Chevron and Hess CEOs on $53B Deal, 5% Yield Effect on Stocks, Apple’s Losing Streak 10/23/23

SPEAKER_1 (0:00)

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Carl Quintanilla (0:31)

Market Moving Insight and Analysis join Jim Cramer, David Faber, and me, Carl Quintanilla on the opening bell hour of CNBC Squawk on the Street.

Good Monday morning, welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer, who's back. David Faber at Post 9 of the New York Stock Exchange. Futures trying to recover a bit from a stumble this morning as the 10-year peaks just above 5%. Plenty of M&A to get to today, including a mega deal in the energy patch and the biggest week of earning season on deck. Our roadmap begins with stock sliding to start this new week of trading. S&P closing below its 200-day moving average for the first time since March.

David Faber (1:04)

Plus we've got a mega deal in the oil industry. Chevron is buying Hess, the price tag, $53 billion in stock. We're going to have the CEOs of both companies joining us right here at Post 9 momentarily. And one of Apple's largest suppliers, Foxconn, reportedly being investigated by authorities in China. They are said to be conducting tax audit inspections and reviewing land use of Foxconn subsidiaries. That is pressuring shares of Apple a bit as we get started with trading 29 minutes from now.

Oh, actually, I'm going to send it to myself. Thank you, Carl. As we do start not with the markets itself, but with that major deal in the energy sector. Chevron, as we told you, green, acquire Hess. It's an all stock transaction. It's valued at $171 a share before, of course, we see Chevron trade this morning.

The ratio, 1.025 shares of Chevron.

And again, we're going to be speaking to both the gentlemen behind that deal very shortly. Jim, it follows, of course, Exxon and Pioneer. I am told, however, these two were talking long before that. At least they've been having conversations. My understanding is that date back a long time, but even in terms of getting serious about a potential deal now, it didn't have anything to do with Exxon, Pioneer. Nonetheless, we are seeing significant consolidation amongst some major players.

Jim Cramer (2:30)

Yeah, I think that there's a sense that oil's worth less on Wall Street than it is in the ground. That's a great time to buy one of the undercurrents. I do.

Carl, I got to do this, but does Mike Wirth, the CEO of Chevron, believe maybe, you know when you talk about higher for longer, does he believe in that for fossil fuel, higher for longer? Because I do start thinking that maybe EVs are in play here. The reason I say that is because Wall Street is not valuing these companies as if their value is like, look, they're going to go away.

But what we've seen in EV world in the last couple weeks is very telling, and I don't think oil's gone away. I think oil's actually been underestimated in terms of how long it's going to be with us. So you do need this. And David's been to Guiana.

David Faber (3:19)

Or Guyana, as those of us who've been there like to call it.

Jim Cramer (3:22)

Well, Mike's calling it Guyana, so we'll switch to that.

David Faber (3:25)

I'm going to have to correct it.

Jim Cramer (3:27)

Is that like tomorrow?

David Faber (3:27)

I spent a lot of time on getting that right.

Jim Cramer (3:30)

All right, well you better, like maybe you, you will correct some people down at the end of the year.

David Faber (3:33)

There we are on one of the Exxon FBSOs, by the way. Oh my God, we're using your footage?

Jim Cramer (3:37)

That's an Exxon deal.

David Faber (3:39)

They are going to be a partner with Exxon there, Hess is in.

Jim Cramer (3:41)

Yeah, that's okay there.

Sara Eisen (3:42)

Mike's watching right now, in fact.

Jim Cramer (3:44)

And they like each other, because who doesn't in the oil? What namey two oil companies do they hate each other with?

David Faber (3:48)

They like each other when they could be producing as much as a million barrels of oil every day.

Jim Cramer (3:54)

Yeah, strange base close.

David Faber (3:55)

They like each other just fine.

Carl Quintanilla (3:56)

Your point though about the EV curve though, Jim, is a good one. Some of the adoption forecasts getting pushed, I mean the UK pushing back net zero targets, as it's politically increasingly untenable to have some of these firm deadlines.