Markets and the China Effect, Hurricane Milton Factors, Nvidia's #2 10/8/24

David Faber (0:00)

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

Carl Quintanilla (0:05)

Good tuesday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer and David Faber at Post 9 of the New York Stock Exchange. futures are mostly positive as stocks in Hong Kong suffer their worst decline since 2008 Pepsi kicks off Q3 earnings. A lot of feds speak today, watching Hurricane Milton, now one of the strongest Gulf storms in 20 years. Our roadmap's gonna begin with futures though, shrugging off these China jitters after Beijing holds off on further stimulus. And one key fed official says our economy is well positioned for a soft landing.

David Faber (0:35)

Plus, PepsiCo trims its revenue outlook. It says US consumers continue to pull back on buying snacks and drinks. And keep an eye on shares of Nvidia. Six-week high, eclipsing Microsoft as the second most valuable company. That kind of happened during our show yesterday. More gains today, not from Microsoft, but for Nvidia.

Carl Quintanilla (0:56)

Let's begin with the markets from the US to China. We mentioned Hong Kong. Actually, the divergence, Jim, between Hong Kong and Shanghai was historic.

Jim Cramer (1:04)

Yeah. And let's remember also, there's some crazy stuff going on. There's this hot money component. Like when there's not enough money, hot money that can go by Shanghai and also by Nvidia at the same time. So the money flows back. Finally, they didn't announce stimulus today. And matter of fact, they're putting the brandy hennessy, one of your favorites probably, hennessy. They got a tariff one. Well, they're counting the cases. But all I can say, Carl, is that if we could get that money back, if we could get the chinese money, remember when Dave Depp, who's like the best in the world, was saying everything? Well, today is like nothing. So if the money comes back, then I think that you'll see a decent opening.

Carl Quintanilla (1:47)

Right. They had this press conference with this National Reform Council, where I guess the details on stimulus were pretty light.

Jim Cramer (1:54)

Right. And we did the whole essence of it is it's the bazooka. And David, the bazooka can't just be done for like three days. You got to like bazookas. I'm going to talk about bazooka. Don't get me wrong. Bazooka. Bazooka is Roblox.

David Faber (2:08)

You talked about the smart money guys, fast money guys. There was this expectation somehow that after China had been closed for a week, that all the domestic chinese investors would rush to buy.

Jim Cramer (2:21)

yes.

David Faber (2:21)

Because stocks were up so much. Remember other markets, Hang Seng had been open. Or, um.

Jim Cramer (2:27)

Hang Seng, China was closed. Hang Seng didn't open. That's why Hang Seng is now reflecting the new market.

David Faber (2:32)

In fact, the chinese were like, oh no, sold to you.

Jim Cramer (2:36)

Right.

David Faber (2:36)

Thank you so much. Now we're up. Take a look at Baba.

Jim Cramer (2:40)

They did it again, is what you're telling me?

David Faber (2:42)

I'm just saying. Look, I mean, this is what's happening, right? The stocks went up. I mean, look at Alibaba, right? You know, they're all right. In a week, two weeks. Well, we know what happened to so many of these companies, but Baba's multiple went from what? Like eight to 14?

Jim Cramer (2:58)

13, yeah. Absolutely. I did that last night, and frankly, they still have a huge amount of cash as of market day.

David Faber (3:02)

Okay. I mean, maybe it didn't deserve to be eight. I don't know, but now of course it's gonna be down or as much as 7% this morning. As the chinese come back from vacation, not to buy, but to sell.

Jim Cramer (3:14)

Well, they didn't get, you know, they didn't come get like some sort of thousand dollars per person thing like we did for COVID.

David Faber (3:23)

No.

Jim Cramer (3:24)

They didn't do that.

David Faber (3:24)

No, they didn't.

Jim Cramer (3:25)

The chinese communist have been horrible.

David Faber (3:27)

There's been a lot of hope built into a lot of announcements that did come without specifics behind them, or at least in some cases.

Jim Cramer (3:37)

But David, liquidity, liquidity. They put a lot of liquidity in, and it looked like that you could buy back stocks for without putting any money down. If you're a company, the companies were, the two that were cheaper, Baidu and BABA, and they're still cheap on a multiple basis, which would make it so that if you're a smart person, you might just say, okay, look, now it's finally coming down, let's buy the two that are good, Baidu and BABA. Let's buy those two.