Win Streak Ends, "Powell Effect" In Focus, No "Power" for Stock Plummeting 35% 11/10/23

SPEAKER_1 (0:00)

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David Faber (0:31)

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

Carl Quintanilla (0:44)

Good Friday 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. Closing out of choppy week, and that equity stumble on Thursday. The S&P about a dozen points from breaking even for the week. Got some earnings blowups to look at. Biden and Xi announce a summit next week. A roadmap is gonna begin with the Powell effect on markets though, as the Fed shares message on inflation and rates does put an end to that win streak.

David Faber (1:06)

Also ahead, Tesla shares are down almost 5% this week, but that's not stopping one firm from calling it a very expensive auto company. Plus, Treasury Secretary Yellen to meet with China's Vice Premier for a second day, setting the stage for talks between President Biden and Xi that of course expected next week.

Carl Quintanilla (1:27)

Let's begin with the markets and the end of that win streak for the SMP and Nasdaq two years long, following this comment from the Fed chair yesterday.

Jerome Powell (1:37)

The FMC is committed to achieving a stance of monetary policy that is sufficiently restrictive to bring inflation down to 2% over time. We are not confident that we've achieved such a stance. We know that ongoing progress toward our 2% goal is not assured. Inflation has given us a few headfakes along the way.

If it becomes appropriate to tighten policy further, we will not hesitate to do so.

Carl Quintanilla (2:05)

I'm not sure you were counting on even this.

Jim Cramer (2:07)

I didn't count on this auction, which was really horrible. And I think that what's happened is we tend to forget that we have to deal with 30 year issuance this year because it was done by a treasury that frankly never thought that we would get to these levels. Treasury's kind of uniquely out of it.

When you parse Powell, Powell's been saying the same thing over and over again. We need six months, not two months, but six months.

And that's a decent moment interval to measure inflation. David, the one thing I would say is that during this period, it's going to continue to go its way if you look at the inputs. We have CPI next week, and a lot of the inputs are very positive for Powell, but not enough time. He doesn't want to just say, hey, listen, we'll start cutting. But this stupid curve has been wrong for so long, and all we do is listen to how right the curve's been. It's been so wrong.

David Faber (2:58)

So what, the lags are lagging?

Jim Cramer (3:01)

Yeah, the lags are lagging. That's good.

The forecast is the forecast.

David Faber (3:07)

Watch members of our armed services, various members here celebrating Veterans Day.

Jim Cramer (3:11)

Boy, remember we used to be off Veterans Day, which was so right.

We've given up on a lot of the days when we were growing up, where we used to commemorate. I think we used to talk about 11 o'clock is when World War I ended, my grandfather was at the Pershing. It was like a big deal, he was like, yeah. But now everything's in rear guard action.

My own view, but it's worth it. I think it's a great, you know, we should remember people, not just the people who survived, but everyone should go to Arlington if they ever get a chance to see another place. Just incredible.

Carl Quintanilla (3:45)

Well, we got Armed Forces Day, Memorial Day. This is the one for Veterans, anyone who's ever served.

Jim Cramer (3:51)

Right, and I think that it is, I'm glad we're doing a moment of silence and I'm glad that people remember because I think a lot of people have forgotten anything in history.

Carl Quintanilla (4:00)

We'll hear that moment of silence about 20 past the hour. Meantime, Jim, on the auction, a lot of forensic analysis on whether or not QT is in peril or if the Fed starts managing the runoff balance, the pace.

Jim Cramer (4:13)

Look, I think Powell is, I think Powell is a lot, first of all, I think he's a lot cooler than people realize and that he, unlike Treasury, he knows the game.