Markets Aim to Rebound, "It's Glowtime" for Apple, New Starbucks CEO's 1st Day 9/9/24

David Faber (0:00)

Market Insight and Analysis. You're listening to the opening bell of CNBC's Squawk on the Street. Welcome to Squawk on the Street. I'm David Faber with Jim Cramer. We're live from Postline at the New York Stock Exchange. Carl's off this morning. Let's give you a quick look at the futures. You just heard Joe and Andrew talking about the markets, of course. Look like we're gonna be up, Jim, after I was out last week, but it wasn't the best week.

Jim Cramer (0:22)

Last week was a terrible week.

David Faber (0:23)

If at least you were along the market.

Jim Cramer (0:25)

Exactly, and Friday was really bad. I've got to tell you once again, David, it's my alleged favorite Nvidia that is dragging things down.

David Faber (0:33)

Well, we're gonna be talking about that. Our roadmap does, of course, start, as you might expect, with those stocks that are looking to rebound following that rough start to September. The Nasdaq is coming off its worst week since January of 2022

plus, it's glow time for Apple. The company is hosting its long-awaited iPhone event today. We're gonna get you ready for that. As well, also day one for the new CEO at Starbucks. In case you haven't heard, his name is Brian Niccol. He used to run Chipotle, and he's aiming to turn things around for a company that seemingly has sort of lost its way a bit. Stocks still down more than 20%.

Jim Cramer (1:09)

A bit is a questionable term, because I think it would be a lot.

David Faber (1:13)

Okay, I know you got a lot to say on that. Let's start, though, with, of course, these markets. You already heard Jim referring, of course, to the performance of NVIDIA last week.

Not alone, in the sense of many of the chip-related names were getting hit. Once again, and I know, again, I wasn't here for it, but you were hearing, because I read, I still am involved in hearing about what's going on, these questions as well about the long-term return on invested capital and whether, in fact, you're ever going to really get that return that is justified by the hundreds of billions that are being invested.

Jim Cramer (1:44)

Look, I think you're onto something huge, which is that the semiconductors have become the proxy for whether AI is anything or not. Even though there's plenty that shouldn't be the proxy, we just say a micron down very, very big. But you know what? We don't talk about this. The consumer packaged goods stocks, David, they're parabolic. Now, we do know there's history on their side that you're supposed to actually buy them right here on the economic cycle. But David, when I look at a Campbell's suit, I look at it and I say, like, a Model Ease. Are these the new growth stocks, really?

David Faber (2:17)

Hard to imagine or make a real case that they're truly growth stocks.

Jim Cramer (2:20)

No, no. And I do think that I would rather take a look at whether Dell is sustainable for more than one day, having been added to the S&P. because Dell was one of the weakness stocks, super micro. Some of the, Qualcomm, these are not companies that there's anything wrong at. So I thought it was pretty interesting.

David Faber (2:41)

You know, when it comes to the overall market, Jim, and valuations at this point, it's going to be hard to make an argument that things are cheap. I mean, as we head into this week, I think the S&P is at 21.2 times. The equal weighted S&P, still at not a particularly cheap 17 times.

Jim Cramer (2:59)

No.

David Faber (2:59)

Take out the top seven, you go the S&P 493, as people like to do now, and 19 times, and the Magnum's in 7 are about 29 times earnings. So when you hear those multiples that I just recounted, what do you think?

Jim Cramer (3:14)

Look, I did a piece this weekend for club members, and I started with trying to figure out where the S&P was, and I said, oh my God, it's still, I mean, these Magnum's, the Magnum's have come down. It doesn't matter, it's still over 23 times earnings. So David, you're right, market is historically expensive. You know what, take out the value or value trap of the oils, and you get a market where you have things like American electric power being growth stocks. Everyone's PCG, Pacific gas and oil, they've been transformed into growth stocks.

David Faber (3:46)

It's all part of that same trait.

Jim Cramer (3:48)

Right, because they're not.

David Faber (3:49)

And which we talk about so often, because of course it will be and is a very important issue, which is power consumption and the need for it, the incredible growth of data centers to house all of the Nvidia chips and everything else that goes in a data center to power this generative AI economy that we're all waiting for, so to speak, and so you end up with power producers that are becoming growth stocks because of the idea that they're going to be under so much pressure to produce even more.