The Nvidia Rally, 2025 Stock Picks, & an Exclusive: Turo CEO talks safety concerns 1/3/25

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Sara Eisen (1:07)

Good Friday morning, welcome to another hour here of Squawk on the Street. I'm Sara Eisen with Mike Santoli this hour. We are live from Post 9 of the New York Stock Exchange. Carl and David had the morning off. Stocks are rallying this morning, and it's the usual suspects right on top. Look at the NASDAQ, it's up 1%.

Why? Nvidia, Amazon, Tesla, Microsoft, Broadcom, Alphabet, they're working again. Palantir, Apple, interestingly, is left out of that group today. But overall, trying to stage a rally after several days in a row, five days in a row, for the S&P and the NASDAQ, lower. Consumer discretionary, utilities, communication services, energy, healthcare, industrials, real estate, all higher in today's trade. Take a look at treasuries. Lower yields may be playing into a little bit of the good mood on Wall Street today, 4.57. So we're off that 4.6 level where we were in the previous few sessions, perhaps acting as a headwind for stocks, although we are seeing a little bit of selling in the short end of the curve with the two-year elevated at 4.25. 30 minutes here into the trading session. Here are the movers we're watching. President Biden officially blocking the $14.9 billion takeover of US. Steel by Japan's Nippon Steel, saying the deal would, quote, create risk for our national security and critical supply chains. Shares of Ribbion soaring, the EV maker meeting its 2024 vehicle production target after lowering projections, and then watch those alcohol-related stocks after America's Surgeon General called for cancer warnings on alcoholic beverages. According to the CDC, alcohol consumption is the third leading preventable cause of cancer in the United States after tobacco and obesity. Much more on the fallout coming up later on in the show. We do have some economic data crossing the tape right now. This is the ISM manufacturing number comes in at 49.3. That was actually a little bit better than expected. Consensus was 48 and is also the highest in nine months. December new orders 52.5 versus 50.4 in November. We're not quite at expansion level as far as the manufacturing industry. That would have to be a 50 or above number. We're at 49.3, but it's coming back in the right direction, Mike, and that's good news.

Michael Santoli (3:13)

It is. Manufacturing has been at what normally in most cycles would be considered downturn readings for a long time. It's one of those recession signals that was firing and really didn't play out. Definitely good news. I think the market does want reassurance that growth rates are pointing in the right direction. We're not looking for that kind of bad news as good news type dynamic except for the impact on yields and we actually do see yields perk up and turn higher on these numbers. It's a little bit of a delicate balance here as we're trying to find this equilibrium among equity valuations, what the Fed's going to do, market bond yields, the dollar, all this stuff converging in new territory.

Sara Eisen (3:57)

The dollar is turning up, which has been stuck in the mud on the result of higher interest rates. That signals that the Fed might not have to cut as much in the year and that's sort of what's been the primary mover of yields. Just wanted to throw in another economic chart for you, which is the updated forecast for GDP for the fourth quarter. It comes from the Atlanta Fed. We follow it because they updated it in real time and put in place all these new inputs. And the latest is the private investment, which actually took the GDP number for the fourth quarter to 2.6. That's what we're tracking now from 3.1, which is what we were tracking, I don't know, last week or so, which is still higher than what Wall Street thinks. The blue chip consensus still is just hovering around that 2% level. But I highlight it because it's still pretty good. 2.6% growth in the fourth quarter. We're still coming off of a year where we just, I mean, if you want to know why the market has had two back to back years of 20% plus returns, the first time we've seen that since the late 90s, right? You can look at growth becoming outperforming expectations.