JPM Raises Recession Odds, Lilly Blows Past Estimates, Warner Bros. Discovery Disappoints 8/8/24

David Faber (0:00)

Market Insight and Analysis. You're listening to the opening bell of CNBC, Squawk on the Street. Good Thursday morning, and welcome to Squawk on the Street. I'm David Faber with Jim Cramer, live from Post 9 at the New York Stock Exchange. Carl Quintanilla is at the Olympics in Paris. Let's give you a look at futures. We're setting up for a higher open. Not sure that means much, of course. If you followed yesterday, we looked like we were set up for a higher, well, we were a higher open, but not a higher close. And let's start with our roadmap this morning, not on the markets, but on what's affecting them, namely the odds of a US recession, JPMorgan setting, easing labor market pressures as it raises those odds. Plus Eli Lilly, the biggest gainer on the S&P pre-market. It blew past earnings estimates, hiked its guidance on strong sales of what, everybody? Come on. Yeah, of course, it's weight loss drugs. And shares of Warner Bros. Discovery tumbling on its latest results, included a $9 billion write down. It's a goodwill impairment charge, non-cash.

SPEAKER_3 (0:59)

Non-cash.

David Faber (1:00)

Non-cash.

SPEAKER_3 (1:00)

Non-cash.

Carl Quintanilla (1:01)

Non-cash.

David Faber (1:02)

TV networks. It's not a great business to be in. But here we are, a TV network. And we like to talk about the markets here. Hopefully, you'll still watch us and pay for your cable bill for doing that. We've got a lot of volatility. Major indices coming off their fourth negative session in five. And Jim, I did reference, of course, yesterday. We can watch it tick by tick there. Looked like we had a nice start. You and I left the air, or when you left at 10 o'clock, things looked fine.

Jim Cramer (1:27)

It was a beautiful day.

David Faber (1:28)

Trying to get an answer to what happened. You know, as usual, nobody knows anything. What do I got here? It's a reduced risk market instead of a buy the dip market. The VIX is still higher. It's August. There was a 10-year retracement. We're repricing risk. We're waiting for the NVIDIA print. We're in a holding pattern. I don't know. What do you got?

Jim Cramer (1:49)

Well, what a pile of, okay. So let's just look.

David Faber (1:52)

What a pile of what?

Jim Cramer (1:53)

Let's deal with reality, okay? Yesterday was the day I think to find, actually by the stock of Walt Disney.

David Faber (1:59)

Okay.

Jim Cramer (2:00)

Because things look good, very good. Then you peel the onion and you find that things are not that good, and you keep coming back to this.

David Faber (2:09)

Although we knew that first thing this yesterday morning, I will say. Sorry.

Jim Cramer (2:13)

No, we're well ahead of the game.

David Ricks (2:15)

We're ahead of the game.

Jim Cramer (2:16)

We're at warp speed. To use a program that I know you liked.

What I'm saying is that when you go back over anybody that took a big price increase or many price increases, people are done. They're not gone. The consumer is choosy. The consumer has been empowered. The consumer goes where they want to go. Consumer likes convenience, hence DoorDash and Uber. The consumer doesn't like anybody who raised price and raised price and raised price. The consumer likes Costco and Walmart doesn't like general retail. The consumer is being revealed, David, as someone who's canny and done with the companies that took advantage of COVID, raised price, complained supply chain, claim whatever. David, we need price rollback if you want to get the consumer in.

David Faber (3:02)

So, Ari, how did that-

Jim Cramer (3:03)

But Carvana said that, by the way.

David Faber (3:04)

It's an interesting take, but what does that have to do with yesterday's moves and what it means for today?

Jim Cramer (3:12)

That's the take.

David Faber (3:14)

That's the take?

Jim Cramer (3:15)

Yeah, that's the take.

David Faber (3:16)

Okay, so I'll extrapolate. So, the consumer is weakening, and therefore, odds of recession are strengthening.

Jim Cramer (3:24)

You asked me on the 30 billion.

David Faber (3:26)

Why did the yields go up, then?

Jim Cramer (3:27)

Well, the yields are just- these auctions aren't that good, or they make jobless claims. Forget the yields. It's all within a little bit. It's just niggling. What does matter is you have companies that are totally out of sync. And they're not in trouble, but they're doing really poorly. And you referenced Warner Bros. Discovery. It's not doing well, okay? We have companies like HubSpot that Alphabet was going to buy. Not doing well. We have today, David, I have something that I think you would love, which is a downgrade of Intel.