Earnings Parade, First Republic Tumbles on Deposit Woes, Exclusive With Dow CEO 4/25/23

David Faber (0:00)

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

Carl Quintanilla (0:05)

Good Tuesday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer, David Faber at Post 9 of the New York Stock Exchange. Pretty decent serving of corporate results today.

Got beats from GM, GE, Pepsi, McDonald's, Raytheon, but it's First Republic's results last night. Still weighing on sentiment and the two years down to 403 Our roadmap begins with that blue chip earnings parade. All the names we mentioned including UPS, McDonald's all crossing the tape.

McDonald's CEO will join us exclusively in the next hour.

David Faber (0:33)

Plus shares of First Republic Bank are tumbling yet again. The regional bank saying deposits dropped 40% in the quarter. They do say they've since stabilized, but we're gonna dig deeper into that.

And Dow delivering a quarterly beat. Shares though slipping as there was a volume decline. CEO Jim Fitterling will join us in a few minutes to talk about the quarter.

Carl Quintanilla (0:53)

Let's begin with the busy earnings parade as we mentioned, Jim. You highlighted GE, GM and Pepsi in Squawk.

Jim Cramer (1:00)

Look, I think sometimes you just have these standout quarters. I mean, GM, when you saw their beat, it was a clear beat and it was just on demand. And what I'm focused on, and David, I think you can comment on these too, because this is really the crux of what means talk to Dow. Demand, this is an economics class today. The demand for GM for their internal combustion engines was quite strong. And that's how you get the stock doing okay. PepsiCo, look, they were able to raise price and like Coca-Cola, it didn't really matter. They sold a lot, quickly, in snacks.

I look at GE though, and I think to myself, it's so back, it's incredible.

He did it. David, he did it. And he did it in a way that you really want, which is that aerospace was strong, but that power and renewables will be good next year. For the first time, I felt like I wanted to own them.

David Faber (1:51)

It is, you get so accustomed to not believing in a way, that when there finally is a reason to believe, you still doubt yourself.

Jim Cramer (1:59)

Yes, that's a great way to put it.

David Faber (2:01)

And so, I mean, the stock now is sporting a very high multiple, but it seems to be perhaps deserved given the growth rate that they've got going at GE now, Jim. But again, and you say it and you're like, really?

Can that really be?

Jim Cramer (2:14)

Well Raytheon Technologies, they did have terrific commercial.

And so I know that that's fine. I mean, Carl, I think what David's saying and I feel the same way, which is that we've come to look at GE as a company that reports its earnings kind of crazily each time. Looks different, looks different.

David Faber (2:29)

Yes, yes.

Jim Cramer (2:29)

This looked like what Raytheon looked like.

I mean, it looked like an industrial and it made me feel like it's not that it's back, because it's clearly back, but that it's a kind of high class, high growth industrial that people should like, except for they started liking it 60 Right.

Carl Quintanilla (2:47)

First positive free cash flow for a Q1. In about 10 years, as they raise both adjusted EPS and the free cash flow down.

Jim Cramer (2:56)

It's GM and GE are great stories today, because this is a story of story companies doing well, but still having supply chain problems in the case of GE, still having what I would regard with Raytheon, less supply chain, but more wage issues. This is what happened with the airlines, by the way, yesterday.

I think that if I were, people ask me, what would you do if you were the Fed? And the answer is, you don't feel any, you don't feel great.

You see companies having to raise price again. You talk to PepsiCo. They're not seeing, I thought PepsiCo was going to see in the second half, like Coca-Cola, a moderation of price increase, a moderation of their cost. No, definitely not.

Jim Fitterling (3:37)

That's worrisome.

Carl Quintanilla (3:38)

At the same time, there's always a UPS. You mentioned Verizon. There's Packaging Corp last night, right?

Jim Cramer (3:46)

I hesitate on UPS. You know, I mean, I've not been a big fan of the company lately, which is not, I'm just looking at the stock. I don't have any great insight, except for the fact that Federal Express.

David Faber (4:00)