Volatility and the AI Trade, Apple Jumps on Berkshire Stake, Apple and Succession 11/17/25

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David Faber (0:45)

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

Carl Quintanilla (0:50)

Good Monday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with David Faber, Sara Eisen at Post 9 of the New York Stock Exchange. Cramer has the morning off. Go birds. Futures lose some earlier gains. Bitcoin slips below 94K. Busy week with Nvidia earnings on Wednesday, jobs number on Thursday, and earnings from Home Depot, Walmart, Target, Gap all throughout the week. VIX still above 21 A roadmap begins with the state of stocks and this AI trade as investors gear up for Nvidia this week and some new bullish calls on the S&P.

David Faber (1:19)

Plus, keeping an eye on Shares Alphabet, they're rallying in the early going here. Berkshire Hathaway reveals a new position in that technology giant.

Sara Eisen (1:26)

And the health of the economy. President Trump cutting tariffs on goods like coffee, bananas, and beef in an effort to slash consumer prices.

Carl Quintanilla (1:35)

Let's begin with the markets, including this bullish call from Morgan Stanley's Mike Wilson today. The firm lifts their 12-month S&P target to 7,800. They cite some strong earnings growth, sort of feeds, Sara, this notion that there's gonna be some acceleration in growth, that flows are still pretty supportive, financial conditions easy. That's sort of the bull argument of the moment.

Sara Eisen (1:57)

There's a little bit of a theme in some of the research, which is maybe a little bit of short-term economic pain or slack, I'll say, in the labor market, but longer term, the set up is pretty good going into next year because that's when we start to get some of the benefits of the one big beautiful bill in terms of consumer spending power. A lot of economists looking through some of the higher inflation as temporary because of some of the tariff pressure. At least Morgan Stanley actually is in a separate note, put out an economic outlook and they say that, sure, weaker growth and more labor markets lack near-term, but the effects of policy shocks subside in 2026 Inflation starts moderating, unemployment rate starts normalizing in second half 26 and GDP picks up. And that's sort of the thinking. So can we get over this short-term hump that the markets were worried about last week on whether it was AI, whether it was uncertainty around the Fed, cutting interest rates, which is another core pillar of this bill market. And so look ahead to 2026 where the outlook is bright. That's a key question.

David Faber (2:58)

The outlook is great for 2026 That's just right. That's just no greater. It's bright.

Sara Eisen (3:03)

Yeah. I mean, I think that looks.

David Faber (3:05)

I'm just asking, like, what's that based on?

Sara Eisen (3:08)

Some of the effects of the One Big Beautiful bill start to kick in on the consumer side. Right. So that that's healthy.

The deregulation starts to kick in and people think that's good, you know, as the regulators are in place. There's an expectation of increasing Fed cuts next year as the shape of the as the as the faces and the voters on the Fed change. And President Trump has more power, including a new Fed chair in May. All of that, I think, is is part of the bull case on next year for for growth and then tariff impacts. You know, if they are one off, we'll find out, you know, and should start subsiding.

Along with some new relief.

David Faber (3:45)

Although it's not clear that we've had that much impact from tariffs to begin with, right?

Sara Eisen (3:48)

True. I mean, you do see it elevated in certain prices, you know, in like grocery, in the CPI. But you're right, the elevation is actually-

David Faber (3:56)

Well, now bananas, bananas, beef and coffee may be getting cheaper again, potentially.

Sara Eisen (4:00)

That's helpful.

David Faber (4:00)

Would be helpful, yeah. But of course, tariffs actually didn't create higher prices, but taking them off will create lower prices.