Squawk on the Street 2ND Hour 11/26/24

Sara Eisen (0:07)

Good Tuesday morning. Welcome to another hour of Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and David Faber, live as always from Post 9 of the New York Stock Exchange. Take a look at stocks. Got a little bit of a mixed picture going on today. The S&P is higher by a quarter of 1%.

The Dow, though, weaker by almost 200 points. It tells you where the strength and weaknesses are happening today. So materials are under pressure, healthcare, financials, real estate, industrials and energy. They're all down, but there's strength in the market. Utilities, communication services, technology. It's why the NASDAQ Comp is up half a percent, even though you have a Dow down 200 points. A little bit of a lopsided reaction, and there are pockets of weakness even further if you look in the automakers, for instance, on this new tariff threat. We'll talk about it. Take a look at Treasuries, how they've been handling all of this news. We do have some data in just a moment. The 10-year note yield a little bit firmer at 4.3, right on that level, and the two years just below it. We're 30 minutes here into the trading session. Here are some big movers we're watching. Amgen plunging after its weight loss drug data disappoints, but other GLP-1 stocks moving higher on positive news out of the Biden administration. More on that story coming up. Big retail moves as well. A lot of earnings this morning, including Best Buy, Kohl's, Dick's Sporting Goods. We're going to take a closer look at what their results and guidance may be signaling about the consumer and the crucial holiday shopping season. Got a lot of different directions. Kohl's down more than 21% and management changes there as well. And then Rivian down right now, giving up big gains from earlier this morning. The EV maker getting a $6 billion federal loan to build a factory in Georgia. Stock has now reversed lower.

Carl Quintanilla (1:41)

Let's get some data this morning. A pretty good diet ahead of even more tomorrow. Rick Santelli's got it. Hey, Rick.

Rick Santelli (1:47)

Yes, let's look at consumer confidence for November, shall we? If we look at the headline number expected to be up near 112, comes in as expected, 111.7. 111.7, that's actually the best number of the year.

That takes you all the way back to July to find a higher number. That's July of last year. Now, if we look at the present situation, 140.9, sequentially higher, much better than expected. That's the best level going back to March of this year. And finally, what lies ahead in the form of expectations, 92.3, sequentially higher than a slightly upward revised 91.9. And 92.3 is the best level going back to, and you have to go back quite a ways, that's December of 21, December of 21 So pretty good confidence. Real quickly, on Richmond Fed Manufacturing, we now have 13 consecutive negative months in a row, minus 14, and business conditions. The service side breaks the trend. It was 32 consecutive negative months. It comes in up 10, it reverses that trend. And finally, new home sales for the month of October. A huge miss here. And remember, October saw interest rates go up 610,000. We're expecting a number around 725,000 seasonally adjusted annualized units. This is the weakest since November of 22 And for more, digging down on that weak new home sales number, let's go to Diana Olick. Diana?

Diana Olick (3:21)

Well, Rick, I'll just reiterate what you said. Huge miss. But frankly, I'm not sure why the expectation was as high as it was because as you said, the 30-year fixed rate mortgage started October at 6.2 percent. By the end of October, it was at 7.09 percent. Now, these numbers are based on signed contracts. So that's people out shopping during the month of October, looking at those rising interest rates. We talk about the home builders buying down rates all the time. They can buy it down into the 5 percent range. But when you see rates go higher, consumers start to think, wait, maybe I should pull back. Also, it was right before the election. A lot of uncertainty. People don't like to spend during times of economic uncertainty. The median price took a jump up, though. $437,300. That's up 4.7 percent year over year. The builders had been trying to pull back prices by building cheaper homes. But again, you're seeing they've got a lot of pressure on them for pricing. And why is that? Look at what we're talking about today with tariffs. Lumber prices are already up 20 percent year over year before we heard about the tariff issue today. That's because tariffs jumped up higher in August to a 14.5 percent rate for softwood lumber for Canadian lumber tariffs. So you're probably going to see that go even higher, and that's going to hit builders even more, hitting their margins, making it harder for them to build those cheaper homes that we really need. I'll just say lastly, supply jumped up to a 9.5 month supply from 7.6 months. That's a lot of supply. But the one thing though is that builders have some supply that is for sale that they haven't started yet, so they could just not start those homes. But again, it's a huge miss for the builders. Back to you guys.