Markets Rally on Inflation Data, Oracle CEO Exclusive, Big Win for Microsoft-Activision 7/12/23

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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.

Good Wednesday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer at the New York Stock Exchange, David Faber is on assignment. Heading to Sun Valley, as Joe says, where he'll have an exclusive with Eiger tomorrow at 8 AM Eastern time. Meantime, the Bulls get their wish as June CPI comes in cool. Lowest monthly core in more than two years. Yields are dropping two year near 475, as a second rate hike this year is now in question. Our roadmap begins with that print. Inflation falling to its lowest annual rate in more than two years as well. Plus, game on for Microsoft. After a judge rules, the company can close its deal to buy Activision and Domino's shares are surging, leading the S&P in the pre-market, announcing this new partnership delivery with Uber. Let's begin though with market reaction to CPI. As we said, coming in lighter than expected, Jim.

Airfare's down eight, used car's down five tenths.

Jim Cramer (1:33)

There's a lot of oddities. I mean, there's a couple of real wins that people aren't thinking about.

You've got, well, again, you definitely have the used car is very good, but shelters down a little bit. And what's interesting is what's up is almost, I don't want to say it's meaningless, but bakery, bakery products. I mean, you can easily trade down on that, right? Fresh whole chicken. So I mean, switch over to beef.

Carl Quintanilla (1:57)

Eggs down seven.

Jim Cramer (1:58)

Yeah, I mean, sugar and sweets. Well, good, we should have less of those anyway. The ones that are up, I am telling you, are going our way too.

Because there are things that frankly are not, if you really got to go granular in this, pal's winning because the things that are up are not nearly as important as the things that are down.

We still have to worry about wages. I'm doing a lot of work on wages and it's not good.

IRA infrastructure, number of plants being built, battery plants, those are not going his way. So we're going to see a plethora of new jobs created that we're really not ready for. But when it comes to the actual empirical data, I mean like other than Twinkies, we're in good shape.

Carl Quintanilla (2:40)

Yeah, well you mentioned wages. Real average hourly earnings, Jim, June to June, now up better than 1%, is going to give some tailwind to the consumer who's going to find that inflation is softer than wages right now.

Jim Cramer (2:56)

Yeah, I mean I think it's just, there's some real wins here. Look, I mean, and the ones again that aren't so good, I mean, clocks.

I mean, hey, who needs clocks? What's the point of a clock?

Carl Quintanilla (3:10)

Maybe that's part of the issue.

Jim Cramer (3:11)

Maybe they're talking about some antediluvian clock.

And then we have jewelry and watches, and I just think that's Apple Watch. So, and look, I know people are saying, Jim, you're being facetious. No, I'm actually being empirical. The numbers are very good. And right now, if you don't think pal's winning on the details, I really think you should just get the page after page of what matters. But the big one is used cars, and we saw that coming with Mannheim, and that is right in the sweet spot of America.

Carl Quintanilla (3:42)

Yeah, and a lot of discussion on how it's gonna feed through into July's print as well. That said, then why are people still talking about next week as a given?

Jim Cramer (3:51)

Well, I think you have to talk about next week as a given because we are not going to see any ability to keep wages down when we have three states, Tennessee, Kentucky and Louisiana, that are in a level of wanting to put up factories that they could distort the whole darn country.

The number of jobs that are open because of IRA, because of CHIPS, is so extraordinary that it's just inflationary per se.

And it's really, I mean, I've been putting together the actual numbers of jobs that are required for windmills, just for pipes from West Virginia, for all the different natural gas liquids for LNG. It's insane. So they have to. Some of these projects can't be stopped by the Fed, but the wage inflation is just going to be enormous. So I don't think it's wrong. I think Jamie Dimon has made some points today when he talks about having to go up, but it all has to do not with what we're seeing in the CPI, but what could be in the pipe for next year, given the fact that there's gonna be such wage inflation caused by the federal government.