Squawk on the Street 12/12/23

SPEAKER_1 (0:00)

What's on the horizon for financial markets?

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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 who's back. David Faber at Post 9 of the New York Stock Exchange. Big morning.

Futures slip from the highs, but they hold gains as November CPI comes in mostly in line. Headline runs a tenth hot. Year on year falls to three one ahead of the Fed decision tomorrow.

A roadmap begins with stocks holding at highs of the year after that key inflation read. What does it mean for Fed rate cut expectations?

David Faber (1:02)

Plus call it Hasbro's holiday humbug. It's cutting nearly 20 percent of its workforce and saying the challenging conditions are expected to persist into next year.

And speaking of cuts, Ford cutting F-150, reversing cutting production plans in half. The company is saying it's matching with customer demand in terms of those cuts.

Carl Quintanilla (1:27)

Let's begin with market reaction to CPI on day one of that Fed meeting. Jim, Core was.3 but actually.28. I got a little uptick in used cars, which people might be looking past.

Jim Cramer (1:37)

Used cars are up 50 percent since 2019 Housing is up 40 percent since 2019 The only times that we've had sustained double digit increases in the price of food is during COVID. You don't have a big drop in price of food at all. As a matter of fact, food away from them was.4. So there'll be people who want to celebrate and say that this is enough for J-PAL. It's actually not at all enough.

And I think that what you're... You have to have some rollback from the highest prices ever.

David, I think that people don't realize how much damage was done to the working person during COVID. So when you have these numbers that are not up as much as we expected, I say, well, wait a second, how about down?

David Faber (2:24)

Yeah. I mean, damage done, but also a great deal of money coming in from the government for those same people, right?

Jim Cramer (2:33)

Right, but 9% increase in minimum wage since 2019

That's the working person.

So I come back and I say, you know what? The person in the middle and upper middle, they may be fine with this. And as a matter of fact, we all know that because of rates being so high, that housing is now a dream. I mean, we saw that piece yesterday in the Wall Street Journal about how renting is so much cheaper. So I look at this number and I just say, how much of it is just really an ennui we have? We just say, okay, he's fought it and fought it, and it's okay. But it is not ennui if you're a working person.

David Faber (3:09)

Okay, but isn't his number just a number? He's not necessarily thinking it was the stratification of the economy?

Jim Cramer (3:16)

I think his no. I think he's very attuned to how well people who are making $45,000 and less.

And Carl, when I look at the numbers and I think about what happened during COVID, and David's right, a lot of government money came in, but I don't think these are satisfactory numbers at all, because the big things are cars and food and homes. It's not apparel. You can always go to TJX if you want to get apparel.

Carl Quintanilla (3:45)

Yeah, shelter was not cooperative this time, up 4 tenths. Although, first uptick in used cars since May, I mean, you actually think that's a sustained trend?

Jim Cramer (3:55)

How can used cars be up 50%? I happen to be someone in this three-day period who was in the business of financing cars, and they said that the lower prices are for cars with 100,000 miles per mile, and people are borrowing a lot of money for 100,000 cars. That's an unholy situation. So, again, I come back to what are the big things that people buy, and then what are the sustained things people buy? Food, and then housing, auto, and they're all not good enough yet, but going in the right direction.

Carl Quintanilla (4:36)

Right. You're not looking for a retracement to 2019 prices.

Jim Cramer (4:39)

That's not going to happen. They're too far away. But I do think that the sustained notion that you can raise prices no matter what after so many double-digit increases, if you go back, I mean, let's forget 2019 for a second. Let's go back to 2003 Let's do a 20-year view. We've never had a sustained period of inflation like this.