Powell Effect on the Markets, What to Expect From Apple’s Earnings, Peloton CEO Steps Down 5/2/24

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 and David Faber at Post 9 of the New York Stock Exchange. Pre-market adds to Wednesday's Post-Fed rally, as Chair Powell eases some concerns about a rate hike, watching some key levels today. Oil still below 80 and the VIX just below 15 Our roadmap begins with the Fed leaving rates unchanged, and the Chair saying inflation's still too high, that the path forward is uncertain.

David Faber (0:31)

Plus we got a big day, of course, for Apple, which will report its earnings after the bell. This and its signs of an iPhone sales slump, and of course, potential struggles in China.

And we're keeping an eye on shares of Carvana. They are up as much as 40% in the pre-market. Remember when that thing was close to bankruptcy, or so people thought? Well, this was a record setting quarter, and we're gonna talk with the CEO. That'll be next here on Squawk on the Street.

Carl Quintanilla (0:58)

Let's begin with the markets and the Fed, a day after the chair delivered this message on rates.

Jerome Powell (1:07)

It's unlikely that the next policy rate move will be a hike. I'd say it's unlikely.

You know, our policy focus is really what I just mentioned, which is how long to keep policy restrictive.

Carl Quintanilla (1:21)

Lot of takes today, Jim. BNP parable unequivocally dovish, you agree?

Jim Cramer (1:27)

That's a hard one because I think that B of A saying, FOMC meeting, wait and see, FOMC bias here of Morgan Stanley, firm hold, FOMC stalling for time, Wells Fargo. I mean, I think that I like the idea that what he's really doing is saying, listen, I'm gonna stall for time, things will go my way. He was confident. He was not trapped, by the way, into saying something stupid like, yeah, I know, I shouldn't have said what I said. You know, David, there's a gotcha element to the media.

But Jay Powell has been around for a long time and he kind of knows how to speak without being trapped.

David Faber (2:08)

Yeah, he's done enough of these that you'd think he kind of knows how to navigate them.

We talk often, though, about at least what are these mixed pictures that we see in terms of the performance of the consumer, particularly medium to lower end, reflected in any number of the earnings that we've been going over lately. I just continue to wonder how that's playing for him and how he addressed that during the call, during the conference call.

Jim Cramer (2:32)

I'm glad you mentioned it up. We mentioned it because we just keep hearing the same thing, strapped, strapped, strapped, consumer is strapped, consumer can't afford this, consumer can't afford that. And when you hear that upgrade today, very important upgrade by UBS of TJX, Evidence Lab, just kind of saying, listen, when the consumer is strapped, you go this way.

And Carl, when I look at whether the consumer is strapped or not, I think that maybe the key person to talk to is a guy, let's say, Ernie Garcia, because he has a Carvana, the best view I know, because that is a very fractured market, he's got 1% of it. And people want used cars because they can't afford new cars. Now we'll get forged numbers, but I do think that Garcia has the pulse of this economy.

Carl Quintanilla (3:21)

Well, certainly they are relying heavily on the strength of the labor market. Jim claims 208, looking for 211, just continues to be robust, and we'll see what we get tomorrow.

Jim Cramer (3:33)

It's robust, but I think that people, I don't know, did they spend all the money they had? Did they become more frugal? Are they just more aware that everything went up in price and they just don't understand why that happened? And David, there is a mystery, and look, we're not political, but if you were a political person, you would say, you're trying to relate why when you go to the supermarket, Biden should still be president. Now, they have nothing to do with each other.

I mean, nothing.

David Faber (3:58)

No.

Listen, but rates are playing out through the economy. Sarah talks about this all the time, whether it's your mortgage, whether it's your car loan, whatever it might be, in terms of at least your borrowing. And if you are, you know, if you're strapped in some way, it may very well be because your monthly bill has gone up in some fashion as a result of what you're financing.