← Squawk on the Street
Squawk on the Street
DOJ Powell Probe Backlash, JPMorgan Chase's Earnings Beat, Eli Lilly CEO Exclusive 1/13/26
00:41:53
Carl Quintanilla, Jim Cramer and David Faber discussed the Justice Department's criminal probe into Federal Reserve Chair Jerome Powell — and how it's facing blowback from both sides of the aisle on Capitol Hill, as well as condemnation from central bankers around the globe. The anchors also discussed JPMorgan Chase's quarterly beat as the bank's results kick off earnings season. In a CNBC Exclusive at the J.P. Morgan Healthcare Conference in San Francisco, Jim interviewed Eli Lilly CEO David Ricks about obesity drugs and the company's growth into a $1 trillion pharma giant. Also in focus: December CPI holds steady at 2.7% year-on-year, Microsoft's new data center initiative to lower power costs. Squawk on the Street Disclaimer
Loading summary
Transcript214 lines
- [00:00]
Jim Cramer
This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information.
- [00:08]
Carl Quintanilla
Packed daily market Preview delivered in 10.
- [00:11]
Jim Cramer
Minutes or less, including projected stock updates, monetary policy decisions and key results and statistics that may impact your trading. Download the latest episode and subscribe@schwab.com Market.
- [00:24]
Carl Quintanilla
Update podcast or find Schwab Market Update.
- [00:27]
Jim Cramer
Wherever you get your podcasts. Before we had AT and T Business Wireless coverage, our delivery GPS wasn't the most reliable. Once our driver had to do a 14 point turn to get back on route. A 14 point turn.
- [00:40]
David Ricks
An influencer even livestream the whole thing.
- [00:43]
Jim Cramer
Not good for business. Now with AT&T business Wireless, routes are.
- [00:47]
David Ricks
Updating on the fly and deliveries are on time. And the influencer did get us 53.
- [00:52]
David Faber
New followers though AT and T Business Wireless connecting changes everything.
- [00:59]
Jim Cramer
It's Jim Cramer here. You're listening to the opening bell of cnbc. Squawk on the Street. Don't miss a minute of the action.
- [01:07]
Carl Quintanilla
Good Tuesday morning. Welcome to Squawk on the Street. I'm Carl Quincean here with David Faber Post nine of the New York Stock Exchange Kramer once again at the J.P. morgan Health Care Conference in San Francisco. Futures do erase some losses here as the worst fears about December CPI go mostly unrealized year on year core to 7 is a 10th light. Meantime, earnings season kicks off with JPM and Dell. Delta 10 year is backing off once again off of 4 to our roadmap begins with the latest read on inflation and what it means for the Fed's next rate move as global central bankers now unite in their defense of Jay Powell.
- [01:39]
David Faber
JP Morgan is kicking off earnings season. The bank beat estimates this thanks to better than expected trading revenue. We'll keep an eye on that stock. President Trump announcing a new tariff on any country doing business with Iran. This amidst the crackdown of course on protests there, a move which could derail America's trade deal with China. China and as we mentioned, Jim is out west at the J.P. morgan Health Care Conference. Eli Lilly CEO Dave Ricks is going to join us or him certainly for a CNBC exclusive a bit later in the hour.
- [02:12]
Carl Quintanilla
Let's begin with CPI this morning and the Fed as we dive through some of this data. Jim about a half hour old. There were some fears that there was going to be payback for that cool reading out of November, but this isn't too bad.
- [02:25]
Jim Cramer
No, I look shelter still too high. Food at home still too high. Surprising break in used cars. I can't find that in the actual work that I do. And also energy. But we think the energy could come down. This was a very soft number. And I understand if the President were to actually say I think rates should come down. As long as this doesn't involve decoration of the Federal Reserve building.
- [02:48]
Carl Quintanilla
Yeah. The only hole in the donut there, Jim, might be grocery 2, 4 year on year. Yeah, 7, 10. That's the biggest monthly gain in about three years.
- [02:59]
Jim Cramer
Look, food's too high. A lot of that is tariffs. A lot of that is say for instance when you deal with Brazil. Brazil would be a way to get cattle down. Cattle is a principal source of food inflation. I'm surprised the President hasn't addressed it yet. But when you're a political enemy, you as Brazil is regarded now, you're not going to get lower tariffs. And I think that what the President's going about incorrectly, and I know now the President feels like a little of a free fire zone after what he justice did with Powell is you just go and you make a deal. Let's get beef down. That is a principal source, a staple and it's way too high and it's up to the President to lower it.
- [03:39]
Carl Quintanilla
Jim, you did say yesterday that about the doj, that they are in league with the President and you can't believe that they take themselves seriously. Where's your head right now on DOJ and Powell?
- [03:52]
Jim Cramer
Well, look, I mean everyone keeps talking about the attack on the Federal Reserve and independence. That's because we're a business network. That the fact that the Justice Department is being revealed as a pawn of the President, even to the point where the President doesn't know it's a pawn. That's what the real attack is on. I think the just. You don't want the Justice Department to be a farce or a joke. It tends to be a really important arm of government. But right now it just seems like a kind of a hack, hack group of people. Joe, when I got out of law school, the number one job to get was before you go to any of these firms like you know, Paul Weiss or Krabath or Sullivan, you went to the Justice Department. I don't think anyone would be thinking about going to the just department now because you just have to do the bidding of someone else to go after Powell to make it so that he could be in jail. It's farcical. And I think that the Justice Department is the one, the agency that is really being hammered, not the Fed.
- [04:42]
Carl Quintanilla
What was interesting yesterday, David, was the Republicans who came out saying this is sort of unnecessary. Tillis, Murkowski, McCormick, Collins, Kramer. Kennedy's line was fabulous. We need this like we need a hole in our head. Everybody needs to take their meds.
- [04:59]
David Faber
Yeah. There's no doubt there is significant opposition even amongst Senate Republicans to that. And there is the possibility, therefore, that you could hold up any nominee to replace. Replace Powell, for example, which would be significant. There also is this now question that's much more significant as to whether Powell remain on the Fed after his term as chair expires, which was unexpected, perhaps. But in terms of trying to maintain the independence of the actual organization, the agency, he may do that. Jim, I know we're going to continue to hear about this. You've been outspoken again. You just heard it as well in the Justice Department. We can cite any number of other areas outside of what is being done to the Federal Reserve chairman. And that also show a lack of independence on the DoJ. It is much more a part now of the president, see, as opposed to an independent agency. But, you know, interestingly, yesterday, Jim, there was not really that much of a market response to all of this.
- [05:59]
Jim Cramer
No. I think the problem is, David, that when the Justice Department becomes just an arm of. Of the president, as we actually saw with RFK and President Kennedy, it tends to diminish that department. David, if you're doing a renovation of your house and it goes way over, do I attack you? Do I criminalize what you're doing, or do I go after the contractor? I think, again, America is very confused. We've all had contractors have overruns. We tend not to blame a customer, but suddenly the customer could end up in jail. By the way, it's criminal. You know, the idea of criminalizing everything that is civil is also something that seems so politically motivated as to make it so. You've got a farcical Justice Department. We got to restore the value of the Justice Department or the Justice Department. The Attorney General should just quit or be fired. This is a great opportunity to fire an attorney general. It's fantastic opportunity because obviously we can't criminalize everything. We can't send everybody to jail because we decide, you know what that guy belongs in. Jay Powell does not belong in jail. And that's what this is about, putting him in jail. Why do people act like this is some bloodless thing about interest rates? I don't think Jay Powell should be thrown in jail because the contractor had an overrun and he said something in Congress, and I think even President Trump recognizes that. The orange jumpsuit Thing, look, it's bad, it's a bad look for the Fed, but it's the Justice Department's fault, not the Fed's fault.
- [07:20]
David Faber
No, but the reporting yesterday, I think it was the Journal talking about how Trump is at least mused about replacing Pam Bondi as, as, as AG has been warped that she's not been supportive enough of the Trump agenda. Nothing to do with.
- [07:35]
Jim Cramer
Right.
- [07:35]
David Faber
With this part of it.
- [07:37]
Jim Cramer
Well, she's going rogue. I mean she's, she's going rogue. It's okay to say this stuff. I mean we have to start saying things that you would never say. But we said him in 1962 when RFK had a get Hoffa squad. We said it in 1962. And RFK investigated the railroads for the steel companies for antitrust because President Kennedy didn't like them. And that was something that I know that our current president may have found to be distasteful. But this is really incredible. We are talking about getting criminal lawyers in order to be able to defend yourself for an overrun when we're trying to run a darn country.
- [08:11]
Carl Quintanilla
Well, that's why this statement, Jim, by global central bankers, the heads of Australia, Brazil, Canada, Denmark, the Eurozone, South Korea, Sweden, Switzerland and the UK is so interesting. And then Diamond's comments today, a bit about, about Powell himself.
- [08:26]
David Faber
We can move on of course to JP Morgan earnings, but as you might expect, we were waiting for what Jamie Dimon, the company's leader would have to say about Powell. And there it is, the cornerstone of price, financial economic stability, interest, citizens standing up for Fed independence. No surprise there. You know, saying in his remarks as well, anything chips away at that is probably not a great idea. We'll have the reverse consequence. He also said, and there is that coming at the end of this statement as well. And he, he believes will raise inflation expectations probably actually have the effect of increasing rates over time as you lose faith, so to speak, in the, in the central bank. And that takes us to the numbers themselves, guys. Jim, I don't know if you've had a chance to look at them. I mean we're talking about a stock that inevitably seems to move higher over these last couple of years, but not typically after it reports earnings. Even when they, as they did this quarter, beat the estimates of the analysts who follow the company.
- [09:30]
Jim Cramer
Well, we hope there's a Roche Motel. Remember last time Jamie spoke, he was talking about the cockroach theory, which turned out to be untrue, by the way. There are really only two. There was that first brands in Tricolor at that point. We're still calling it Tricolor. We had no idea what that was. David, Investment banking. Disappointing. Now, is that some sort of timing issue? Because I think there's investment banking for even the smallest firm right now. And I thought the JP Morgan should have a better investment banking number because otherwise, everything else clean.
- [09:57]
David Ricks
Yeah.
- [09:57]
Carl Quintanilla
Loans up 9. Equities a huge beat, obviously, up 40. Guidance on NII above consensus for the full year. They do. Jim Dimon does say that the impact of a cap on a PR would be dramatic.
- [10:15]
Jim Cramer
Right. I mean, look, it's the end of credit as we know it. Look, it's an unfortunate thing. You have to pay higher interest rates because other people are defaulting. And we do want a system where banks want to give you a credit card. It's a good business. Is it? Is it uxorious? Well, for the people who didn't understand the process, absolutely. If we had Max Levchin on right now for Buy Now, Pay later firm, he would say it definitely is, but they have a different model. David, the fact is, is that people do default. It is unsecured and someone has to make up for the 3 to 5% of the credit cards that are default. I don't know how you get around this unless you decide that, well, you know what, no one should do it except for a handful of people. And then only people get credit cards if people don't need them.
- [10:59]
David Faber
That's a good point. Well, and that goes to the idea that it would actually, the ultimate impact would be less borrowing, which would not necessarily be good for the. For the broader economy as well. Interesting, kind of interesting story in the Journal today also about JP Morgan taking over for Goldman Sachs for that Apple card. I remember when you talked a lot.
- [11:18]
Jim Cramer
I was a loser. Boy, Goldman. Remember we were hammering Goldman when they did. I remember telling Goldman, look, you guys are going to lose a fortune. And someone at Citi had told me this could be like a $7 billion hit. But the Goldman guys. Yeah, but it's Apple. But it's Apple. You didn't even know Apple was involved. Anyone who used that car realized that you were rooted to a call center in Mississippi who had no idea what they were talking about because Goldman didn't want to get his hands through the credit card. And I don't mind. I don't blame him because, man, that business sucks.
- [11:45]
David Faber
I don't know, is there something in the air out there in California that just like you suddenly are, you know, speaking the truth? What's going on?
- [11:53]
Jim Cramer
Having a Great time.
- [11:54]
David Faber
You're having a great time at all. Any sleep, right? Yeah. That was two days ago.
- [12:01]
Jim Cramer
Two solid hours.
- [12:02]
David Faber
You got two solid hours.
- [12:04]
Jim Cramer
What are you doing? Your phone.
- [12:05]
David Ricks
I know.
- [12:05]
David Faber
I'm looking for things.
- [12:06]
Jim Cramer
Usually have it right in front. This is how the show's done typically. Oh, look at that. I didn't even count on her. Never mind.
- [12:16]
David Ricks
Carl.
- [12:16]
Jim Cramer
I'm having some fun. What can I say?
- [12:19]
Carl Quintanilla
That that sit down between Rickson and Jensen looked pretty interesting yesterday. We're going to talk more about it. But this notion of living forever is literally something you're writing about.
- [12:31]
Jim Cramer
Yeah, well, I mean, we were talking about what it would be like and whether it be not so great to live forever. The downside of living forever. It was kind of a otherworldly discussion. I didn't expect to see that between these two gentlemen who are pretty sober. They also talk about living past 100. The upside and downside of that. Frankly, I thought we were going to talk about drug discovery, but what the heck, why not go science fiction?
- [12:55]
Carl Quintanilla
Jim, we'll get to a lot of that. Very busy couple of days you've had out west at the JPM Health Care conference. When we come back, you'll hear what Novo CEO told Jim about the Wegovy pill last night at the conference. Tons of news coming out of there in the last 24 hours. Speaking of weight loss, as you just saw, Eli Lilly's Dave Ricks from that conference coming up. Later on this hour, we'll dive into Delta L3Harris and a bunch of calls on Chipotle FCX, Amat Micron, our own parent version. When we come back, Comcast Business helps retailers become seamlessly restocking, frictionless paying favorite shopping destinations.
- [13:32]
David Faber
It's how nationwide restaurants become touchscreen ordering quick serving eateries and how hospitals become.
- [13:37]
Jim Cramer
The patient scanning data managing healthcare facilities that we all depend on.
- [13:42]
David Faber
With leading networking and connectivity, advanced cybersecurity.
- [13:45]
Carl Quintanilla
And expert partnership, Comcast Business is powering.
- [13:49]
David Faber
The engine of modern business powering possibilities. Restrictions apply.
- [13:53]
David Ricks
Hey Fidelity, can I get a second opinion on stocks in the Fidelity app?
- [13:58]
Carl Quintanilla
With Fidelity, it's easy to get an.
- [14:00]
David Ricks
Outside opinion from independent experts in a single score.
- [14:04]
Carl Quintanilla
And then when you're ready, trade US.
- [14:06]
Jim Cramer
Stocks and ETFs with no commissions. That's right.
- [14:10]
David Ricks
I am always right.
- [14:12]
Carl Quintanilla
Investing involves risk, including risk of loss.
- [14:14]
David Ricks
Online US equity trades and ETFs and.
- [14:15]
Carl Quintanilla
Retail fidelity account sell order assessment fee not included, some account types and securities excluded. Details@fidelity.com commissions Fidelity Brokerage Services, LLC member.
- [14:21]
Jim Cramer
NYSE, SIPC not every sale happens at the register. Before AT&T business Wireless checking out customers on our mobile POS systems took too long. Basically a staring contest where everyone loses. It's crazy what people will say during an awkward silence.
- [14:38]
David Faber
Now transactions are done before the silence takes hold. That means I can focus on the task at hand and make an extra sailor too. Sometimes I do miss the bonding time.
- [14:48]
Jim Cramer
Sometimes.
- [14:48]
David Faber
AT&T business Wireless connecting changes everything.
- [14:55]
Carl Quintanilla
Welcome back. Shares Inovo Nordisk up more than 25% since last month's FDA approval of its Wegovy pill to treat obesity. Last night on Mad at the JP Morgan Health Care Conference, Novo CEO talked to Jim about pricing the drug.
- [15:09]
Jim Cramer
If you want to really make this accessible, then you have to put it.
- [15:14]
David Ricks
At a price where everyone can afford.
- [15:16]
Jim Cramer
Something that the president, you both agree on. We have, we have actually.
- [15:24]
Carl Quintanilla
Jim, takeaways from that. Sit down.
- [15:27]
Jim Cramer
Well, look, I think that prices. We used to talk about the idea that maybe this could be $1,000 a month break. The treasury competition does work, obviously. Lilly and Novo. What I thought was really interesting was this first mover advantage. We have to figure out when we speak to David Ricks, what does it mean to have first mover advantage on a pill? Let's say you tolerate the pill, your weight goes down. Does the doctor say, you know what really just came out with a pill. Why don't we give that when we give that a shot? That has not been the way that things have gone in the, in the medical profession. But I think Dave Ricks will have some answers and I really want to know because boy, did he ever come on strong versus Novo. They wipe the floor with Novo. I think Nova's trying to get back in the game. Let's hope they do. We need competition.
- [16:08]
Carl Quintanilla
Well, we have talked about sort of the cadence of these medications and it's not something that you tend to hop or brand switch once you're in the midst of treatment.
- [16:18]
Jim Cramer
Well, it's not really the doctor's role to be able to say, you know what, you really tolerate this pill. Let's just decide to switch. But again, if the Lily pill is superior, then I think you would do that. We want to find out the difference or whether these are now somehow become commodities, which is really crazy because one of the specialized medicines in history you little surprised Jim.
- [16:41]
David Faber
Overall, we haven't gotten a lot of deal announcements so far. Meanwhile, day two.
- [16:46]
Jim Cramer
Now, Jensen Wong talked about this amazing deal that he did with Eli Lilly and he said maybe this is the biggest thing has come out of the Conference. David, you and I both remember when this is where big deals occurred to me. It's where now smaller companies are hoping for a big deal. Now that the FTC has changed its mind about combinations. I am surprised. David, the biggest news was Eli Lilly and Jensen Wong get together.
- [17:10]
David Faber
Yeah, that's interesting. What about you know one of the names of course is this Revolution Medicine. It's not a name that we necessarily knew although it would be a fairly large deal were to happen. Merck the latest name to come around. I know they talked a bit more broadly about their acquisition strategy. Did Mr. Davis, the CEO of Merck yesterday Jim saying things like, you know, we are looking at later stage acquisitions. Obviously they're going to be dealing with the key true to patent expiration coming up in 2028. That's some 32 billion in revenues that they need to replace over time any pickup there in terms of what they may be thinking.
- [17:45]
Jim Cramer
Well look, I think that Keytruda is such a huge drug that almost no matter what you do, you're not going to be able to make it up. You sure are going to have to try and Davis is trying very hard to do it at Merck. It's been the stock as reacted to that. But a lot of these companies here are really talking about Patton, Cliff Patent Cliff Patent Cliff. And it does make you remember that this is really one uncertain business versus say Nvidia which has each iteration succeeds. There are a lot of companies that can't iterate and there's a lot of drugs that fail. We forget what a not so great business these people are really in and how amazing it is to say Eli Lilly has clear visibility to the 2030s. A lot of companies had clear visibility 21st Novartis surprised me Vast Air Simmons they seem to have clear visibility the 30s but Pfizer does not have clear visibility. I think to I don't know, March.
- [18:42]
David Faber
Oh that's not nice Jim. To march.
- [18:46]
Jim Cramer
David, it's not about friends, it's about money. How many times do I have to tell you that in the last 20 years?
- [18:53]
David Faber
I know you do. You tell me over and over again. And obviously there are still other drugs that are going to compete with Lilly and Novo or at least potentially be out there. Jim and you know others want in on the GLP1 Craze course we know Pfizer Novo over Matsera, remember and they won that battle.
- [19:11]
Jim Cramer
That was interesting because it was Novos to win initially. I don't think they think they needed Pfizer has some interesting thing Amgen is going to talk today to me about the. The best kind of pill or injection over one month, a Regeneron's got something that combines with cholesterol. Everybody has something, but you want to be like. Well, you want to be like Lloyd. Because what they have is manufacturing. They have half. They have skill, they have scale. Everybody else is just kind of got press release. The press release ratio here is really.
- [19:44]
David Ricks
A lot.
- [19:44]
David Faber
A lot you got tonight.
- [19:48]
Carl Quintanilla
Yeah.
- [19:48]
David Faber
You got. Is Lynch Life for General. Is that or.
- [19:52]
Jim Cramer
Yeah, he's still more than ever. More than ever.
- [19:55]
Carl Quintanilla
First ever.
- [19:56]
Jim Cramer
My first stock is at five bucks.
- [19:58]
David Faber
Yeah, I remember one of the first few in terms of CEO tenure.
- [20:05]
Jim Cramer
I saw him once up at Saratoga with racehorses. Isn't that usually the top can be.
- [20:12]
David Faber
The top can be.
- [20:14]
Jim Cramer
Could be. Actually, I think Regeneron's got a lot of room. They've got more room than a lot of companies realize. Have some really good drugs. But Lily is the one. David Lilly is. There's just nothing. There's Lily and then there's everybody. Everybody else, and that's what you want. There's the Indiana football team and there's everybody else. There's Lillian.
- [20:33]
Carl Quintanilla
Look forward to catching up with State, right? In a bit, Jim. We'll get your mad dash. We'll count down to the opening bell. We'll dive into Delta. The other big earnings print of note this morning, shares down about 4% before the bell. Stay with us. Hey, Fidelity.
- [20:48]
David Ricks
Can I get a second opinion on stocks in the Fidelity app?
- [20:52]
Carl Quintanilla
With Fidelity, it's easy to get an.
- [20:53]
David Ricks
Outside opinion from independent experts in a single score.
- [20:57]
Carl Quintanilla
And then when you're ready, trade US.
- [21:00]
Jim Cramer
Stocks and ETFs with no commissions. That's right.
- [21:03]
David Ricks
I am always right.
- [21:05]
Carl Quintanilla
Investing involves risk, including risk of loss.
- [21:07]
David Ricks
Online US equity trades and ETFs and retail.
- [21:09]
Carl Quintanilla
Fidelity accounts sell, order, assessment, fee not included. Some account types and securities excluded.
- [21:12]
David Ricks
Details@fidelity.com commissions Fidelity Brokerage Services, LLC.
- [21:14]
Carl Quintanilla
Member NYSE, SIPC.
- [21:17]
Jim Cramer
Oh, could this vintage store be any cuter?
- [21:20]
David Ricks
Right?
- [21:20]
Jim Cramer
And the best part, they accept Discover. Except Discover in a little place like this. I don't think so, Jennifer.
- [21:27]
David Faber
Oh, yeah, huh?
- [21:28]
Jim Cramer
Discover is accepted where I like to shop. Come on, baby, get with the times. Right. So we shouldn't get the parachute pants.
- [21:36]
David Faber
These are making a comeback, I think.
- [21:40]
David Ricks
Discover is accepted at 99 of places that.
- [21:43]
David Faber
That take credit cards nationwide.
- [21:44]
Jim Cramer
Based on the February 2025 Nielsen report. What if you could monitor the health of your career? For most people, it starts out strong. A new exciting job where it feels like anything is possible.
- [21:57]
David Ricks
But somewhere along the line, things change.
- [22:00]
Jim Cramer
That promotion you expected never happened. You haven't had a raise in ages and you're starting to feel irrelevant. These are early warning signs that your.
- [22:09]
David Ricks
Career is about to flatline. You need to get yourself immediately to.
- [22:14]
Jim Cramer
Strawberry Me where a certified career coach will help bring it back to life. Your coach will push you, challenge you.
- [22:21]
David Ricks
And help you put together a plan.
- [22:22]
Jim Cramer
To get ahead, either at your current job or by helping you land a new, more rewarding one. Every Strawberry coach is certified in career resuscitation. Go to Strawberry Me Coaching and get 50% off your first coaching session. That's Strawberry Me Coaching. Now is the most affordable time ever to find out if career coaching is right for you.
- [22:48]
Carl Quintanilla
Only a couple of weeks into the new year, but check out how the stock rally has really broadened out since we turned the page on the calendar. Especially small caps. The S and P is underperforming the Russell last week, at least by the widest margin since November of 24. We'll talk about whether or not this continues, what it means for the rest of the year when we come back. Opening bell just a few moments away. Don't forget you can catch us anytime, anywhere. Just listen to and follow the squawk on the street Opening bell podcast.
- [23:18]
David Faber
All right, let's get to a mad dash dash with with Jim of course a couple of minutes before we get an opening bell here. Want to talk a little Alphabet?
- [23:27]
Jim Cramer
Yeah look David, I think that what happened yesterday we broke the story this combination being Google and Apple is really starting to get get people to be concerned about the power of Google again. Elon Musk talking about maybe they're too powerful but I think we're missing is is that the last justice justice decision last court decision said that Apple is a good competitor to Google so you don't have to worry about anything. But David, this may be game set match for a lot of the different these these chat bots that don't have anybody tying up with them. This was such a great thing for Google and of course for Apple. It looks like they didn't have to spend all that money anyway because they've got Siri powered by Google. I don't think Google stops here. I think out but goes straight shot to 400. Straight shot.
- [24:14]
David Faber
Straight shot. Yeah.
- [24:14]
David Ricks
It's interesting.
- [24:15]
David Faber
I think the biggest move yesterday Jim on the news now it may have been anticipated. It's not clear what if any payment will take place from Apple to Alphabet for this it was not is not expected to be anywhere near what they've been paying of course for this to be the search provider on on Apple in the past you surprised the stocks didn't really react to this yesterday or perhaps that expected given we kind of knew this might be coming.
- [24:42]
Jim Cramer
Well I think that there's a an understanding that this time Google has to do some heavy lifting because they're taking over. Siri before it was just the foundation was let's use Google for search. I thought, I thought that it should have been up much more. I thought Apple should have not much more. I think the market has really sour on these big cap techs. It's a big mistake. This is the one to own Alphabet. It goes much higher.
- [25:08]
Carl Quintanilla
Jim, let's get the opening bell here in the CNBC real time exchange the big board its pinnacle completing their merger with Synovus Financial at the NASDAQ Fintech bank the Bancorp doing the honors. Jim, to your point about whether or not Alphabet deemed rewarded you just mentioned this outperformance by the small cap. Is it simply a function of the market being more interested in this market broadening?
- [25:37]
Jim Cramer
Yeah, I think so. I mean there are a lot of people who feel like they got to catch up. I am really I want to make a case that says at the beginning of the year there's a lot of people do things when you look at the small caps that tends to be done by an index. If you actually break down the small caps you wouldn't want to own half of them because they're losing fortunes including many of the companies I see here that are small cap. I want to warn people that this is just strictly an allocation into small caps is not identification. A lot of small cap good companies and a lot of these Russell 2000 moves have fizzled out because once people realize what they're buying it turns out that they're not buying anything that belongs in an investable safe category because they're just not too many.
- [26:18]
Carl Quintanilla
You've never been a fan of the small caps as a group but that hasn't stopped it from hitting all time highs obviously along with equal weight SPW look.
- [26:28]
Jim Cramer
Yeah look I think it's catch up. I like equal weight but that's part and parcel with why Google didn't go up gigantically yesterday. Equal weight. People are looking at things and they're saying you know what maybe it's time to buy materials. Equal weight means you know let's buy some Caterpillar. It means let's buy some health insurers. Let's Buy some smaller drug companies.
- [26:47]
Carl Quintanilla
Yeah, and maybe some Boeing, which I know you wrote about this morning. Delta, which we'll get into the numbers. That's an order for as many as 60 Dreamliners.
- [26:57]
Jim Cramer
Yeah, Boeing. Boeing reported a really great quarter last. I don't know why the stock went down. It's a cash flow story. Kelly or Burke would tell you that. Ever since then, what's been going up is. Is that they've been getting orders for the planes that they can make without any government intervention, which is the Dreamliner. That's where the big profits are. That was a gigantic order by Delta. Delta did not like Boeing. Boeing is back. Airbus can't make them. Boeing is very. Another straight shot because there's just no competition and they can make. Welcome Ortberg. Congratulations. I mean, David, you know Ortberg, he turned out to be a cruel taskmaster, a tough guy, a humorless. Maybe that's what Boeing needed.
- [27:36]
David Faber
Maybe humorless with you, Jim, I don't know, you know, but when we spent time together, the last Never stop.
- [27:45]
Jim Cramer
Well, it was a laugh riot. Yeah, it was like what a young man or something.
- [27:49]
David Ricks
Yeah.
- [27:50]
David Faber
I mean, it just, you know. I know. I think you can have that effect on people. You know, they're funny and then they see you. Well, they're just too.
- [27:59]
Jim Cramer
I don't know. I mean, David, you have a better relationship, but I thought it was pretty straightforward that. Listen, Jim, this is what's going to happen. Stock was at 180 and then it went to 240. He can be as. I don't. I don't want fun if I can get no fun and 180, 240. I'm fine.
- [28:15]
David Faber
You are right. You are A dollar sign masquerading as a man after all.
- [28:20]
Jim Cramer
I used to think. I used to think that Charlie Sharp wasn't funny. Turned out he was funny.
- [28:24]
David Faber
No, there's. There's oftentimes and it's a key. It's a real key personality trait. You got to have somebody who's got a sense of humor somewhere. It may be buried deep in there, but you got to find it if you can. Otherwise there no Jensen Wong's funny.
- [28:37]
Jim Cramer
He actually. He's super funny.
- [28:38]
Carl Quintanilla
Never.
- [28:39]
David Faber
Never met. Never really met him.
- [28:41]
Jim Cramer
Well, he's laughing. He always laughs on the inside.
- [28:44]
David Faber
There you go. All the way to the bank too.
- [28:46]
Carl Quintanilla
All right.
- [28:46]
David Faber
You know, speaking of Jensen checking in on sort of the AI trade, so to speak, some news that it's worth getting to Metta. We talked about this a bit yesterday, but they kind of quantified it as the day went on in terms of this team that's going to oversee the infrastructure build out. You see these social media posts from Zuckerberg planning to build tens of gigawatts this decade, tens of gigawatts and hundreds of gigawatts or more over time. You cannot overstate the enormity of those numbers. You're talking the equivalent of powering tens of millions of homes for of course, their incredibly ambitious plans to build data centers to power the AI rebel air revolution. Zuckerberg anointing or appointing I should say a couple of people to oversee the effort. And obviously we talked yesterday as well about Dean Pal McCormick joining the company as president, helping to also be involved in that as they try to seek money and financing as well and sovereigns and everything else. But Jim, it does come back to this issue of power and where it all is going to come from. And by the way, gets you to Microsoft this morning that also is talking about kind of answering some of the questions at least, or the concerns of citizenry, so to speak, saying we'll pay higher utility rates to cover electricity costs of data centers, minimizing water use as well, replenishing more than we use promise construction and ongoing operations jobs. So trying to answer some of those critics.
- [30:25]
Jim Cramer
Yeah, well we don't want gigawatts per share, we want gig of money per share. I think that right now Zuckerberg is completely off message. We actually, I mean I don't want huge nuclear plants to power Ray Bans. It just doesn't have a good feel to it. I also feel that the idea that there is enough power has become the gating factor what they should be talking about but they don't want to do, which is say look, we can't spend as much money as we like because we don't have the ability to build a nuclear power. Hey, by the way, Dave David, have you noticed that all of a sudden it's easy to build nuclear power plants and yet nobody can do it?
- [30:58]
David Faber
Yeah, I have noticed. At least it's easy to make announcements, that's for sure. Brad.
- [31:03]
Jim Cramer
David, I'm going to build a couple new. I want to do a Three Mile island four.
- [31:07]
David Faber
Okay, well that comes to you again last week from Metta. Obviously Vistra is an existing, you know, a company that already has nuclear. But then OCLO CEO I think joined you yesterday on Money Movers, right, Carl?
- [31:20]
Carl Quintanilla
We did. And I mean they don't see much in the way of friction in getting these Things developed, Jim, either through public opinion or regulation itself. By the way, within CPI, electricity bills up 6, 7 year on year. That's, you know, three times the. The index.
- [31:38]
Jim Cramer
Well, they got away with it. The utility company, the utility commissions were completely blindsided. They didn't know what they're doing. They were so thrilled there'd be a lot of new jobs. Of course, once you build nuclear power plant, there's like seven people watch it. I think it's so glib that these people are talking about nuclear. It doesn't. Everybody may be in favor of it. You'll go find some nuclear engineers, go find some people who know how to build this. We got out of this business. It was a bad business. Now you're going to rebuild it on the fly. I think these people should come out and say the truth, which is that when, and it's not just small nuclear reactors, but when Southern, which is a real utility, tried to build a couple of these nuclear power plants, it almost destroyed their balance sheet. They almost went bankrupt, for heaven's sake. So I think all these companies are way too glib talking about nuclear power. And what they should be talking about is natural gas, which we have a lot of. And they should be trying to build as many turbines as possible, but they're so focused on being green that they are willing to put their whole lot on nuclear. I think that would be terrific if it worked.
- [32:33]
Carl Quintanilla
Is your, is the crux of your complaint around nuclear, Jim, about the cost or the, the duration or about the risk, the safety risk?
- [32:43]
Jim Cramer
Oh, no, I'm totally in. I don't think there's safety risk. I think that there's so much safety risk built in that you can't build them as fast as you'd like. There is such a thing called the Nuclear Regulatory Commission. They seem to forget that. By the way, that thing seems to still be independent. I mean, isn't that incredible? That's not politicized, David. Wouldn't you think the NRC should be filled with hacks? Like get some hacks in there?
- [33:04]
David Faber
Yeah, well, it might happen.
- [33:07]
Carl Quintanilla
Well, you saw EPA yesterday.
- [33:09]
David Faber
Yes.
- [33:09]
Carl Quintanilla
The EPA will no longer.
- [33:11]
David Faber
No longer take account human lives saved. Right.
- [33:14]
Carl Quintanilla
Lives when setting pollution limits. So there's, there's an example for you.
- [33:20]
Jim Cramer
Well, look, I just think that you can't find this. You can't find the engineers. I mean, we're producing very good.
- [33:28]
David Faber
Go to China. Go to China. They're building. They're building nuclear a lot.
- [33:33]
Jim Cramer
China.
- [33:33]
David Faber
Well, that's where they are.
- [33:34]
Jim Cramer
I just think that we have to be real.
- [33:35]
David Faber
That's where they are. Want to bring them over?
- [33:37]
Jim Cramer
They are. No, they're in Taiwan. You want to go there? They're in Taiwan. No, I'm just being realistic. If everyone's building a nuclear power plant, where are you going to find the people who know how to do it? Where?
- [33:48]
David Faber
My point in saying that is that the Chinese, to the extent that they trail us in the development of AI they are far ahead of us in the building of the infrastructure to power it. There's no doubt about that.
- [34:02]
Jim Cramer
Whether it's nuclear, wind, hydropower, maybe jail versus wind. Come on. It's a command economy where if you don't do what. What the capitalist government wants, then, you know, you could be. Look, they still execute people for white.
- [34:17]
David Faber
All right, well, we're shutting down all wind and, you know, all wind in this country. Right. So you think that we need.
- [34:24]
Jim Cramer
Well, when generating capacity. Courtney is your favorite.
- [34:28]
David Faber
Yes.
- [34:28]
Jim Cramer
What do you want me to do? I like. Look, I want you to know if it's clear.
- [34:32]
David Faber
Asking some questions, man.
- [34:33]
David Ricks
That's all it kind of brings up in charge.
- [34:36]
Jim Cramer
I just want to be. Hey. When you're trying to open a decommissioned plant. A decommissioned nuclear power plant is meant to never be recommissioned. That's the whole point of decommissioning. I think these guys are over their heads when it comes to nuclear power. They should just go to the G Vernova and there's like a little plank going up in Canada. Well, that's great. Okay, there it is. There's the paradigm. Okay. We got to be realistic. This is the big gating factor. I think Michael Semblance at JP Morgan explained it very well. The reason why we will not spend as much money is because it's too difficult to get power.
- [35:13]
Carl Quintanilla
Jim, we got a special guest this morning over where you are at the J.P. morgan Health Care conference. You want to get to it?
- [35:20]
Jim Cramer
Yeah. Well, we do have someone who has revolutionized medicine. He's got a trillion dollar company, the only one, by the way, that is not into tech. It's David Ricks. Eli Lilly. David, congratulations. I mean, you're over a trillion dollars. What made you. How did you get there?
- [35:36]
David Ricks
Well, it's, you know, it's really been a story of innovation. And I think we're the only trillion dollar company east of the Mississippi, which is, you know, the rest are tech companies. What did we do at Lilly? We sped up the R and D cycle and we really bet on ideas that we think could scale and reach a lot of people. For a long time the industry was focused on specialty medicine, small markets, orphan diseases. We've done a bit of that in cancer, but mostly we focused on common diseases and of course the most common disease is obesity. So that's driven us to where we are now. We're focused on of course building out that that market, adding even more innovation this year with potentially the launch of our oral later this year as well as reading out the data set for the triple acting triple G retatrutide, all that data will come in by mid year and at the same time expanding our manufacturing footprint and investing in new innovation outside of obesity for the long term. So it's a really exciting time at Lilly and the goal is not necessarily ever to just drive the market cap up, but to make great medicines that help millions and millions.
- [36:41]
Jim Cramer
Of course. Now I spoke with the CEO of Novo Nordics. They talked about the first mover advantage for the pill and how doctors who prescribe a pill for for Novo might be reluctant to just say listen, it's time to switch the Lilly when yours comes due. Do you think there's a possibility that the first mover advantage can't be overcome?
- [37:00]
David Ricks
Well, I think you know, of course Novo had a first mover advantage in injectables as well. I think here that's probably missing the point. The thing that's very attractive about the orals, these aren't necessarily more effective medications, they're more accessible medications. And so having choice and two will be great. Let's remember today in the US there's maybe 100, 120 million people who could benefit from these medications. And we're treating about 10 or 12, so we're about 10% in to the market. The real thing that orals will do, novos perhaps, but we think ours as well is expand the reach of this class so more people can have access with their insurance, with self pay options or however they'd like to get it. And that's going to be market expansive I think over the next three to four years in a very significant way.
- [37:46]
Jim Cramer
Injections require an injector, they require a cold, they require the ability to be able to get it to the patient and not having it spoiled. A pill once a day has got to be far more lucrative for Eli. Will it?
- [37:59]
David Ricks
Well, margins are good and of course the cost is in R and D. What we had to do, which is different from what Novo did, which repurposed its protein into an oral, we created a whole new molecule which is using chemistry and that's a Difficult scientific feat, one I think no one else has done yet. But last year was important for the company to discharge the risk that can come with that which is off target safety events, et cetera. The ORFA program looks very clean. It's under review with the FDA and we can scale it. So this points out another thing. Not only can it'd be a more convenient option in Europe and US where we already have the injectables, but we can really reach the globe low and middle income countries where maybe the first thing we don't think about is obesity, but it's a growing cause of diabetes and chronic disease in places like India, China, Brazil. So there was no way we can meet all that demand with injectable systems. The oral can reach these markets and really scale. In fact, we've already submitted in dozens of countries around the world just within weeks of our final data set reading out. So we're excited that this will be a year to introduce or forglipron or oral around the world and really scale that business reach more patients.
- [39:06]
Jim Cramer
With the GLP1 I think the scale is really important. You have been busy building plants in this country. If there's a rollout, will you be able to meet the incredible worldwide demand with the plants that you've built in the last few years?
- [39:19]
David Ricks
Yeah, absolutely. So we're very confident. Supply. You may remember last year at this conference, I mean there were like three big questions. Will the oral pill work? We just talked about that. The second one is, was there enough supply to grow the business? That was the gating factor on our growth in 2024, in 25, we solved that. The team executed incredibly. We have some of our new plants up and running, but actually the majority of that investment, $50 billion we put in the ground is not online yet. So we have a lot more growth in supply ahead of us. I don't foresee any problems in the coming years with supply and we have a pretty big lead over everyone else in terms of that capital base.
- [40:01]
Jim Cramer
One thing you told me was, is a persistent issue that injectables. After 13 months, people get tired of ching ka ching, but they may not get tired of the pill because they won't even notice they're taking it.
- [40:11]
David Ricks
Yeah, and that's the third thing that's really important to talk about, which is the maintenance phase. So many people are able to fortunately with Zepbound, reach their weight loss goals within a year, year and a half. And then they want to graduate to something that may be more convenient, more familiar in terms of their regular morning routine. And that is a pill in that pillbox. The Monday, Tuesday, Wednesday or forgloprine will fit right into that. And we produced some data in December, pretty compelling that showed people who lost weight were able to keep it off switching from either the competitor's products, semaglutide or ours versus just going cold turkey, which we know does not work for many people. For some it does. But you really have to change your lifestyle in a dramatic way. So this would be a great option for people to graduate from an injectable once they reach their weight loss goal to maintenance. With a normal.
- [41:02]
Jim Cramer
Amazing meeting last night between you and Jensen Huang, you've got a fantastic partnership. Nvidia Lilly, one of the things you discussed is there are things that are human nature kind of wrong way human nature that this can adjust opiates which I start thinking about fentanyl, smoking, drinking. Do you really see one day when this will affect those? Because if that's the case, maybe everyone should be on this.
- [41:29]
David Ricks
We hope so. So you know another theme here is new innovation coming from Lilly. So I talked about our triple acting retatrutide and interestingly here we get a glimpse of the future of development of of this category of incretins or weight loss medications. In December we read out our first study in that phase three program which showed almost 29% weight loss. Incredible. But even more important I think was we demonstrated that for people with chronic knee pain and overweight we had a dramatic effect on pain much greater than commonly used pain medications. And so here we have an inflammatory system. We also read out a study of Zepbound plus our medicine Tultz in psoriatic arthritis. Guess what? When you go on Zepbound it boosts the effect of that market leading product in psoriatic arthritis. There's a whole series of studies in inflammation coming and as you're pointing out in brain disease we actually have a dedicated molecule called brinepatide that just entered phase three. We're going to study in alcohol use disorder to begin with. We're quite confident that these medicines work there because of all the anecdotal reports of limitation, of drinking, smoking cessation. We are going to take on opioid use disorder and even other brain diseases like consider bipolar disorder and other neuropsych conditions that appear to be modulated by the same pathway.
- [42:44]
Jim Cramer
One last question, Jensen Wong did raise an interesting question which is that we have say alcoholism want to go against smoking. What about workaholic, can it go against something good?
- [42:55]
David Ricks
So Far we haven't seen that actually people feel often quite more energized. Their sleep quality goes up. So overall as you know, we're indicated for sleep apnea. Overall I think it's a positive for humanity. And what a great event that was last night with my friend Jensen Huang. Really just to comment on that, really the first I think real effort where it's not just a press release.
- [43:16]
Jim Cramer
Nice. It's nice.
- [43:16]
David Ricks
But we're putting together dozens of computer scientists from Nvidia, biologic and chemical scientists from Lilly. In one place we're bringing massive compute power. We're going to make new models to model the human biology and hopefully have some real breakthroughs in several years.
- [43:32]
Jim Cramer
But that will be west of the Mississippi.
- [43:34]
David Ricks
That will be here in the Bay Area. That's, that's where tech is. Biotech is actually in Indianapolis.
- [43:39]
Jim Cramer
Absolutely. Very exciting. David. Rick, CEO of Eli Lilly remarkable trillion dollar company based on much more than just GLP1 a long history of innovation. Thank you. Thank you David. And back to Jim.
- [43:51]
David Ricks
Thanks Jim.
- [43:51]
Carl Quintanilla
Talking a bit Jim Cramer out of jpa Morgan health care before the break watch bonds here with the dow down about 3, 300 we will get new homes having chopped our way through CPI today we'll get Mousalem at 10, barking at 4 and then this afternoon 22 billion in 30 years as the yields back off 10 year back to 417. Tonight CNBC brings you a special program. Warren Buffett a life and legacy. In a series of never before seen interviews, our Becky Quick sat down with Buffett to talk about business and the in life as he leaves the role of Berkshire Hathaway CEO that he held for over six decades. Be sure to tune in tonight 7:00pm Eastern Time. We are back in a moment. Jim, what's on mad tonight?
- [44:36]
Jim Cramer
All right. Can't be grumpy. Sorry. David Regeneron Novartis Cardinal preannounced just now and Amgen and I promise to be upbeat. David. I will not be you know I'm not gonna be grouch.
- [44:49]
David Faber
Okay good good. I did we did check lynch life for is the longest serving CEO now I believe in the S and P.
- [44:57]
Jim Cramer
Now that Warren Buffett special coming up by Becky of which I cannot wait to see going to be great Carl.
- [45:02]
Carl Quintanilla
Be fantastic and then are you back tomorrow with us?
- [45:05]
Jim Cramer
We have a big lineup Red eye. No he's kind of going to be a tight one.
- [45:11]
David Faber
Now you take you you get a little rest. All right? You get a little rest.
- [45:15]
Jim Cramer
Well the problem is tomorrow the Brionis don't hold up. David. When I go right from the airport here, you notice the Brionis are wrinkled.
- [45:22]
Carl Quintanilla
That's even with your 150 count. Now that's sad.
- [45:24]
David Faber
You notice that It's a problem.
- [45:27]
Jim Cramer
200 now. I went to Milan.
- [45:29]
Carl Quintanilla
You got that written into the contract, Jim. I will see you tonight. Safe travels.
- [45:37]
Jim Cramer
Thank you. You've been listening to the opening bell on CNBC's Squawk on the Street. All opinions expressed by Squawk on the street participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by them on television, radio, Internet or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Such opinions are based upon information Squawk on the street participants consider reliable, but.
- [46:10]
David Ricks
Neither CNBC nor its affiliates and or.
- [46:12]
Jim Cramer
Subsidiaries warrant its completeness or accuracy and it should not be relied upon as such. To view the full Squawk on the street disclaimer, please visit cnbc.com squawkonthestreetdisclaimer Olivia loves a challenge.
- [46:24]
Carl Quintanilla
It's why she lifts heavy weights and likes complicated recipes. But for booking her trip to Paris, Olivia chose the easy way with Expedia. She bundled her flight with a hotel to save more. Of course, she still climbed all 600 to the top of the Eiffel Tower. You were made to take the easy route. We were made to easily package your trip. Expedia Made to Travel Flight inclusive packages are atoll protected.