Stocks Tumble on Inflation Surprise: What Investors Should Do Now 4/10/24

Carl Quintanilla (0:00)

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 (0:08)

Good Wednesday morning, and welcome to Squawk on the Street. I'm David Faber with Jim Cramer. We are live from Postline at the New York Stock Exchange. Carl's on assignment this morning. Let's give you a look at futures, of course. As Andrew just told you, we are looking for a sharply lower open. Given that, hotter than expected CPI print. And our roadmap does begin with that inflation surprise. Consumer prices rising more than expected for Mark.

Futures, as you just saw tumbling. And of course, all of it, because the odds for a June Fed rate policy pivot, well, they're going.

They're going down.

Jim Cramer (0:39)

It was always going to be hot.

David Faber (0:42)

No. Plus big tech divergence. Alphabet Amazon at highs, Jim. But Apple and Tesla, I don't know if you've noticed, they've been struggling a bit.

Nvidia, we're going to talk about that stock, of course. How could we not? It's ignoring a correction.

A correction.

Jim Cramer (0:56)

Well, if you don't know what it is, or if you think it's my goal, go on, why don't you sell some?

David Faber (1:00)

And finally, Jim, the airlines are leading the S&P pre-market gainers. Delta, topping quarterly estimates.

It's focused on efficiencies.

Jim Cramer (1:08)

I'm focused on the fact that Phil Wabose been here for 25 years and he's the best. And I want to say congratulations. This is that new side of real things. We've got the best there is, and I'm sorry, I have to point it out.

David Faber (1:18)

Why, and Phil, more than we ever have. All right, let's start off, though, with the broader market, Jim. Get your reaction to the hotter than expected CPI print we've seen and heard from our friends on Squawk Box, obviously, and the analysis from their guests in terms of expectations for a Fed rate cut, which are fading fast, the yield curve actually inverting a bit. You've got the two-year moving up more in yield than the 10-year right now.

Jim Cramer (1:41)

Right, so you start thinking, well, why did the Fed kind of commit to neutrality? Because these numbers were the numbers, what was bad was worse. I mean, we've been worried about shelter for a long time, shelter going in the wrong direction. I think the Employment Urban Friday gave you a good read of what was going to happen, of things that we're going to have to cost more.

We have a surge in people who work in travel leisure, so of course those wages have gone up. We had a surge of healthcare, those wages have gone up. But David, there's a war premium to oil, and we know there's a war premium to oil, so that should be the least of our concerns. As long as there's a war, there's going to be a premium. Do you think that war in the Middle East is going to last forever? Speaking of the Middle East war, if it's going to last for a long time, then there's going to remain a premium. But the only number that I really, the numbers that I really freak out about, I guess I'm supposed to freak out about, are just the endless ways to be able to find people to have somewhere to live.

And that includes immigrants, of which, by the way, since the government doesn't have any numbers at all, we have to presume is hot, and it won't stay. By the way, raising mortgage rates only makes it exasperate, because-

Exasperate because you don't want to build. If you're tall brothers, you look at these numbers, and you know, I'm going to make fewer homes. So that's the intractable part. That's the part that if you raised rates, wouldn't make things better. So that's where the Fed's really in a box, not food. I mean, finally, food stopped being more expensive at home. It's a little more expensive at the store. I like that.

But these numbers are the numbers of an economy that is on the move, and it's terrific. And if we're all going to sweat the program and decide that the 10-year and 30-year auction is going to go bad and we get to 5%, you and I have been there 5%. That's called a great level. So I don't want to lose sight of how a natural...

David Faber (3:31)

Oh, but the fact that we may very well get no rate cuts for the remainder of this year is very different than what people had anticipated as 2023 came to an end, not to mention even a few weeks ago or months ago.