The Tech Sell-off and Beyond, Chips Try to Rebound, Sen. Vance's Wall Street Message 7/18/24

David Faber (0:00)

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

Carl Quintanilla (0:05)

Good Thursday 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. Futures do indicate some reversal from Nasdaq's drubbing yesterday. Worst session in a year and a half. Worst day for Semi since COVID. TSM guidance is helping a bit. Netflix tonight, ECB holds steady. Our roadmap begins with some market rotation a day after a new Dow milestone.

The Nasdaq sell-off, of course, and the Russell pulling back from a 52-week high.

David Faber (0:31)

Also ahead, the chip sector is looking to recoup some of those very steep losses from yesterday. Taiwan Semiconductor is out with earnings. It does have guidance above what many analysts had been anticipating.

Plus, we'll give you the latest from Republican National Convention. This after Senator JD Vance delivered his vice presidential nomination speech last night.

Carl Quintanilla (0:50)

Let's get to the markets a day after that big sell-off in tech stocks. Jim, you did right. They're making it hard to own some of these.

Jim Cramer (0:56)

Yes, they are and I know that at 3.30, the Nasdaq futures were up about.3 and then at 4.30, they're up to.6 and they brought them right down. But now we're back to.6 and I think that what, I mention this only because the last half hour, even the last 15 minutes were some of the worst I have ever seen. David, there were people who wanted to get out of stocks so badly and using ETFs too, that you would have thought that tonight Taiwan Semi was going to blow up. That did not happen.

I think that this out of tech, out of S&P, the big tech stocks and in the Nasdaq was a program that lasted a couple of days. I don't know how long it can go on.

I mean, it's just a program. I mean, someone's motivated to bang out the semis, bang out mega and put money in small cap and you and I both know, because we talked about it, small caps can't really sustain that amount of money in without just taking them all up too far.

David Faber (1:56)

Well, right. We talked to Bob Asani about the sort of the mechanics of some of the ETFs and what that will mean and how they go about mirroring the performance of the index and what they have to buy.

That is something worth watching. But on the other side of this, obviously the chip sector fell dramatically yesterday. It seems largely because of the Trump comments in the interview about Taiwan, as opposed to the potential for new deterrent actions by the Biden administration against foreign companies that use some US parts and they're selling to China. Overall, it just tanked a lot of the semis. AMD had a very bad day, NVIDIA and any number of Qualcomm go on from there.

Jim Cramer (2:41)

Right, well, I do want to point out, Carl, this is something for our at-home investors. A study just came out by Arizona State University and it looks at 100 years of returns of stocks.

People say to me, Jim, why do you stick with this NVIDIA? Why did you name your dog NVIDIA? Okay, so, in 100 years, the highest annualized compound return for any stock with at least 20 years of return was 33.38% earned by NVIDIA shareholders. Greatest performing stock. Now, this is the greatest performing stock over 100 years. So, no, I'm not gonna flee it because someone's got some damn program which takes up 10 biotechs that are worth zero and blows out of the company who's no longer in the $3,000, it was kicked out of the $3,000 club yesterday.

I say welcome back.

Carl Quintanilla (3:28)

Yes, B of A today writes about the period last year where everybody lightened up on NVIDIA.

Jim Cramer (3:34)

How was that?

Carl Quintanilla (3:35)

Went for idiosyncratic winners like Pins and AMD. They think this might be what they call it, a fake AI top.

Jim Cramer (3:42)

Well, the biggest, there was a huge day where NVIDIA was down nine points versus what, obviously percentage wise, very big. And I was vilified by people at a charity event. Why are you sticking with this thing? But I always, you know, I always ask them when they say that, do you know what NVIDIA does?

Goes higher. That's like their, nobody, I mean, you have to study NVIDIA to realize that it made me part of a bigger trend. Now, I don't know if it's gonna go up today, but David, over a hundred year period, the best performing stock, isn't that worth something?