Yields and the Market Slump, Dimon on Rates, Pres. Biden and the UAW Strike 9/26/23

SPEAKER_1 (0:00)

What's on the horizon for financial markets?

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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 (0:36)

Good Tuesday 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 look to unwind Monday's late day bounce. These cautionary comments from Jamie Dimon, Neil Kashkari, even Moody's fueling the bearish sentiment. Ten-year did hit 4, 5, 6 overnight, but has backed off. A roadmap begins with the September slump for stocks. S&P NASDAQ now on track for the worst month since December.

David Faber (1:00)

Plus economic risks. Moody's warning that a government shutdown would be negative for its US rating. No surprise there.

And history in the making. President Biden would be set or would become the first sitting president to visit a picket line. He's planning to join Strikers as those workers of the big three hit 12 days of walking out on their jobs.

Carl Quintanilla (1:24)

Let's begin with the markets on track for a lower open on this Tuesday. Jim, you've been watching yields, of course, and you commented this morning about the 20 year in particular.

Jim Cramer (1:33)

Yeah, I just think that we've been going toward, I've been saying this to club members, a, let's just say the opposite of an inverted yield curve, a de-inverted, I'm calling it, but that's kind of Prolix way to say it. But you've got a 4.8, you've got a 5, I mean a 5.3. And what I think you can happen is that on the 20 year, you can easily get to 6 And with, let's say, Neel Kashkari is right, Fed member, you have one hike, then you have no more inverted yield curve. Now, the problem is that, geez, I think people have to understand when I go over stocks, locking in a 4.8 is considered to be really pretty terrific.

David Faber (2:12)

It's not bad.

Jim Cramer (2:13)

No, it's not bad versus 2006

David Faber (2:15)

4.45 for 10 years is not terrible either.

Jim Cramer (2:18)

No, and you're going back, people are looking at it and you go back 16, 17 years, you say, wow, this is a great rate. So I think that that's really what we're up against with stocks. And I can talk about what Mike Weir said yesterday, CEO of Chevron and where oil is going, talk about what Jamie Dimon is saying and get ready for 6 But what I'm saying is that they haven't been able to sell the economy enough.

And they're selling a lot of bonds, feds dumping its bonds.

And I'm not saying we're dinosaurs because we've had tremendous periods where stocks have gone up when there's 6, 7 percent on the 20 year. But David, let's face it, we can sit here all day and talk about, you know what, I really like the 20 year here. I'm taking it to a buy and no one would disagree with us.

David Faber (3:02)

No. Well, listen, then, I mean, the 10 year has come into, you know, a lot of conversation. Obviously, you and I were out yesterday when we breached that 4.5 percent level, but it certainly did seem to get a lot of people's attention. I don't know why 449 somehow doesn't put four or five. Oh, it's what's double your point is twofold, though, Jim, isn't it? One is the impact on the economy and the other is that it does pose a real choice or opportunity for investors who who might prefer not to invest in equities.

Jim Cramer (3:32)

Exactly. I mean, I think we've had tepid reception for equities for a while. Now, we did have that vicious decision by the Fed to surprise people on October of last year. But but Carl, I just think that you could have this terrible situation where rates go up, earnings go down, dollars too strong. And what you would have is people who say, what do I need this for? Now, no one that I read today is saying, you know what? This could be the end of the move that rates could stop going higher. And that would be, I mean, obviously, one of the greatest things in the world. But I just don't see the big layoffs. I don't see the Fed winning yet.

I don't know whether one rate hike is enough. I do know that when you speak to people, they don't want to talk stocks. It's like, jeez, 4.8.