Retail Sales Surge, China's Surprise Rate Cut, Fitch Warns On Banks 8/15/23

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Carl Quintanilla (0:31)

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. Pre-market is lower as that 10-year does hit 427 on the back of these red hot retail sales numbers up 7 tenths. Meantime, China with that surprise rate cut, and Home Depot gets this week's earnings train going. Our road map is going to begin with retail though. July sales coming in stronger than expected, while Depot does post a quarterly beat despite a decrease in comps.

David Faber (1:05)

Also, I had Warren Buffett's Berkshire Hathaway discloses its stock home building stocks that include DR Horton and Lenar. That was a second quarter purchase.

We've gotten another warning from Fitch. This time, the rating agency is telling CNBC it may be forced to downgrade dozens of banks that could include JP Morgan Chase.

Carl Quintanilla (1:26)

Let's begin with the markets though. Jim, there had been a lot of credit card data that said retails was going to come in pretty strong here.

Jim Cramer (1:32)

Right. Well, look, the Fed has to tighten. And we know that. I just don't want a big Jackson Hole, you know, boom. But the economy, the consumer is strong.

The enterprise is strong.

The weakness is, what, in trucking, in some really bad retailers. David, at times you have to play a game where you find where there's weakness. And I need to know where there's weakness. Give me some weakness.

David Faber (2:05)

China.

Jim Cramer (2:06)

Oh, well, you see, but that's not.

David Faber (2:07)

Go to China, young man.

Jim Cramer (2:08)

China's not in America. You just want to give you a little.

David Faber (2:11)

Oh, well, you didn't specify.

Jim Cramer (2:13)

No, I'm just saying.

David Faber (2:14)

You didn't specify geography. Just to be fair, you said find weakness.

Jim Cramer (2:17)

I told you weakness.

Absolutely. China's weak. As a matter of fact, I'm no longer even going to give out numbers about unemployed young people because they should all be in school.

David Faber (2:26)

Well, they are all in school, right?

Jim Cramer (2:27)

They should be in school.

David Faber (2:28)

It's potentially inaccurate because many of them are in school, so you don't want to do that. That at least is what the Chinese are telling us, why they're no longer telling us what the youth unemployment rate is.

Jim Cramer (2:36)

True. I thought autos might not be as strong because, frankly, when you read the UV numbers, not that strong, but ice is still strong.

Internal combustion engine.

David Faber (2:48)

Yes, sorry.

Jim Cramer (2:49)

The oil patch is strong. Medical strong.

David Faber (2:55)

Pharmaceutical.

Jim Cramer (2:58)

Remember, we also have the beginning of the infrastructure money.

It's all strong. So why should there be weakness if it's all strong? Therefore, that makes it so that interest rates should go higher, and the end of the inverted yield curve is coming as the long end.

David Faber (3:12)

With the 10-year moving up to levels of S to 22

Jim Cramer (3:17)

I always said that that would happen, and everyone laughed at me, like Carrie.

David Faber (3:20)

Did they really laugh at you, or do you just imagine people laughing at you?

Jim Cramer (3:23)

It was Travolta laughing at me as the blood came down on my head, and that's over.

Now, it looks like the economy is strong, never got really weak. Like I've been saying, this whole soft landing, hard landing, I've been disputing it the whole way. You have? Because the plane is not going anywhere. It's just kind of like in Hijack by episode six. Don't want to get no spoilers.

Carl Quintanilla (3:46)

Kind of like when they spin you, they're coming into LGA, and there's weather.

Jim Cramer (3:51)

Yeah, but it's just, we need, look, what's the weakness in tech? We have AI. I've been looking at some of these companies that are involved with infrastructure. The orders are finally coming in. They are so huge.

Caterpillar, Caterpillar are an amazing quarter. The only real weakness, I have Norfolk Southern and the rails have experienced some weakness.