Hot PPI, Retail Sales Miss, Mnuchin Talks Buying TikTok, Tesla Valuation Slides Below JPM 3/14/24

David Faber (0:00)

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

Carl Quintanilla (0:05)

Good Thursday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Mike Santoli, David Faber here at Post 9 of the New York Stock Exchange. Cramer has the morning off. For the second time this week, stocks taking a glass half full view on some hot eco data. This time PPI doubling expectations.

Hottest annual rate since September. Ten year almost hits highs for the month around 423 A roadmap begins with that other key read on inflation. PPI higher than expected as we said.

David Faber (0:30)

Plus Tesla shares, well, they continue to have a very rocky ride this year. In fact, they are the worst performing stock so far on the S&P for 2024

Another firm cuts their price target on that stock. And former Treasury Secretary Steven Mnuchin telling CNBC just last hour that he is putting together an investor group to try to buy TikTok or the US business.

Carl Quintanilla (0:54)

Let's begin with the market reaction to PPI and retail sales as well, which did sort of recover last month's decline. A little bit like Control Group, a goose egg, that's gonna be interesting for GDP.

Mike Santoli (1:04)

For sure. And as you mentioned, the market trying to look past it, struggling to do so maybe. CPI this week, you had these big Treasury auctions that maybe we thought it would knock the market potentially off course. Now, there was a hiccup lower in the indexes and bonds definitely are registering this hotter than expected inflation number.

10-year up to 422, two-year yield up to 465 At this point, if this were an acutely Fed-dependent stock market, it might matter more on a day-to-day basis to equities. It's not been the case. If you dial back to December, when we first got that Fed pivot and everybody got excited about how soon the Fed might cut because inflation was gonna be friendlier and all the rest. Yeah, to me, the argument was at the time, good news on the economy can now be good news.

It kind of doesn't matter when the Fed cuts if they kind of are looking for an excuse to do so and the next move is lower. And then you had the criticism that this is way concentrated market that only six stocks were driving. None of those things have actually been true. Well, good news is good news on the economy. But in terms of we need the Fed and we need only those six or seven stocks, that's been disproven because the economy has done better. So you have 5% nominal GDP growth, give or take, and that's insulated this market.

Although, we have this soft upside bias this week in the indexes, but it's been dependent day to day on what Nvidia decides to do and what the excitable public call option flow is directed toward on a given day. Today, Nvidia is going to back off a little bit.

I still think everyone can look at these numbers and say, it's an overbought market, it's an expensive market, it's looking frothy in areas. But on the other hand, these strong uptrends to start the year, like I said, 2013, 2017, a market that basically looks through the challenges, you can't really declare that this is the moment when it's gonna matter. And I think that's where you are. I'm very mindful. Peter Lynch, what'd he say? More money is lost anticipating corrections than in corrections themselves. Not sure that's the case right now, but I look at really elevated sentiment numbers and stuff like that. It kind of doesn't matter because broadly speaking, the economy's hanging together, earnings moving the right way, credit markets couldn't be more flush. And you know-

David Faber (3:25)

It's Nvidia's market and we're just living in it.

Mike Santoli (3:27)

Although we're gonna be down today and the indexes are hanging in there. So on a given day, even when Nvidia takes a break, so far, the last week or so, you've managed to kind of marshal the other troops and say we're gonna hang in there. So I don't know how long it can continue. Maybe we'll talk about Robin Hood's numbers and how they're seeing massive volumes and it seems like there's just an excitement around certain things, whether it's crypto and obviously AI and on the other hand, commodities are starting to roll.

Carl Quintanilla (3:55)

Yeah, well, your general point then is that the market doesn't need the Fed as much when earnings expectations are inflecting. Earlier in the week, BofA went to 250 for the year on S&P EPS.