Squawk on the Street 01/04/24

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Sara Eisen (0:16)

Market insight and analysis.

Carl Quintanilla (0:17)

You're listening to the opening bell of CNBC Squawk on the Street.

Sara Eisen (0:22)

Good Thursday morning.

Carl Quintanilla (0:22)

Welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer, Post 9 of the New York Stock Exchange. David Faber has the morning off. Bulls looking for some relief after two 1% declines to start the year on the NASDAQ. Yields are elevated again, though, as jobless claims come in at the lowest level since mid-October. A roadmap begins with the big tech route. MAG-7 stocks in the midst of their longest decline in more than a month. Apple shares tumbling 6%, another downgrade today. Plus watching Pharma, Walgreens slashing its dividend, Lilly taking weight loss drugs direct to consumer.

It's all about autos. GM gets an upgrade. Rivian downgraded and Ford set to announce its latest sales figures.

Let's begin, though, with stocks trying to bounce back from another tough session. S&P riding a three-day losing streak. Jim, back-to-back 1% declines on the NAS only happened a couple of times, 1980 and 5

Jim Cramer (1:13)

Yeah, we trimmed these stocks at the beginning of the year, and we did it because it just felt like this was one of the greatest runs ever. And right into the last, from the limit or not, even from when the Fed signaled that they were probably going to be done tidying, Mag 7 still was up 11

You had the S&P non-weighted, not overweighting Apple, all 500 equal, that was up a couple percent more. So you can say that that had been doing better, but the group started performing. But the main thing that's happened obviously is everyone's just picking on Apple, concerned about handset inventories. Some people are thinking it goes right through the supply chain, that's Corvo and that's Skyworks Solutions. And at a certain point, you're going to say, well, I heard that already.

But it sounds like that harsh remark. Look, these are rigorous pieces because as I said the other day, I think Apple will go to 160 without a problem just because China and because handsets are in oversupply. But Carl, Apple was up almost 50% last year. And everyone acts like Apple was disappointing. And if all of our stocks were up 50%, do you think we'd be sitting here?

Why talk about it? Let's just talk about the playoffs. Let's just be unbelievable if everyone was up 50%.

Carl Quintanilla (2:26)

Jim's referring to this downgrade today out of Piper.

Jim Cramer (2:28)

Yes.

Carl Quintanilla (2:29)

They do cut Apple to neutral.

They go to 205 They were at 220 But to your point, they also cut Microchip and Corvo and Skyworks.

Jim Cramer (2:37)

I mean, it's funny because Microchip, it's not funny, but Microchip just got the great grant from the Commerce Department. By the way, that is a terrific grant because it's going to expand what they're doing in Colorado Springs, and it's talking about Oregon.

And Microchip is the dumb chip, so to speak, meaning what we really lost in the supply chain, whether it be for defense or for aerospace, were these chips that are called large form factor.

They're not the most up-to-date cutting. And that's what we're hostage to. So I thought this was a very good Commerce Department, once again, finding a way to do the right thing and make people feel that your tax dollars are going a long way.

Carl Quintanilla (3:09)

We'll wait to see if those grants get finalized because they are in a preliminary stage.

Jim Cramer (3:13)

But I would say that so far, what I'm seeing is that they're focused on defense and aerospace. And that's good because talk about critical. I mean, when you pick up the front page, they're not talking about what we're doing. They're talking about what's happening in Iran. And we obviously, if we're going to try to stop the so-called rebels in the Red Sea, that's dumb chips. That's not high-end chips.

Carl Quintanilla (3:32)

Right. And to that point, Micron does get upgraded over at Piper.

Jim Cramer (3:36)

Interesting, because that really is that cell phone.

Carl Quintanilla (3:40)

And we had Sanjay on a few weeks ago.

Jim Cramer (3:42)

Yeah, I thought Sanjay tells a very good story. The stock had dropped. I was surprised to see the stock was down to 82 Now that does, I talked to you about something that no one's talking about, which is this Microsoft putting a-