Rate Fears Fuel Market Selloff, Tesla Deliveries Disappoint, CEOs on GE's Final Split 4/2/24

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.

Good Tuesday morning, welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer, David Faber, and Post 9 of the New York Stock Exchange. Futures are sharply lower on the back of Monday's decline as bonds continue to break down. 10 year 438, highest since November.

Meantime oil eclipses 85 for the first time since October. A roadmap begins with these market worries about rates as some of the strong eco data fuels concerns. The Fed might hold off on a June cut.

David Faber (0:33)

Also, I had a rough morning for shares of health insurers. The government's Medicare advantage reimbursement rates, they come in short of expectations. Many of these stocks down rather sharply.

GE shares though, they've been up sharply. Wow, and the company now completing its final split by spinning off its power generation business. GE Aerospace CEO Larry Culp and GE Vernova Chief Scott Strazik, both of them are going to join us right here at Post 9 a bit later in the hour.

Carl Quintanilla (1:02)

Let's begin with the markets though and these rate concerns. We mentioned the 10 year going back close to 4.4. Jim, this all got started with the ISM data yesterday.

Jim Cramer (1:10)

But it's just constant. I mean, you look at it, it just drips and drabs, but rates are going higher. But the market is reacting in a curious way. Yesterday, the NASDAQ actually finished up.

I thought that was just incorrect. These are the stocks should be getting hit, David. And I do think that this is kind of a very important moment in the market because we had forgotten about rates.

David Faber (1:34)

Well, we did yesterday, as is your point, but a mistake for the NASDAQ to be up, what does that even mean?

Jim Cramer (1:42)

No, I just mean that, you know, if rates are seriously going to go up, then you want to sell a high multiple stocks.

David Faber (1:46)

You would think so. You also want to keep an eye once again on those companies that have a debt stack that needs to be refinanced. I think there had been hope at the early parts of this year that you'd see a lot of rate cuts and therefore the refinancing risk was lower.

Jim Cramer (1:59)

Right.

David Faber (2:00)

Any number of those highly levered companies that do have refinancings coming up, let's call it, in the next 18 months?

Jim Cramer (2:06)

Well, you're going to need, and Carl, I know you still let JP Morgan be, you're going to need the economy to stay strong.

But that also means you won't get the cuts that some are hoping for. You know, I never believed in the cut theory because I think the economy is really strong. But those guys, I mean, I guess those guys, they wear Tommy Hilfiger. That's the only thing that they do. The only genuine wheat is. And they're Medicare.

Yeah, Medicare was something.

Carl Quintanilla (2:27)

We're going to get to some of the insurers today.

Jim Cramer (2:30)

Just astounding. That was a Biden shutdown.

Carl Quintanilla (2:33)

The rates are one part of the picture, Jim. Now the market's now pricing in fewer cuts than the dots.

Whereas before we were pricing in double the amount suggested by the dots. But we mentioned oil too.

Ukraine struck one of Russia's largest refineries. Iran is vowing revenge for the attack on their embassy in Damascus.

Jim Cramer (2:53)

Look, in the meantime, there are states in the Gulf that are building nuclear power plants. We're gonna hear about that.

From GE Vernova, I think that oil could go a little bit higher. There are some very good strategies to think goes to 100, but natural gas is lower, oil's up and gasoline's up. I don't wanna emphasize too much what's going on because we know that it could be ephemeral. Not inflation, but oil. I never wanna get caught up in the ephemeral inflation.

Carl Quintanilla (3:22)

This note from JPM suggesting that Putin could put the squeeze on Biden ahead of the election by taking oil to 100

Jim Cramer (3:28)

Well, what we have to do, they took out a lot of Ukraine capacity. I would say that we actually have the exact right people on.

Vernova is actively involved in Ukraine. We're gonna find out. I think it's important.

David Faber (3:49)

Back to Carl's point, though, I just want to revisit. Sure, no, I'm happy to do that. The Chinese and the Indians have been buying the Russian oil, is that correct?