Market Rally and Fed Aftermath, Starbucks Surges, Gains for Lilly and Novo Nordisk 11/2/23

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

Sara Eisen (0:36)

Good Thursday morning and welcome to Squawk on the Street. I'm Sara Eisen with Jim Cramer at Post 9 of the New York Stock Exchange. David's on assignment, Carl has the morning off. Taking a look at futures.

The Post Powell celebration continues. Dow futures up 220, S&P futures up 38 We are seeing buying across the board. NASDAQ also getting a bit about 200 points. Continuing yesterday's afternoon rally. It's actually the fourth consecutive day of gains on the back of lower treasury yields. Our roadmap starts with the Fed. One day after its rate decision, we're gonna break down Wall Street reaction to Chair Powell's comments.

On the earnings front, Starbucks among this morning's top gainers. Demand for higher price beverages, helping to fuel better than expected results.

You also have anti-obesity drugs driving quarterly profits at Lilly and Novo Nordisk. But there's much more to that story. We will fill you in on this very busy day of earnings. We're gonna begin though with the aftermath of yesterday's Fed decision. Yields moving lower this morning. Dow and S&P each aiming for a fourth straight day of gains. As I mentioned, Nasdaq going for five.

Jim, the market heard what it wanted to hear. Which is that they think the Fed's done.

Jim Cramer (1:42)

A lot of shorts have to cover. I felt a combination of what Powell said, which was basically going our way.

There was one moment, of course, we said, listen, we didn't talk about cutting. That plus the under-recognized quarterly refunding statement, which was supposed to be business as usual, but was anything won by now my new hero, Assistant Secretary for Financial Markets, Josh Frost, made me probably pass this guy 100 times going to Wendy's or the Dunkin Donuts to the Fed. The fact that there's mostly 10-year and 3-year makes it so that there could be equilibrium on the 30 But that, plus what Powell said, really does create a momentary, let's say, squeeze, because maybe there won't be enough 30-year paper, and maybe there are not enough stocks in the S&P 500 for sale right now, including Magnificent Seven. True.

Sara Eisen (2:35)

I think what it showed us is that the Fed and the Treasury are both paying attention to what's happened in long-term rates.

Jim Cramer (2:42)

I think they're watching our shows and recognizing that the tone-deaf nature of Treasury no longer cuts it. I think that the attack... Look, people react to attacks. They'd like to nod. They'd like to all be just...

Well, I think that Druckenmiller is not alone. I mean, the idea that you shouldn't pay attention to what the market says is something that Secretary Yellen probably didn't want to be known as. Look, Secretary Mnuchin, Secretary Geithner told me multiple times that my strategy of going long would cost the Treasury a great deal of money.

And they... You know, Geithner never traded, and Mnuchin, I know it. I worked for his dad. I think he was just poorly served by his own thinking.

Sara Eisen (3:22)

You're saying that everybody didn't... No one took advantage of the low-rate station long-term, and now we're in this pickle.

Jim Cramer (3:26)

I mean, Gary Cohn, whom you know quite well, I said to him, why don't you do a 50-year? It got a little laugh, kind of like, like, got a laugh on the...

They know nothing. You know, maybe I am a legendary Wall Street funny man.

Sara Eisen (3:38)

It would have been a good move, certainly now, that they're going to issue a lot of debt at much higher rates, and that's going to cost. But to your point, I think that announcement yesterday, lower than expected, is certainly on the issuance at the long end, on top of a weak ISM, I should note, which is really changing GDP expectations for the fourth quarter and bringing them down. The market's cheering softer economic data, as long as we're not barreling into a recession. And then Powell, switching his message a little bit, saying the risks are more balanced in terms of over tightening or under tightening.

Jim Cramer (4:10)

Did you detect the kind of picture of smile that maybe he's getting it right?

Sara Eisen (4:14)

I think he felt good when he talked about it.