Meta and the "Tech Wreck", UAW-Ford Tentative Deal, Southwest and ServiceNow CEOs 10/26/23

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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 Thursday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer, David Faber at Post 9 of the New York Stock Exchange. Equity futures under pressure all morning as the street continues to sour on MegaCap Tech. But some improvement just now as Q3 Core PCE comes in a touch light at 2.4, even with GDP at a whopping 4.9. Our road map is going to begin with the tech wreck, including Meta shares under pressure as guidance overshadows this quarterly beat.

David Faber (1:04)

Also ahead, the UAW and Ford reach a tentative agreement nearly six weeks after the union began that walkout against Detroit's big three.

Plus Morgan Stanley says it's got its new future leader. Don't miss the first on CNBC interview with incoming CEO, Ted Pick and current chief executive, James Gorman. That will be in the next hour of squawking the street.

Carl Quintanilla (1:26)

Let's begin with the NASDAQ, which is set to fall deeper into correction territory. The NDX coming off its worst day of the year. Jim, now down 11 from the July highs.

Jim Cramer (1:36)

Yeah, it looks like the mega caps are catching up to the decline of everything else.

I think there's this overwhelming sense that they all went too far, that they all got overvalued. Now, I do not share that and we're going to get to Meta. But these are not ultra-expensive stocks. There are a couple of turns in PE, meaning that they're just slightly expensive than the rest of stocks. But David, they've become major sources of fun. I think that it's far more correlated with the bottom market than with the actual earnings.

Yes, Google did not tell a good story, but it wasn't like they missed bit. Meta, other than a few lines that were about meaningful spending, meaningful hiring, and then also obviously, difficult to advertise during when you have a war, it was quite good. Now, its stock is down literally 20 points from where it was after they first reported. But I'm just trying to present that these are more of a function of a revulsion of companies that have gotten too big and bonds. Today, we have a bottom market that's tame, but people use these to sell and they don't even bother to listen other than a snippet.

David Faber (2:44)

You know, I'm hearing the same from any number of other market participants this morning, kind of almost saying it's a market thing. It's not a meta thing.

Jim Cramer (2:52)

I'm so glad.

David Faber (2:52)

Because meta, to your point, Jim, and again, I did speak to, I'd say three people who own the stock and have for some time, but their basic contention is that was a great quarter. Everything was largely positive. You did scare some people because of the commentary around the ad market, as Jim just said. You gave them a wide range, which perhaps also sort of, again, in terms of where things may end up for guidance.

I'm told, by the way, in the callbacks, you know, after an analyst, after the call, typically then they'll call around and they'll sort of call back to some accounts and the like, and they kind of said things are already turning a bit. Not dissimilar from what we heard from SNAP in terms of saying there was a dislocation a bit during the beginning of the war, but maybe things are coming back a bit. Operating margins, amazing.

You know, the discipline still, the belief they had the discipline and spending still in place and that if revenues were to start to moderate, they would actually be more disciplined again, Jim. Seems to be an overriding fact.

Jim Cramer (3:53)

That seems true.

David Faber (3:54)

So a different day to your point, and I think many people would say, granted they own the stock, that this stock would be higher, not lower.

Jim Cramer (4:01)

And I don't think the CFO meant to panic anyone when she was just stating what she saw, which is that, I mean, I remember when I was running the street.com, the war broke out in Iraq, and suddenly our sales plummeted, our advertising plummeted, and I said, why is it, why is it okay? Well, idiot, don't you see people don't advertise when there's a war?