10AM Hour: BNY CEO on Trump Accounts, Chip Stocks Rebound, Trump calls FIFA President Over Red Card 7/6/26

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Carl Quintanilla (1:00)

Good Monday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with David Faber, Leslie Picker live at Post 9 of the New York Stock Exchange. Sara Eisen is off today. Tech stocks rebounding to start the week. We're going to tell you about three chip stories that are driving the action this morning. Trump accounts now officially live. The CEO of BNY Mellon, chosen as the financial agent for the accounts, will join us from the White House and the red card reversal heard around the world will explain how Steve's decision to rescind the suspension of a top US striker is shaking up some betting markets today.

Let's get straight to the market action though as tech comes out hot to start the week. Joining us this morning is Steve Sosnick, chief strategist at Interactive Brokers who joins us here at Post 9 Steve, great to see you. Welcome.

Steve Sosnick (1:41)

Good morning, Carl. Great to see you.

Carl Quintanilla (1:43)

Have you had time to sort of process this midyear rotation, whether we're exiting tech, broadening or reverting back to tech?

Steve Sosnick (1:51)

I think you're seeing two different factors occurring at once. I think what's going on is you still have the momentum trade going on in force and people buying every dip. The problem with momentum, of course, is if you're buying strictly by following trends, you're looking at price action and you're saying fundamentals really could take a backseat or not even matter. Momentum strategies are easy to implement. You could basically have an AI agent do it through your Interactive Brokers account if you wanted to. But basically, so a lot of that is just trend following, you're blind at buying. On the other hand, you are starting to see more investment-oriented accounts beginning to rotate into other sectors that had been lagging. The problem is, there's not a ton of values out there right now, so I think it's just more of a search of spinning wheels to a certain extent. But I think it's better to spin your wheels into something cheap sometimes than just chase the expensive ones.

Carl Quintanilla (2:42)

Do you see those opportunities broadening though if the Fed doesn't need to follow through on some of their tough talk?

Steve Sosnick (2:47)

Agree. Yes, if the Fed is not going to follow through on raise rates, I don't think it's necessarily... You know, 25 basis points here and there is not an end-all be-all. And I do think some of the stuff that Warsh wants to do behind the scenes in terms of pseudo-quantitative tightening, things of that nature, affect the liquidity that goes into the markets. But I think in general, this is where you want to be strategic. There is dispersion among stocks, which is generally a stock picker's type of market.

Leslie Picker (3:17)

What about some of the hyperscalers? You had a note out from Morgan Stanley saying that momentum is fading in the semis and that they're seeing investors rotate into some of these hyperscalers, which have lagged. Is that a move?

Steve Sosnick (3:30)

Well, Leslie, I think what I delineate this as is the makers versus the takers. And the makers are the picks and shovels, the semiconductor stocks. The takers are the hyperscalers that have to buy all this stuff. I think there is a natural push-pull. We really went very heavy toward the makers in terms of, you know, obviously the semiconductors. But you see things like Corning Glasswork, you know, Corning is up big as part of that trend. So, but you do have to wonder at some point, how much can these companies soak their best customers? You can't just pass along price increases forever. Many of them do have long-term contracts, but you know, the idea that these companies are just going to be able to expand infinitely might be a little tricky, especially after Metta said, you know what, we overbuilt, we're going to take a bit of a breather.