rick santelli is in chicago for more what can you tell us this afternoon?yields going into the fed meeting. if you look at a chart that starts on basically a week ago friday you'll see is every session in 10s, every session, including today, has had a higher high than the previous day. so for 10s, seven in a row, for 2s, six in a row but the other issue that all treasury yields share is they've had six consecutive higher yield closes in a row. today we look like we're going to break that pattern, but it's still awfully close, kelly we're only basically down a basis point or so on the 2s and a little over a basis point in tens we're hovering close to actually neutral. if you look at the 10s specifically, yesterday's close was basically a four-week high yield close and all of that, of course, is taking a bit of a pause in front of the fed meeting tomorrow we all know that the future, what the fed is going to do, has changed dramatically not only in the mind of investors, but also how it's starting to show up in the marketplace. finally, the dollar index. this

rick santelli is here from chicago with more.n the past week on the ten-year. >> oh, absolutely. you nailed it. and we will slowly get to that. but first, you really brought up something important. this week was about inflationary pressures have not abated and in many cases they've gotten warmer. when it comes to import, export prices, it gets murky. there is a lot of moving parts but i picked one in particular. this is year-over-year import prices going back about a year and you could see that we have definitely moved higher, up 1.3% today. the low that you see there on that chart happened to be in '22 -- '23 when it was down over 6%. so we have moved higher. and if you look at the two-year, and this is just today, we see how the yields have moved higher and there wasn't any real dynamics other than import/export prices and the equity markets moving higher on the nasdaq is a good accomplishment. but kelly, about 25 basis points, well look at the week to date in ten. if you look at that at 4.39, we're just shy of 29 1/2 which mea

rick santelli, we are under 4:20 on the tenure. >> we are. and it is notable. back to the wednesday before thanksgiving, you can see with the two's in the 10's on the same chart come that we lost ground on the friday afterwards and many thought that might be a holiday move. but here we are. you can see on the charts that the two-year is leading us back upward but yields are lower then they were pre-thanksgiving. we open the chart up on 10 specifically to mid-october, we are hovering near what they closed at friday which is the lowest level in a month and a half. as we look at the data, it is clear why the two year leading rates are higher and not coming down as quickly because the data, especially from a sequential standpoint with the pmi is higher. except for prices paid which was lowered and that is a good thing even though some metrics were below 50. maybe the most important issue is, how do we calibrate with the rates around the globe? here's the tenure versus the eu tenure. any kind of close above the april close of 218 basis points will be the widest in f

rick santelli is tracking the action. rick. >> reporter: hi, jon.pmi this morning at 9:45. if you look at the last 28 months, the last 28 months, we have only had one reading above 50 that was november of last year. not only was today's reading weak and under 50, it was under 40. weakest since september of this year. now, consider this. normally, when we see very weak data, we see a differentiation on the coupon curve from the shortest coupon at two-year to the longest at 30-year. as you look at the charts, there's virtually no difference. we're significantly lower in yield, higher in price all along the curve. as a matter of fact, if you look at the twos/tens spread, it's hardly moved from last friday, hovering at 30 basis points, virtually the steepest going all the way back to mid-2022. now, technically, many traders always are looking for clues as to when they can lean against these higher rates and longer maturities. well, the thirty-year bond delivered. if you look at a chart year to date, what you should notice is that friday's close was a wh

thank you, rick santelli. is week, we got the jobs report on friday, as rick just mentioned. we'll get some of the adp private sector reads. reads on services a ton of fed speak as well this week, and some important consumer earnings. kroger comes at the end of the week, lululemon, campbells, hewlett-packard, enterprise, the beige book, which is good color from what the fed districts are seeing across the country in terms of inflation, and access to lending. and the economy, the fed pays close attention to that. guys, the biggest story in my world over the weekend is the truth social post we got from president-elect trump threatening the bricks about the u.s. dollar. i'm going to go really deep on this. >> oh, boy. >> here's what the president-elect says, the idea that the brics countries are trying to move away from the dollar while we stand by and watch is over. we require a commitment from these countries that they will neither create a new brics currency nor back any other currency to replace the mighty u.s

let's get to rick santelli hey, rick. >> now, these are preliminary.ks we get the final. they will be altered, potentially. there's some surprises here. if we look at the headline number, sequentially higher, better than expectations, comes in at 74.0 that's since april of this year. current conditions same scenario, better than the windshield, better than the rear view mirror by far 77.7 also the best since april of this yore.ear. now, here's the surprise what lies ahead, expectations takes a nose dive. it's below expectations. it's below the last, so it's lower sequentially comes in at 71.6 last look in our final read was 76.9 that's the weakness since july of this year now, on the inflation front. also some surprising news. the one-year inflation jumps from 2.6 all the way up to 2.9 that would be the hottest since june of this year, when it was 3% yet 5 to ten-year came in exactly as expected at 3.1 1/10 cooler than the rear view mirror at 3.2. 3.1, this will be the smallest month over month change in that category, just since october when it was 3.

. >> our jolt is the big data point of the morning let's get it from rick santelli. arl. even though rates are definitely down from where they were pre-thanksgiving they're moving up a bit on the jolts for october because instead of 7 million and a half we are at 7,744,000 a bit higher than expected last month was downgraded from 7.44 million to 7.372. why is that important? whether it was revised or not both numbers remain at near four-year lows going back to january of '21, but we have lifted from that level a bit and how does the current read of 7.744 million stack up it comps to august where 7.8 million but it does break that kind of big drop that we had last month if you look at yields they have moved up a bit, but do remember we're still way below some of the levels just think it was about 14 sessions ago ten year was trading in an intraday high of 4.5% a lot going on in the world, carl we want to watch that chinese currency, right now it is at a one-year low versus the green back sara, back to you. >> yeah, fears over tariffs playing in, lack of stimulus thank

sarah, back to you. >> thank you very much, rick santelli.hat's the problem? partly, the stickier inflation on the road down to the fed's 2%. we heard fed chair powell, and the market threw a tantrum, hinting at pausing the rate cuts, doing fewer rate cuts, the dot plot showed they only expect two rate cuts instead of four that they had three months ago. the problem is inflation. i decided to look. and there's so many inputs, pce was better than expected. cpi, which was a little bit sticky. decided to put that all together. atlanta fed does a sort of inflation tracker and look at the inflation measures from the fed's preferred gauge to the core gauge to the cpi, and what it's showing you is that we're seeing a lot of -- we'll try to work on getting the chart. what it shows you is while we have made a lot of progress, certainly from where we were this time last year, and the year before that, we're still not quite at the 2% level, 2.4% is not bad. that's where we are on pce. some of the other indicators show it's a little bit firmer between 2

let's talk to rick santelli up in chicago for more on this.ternoon, indeed. the fed has its thumb on the short maturities with the overnight movement and the long-dated maturities are market driven even though they have things like qe, and when we talk about the inflation it goes to the end and the longer mature tease. look at ppi with food, energy and trade. realize in november of last year it hit its cycle low after the highs that were made at 7.1% in 2022, and it came down to 2.5 a year ago. what was it today, 3.5. 100 basis points higher. we use the term sticky sometimes, and that's not sticky but getting hotter, and how did it affect the markets? well, depends on the maturity. here's 2s, 10s and 30s. the twos have been lazy, and the tens and 30s more aggressive. tens and 30s every day since friday, and it's on the yield. that speaks volumes about what kelly just said. the fed, it's baked in the cake. nobody will be able to talk the markets out of that because it's already in the hopper, but it's showing up in the markets as well, and ulti

for more on what the markets are making of the fed's interest rate actions, let's go out to rick santelli>> so many interesting dynamics going on here. first of all, this is the sixth consecutive session we look to have a higher yield close. many wanted to say, well, kind of neutral day, we're not doing much but yes we are getting towards 4.5%, a, and b, the momentum of the technical sell-off that pushed yields higher, and a two-year now is 80 basis points away from a tie yield close in april, and the 10-year is only 30 basis points away. that speaks volumes. let's find a trader. paul. how are you doing today? >> hi. >> we know the big fed meeting is this week and we have 97.9% chance of a quarter point ease, and there after it gets dicey. your thoughts of what you are hearing on the floor? >> in september we had interest in the fed meeting, and this time around, not as much. there's some interest, mostly forward-looking with the dots and seeing what the rate path will look like going forward, and that's -- >> it comes to inflation, and inflation and deficits it seems like after the elect

great to see you enjoyed it >> thank you >>> let's turn to rick santelli. what do traders thinks about the odds of a cut? >> it may be good news it may be too early to tell. let's start with the fed here is a two-day chart of fed fund futures for january, next month. we don't need to get into percentages or numbers or anything all i want you to look at is that it rallied. it rallied strong when the data came out when fed fund futures rally, it means less fed all i'm trying to demonstrate with that chart, we haven't changed. we are 70 plus percent for a cut at the december meeting. january is nowhere near. it's hovering around 25% it's at the end of the month what this tells is that on a snap view from the market and all its participants, the minute the report hit, it wasn't a hot report and it's not going to make the fed proceed in probably any different way. when it does rally, that is a sign of easing that is something you want to pay attention to now, if we consider what the big numbers in the report were, as you were discussing with your guest, average

let's get to rick santelli in chicago.h rates backing up as the market odds remain high. >> today has been a strange day. the market seems to be doing exactly the opposite, like a seinfeld episode. at 8:30 eastern, warm cpi. 3.3% year over year. doesn't sound like it's in the zip code of the fed's 2% target. look what happens at 8:30. rates move down. then as the day progresses, you see rates popping. that was after a solid ten-year option. the opposite affect. matter of fact, if you go back to friday, left side of the next chart, rates went down on a good jobs report. they have gone and stacked every day since, meaning we had a higher high on monday than friday, higher high on tuesday than monday. today, a higher high than yesterday. if you look at the other big dynamic, two to ten spread, steepen dramatically. it did what one would expect on warm cpi. what's more, if you go to a week to date on two and ten, it popped on the left side when we had the jobs report. when you spend 87 billion in one month to service the debt,

percent on the s&p and nasdaq after yesterday's declines but interest rates remain in focus out to rick santellifor more on this developing story. rick >> yeah. i'll tell you the interest rate complex is wild just like equities if you look at the first chart, this chart starts on the 9th of december which means we've had nine consecutive sessions in a row on the 10-year where the yields on any given day are higher than the previous day that is building momentum. we've talked about it, and it's been a great technical indicator 2s, 10s spread the steepest and widest since mid 22 speaks volumes about the market's anxiety on inflation finally the dollar index on pace for another record close going back to the end of 2022. but maybe the most interesting story is all that volatility in equities what it may mean and for that we're going to talk to chem >> rick. >> yesterday was one of those days where the equity markets went wild. so did interest rates. when we spoke you had a good explanation that i think viewers would be interested in. >> it's a perfect storm. not only getting the inflation in the ca

rick santelli was tracking the action. >> it was a little soggy. the last leg of a three-legged coupon auction process. 22 billion 30-year bonds. the yield, 4.535. that was about a basis point and a third above the higher yield, lower price. c minus is the grade for this 30-year bond auction. i can make it easy. look at a 10-auction foreign bidders were light. direct bidders, and how much the dealers took down, those improved slightly over average. the pricing wasn't very good. yields made new highs after the auction. if you look at charts, you will see, especially the long data, 10, 20, 30, spiking. the long data treasuries are now on the fourth day where they have taken out the previous day's highs. from friday, monday's was higher. tuesday higher than monday. wednesday higher than tuesday. today, higher than yesterday. i bring that up because we continue to build momentum to higher rates now led by the long end as it was about four or five weeks ago. if there's a lesson to be learned, it's this. many follow every auction to really assess how the

rick santelli. the broader market is trying to close out with nice gains here. the same cannot be said for small caps. the russell 2000 is closing out with its worst month in two years. it's down 8% in december and that leaves it up only 8% this year. that compares with a 25% climb for the s&p 500, but my next guest says that is about to change. small caps outperform large caps in the six months after a half- point rate cut in the third year of a new bull market, and in the first year of a new presidential cycle. nancy pry liz here, portfolio management or at essex management. nancy, you know as well as i do that past is often not prologue. >> that's very true, and these are just correlations, not causation, they are historical facts, and there is no certainty they will continue. having said that, we have seen modest, it still in a performance for the past six months of the smaller cap segments. more fundamentally, what we are starting to see is a spreading of he growth opportunities in some of the smaller cap beneficiaries of many of the economic trends that ha

we have rick santelli here to enlighten us. >> i will tell you what.f the data might be used different but it was light trading in the trade deficit was bigger than expected. wholesale inventory reserves -- reverse from positive to negative. all of that necessarily is good. the biggest issue of all is the yield curve. looking at the two year to date, we settled last year at two year at four and a quarter which means it is up six basis points. looking at the tenure, it was that3.88. it is now 4.61. up 73 basis points. 73 minus six means the spread is 66 basis points steeper and that makes sense. you look at the chart and we are at minus 37 at the end of last year and basically hovering at 29, 30 right now. that is a huge move and it underscores the dynamic most traders were paying attention to all year. they thought that that issuance would push up rates but did didn't want to pick a certain part of the curve so they picked the spread and it was quite profitable. and a lot of basis plains. there is more going on. everybody else and the world is not doin

rowe, somebody said they're going to 6% rick santelli was on our desk, he was talking about -- >> 7%.7%, 10%, we were hearing that jamie dimon said prepare for six, seven so, that's one of the biggest shifts we've seen year over year but can we see yields on the ten-year go much higher without the fed starting to raise rates? >> um -- you know, when you think about what the backdrop would be to get to a 6% ten-year, it's probably one of pretty aggressive growth and inflation m and in that world, the fed would try to slow it they would probably get behind the your can curve it would start slow, they wouldn't believe it, like 2021 >> but the stock market would hate that. >> well, it depends on -- i think it depends on how quickly you get there. if you got to 6% and it happened very fast, the stock market would hate it, because the volatility component if you did it over the course of two, three years, and it was gradual growth, then i think it's a very different answer for the stock market, and so, i think how you get to that 6% level would really matter. i do think we will see a 6% han

rick santelli is here to explain it. >> big pops and yields. maybe the star will be the dollar. we will get to that momentarily. remember they were at 421 before the announcement came out and they are up about 10 basis points. looking at 10, they are at 438. here we are now at 444, almost 445. basically up eight basis points from where they were. what is really interesting, if you consider on the 17th of september, the session right before the 50 basis first cut, we are now 70 basis points higher and higher in a two and 80 basis points higher than a 10. look at the dollar index. this is amazing. the dollar index is up almost three quarters of a cent on the session and most of that was after the announcement. it will be looking potentially at a new cycle high close and thinking about what all that means, my impression of what it means is the market is looking at this like maybe it is the last hurrah on easing for a while that would go along with the way you are peering this move with the equities. and let's look at the face. the last cpi, we had back-to-back year-over-year per gl

we have retail sales and let's get more from rick santelli. hey, rick. >> good morning, carl.ds on business inventories and remember, this is the first month of the fourth quarter and many were being looking for a big, positive number potentially as many large entities try to get in front of the notion of how tariffs might affect future pricing and we are expecting 0.1%, carl and it came in exactly 0.1%, and last month it was exactly the same even though it was downgraded to zero, unchanged and this put a positive spin on the gdp numbers for the fourth quarter when we get them in a little over a month. also out is our december read on national association homebuilders market index and for that we head east to diana olick. diana? >> rick, builder sentiment in december was unchanged from november at 46 according to the nahb survey. anything below 50 is considered negative. the index stood at 37 last december and carl harris said in the release, while builders are expressing concerns that high interest rates elevated construction costs and a lack of buildable lots continue to act

rick santelli has that for us. rick! >> david, big miss on december chicago pmi.e know manufacturing hasn't looked good in a while, it's been a long while. 36.9 is our december read. we're expecting the number around 43. that now makes 27 months, if you look at the last 27 months, we've had only one reading above 50, and that was in november of last year. 27 months, one reading above 50. of course, this is a big miss. we can continue most likely not only to look at the slowdown in manufacturing, but many are assessing exactly what's going on in the service sector. interest rates are down, 455 and a 10 is down 8, 425 in a two-year is also down 8. we see still see 29 plus on 2s to 10s which is in the neighborhood of the steepest that curve has been since early june of 2022. "squawk on the street" will return after a short break. louis! cut! more mud! action! louis, louis! cut mud on her face! louis! okay everybody, that's lunch! (♪♪) (♪♪) mud mask? no, no, no! compare hotels in the hotels.com app do you have a life insurance policy you no longer need? now you can se

let's get to rick santelli. >> indeed. watch the interest rates move up. the december and these are preliminaries and they're better than expected. two out of three, 48.3 on manufacturing. that's the one that isn't better. sequentially lower. sixth consecutive read under 50. the weakest since september, and here's the reason rates are moving up. the service sector is booming. 58.5. that's the highest number of the year and if you look at the composite, 56.6. that is the best since march of '22, and definitely well above the 54.9 in theerer rear-view mirror. it's about services and rates now. while we're hovering at 4.39, we see the matureries are also moving up and that's down a couple of basis points, and we want to paint -- excuse me. almost up to 4.24% getting very close to unchanged. remember, 4.40% is the recent high. we want the pay very close attention to that level, and do keep tune to this channel because "squawk on the street" will return after a very short break. weathertech presents. ♪ deck the halls with gifts so happy ♪ ♪ fa la la la la, la l

. >> let's first get to economic data, rick santelli has it for us. >> leading economic indicators forof 1%, they have had 32 consecutive months without a positive number. we have one zero this year but the last positive integer was in february of 2022, equal to the current 3/10. to find a bigger number, you go back to december of 2021. on that, we see interest rates, particularly the 10 year, making new high yields on the session. should they close, highest yield close going back to the end of may and the yield curve steepening to the tune of 25 basis points currently. also, the steepest since the end of may, seven months. november existing home sales, and for that we go to diana. >> existing home sales in november rose 4.8% to a seasonally adjusted annualized rate of 4.15 million units with sales up 6.1% year-over-year, the street was looking for a 2.5% gain in october and this count is based on closing so contracts likely signed in september and october, mortgage rates have fallen to an 18 month low in september but shot higher in october. the supply of homes for sale, 1.33 million

. >>> rick santelli is standing by with breaking news. ctivity levels for the third quarterfinal read. we take 2.2%, the last look, and it remains the final permanent read. 2.2% on productivity. it's the best quarter going back to the last quarter of 2023 when it was 3.1. i know there's been a lot of talk about the improvement of productivity. there is some truth to that, but to put a face on it, if you look at the year before covid, here is the four quarters of productivity. 3.4, 2.4. those are the 2019 numbers. it is not as these are lofty, but they are making a comeback from bouncing around post and during covid. now unit labor costs are coming in at 8 cents. this is really interesting because on our last look, it's almost half. it's actually more than half of the 1.9 that we had on our last look. we're looking for it to rise a bit. 1.9 was the highest level going back to last quarter of last year. now, we revise to .8%. that is lightest going back to last quarter of 2022. that is pretty good news and you are seeing a little bit of buyi

rick santelli is standing by at the cme and has the latest data. rick? >> reporter: yes.t with the month o'er month import -- month-over-month import. up.1, a solid number. it follows at least up to this point anup.3, the best number going all the way back to april. if we stirrup out petroleum, it moves higher, up.2. that's back-to- back.2. solid number, as well. those are month to month. let's look at import prices year over year. expected up 1%, they're up 1.3%. up 1.3%. that's the biggest pop on a year-over-year basis going back to up 1.7 in july. now if we look at export prices month over month, they're unchanged. we're expecting down.3. so unchanged, and export prices year over year expected to be up.3, almost triple that, up opinion.8. that's the -- .8. that's the hottest since july. it's easy to summarize. we see for the most part that these are all higher with respect to pricing both import and export. now i'm going to throw a curve ball out there. the curve ball is from the beginning of october through the end of november, and this is a november number, the dolla

. ♪ >>> welcome back to "squawk box" rick santelli live here at hq, breaking news.her you have to go back to april of this year. strip out food and energy, as expected, up to tense, 1/10 lighter than the three tents in the rearview mirror. if we serve up food, energy and tray, 1/10, to tense underwear we were last month, up 1/10 equals september, find a lower number, you go back to unchanged in may 23. yes, 23. let's take a step back and do year-over-year, not very good news here. 3% on headline year-over-year. that is a big jump. we were expecting 2.6, 2.4, 3%. we are going back again, 3%, you have to go back to february of 2023 to find a higher number. that was already at 4.7. if you look at year-over-year in energy, that is 3.4, also hotter than expected, 3.4, find a higher number, you are going back to february of 2023. the last one, year-over-year, x trade up 3.5, exactly in the rearview mirror and the rearview mirror 3.5, back to back will print, that means we are looking at the highest back- to-back level since february and march of 2023 when it was 4.5 and 3

rick santelli live from cme hq. breaking news.he best level, well, just recently, since september when it was up .8. but that .8 is the high of the year. as a matter of fact, going all the way back to january of last year, 2023. now let's strip out autos and it drops, but it's still solid but it's half of expectation. so we can see how autos played a large role. drops down .2. .2. of course we look at last month, it also now is revised to .2. the prior month was up 1%. strip off autos and gas, it remains up .2. light to expectations equaling slightly revised .1 which is up .2 from last month. september was a strong month. back-to-back .2. september was up 1.2. finally, the control group, which is the core retail sales, that came in as expected, up .4. a very solid number that will get inputted to other higher up the food chain economic data points. up .4, well, you guessed it, it's the best level since september when it was up 1.2. so there's a couple of things here. we had some positive revisions. september was a solid month. we'

. >>> rick santelli is standing by at the cme in chicago. he's got some breaking economic data. october, expecting a number around minus 75 billion. comes in light. minus 73.8. that is the smallest deficit we've had since it was minus 70 and that was in august. but what's interesting here is that if you go pre-covid on these numbers, and we started keeping track of these in the early '90s, these are some of the highest, largest trade deficits we've had pre-covid if you compare it and take out the covid areas on the chart. so we want to pay particularly close attention to this. it's good news that it went from minus 84 to minus 73.8, its current read, because maybe that gives us a glimpse of how the potential to handicap tariffs in the future may have already affected imports versus exports which affected that trade balance. on initial claims they move up to 224,000. that's up 9,000 from a very slightly revised 215,000 originally reported as 213,000. and if we look at continuing claims, there are now back below 1.9 million. what's interesting here is the last couple of weeks we've

rick santelli is standing by the numbers out right now. >> reporter: yes, housing starts and permitshe lightest going all the way back to mid-2020. so this is good. milton and berle affected the south. we thought we would see a rebound. not happening. expecting 1.4 million comes out 1,505,000, a jump from october so roughly a 6% jump now that comps the best level going all the way back to february of this year, the third highest pace of the year, and these are seasonally adjusted annualized units, of course. let's not stop there there's another number even more interesting, more historic and goes to what you were talking about this morning with regard to the spending package to get us over the hump current account balance third quarter $310.9 billion this number series, joe, started in 1960. this is the biggest negative balance we have ever had, and pre-row pre-covid under $100 billion so if you look at the end of 2019, it was minus 99.5. and if you look pre-covid in its entirety all the way back to 1960, pre-covid, the current biggest account negative balance was 218 billion. this i

investment officer and head f equities an fixed income at naeven, steve liesman back on set and rick santelliers what's the number again? >> 214 with a tick up in the unemployment rate. >> what do you think >> 2 something there is going to be a rebound because of the weather. >> and the strikes. >> and the strikes >> 80,000 plus for that number, joe. >> why not >> really debate here and say 2 something. >> 2 something wild man. >> what do you think, rick i think around 180 i think we're going to come in a little bit light. >> any revisions do you think? >> that's a big story. >> because we may have to go back and rethink what we thought before, which changes what we think now. >> that's been the pattern, steve. >> you're right. >> look at the qc data wraef overstated employment by 1.2 million. the jobs in health and government. >> too wonky, downgraded how much they're going to downgrade it, minus 800 to minus 600. >> the data for june suggests it's an extra 400. a million, that's a lot. >> i think there's a bunch of data in this economy and the main story it's coming in stronger than we expe