Meta Surges, Earnings Barrage, Southwest and ServiceNow CEOs, GDP Growth Slows in Q1 4/27/23

Jim Cramer (0:00)

It's Jim Cramer here. You're listening to the opening bell of CNBC's Squawk on the Street. Don't miss a minute of the action.

Carl Quintanilla (0:07)

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. Futures bouncing a bit.

Despite a weaker than expected Q1 GDP number, market seems more interested in the ongoing wave of companies raising guidance today. Honeywell, American, MasterCard, Merc, and Meta guiding above last night. Our roadmap begins with the economy though, expanding slower than expected.

And this earnings deluge, it is the busiest day of corporate results. Comcast, Caterpillar, Big Pharma, all crossing the tape and of course Amazon tonight.

David Faber (0:38)

Plus shares of Meta are surging. In fact, they're getting very close to a one-year high. The company forecasting a resurgence, an acceleration of revenue growth.

And the CEOs of ServiceNow and Southwest Airlines are going to join us this hour. We'll be discussing of course, those companies quarterly results.

Carl Quintanilla (0:56)

So, let's begin with some signs of an economic slowdown. The government's initial reading of first quarter GDP coming in at an annualized rate of 1.1, that's compared to 2.6 in Q4, and expectations of about 1.9 or 2 Atlanta Fed, actually, Jim, was right on the money at 1-1.

Jim Cramer (1:11)

Yeah, but they've been right on a lot of stuff. I follow them now. It used to be St. Louis Fed. You can look at them, but Atlanta Fed's been great.

We have a lot of people and people still being hired at higher wages. So, if I were the Fed, I would say, you know what, we haven't won yet. We have to break the cycle of higher wages in a slow down, David, because someone is going to say stagflation.

David Faber (1:45)

So is this going to do that?

Jim Cramer (1:46)

No, I'm saying that I think Pal has, there's no justification.

David Faber (1:50)

Is there, well, I guess, is there any sign in this lower-than-expected GDP number that that cycle is starting to erode?

Jim Cramer (1:56)

I still just see, I just see higher wages.

David Faber (1:59)

Just see higher wages.

Jim Cramer (2:00)

Yeah. Look, I mean, I've been on the phone with a lot of the CEOs. Let me give you my thesis on the higher wages.

People didn't come back to work, okay, 58 to 62

Then they had to bring in all new people. What we've left out is these were skilled workers. So if it's a pilot, you have to train them for six, eight, nine months. If it's a welder, they have to be trained. They didn't have any training. People didn't have like, hey, I'll fill it. You know, one of the things about a pilot, David, it's like they didn't just grab the person in the first row and say, listen, it's your airplane. So that's been this period right now where you're not getting any productivity out of people, but you're hiring them. And I don't want that. I feel like that, look, I'm fine.

We're seeing a lot of manufacturing tepid. We'll hear about that today. But we're seeing still travel, still going places, still wealth, still being hired at higher prices.

David Faber (2:53)

But you don't think that this is a sign of a coming recession?

Jim Cramer (2:56)

No, no, no. I think that there's just not enough. I mean, just, Carl, look at the numbers today. I know a lot of it's pharma, but it's really only Zuckerberg that let people go.

And there even, you could argue, well, it's like 11,000 people from a year ago.

Carl Quintanilla (3:11)

I mean, people are looking at AWS, right? Some layoffs there.

Jim Cramer (3:15)

Right.

Carl Quintanilla (3:15)

Tyson, 10%.

Jim Cramer (3:17)

Well, Tyson's done really poorly and they're very poorly run.

Carl Quintanilla (3:20)

Deutsche Bank's cutting about 800 back office.

Jim Cramer (3:22)

Another good, but another good quarter. Remember when Deutsche Bank was, they decided to rate it and say it was just like Credit Suisse, like, hey, that's Europe.

Carl Quintanilla (3:30)

And Stellantis, 33,000 potential buyouts, right?

Jim Cramer (3:34)

You don't buy that. You got a good yield. I, that was, it should have been better.

Carl Quintanilla (3:38)

You're right, though. We're not seeing it show up in the national.

Jim Cramer (3:40)

No, and you know, you take a look at, at some of the companies that are like in oil. They're all still drilling.

Like there's some stocks like SLB really had a decent quarter. It just kind of goes down every day. That's wrong. We have MedTech all doing well.