Debt Ceiling Talks and the Markets, Banking Turmoil and the Fed, Palantir's AI Surge 5/9/23

Carl Quintanilla (0:00)

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.

David Faber (0:08)

Good Tuesday morning, everybody. Welcome to Squawk on the Street. I'm David Faber with Jim Cramer. We are live from Postline at the New York Stock Exchange. Carl has a morning off this morning. Let's take a look at futures. You can see we are set up for what's going to be a lower open, though we seem to be coming back.

From what I saw a little while ago, and really, who knows, right? I mean, it can all change so quickly. Our roadmap does start with DC's debt showdown. President Biden set to meet with congressional leaders today, Treasury Secretary Yellen saying, We're not a deadbeat country.

Plus, we continue to keep an eye on the regional banks. The volatility, well, it seems to be back when it comes to their stock prices. Chicago's Fed president saying the credit squeeze has already begun.

And checkout shares in Palantir, they are surging. This is the company says interest in its new AI platform is, quote, unlike anything we have seen. We'll talk about that in a bit, but let's get to the debt showdown, if you want to call it that. At least it's a countdown right now to those talks this afternoon. Nobody seems to think anything is going to be accomplished.

Jim Cramer (1:15)

No, it would be shocking. I'll tell you, David, if one more person comes on our air and say, well, of course they have to be solved.

I mean, that's the kiss of death, and I think people should stop doing that. I think they should be saying, will the president, like George Stephanopoulos did, will the president vote the 14th Amendment when it doesn't work? That's a very sophisticated analysis by Stephanopoulos, and the answer is that he may, and then the Republicans would go right to the Supreme Court, and the court is a Republican court. But that's what you have to think about.

David Faber (1:46)

Orzag, just a guest, of course, ran OMB, you know, a frequent guest on our air, had said that's probably the break the glass solution. He didn't use those words.

Jim Cramer (1:55)

That's the term everyone's using, the break the glass. What is it, a Jewish wedding? Give me a break.

I mean, I gotta tell you, this is one of those moments that we all, I mean, hey, you know what? Of course they have to solve it, because we'll look like a Mickey Mouse country. In trail 11, David, the S&P downgrades us, okay?

David Faber (2:13)

I remember, I think we were sitting at this desk, is it possible?

Jim Cramer (2:16)

Yeah, I mean, like the same week, I think that some Latin American country was downgraded to like lower the, I mean, like AAA is J&J and JP Morgan and the United States, and then the United States loses. I mean, it was a frightening time in the Republic.

People seem to forget 2011 entirely. And it was, by the way, Congress is much more to stick with the president back then than now.

David Faber (2:40)

Janet Yellen hasn't forgotten 2011 Here's what she told Sarah yesterday on closing bell overtime about what may happen.

Janet Yellen (2:52)

The only option that really leaves our economy in good shape is, and our financial system is raising the debt ceiling and making clear that Congress stands behind the basic principle that America pays its bills. We're not a deadbeat country.

David Faber (3:13)

Jim, how do you position a portfolio or anything in terms of the next few weeks and the heightened risk, however high that risk is, and everybody's saying it can never happen, but the heightened risk that, in fact, we will default?

Jim Cramer (3:28)

My child trust was 20% cash, probably the most we had, in part because I had total mistrust of Congress and mistrust of the president.

And this time, I'm only in around 11% cash. And that's probably too aggressive.

But there was a reason why I put a button. It was the most unbelievable buying opportunity. You put 19% like in a blink of an eye once they did solve the situation. So I don't want to, I'm not trying to minimize what it's like to be a deadbeat country. I'm surprised the Treasury Secretary used that term. But I will say that it is absolutely certain that you're going to get a rally. You're going to get, yes, the mother of all rallies after this is over.

David Faber (4:11)

You think you're going to, in the stock market. We know obviously one musty bulls are trading at yields that will clearly not be sustainable if in fact we get to figure it out.