Market Momentum, Semi Surge, BOJ’s Surprise Shift 7/28/23

SPEAKER_1 (0:00)

What's on the horizon for financial markets?

At P-Gym, it's a question that over 1,400 investment professionals relentlessly research in pursuit of your long-term goals. Specialized across asset classes, but united in collaboration, our teams provide global and local expertise. Our investments shape tomorrow, today. Pursue your tomorrow with P-Gym, a leading global asset manager.

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.

David Faber (0:39)

Good Friday morning, everybody. Welcome to Squawk on the Street. I'm David Faber with Leslie Picker and Scott Wapner. We are live from Post 9 at the New York Stock Exchange. Carl and Jim both had this Friday morning off. Let's give you a look at futures. Of course, you heard Becky talking about, we're looking for a higher open. We were at this time yesterday and in fact, we got it, but things sort of changed as the day went along.

Let's start with our roadmap though, and those stocks that are in rally mode, the S&P would be on pace for, will it be its third straight week of gains? This is Investors Digest, the latest batch of inflation data.

Scott Wapner (1:12)

Plus Intel returning to profitability after two quarters of losses, sending shares surging in the pre-market.

Leslie Picker (1:19)

And the Bank of Japan shocking the global financial markets with its latest policy tweak. We've got the details.

David Faber (1:25)

We'll start with the markets on this last trading day of the week. That much I know.

Beyond that, I don't really have a lot, so I'm glad you two are here to help.

Scott Wapner (1:35)

And you should got that one.

David Faber (1:36)

Yeah, I got that one.

Scott Wapner (1:37)

It's all downhill.

David Faber (1:38)

We did not.

Leslie Picker (1:40)

Yesterday was Thursday.

David Faber (1:41)

The statistically irrelevant Dow did not manage its 14 day streak to break the 1897 record. So there's that, unfortunately. And then obviously we had that very strong start yesterday in the NASDAQ, Scott, when you were on air later in the day, though, things had changed significantly.

Scott Wapner (1:56)

Well, you had the story out of Japan, that BOJ was going to sort of tweak its policy, maybe tolerate higher rates. The, you know, our rates moved up a little bit and then the market ended up selling off. But this morning, it's all about the PCE and rates are down, the market likes it because it really didn't upset the story that, and this path that we think we're on.

Guys, that the Fed is, you know, maybe takes another pause at the next meeting and then there's only one in three chance right now of a November hike. So nothing that happened this morning in the data says, oh wow, okay, maybe we need to rethink what the path is again for the Fed.

Leslie Picker (2:32)

Which is kind of the mindset and the fragility of the mindset currently is that any kind of volatility on either front could upset that.

But, you know, if you've got something that's kind of just a little bit off from estimates, a little bit in line with estimates, that is seen as a positive thing. Obviously, it's been a very big week for Central Bank news, for earnings news, the BOJ news this morning.

Very, very interesting in terms of what it means for US bond markets, because they're the largest foreign owners of US debt. So there's some thought that maybe there could be some repatriation if yields are allowed to go higher over in Japan, and what would that mean from kind of the Japanese selling off US debt and putting their capital to work instead in their home country?

David Faber (3:16)

Of course, as you say, Leslie, it's been a big week for earnings, and today is no exception. We'll get to as many as we can. Of course, P&G and Ford, Exxon, Chevron, Intel, T-Mobile amongst some of the bigger names.

But Scott, we've come off what would seem to be a pretty good week in terms of at least the big mega cap. Now, we have yet to hear from Amazon and Apple.

Scott Wapner (3:37)

Amazon and Apple next week.

David Faber (3:38)

Yeah, that's next week. But of course, we have Digested Alphabet.

Market liked it, 29% operating margin. Meta yesterday had a very warm reception, although as the day went on, the stock did not perform as well as it had in the earliest going. Microsoft a bit less so, although generally speaking, not a bad quarter. You know, I'm just curious to sort of what your take is on what we've seen, on what the market has done with it. A lot of people yesterday, for example, still talking about Meta's multiple, given what expects to be accelerating revenue growth into the mid to high teens, and yet it trades below the market multiple.