Retail's Wild Ride, Microsoft's New Pitch to UK on Activision Deal, Arm's IPO Filing 8/22/23

SPEAKER_1 (0:00)

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David Faber (0:31)

Market insight and analysis. You're listening to the opening bell of CNBC's Squawk on the Street.

Carl Quintanilla (0:37)

Good Tuesday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer, David Faber at Post 9 of the New York Stock Exchange. Monday's tech bounce looks to continue this morning with Tesla and Nvidia up another 2-4 percent.

Busy morning, we've got some Fed speak and ARM IPO filing, retail earnings, another bank downgrade and more. Our roadmap is going to begin with the retail stuff, Lowe's and Macy's beating on the bottom line. Dick's Sporting Goods though tumbling on a big miss.

David Faber (1:01)

On the M&A front, Microsoft submits a new proposal to UK regulators. The company, of course, seeking to win that final approval for that deal to require Activision. And Softbank owned ARM, it is gearing up for a return to the public markets. The chip designer has filed for what is expected to be the year's largest, IPOs.

Let's get lost.

Jim Cramer (1:25)

Yes. I think Rene Haas is the real deal.

Spent a lot of time in Nvidia before he went to ARM. I think I'm now putting out $100 billion.

David Faber (1:36)

We're going to talk about that shortly.

Jim Cramer (1:38)

Oh, sorry. I was trying to be spontaneous. I'll go right to form.

David Faber (1:41)

We do it every time.

Jim Cramer (1:42)

No, no, you're right.

David Faber (1:43)

We blow up what we plan.

Jim Cramer (1:45)

You're right. No, I was just trying to go right there, but let's...

David Faber (1:47)

Literally the second the show starts.

Jim Cramer (1:49)

Thank you.

Carl Quintanilla (1:51)

We'll do retail since the booth hasn't stacked. We got Macy's, Dick's and Lowe's all on the move, Jim. I'm not sure what's more important, the warning about shrink at Dick's or the warning about credit at Macy's.

Jim Cramer (2:03)

Well, I've got to tell you, I thought that Macy's was needlessly downbeat. I told Jeff Kinnett that I don't like it when you make a forecast which just says next quarter is really bad. We're not selling cars at Macy's, okay?

You're selling stuff that I think could actually be, including their own brand, could actually be very good. The new guys from Bloomy's, Bloomy's had decent numbers. They put up good numbers at Blue Mercury. I just think that this is an opportunity because they really set the bar low.

Lowe's, look, I think that Marvin Ellison continues to do a great job. I was surprised there that the home remodeling for individuals do-it-yourself was weak, but that the pros was very strong because, you know, this is typically a store where the pros are weak and the DIY is strong, so I like that because the pros spent a lot of money. Dick's, we have to go very deep because there have been others that have said theft is a problem and we've just looked the other way. These guys made it so central that it was frankly made me feel that they've lost control of their inventory.

Carl Quintanilla (3:12)

There's a lot of discussion that Dick's is widely considered pretty savvy operator. This element of shrink, meaning stealing, it's a third of their gross margin guidance reduction.

Jim Cramer (3:24)

Well, I mean, look, we had Cornell and Target, who's got a real shrink problem.

He had talked about $500 million, but he was able to deal with it. Lauren Hobart, who is a terrific CEO, is going to have to figure out how to tag the merchandise. I think it can be done. I think they can figure it out.

David Faber (3:48)

David? What did Target do?

Listen, it's not like it got that much better at Target quarter to quarter, did it?

Jim Cramer (3:53)

No, it wasn't good at Target at all.

David Faber (3:55)

No, okay. And it was not the most recently reported quarter, but it was the quarter previous that we learned of and spent a lot of time talking about that almost inconceivable number of half a billion dollars worth of stuff going out the door.

Jim Cramer (4:07)

Okay, so who has no shrink problem? And this is not a Costanza joke. I mean, who has no shrink problem?

It's a really interesting quiz. Where would you never shop to save your life?