Triple Whammy: GDP, Hotter Inflation Gauge, Meta Spark Market Sell-off 4/25/24

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 Night of the New York Stock Exchange. Futures do tumble here, not just on Meta, IBM last night, but that disappointing macro as Q1 GDP comes in 1.6, lightest since 2022 with a warmer than expected core PCE.

Tenure 4.7 is now the high of the year. Our roadmap begins with that growth surprise, GDP increasing less than expected in Q1. Stocks do look to open sharply lower.

David Faber (0:31)

Plus, Meta shares are set up for what could be the worst day the stock has seen in years. The company surprised investors with plans to spend even more aggressively on AI. Also, that second quarter's guidance perhaps not that exciting. On top of that, we got a massive earnings day, of course, Comcast, five Dow components also reported. We got Merck, Honeywell, Caterpillar, Dow, and IBM, one of the biggest laggards on the S&P by the way, ahead of the opening.

Carl Quintanilla (0:57)

Let's begin with the market reaction to the weaker than expected GDP, Jim, one six, looking for two, no, prior to, prior to, estimate was about two five. Goldman was at three one.

Jim Cramer (1:08)

Right, this is one where people are obviously in the wrong way on both, wrong on how slow it is and wrong on inflation. So, the Fed needs some help. It can't just, these were numbers where you could say, you know what, they can cut.

But David, you don't cut when you have this kind of inflation. So, the core price index up to 3.7, you're looking for 3.4. You don't have a, what are you smirking about? These are awful numbers.

David Faber (1:32)

I'm not smirking.

Jim Cramer (1:34)

You're smirking.

David Faber (1:34)

No, I was just looking at you happily, happy to see you. My gosh.

Jim Cramer (1:39)

What am I, your kid? You bring me to work today?

Listen to me. Gee, be sure, no, you know.

David Faber (1:45)

You know, the worry now is stagflation, right?

Jim Cramer (1:48)

It's like, I was leading to that.

David Faber (1:50)

All right, well, I beat you to it.

Jim Cramer (1:51)

Yeah, you did. But look, stagflation to people who aren't familiar with things means that there's nothing you can do. The Fed can't get inflation under control, so therefore it can't cut rates, which therefore makes it so you get today.

David Faber (2:05)

So you get a weakening economy. Or is this just some sort of weird one-off? Or is it reflective of kind of these things you've been talking about, I've been talking about a little bit as well.

Jim Cramer (2:14)

March is your crummy month?

David Faber (2:15)

When you hear, you know, restaurant receipts and various things like that, diesel prices, I don't know.

Jim Cramer (2:21)

No, look, we got a frugal consumer. Thank you, Goldman, for upgrading TJX.

We have industrials just doing okay. We got Caterpillar and we don't have that revenue raise I'm looking for. We have TAC, we have ServiceNow, they're going to be coming on soon. This stock is down very badly. And one of the reasons is because people say, well, wait a second, they didn't raise as much as they usually raise. Now, that's the kind of positive. In other words, they're still raising.

But what it amounts to, David, is just you're struggling on a day like today to say, okay, what do I do? I got this 10 year 4.7, I was told that if it didn't hold 4.6, then I should settle.

David Faber (2:56)

And not to mention we haven't seen 5% a little while in that two year.

Jim Cramer (2:59)

Hello. I bought that two year, what, this early this week. I'm already taking a beating. Imagine taking a beating on a two year.

Carl, I'm not giving up on it, because today is a tough day. But look, we left here last night, and we could say we left here on Ford, and Ford's great, and Jonas is talking about how we have a part of Ford that is worth the price of Ford.

Carl Quintanilla (3:22)

You want to go through the names that raised, Guidance, Merck, Ford, Royal Caribbean, Chipotle, Waste Management, Align, LRCX, SP.

David Faber (3:29)

Global.

Carl Quintanilla (3:30)

Yes.

Jim Cramer (3:30)

Wow. Yes.

But then, okay, so.

David Faber (3:33)

All that and a five plus percent two year will get you a down mark.

Jim Cramer (3:36)

No, Carl's right. I mean, we're sitting here and we can bemoan everything.