Final Trading Day of May: Nasdaq's AI Rally, Debt Ceiling Vote Watch, China's Bear Market 5/31/23

SPEAKER_1 (0:00)

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SPEAKER_1 (0:07)

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SPEAKER_3 (0:12)

Well, you only get married once, or twice. The three time stops.

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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 Wednesday 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. Final day of the month, and we'll watch for some month-end rebalancing. Futures in the red, China data was quite weak. We are expecting a debt ceiling vote tonight. Republican leaders say it's likely to pass.

Roadmap begins with stocks, though, eyeing a lower open on this last trading day of May, as we await some progress on the debt deal.

David Faber (1:03)

Plus AI mania helping to drive what has been a strong month for certainly big cap tech. The latest read on that sector, we'll also talk about results from HP and HPE.

We're also watching China stocks there entering a bear market. Jamie Dimon calls for increased Washington-Beijing engagement.

Carl Quintanilla (1:23)

Let's start with the markets though, on this final trading day of the month. China kind of threw things for a loop here.

Jim Cramer (1:29)

China is such a bummer. I mean, I'm beginning to think, they won't use the term recession because it's just not allowed to. The communists probably don't like the word, but I mean, we're talking about every article, severe slowdown, contraction. They love that word contraction.

David, the Chinese economy is like a battleship with the propellers shot, just circling.

David Faber (1:54)

It's not moving forward.

Jim Cramer (1:55)

Exactly. Exactly.

David Faber (1:57)

Right.

It's like, yeah. Yeah. A relationship has to keep moving.

Carl Quintanilla (2:03)

It's like it either moves forward or it dies. I think what we have here is a dead shark.

Jim Cramer (2:08)

Yes. It's so much shark week.

Warner. Hey. Time to buy a, no, still too early. Okay.

David Faber (2:15)

We're moving ahead. Let's get back to China and specific to what the data is that makes you say that it is a dead shark.

Jim Cramer (2:22)

Well, okay. So Jamie Dimon, president Jamie Dimon says the uncertainty, I'm sorry, he's just the CEO of JPMorgan. I forgot. The uncertainty in China is, get this, somewhat caused by the government, somewhat. How can he say that in China?

Come on, think about that. You can't just say blast the government, you're in China.

David Faber (2:43)

Well, he can because, why? To a certain extent, he's not Jack Ma.

They're not going to...

Jim Cramer (2:47)

But you have 48.8% PMI, five month flow. You've got oil collapsing. Again, everyone says it's China.

How do they slow the decline over there? Do they have to do just still one more giant stimulus program?

David Faber (3:04)

Well, I'm not sure what underlies it all.

Carl Quintanilla (3:06)

Yeah, I mean, Citi today, risk of a double dip, exporting PPI deflation, a self-fulfilling confidence trap. They think policy needs to change in a hurry.

Jim Cramer (3:16)

Well, look, you have unemployment there. I'm telling you, they're in US circa 1977 They have unemployment this j- What's the matter? They have unemployment. It's gigantic.

Gigantic! 20% unemployment.

I mean, it's communists. Don't communists just put people to work?

David Faber (3:32)

They do. That was not a number I was familiar with.

Carl Quintanilla (3:35)

20%. Youth unemployment, yes.

Jim Cramer (3:38)

Well, let's say people are looking for jobs. Don't they have any, like, you know, prospects?

David Faber (3:45)

And every day there's another story in the Journal or elsewhere about US companies trying to diversify their supply chains, trying to figure out their manufacturing plan, should there be even greater hostility between our country and China. At the same time, you do have leaders, Elon Musk obviously over there, and Jamie Dimon, trying in some way to speak more positively about the relationship, or at least encourage the relationship, warning what decoupling could really look like.

Jim Cramer (4:13)

Well, I was reading Fortune, Jeffrey Seinfeld.

I did not know that Moscow, yeah, I mean, that Moscow was 2% of trade, cut them off, right, very easily. But he's now saying it won't be that hard to cut off or slow.