Israel Secures Border, Pepsi Pops, More Labor Strikes? 10/10/23

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 Tuesday morning, welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer at Post 9 of the New York Stock Exchange. David Faber has the morning off. Equity is trying to build on Monday's bounce as these tragic headlines out of Israel are offset by some dovish Fed speak and some relief in yields. Ten-year drops to 466, that's near the lows of the month. A roadmap begins with the Israel-Hamas conflict entering its fourth day now. Israel says its border with Gaza is now secure. We're going to go live to the scene. Pepsi rallying in the pre-market, posting a beat on earnings and revenue. We're going to dive into that quarter.

And more labor strikes to come. Thousands of hospitality workers in Vegas planning to pick up this week after another round of failed negotiations with the casinos.

Let's begin though with the markets trying to build on yesterday's rally, Jim. Were you surprised at all by what?

Jim Cramer (1:25)

Yes.

Carl Quintanilla (1:26)

Stocks and oil did?

Jim Cramer (1:27)

It was incredible. Yes, actually, I started my show last night by saying a little counterintuitive that you could have both at the same time. But if you take a look at the timeline, obviously, Vice Chair Jefferson speaks and then boom, 130, just like that. But they couldn't take the oil stocks down, obviously, because of what's going on in the Middle East.

And then they didn't have the bonds because of Columbus Day. So it was kind of a three-pronged oddity that oil could be up, that the S&P could roar and we didn't have the bonds to cue off of. And it set up a picture that I think was counterintuitive to the most people in the events that occurred in the Middle East.

Carl Quintanilla (1:59)

You had Logan and then Jefferson talking about higher term premiums and being mindful, they said, of the impact of higher rates, a lot longer term premiums.

Jim Cramer (2:08)

Yeah. I mean, I also think that you had that note from Ed Yardini, who's really, he's always distinguished himself and he's an old friend and done things with him. But he's in the camp, we've got to be more careful.

And that seems to be winning people over.

Carl Quintanilla (2:21)

Yeah.

Jim Cramer (2:22)

I do think that it is overblown that the Mideast could hurt the US versus, say, 73, where you got an oil embargo, which really hurt the US. But I also recognize that if you try to define how far this thing goes, you could be instantly wrong, 48 hours wrong.

Carl Quintanilla (2:40)

Yardini takes his recession odds to year end from 25 to 30s. I'm pretty bullish on disinflation, productivity.

Jim Cramer (2:48)

Yeah, the immaculate.

Carl Quintanilla (2:49)

Yeah.

Jim Cramer (2:49)

I mean, one of the things that, yesterday we mentioned Mike Wilson, and I appreciate his work, but it wasn't like he shifted from bullish where you had one of the greatest rallies to bearish, Yardini, tremendous bull through this period. So when I read him, and I read him every morning because he's a must read, it did feel like, oh, man, are we going to lose Yardini?

Are the bulls going to lose? And then after that, it's very hard to be as bullish. It kind of reminds me of the great late Marty Zweig, who used to be on Wall Street Week with Rukash, where you would be like, oh, wow, I'm on the wrong side of that trade. So you need Yardini. You don't want to lose him. Right.

Carl Quintanilla (3:31)

Meanwhile, you got the IMF warning about a stubborn global economy that they say is limping along. They cut their forecast for China. They cut their forecast for the eurozone. And then moments ago on Squawk, you had Tudor Jones talking about geopolitical risk combined with the weakened fiscal situation here in this country. Take a listen.

Paul Tudor Jones (3:52)

It's a very threatening time. So that is also happening.

At the same time, the United States is probably in its weakest fiscal position since certainly World War II with debt to GDP at 122 percent. So it's a really tough time for, I think, the moral voice of the world. Certainly been the leader since World War II.