PPI Runs Hot, OpenAI Reveals New AI Model, Meme Craze Continues 05/14/24

Carl Quintanilla (0:00)

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.

The opening bell hour ofBC Squawk on the Street. I'm Carl Quintanilla with Jim Cramer, David Faber at Post 9 of the New York Stock Exchange. Futures come off the highs as April PPI accelerates up 5 tenths, but some negative revisions and an in-line year-on-year number do keep yields somewhat anchored. Powell speaks in about an hour. Roadmap begins with inflation and the consumer. Wholesale prices hotter than expected.

David Faber (0:36)

Home Depot says high interest rates have hurt sales. Plus the AI race, OpenAI unveils that new chatbot that can hold a human-like conversation while Google teases new AI tools that will be coming potentially as soon as later today.

And you just saw Andrew talking about it. Man, those memes.

You thought they were dead? Uh-uh, they're back. Yesterday they surged. Today, yet again, triple-digit gains ahead of the open.

Carl Quintanilla (1:03)

Let's get to the inflation data. Year-on-year 2.4 on the core, Jim.

Energy and portfolio management fees once again.

Jim Cramer (1:11)

I love that, but thank you to Boaz Weinstein for bringing down portfolio management fees. Great interview by Andrew, obviously. Look, the bonds aren't moving, and they momentarily were, and I think it's because the revision is so steep.

Prior month revised from.2 to down.1. David, I'm beginning to think when you see these numbers, I know I never want to challenge numbers because the numbers are put out, people were required to do them, but when you have that kind of revision, it's not what you would get if Amazon were running it or Salesforce were running it.

David Faber (1:41)

Meaning what? They're just, they're not using enough.

Jim Cramer (1:43)

Who would ever come up with a product that it could be that wrong? You have any product in your life that is that wrong?

David Faber (1:48)

Well, it's all survey based, right?

Jim Cramer (1:50)

Yeah, but I mean, there are other companies that know how to do surveys. ServiceNow could do the survey.

Obviously, they should just outsource this. You can't afford to be this wrong. There's too much on the line.

David Faber (1:59)

And you believe, as a result, what? That you can't believe the current numbers? No, I can't.

Jim Cramer (2:05)

I don't believe the current. Well, no, I'm saying that the bond market's indicating that this stuff doesn't matter.

I don't want to ever say something doesn't matter. The only numbers that people really do base policy offer is PCE, but of course, the unemployment number at the beginning of a month. But when I look at these numbers, I say, well, what are they worth? I mean, how could you be so wrong? That's a gigantic delta. So my take is that people are just saying, you know what, the press is gonna make something of it, but it's not really a number. Let's see what CPI is.

David Faber (2:33)

I'm gonna spend a little time reading this data collection. Part of the release here, in terms of the PPIs and the price data, they periodically update the PPI sample of survey respondents to better reflect current conditions when the structure, membership, technology, or product mix of an industry shifts significantly into spread reporting burdens amongst smaller firms, Jim.

Jim Cramer (2:53)

Well, no, you can look at them, it's like when they took out housing because it was too hot in 1982 I mean, well, look, I don't wanna spend too much, I don't wanna belabor it, other than that what I spent most of the time trying to figure out is why interest rates didn't go up. And the only thing I can come up with is that if you have this kind of revision, I mean, Carl, think about all the companies that we follow. You think about Google or Amazon.

You think about a ServiceNow, Salesforce. If they came to you, your Bank of America and Mark Bennef came, so listen to me, guys, the numbers we came up with last month, we were saying plus two, it's actually minus one. You know what they would say? You're fired.

You're fired.

Carl Quintanilla (3:30)

Thankfully, the correlation between PPI and CPI is not that strong.

Jim Cramer (3:34)

Right.

Carl Quintanilla (3:34)

And I know you've been active in alerting, say, the Fed on acts to things like apparel, where there is minimal price appreciation.

Jim Cramer (3:43)

We don't know whether Temmu is in.

Temmu is one of the Fed's best friends. Costco is a great friend of the Fed. Amazon is a great friend of the Fed. And you have to, David, if you don't look into like what China has done, not that I'm gonna give you some good stuff about China, we'll talk about, in terms of keeping apparel down, and you wouldn't think apparel was so hot as it was last month. I mean, does the Fed include? We don't know. Again, there's no transparency, the minute-to-minute transparency. Are they only including apparel that is bought from Gap? We don't know.