Rallying Into the Fed Decision, Pfizer Slides On Guidance, Tesla Recalls 2 Million Vehicles 12/13/23

SPEAKER_1 (0:00)

For more than a decade, Comcast has been committed to bridging the digital divide and connecting millions to affordable high-speed internet.

But the barriers to get connected go well beyond affordability. Through Project UP, Comcast is committing $1 billion to reach millions with digital skills training, resources, and opportunities needed to succeed in a digital world. Project UP, building a future of unlimited possibilities. Learn more at comcast.com/project up.

Carl Quintanilla (0:30)

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, David Faber, host 9 of the New York Stock Exchange. Final Fed decision of the year. Futures holding on to gains as we get more signals about disinflation today from PPI, a goose egg, oil below 68, rent, 10-year yields about 416 Our roadmap this morning begins with inflation and Fed expectations. Investors await today's rate decision as stock records continue to pile up.

David Faber (1:04)

Plus, shares of Pfizer are sinking that ahead of the open on week 2024 revenue and profit forecasts.

And Tesla has some autopilot concerns. The automaker is issuing a recall of sorts for nearly all of its vehicles sold in the US.

Jim Cramer (1:20)

You just called it a recall.

David Faber (1:21)

We'll explain. Well, that's the word that's been used. But it's not really, right? Because it's a software upgrade, isn't it?

Jim Cramer (1:28)

It's an iOS 17 I got in the middle of the night.

Carl Quintanilla (1:31)

It's a couple million vehicles. We'll begin with the market rally heading into today's Fed decision.

Jim, PPI encouraging. Lowest year on year since June.

Jim Cramer (1:39)

Yeah, look, I mean, these numbers are all going the right way. I still think that they're going the right way, so why not have them continue to grow the right way? You just don't know what's possible in terms of what could come back. So why let it bite you, given the fact that unemployment is still under four? David, as long as unemployment is under four, I don't think there's any reason to let up on the fight.

Especially because there are some, like, existential issues of how much debt, what could happen in terms of if there's more spending in Washington. I mean, I know these things seem small, but they all add up.

David Faber (2:15)

No, they don't seem small, Jim. And we have discussed them, we sort of do, and then we kind of go for a while, and then we do again. Every time there's an auction now, we're going to focus on it more. We look at the maturity schedules in terms of what Treasury is planning. So it's not an insignificant factor.

The amount of issuance that has to take place, both for refinancing purposes and for funding these deficits that we're running is important. And of course, you know, the words of Gunlock a while back when he was with Watmer talking about $2 trillion in interest costs if rates were to stay where they were over the next five years in terms of what gets refinanced, that gets your attention.

Jim Cramer (2:56)

Yes, it does.

It does. There's an amazing document from Fred Smith. I don't know if you guys know Fred. He built FedEx and he did this Coolidge speech, which is making the rounds and is so informative, talking about the huge amount of debt that the government has taken on just in the last few years, calling for a debt freeze. But when I read these things, I say, you know what, look, we have to be worried about inflation still, and the money coming from the government, Carl, is still gigantic, and I think potentially very inflationary for 2020

Carl Quintanilla (3:32)

This was the subject of a B of A note yesterday, entitled, in part, Fed Can't Touch This, looking at areas of the economy that rates really have no power over. One is the amazing amount of home equity and liquid assets that the American household has, but government spending, Jim, is, in their view, going to keep rates higher over the long term.

Jim Cramer (3:52)

I'm with that. Look, I know Fred from way back, and I don't want to just say, well, listen, I read this one guy, and I feel as well, but it kind of jives with what I've been thinking, which is that we own a bunch of stocks for my travel trust that are based on largesse of the government in 2024

And that's just a major cause of inflation. And Fred talks about how the only reason we get away with it is that we have a strong dollar so you can refinance things. But if I'm pal, I'm going to say, look, there's nothing I can do. I've got all this money coming. I've got to wait a little bit. Let's see what happens. It's not like anyone is calling for a freeze, David. You're not getting anything from Washington which says, you know what, we're done spending.