Squawk on the Street 01/02/24

SPEAKER_1 (0:01)

It's your 2024 Playbook with Julian Emanuel, Eric Sheridan, Chris Verone, the key levels to watch in the new year.

John Fort, Maureen Brennan, closing bell overtime. Today for Eastern CNBC.

Carl Quintanilla (0:15)

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.

David Faber (0:24)

Good Tuesday morning, everybody, and Happy New Year. Welcome to another year of Squawk on the Street. I'm David Faber with Jim Cramer. We're live from Postline at the New York Stock Exchange.

Carl has the morning off. Let's give you a look at futures as we get started with the trading for the year. About a half hour from now right here from the New York Stock Exchange. You can see, and Becky referenced it a moment ago. Of course, we are looking for a down open. Let's get to some news out as well. Tesla production and deliveries are out moments ago. We're gonna dig into those numbers.

And we also have a roadmap for you that's gonna start with, well, what appears to be at least a bit of a slump as we kick off 2024 Investors are perhaps taking some money off the table. You heard Mike Santoli referencing it after that very strong year for the markets that concluded with December 31st. Plus, Apple shares that are under some pressure this morning. Barclays downgrades the stock on what it sees as soft demand for that latest iPhone. Well, prices are jumping this morning on fears of continued disruption over, of course, in the Red Sea.

We will get to that as well. Let's start, though, with that new year for the markets and another year for us, my dear colleague and old, old friend. Thank you.

Carl Quintanilla (1:37)

What are your thoughts?

David Faber (1:38)

You know, as the year ended and we've both been away for a bit, but I can still remember, you were getting a little more cautious, particularly when it came to the Mega Cap, to the Magnificent 7 Is that still the case?

Jim Cramer (1:49)

Yes, and today, for the first time after letting them run for pretty much forever, trimming, have to. I mean, bulls make money, bears make money, hogs get slaughtered, across the board trim. I think that anybody who doesn't is being a pig.

These stocks have had remarkable runs, and I think that the runs are so extraordinary that it's probably time to give them a break and have other stocks do well. We're up 11% since we decided or realized that the Fed was not going to continue to raise. We're up nine straight weeks. That's nothing we've seen since 2004

And David, you know, you've known me for a long time. And I'm not a trader, but I recognize that you're not a professional if you just decide to be a permable.

There were people I criticized last year for being permabares who didn't change their view. I will not be one of those. I tried to switch, as you said before, went on vacation and got increasingly, increasingly negative over the valuations. But there's a lot of stocks that aren't overvalued. But I think that when you look at the Mag-7, David, it's been an extraordinary run. Maybe it's time for them to kind of cool off and buy what you typically do buy when the Fed's done.

David Faber (3:05)

Which is?

Jim Cramer (3:06)

Industrials. They seem cheap versus what they can do year over year.

I do think that we're in a situation where I know I can't find a reason to buy oil, but I guess I just have to look at the Red Sea. That's historically what you buy. And you know, you buy the left behinds. I mean, you can even buy some retail left behinds. But I look at the stocks that we just put up and I say, okay, we'll talk about Tesla in a moment. I have let all those ride and said, don't trade them. I'm not trading. But at a certain point, do you really let those gains just run?

I don't think so.

David Faber (3:45)

You don't?

Even though they continue to dominate their respective areas, there's obviously no lack of competition between certain of those companies. For example, Microsoft and Alphabet when it comes to AI. That said, there's also a belief that both will benefit as this year progresses from their various offerings, particularly for the enterprise.

Jim Cramer (4:04)

But don't you think that what you just said is somewhat reflected in the stocks?

David Faber (4:09)

Yes.

Jim Cramer (4:09)

I mean, I happen to think the world of Microsoft. We bought a ton of Microsoft when it was very low, bought some in the big sell-off, and then Amy Hood came out to CFO and said, look, we're really going to do well with Copilot.