inflation?

But overall, I don't think there are these great hopes for a big season. What do you think, David?

David Faber (2:50)

What do I think, Sarah? Well, I would...

Sara Eisen (2:52)

Were you going online yesterday?

David Faber (2:53)

I would know. I would note that things are very different than they were five years ago, let alone 10 or 15 in terms of judging overall demand from the traffic that we get on a day like today.

As we all know, people shop increasingly online. And those deals were apparent or already made apparent a few days ago and will continue throughout the holiday season. So it's become, Carl, a lot more difficult in some ways, I think, in all the different data points we get and providers to really pinpoint, at least during the season, how strong it is.

Carl Quintanilla (3:26)

Remember back in the day, like live shots were material in terms of foot traffic and I would go out to the mall and you would say, yeah, it's busy or it's not. Longer calendar this year, 31 shopping days between Thanksgiving and Christmas, which as Jan Niffin said on Squawk today, is about the longest you can get as the calendar circulate. We're only gonna have 26 days next year.

So on a nominal basis, we'll have more room for shopping.

Sara Eisen (3:53)

That should help, right? That should help with the retailer's numbers. Remember, this is 20% of usually on average, their overall profits. I think there are a number of factors that work though in the economy, the higher rates that we've had, the higher inflation that we've had, the student loan payment resumption. You know, this has been, it's one we hear about on conference calls from the retailers. They warn about it, Target listed it, for instance, as a headwind. Hard to really quantify. So I went in and I found some surveys. Jeffries did a survey recently, 850 plus consumers with outstanding student loan debt. They say that the results indicate consumers in this cohort are under significant financial pressure.