Trump Sparks Defense Rally, Paramount Responds to WBD, Alphabet Leapfrogs Apple 1/8/26

SPEAKER_1 (0:00)

Hey Fidelity, can I get a second opinion on stocks in the Fidelity app?

SPEAKER_2 (0:04)

With Fidelity, it's easy to get an outside opinion from independent experts in a single score.

SPEAKER_1 (0:10)

And then?

SPEAKER_2 (0:11)

When you're ready, trade US stocks and ETFs with no commissions.

SPEAKER_1 (0:15)

That's right.

SPEAKER_2 (0:16)

I am always right.

SPEAKER_3 (0:18)

Investing involves risk, including risk of loss. Online US equity trades and ETFs and retail Fidelity accounts. Sell order assessment fee not included. Some account types and securities excluded. Details at fidelity.com/commissions. Fidelity Broker Services LLC member NYSE SIPC.

SPEAKER_4 (0:30)

Thy ticket, Lady Jennifer of Coolidge.

SPEAKER_5 (0:33)

Well, many thanks, good sir. Heareth my Discover card. They accept Discover at Renaissance fairs?

SPEAKER_6 (0:41)

Yeah, they do here.

SPEAKER_4 (0:42)

Discover is accepted at the places I love to shop.

SPEAKER_5 (0:45)

Get it with the Times. With the Times? You're playing the Lute.

SPEAKER_4 (0:51)

Yeah, and it sounds pretty good, right?

SPEAKER_7 (0:53)

Discover is accepted at 99% of places that take credit cards nationwide. Based on the February 2025 Nielsen Report.

Jim Cramer (1:00)

It's Jim Cramer here. You're listening to the opening bell of CNBC's Squawk on the Street. Don't miss a minute of the action.

Carl Quintanilla (1:07)

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. Pre-market adding a touch more to Wednesday's selling in the Dow S&P. Although much of the macro data today is actually pretty bullish, whether that's challenger layoffs, jobless claims, Q3 productivity, and the trade balance. Yields are higher. Our roadmap begins with defense stocks rallying in early trade as the president calls for a record $1.5 trillion defense budget. Takes aim at dividends and buybacks for defense companies.

David Faber (1:38)

The president also scheduled to meet with top oil executives tomorrow. They'll discuss how to revive Venezuela's battered oil sector. And battle of market caps. Alphabet now tops Apple. That's the first time it's done that since 2019 That stock of course up 65% over the last year. Also got an upgrade and a price hike today.

Carl Quintanilla (2:00)

Let's begin with these defense stocks today. Jumping on the president's call for a $1.5 trillion military budget for 27 That would mark a 50% increase from this year's Pentagon budget. Jim, it would be almost 5% of GDP, which we really haven't done since the early 90s.

Jim Cramer (2:16)

Right, but it's kind of a, you feel like it's a wartime footing, a cold wartime footing. What I thought was interesting is the analysts completely take it seriously. I mean, without a doubt, and I think David, you'll get a kick out of this, so to speak. You'll have a president that will say, listen, no buybacks. This is an industry that exists with buybacks. No dividends, okay, because you're not doing a good job. But we're going to raise it. And the combination of when you do it, so you get this no buyback, no dividend, shorts. The shorts come in and just like take them apart. And then right at the end, he says, yeah, but we're going to boost your budget. Your earnings are going to take up by 50%.

David Faber (2:52)

I mean, obviously, the last I heard, Congress had the last word on budgets, but who knows these days? Yeah, but that doesn't mean anything right now.

Carl Quintanilla (3:00)

Maybe they'll take this under advisement.

Jim Cramer (3:02)

Okay, so I was prepared for David coming at me after what he did yesterday with the Amazon, where he really hurt me.

Carl Quintanilla (3:08)

Where he accused you of being part of their management committee?

Jim Cramer (3:10)

Yeah, which I understand.

David Faber (3:11)

We had forgotten this until I told him, because he knew there was something yesterday that went over the line, and then I reminded him, and that's where we are.

Jim Cramer (3:19)

All I did was tell Jassy what to do with the retail sector. But Jassy being the CEO. But you probably would forget what happened in April 10 of 1962

David Faber (3:29)

I do. Tell me what happened then.

Jim Cramer (3:30)

Okay, President Kennedy, by the way, who was a liberal Democrat, just so you know.

He said he had enough of the double-cross of Bethlehem Steel. Bethlehem Steel and US Steel were the two big ones, okay? Nine of the 10 richest executives worked for Bethlehem Steel at the time. He made a deal where he said to the steelworkers, listen, you guys don't ask for price increases. Then he went to management of Bethlehem Steel, US, and don't put any price increases through for steel. As soon as it was signed, US Steel came in and said, listen, we just put through a $6 per ton price increase. The president said privately, said, my father always told me that all business people, business men, I'm sorry, were sons of bitches, but I never believed him until now. And what he did was immediately say, okay, that's it. We're shifting all our defense contracts away from Bethlehem Steel and US Steel, because they did this. And Robert F. Kennedy Jr., oh, excuse me, senior, immediately starts an antitrust investigation of this steel industry.