Big Retail Reports, Capital One Buys Discover, Live: Adobe CEO 2/20/24

Jim Cramer (0:00)

It's Jim Cramer here. You're listening to the opening bell of CNBC's Squawk on the Street. Don't miss a minute of the action.

Scott Wapner (0:14)

Good Tuesday morning and welcome to Squawk on the Street. I'm Scott Wapner with Jim Cramer at Post 9 of the New York Stock Exchange. Carl and David have the morning off today. Let's take a look at futures this morning. Do have some earnings to get through and we'll see what the read through is. We're gonna open negative if we opened right now. Of course, S&P would be down by about 18 Dow would be down triple digits, and we'll get to a couple of Dow stocks this morning that are very important, and that's where our roadmap begins. A pair of big retail reports. Walmart and Home Depot both topping estimates. Their stocks, though, are moving in opposite directions. Plus, Capital One is buying Discover Financial Services. It's a $35 billion deal. We do have the details. And the CEO of Adobe, he'll be live at Post 9 this morning, a first on CNBC Interview, breaking down his company's new AI features. We do begin, though, with two big retail names reporting before the bell, both Walmart and Home Depot topping earnings estimates this morning. As we said, though, the stocks are moving in opposite directions, and why don't we take the one that's up, and that is Walmart, Jim, which beat strong holidays, strong e-commerce, comps up 4%.

Jim Cramer (1:16)

They're coming in aggressive. They're coming in aggressive because they're also buying Vizio, which shows you this advertising component that they've got going. I think that what they've done is catch the zeitgeist of the country.

They know that they have to fight inflation in order to keep customers there, and that's what they're doing.

They have a rather remarkable attitude of just month after month being better. Even January, with the cold weather doing well, I find this acceleration of comp stores really exciting. And what it says is, okay, look, the consumer's having trouble. You know where they go? They go to Walmart.

Scott Wapner (1:51)

They're in kind of a sweet spot for where we are right now.

Jim Cramer (1:54)

Exactly. Now I have them on tonight.

Scott Wapner (1:56)

You have Macmillan on.

Jim Cramer (1:57)

Yes, I do. And sweet spot was exactly what I was going to start with, which is the idea that this is a place where everybody knows they're gonna get the lowest price.

But what people are finding is they're getting great variety.

I mean, I think the stores have had a major upgrade without them talking about it. That's one of the things that we really wanna tack today. I think that they're getting a younger group coming in. I think they're getting more discretion. As I know, you have Stephanie Link, she would say more discretion. Yeah. And I just am very, this is something I rarely say.

Scott Wapner (2:30)

Well, look at the chart.

Jim Cramer (2:31)

I am so excited about having the last quarter, by the way, total misinterpretation, stock went way down, shouldn't have. This is the quarter where they just, this is one of the more breakout quarters of a gigantic company. And look at the size of it. Oh, what can I say? I cannot wait to speak to Doug, because they are offering not just food low, power really low, aisle after aisle, sporting goods really low, electronics really low, but people don't go there who are from this environment.

And people who run billions of dollars, they're busy buying, I don't know, Norfolk Southern. This is, or Tesla of course, this is the company they should be buying.

Scott Wapner (3:15)

Stock is going to open at a new high.

It's a good looking chart. And they've managed to work through the issues that were in overhang for a while, like inventory. I want you to listen. I know you have, you said Macmillan on tonight.

Jim Cramer (3:27)

Sure, no, no, let's play away.

Scott Wapner (3:28)

But let's listen to Doug Macmillan on the call, because he addressed that very issue, and where the company is now.

Doug McMillon (3:35)

We're just in a healthier place than we were a year ago, and I think inventory is a big part of that. As we noted, inventory in the US was down 4.5%, down 8% for SAMs, and that just enables us to operate a lot more effectively. We saw markdowns in the quarter be notably less than they were the year before, and all those have an effect on gross margin.

Scott Wapner (3:58)

That's a big deal, because it was such an overhang that we talked about, you know, let's say a year ago, whether it was Target or Walmart, this inventory overhang, and it's just taken a while to work through.