Walmart Slides Despite Q3 Beat, The Cisco Skid, Biden-Xi Summit Takeaways 11/16/23

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Carl Quintanilla (0:31)

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.

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 a bit soft ahead of the open as we get more cautionary signals about the US consumer, most notably from Walmart and jobless claims, highest in two years on a continuing basis. Yields are dropping, 10-year 445, busy day for Fed speak. Our roadmap begins with Walmart though under pressure, raising the full year guide, but it still comes in below street forecasts and it does overshadow a quarterly beat.

David Faber (1:08)

It is also a rough morning for shares of Cisco. That stock is taking a hit after the company cut its full year revenue outlook. We'll also have takeaways from the meeting between Presidents Biden and Xi, and Xi that of course on the sidelines of that APEC summit in San Francisco.

Carl Quintanilla (1:23)

A lot of earnings to get to this morning, but we will start with Walmart sinking almost 6 percent despite beating third quarter earnings and revenue estimates. Retailer gives a cautious outlook about consumer spending. Here's CFO David Rainey on the call last hour.

David Rainey (1:38)

Recently, we've experienced a higher degree of variability in weekly performance in between holiday events in the US, including seeing a softening in the back half of October, it was off trend to the rest of the quarter. Sales during November have turned higher as unseasonal weather abated and we kicked off holiday events.

So sales have been somewhat uneven and this gives us reason to think slightly more cautiously about the consumer versus 90 days ago.

Carl Quintanilla (2:04)

Jim, people say the comp was almost the opposite of Target up 4.9, set it down 4.9.

Jim Cramer (2:09)

Came from a very hot place versus a cold place with Target. And we had Brian on last night, Brian Cornell was very bullish, not on the consumer, but of course his own operation. I would point out, I think that John David Rainey really did give you the thrust of why you probably don't want to sell it down here, which is that cold weather did ignite sales. We did have October was weak, but if you're going to do this week to week, it's very difficult.

I think it's very easy to say Walmart's had a big run. So let's just go by Target.

Carl Quintanilla (2:39)

All-time highs yesterday.

Jim Cramer (2:41)

It's tough to come into it.

David Faber (2:42)

You told us we'd be safe in Walmart though.

Jim Cramer (2:45)

I was wrong. I did not tell you we'd be safe.

David Faber (2:47)

You did. You were talking about how the stores were in great shape.

Jim Cramer (2:51)

No, I was talking about the movie Witness.

No, look, I think that Walmart's been the horse and Target hasn't, but e-commerce is up 24 percent versus Target's much weaker, same store sales healthy. Remember, same store sales were plus 4.9 and Target's were minus 4.6.

David Faber (3:10)

It does matter without a doubt. We pointed out yesterday, of course, there's a big discrepancy in the performance of both stocks over last whatever you want to measure the last couple of years, last year as well, but you did have high hopes coming into the quarter.

Jim Cramer (3:22)

Well, I still-

David Faber (3:23)

They seem to be dashed a bit by this guidance.

Jim Cramer (3:25)

I think that it is Walmart's time. This is the wheelhouse. If the consumer is weak, they will go to Walmart.

I don't want to be too granular here, but in an aisle by aisle contest, you're going to go with Walmart. I do think the target got to the point where it seemed like that it was doing really poorly. Let's remember, same-store sales are the real health lifeblood.

David Faber (3:51)

Without a doubt, and yet that stock soared yesterday on the gross margin, on the profitability, which was far higher. Despite, to your point, and we've talked about this, the fact that many expect, or at least there's an expectation, you could still see negative comps next year for Target.

Jim Cramer (4:04)