10AM Hour: Leopold Aschenbrenner’s Hedge Fund Situational Awareness Sells All Public Positions, Jersey Mike’s CEO on IPO, Meta & Microsoft Earnings Reaction 7/30/26

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Carl Quintanilla (1:06)

Good Thursday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with David Faber, Steve Imoti here at Post 9 at the New York Stock Exchange. Sara Eisen's off today. Major average is trying to stabilize as we begin to close out July. Dow coming off the worst day of the year. We'll talk about the message from the Fed that spooked investors yesterday. Some major moves for trillion dollar tech. We'll get into the action at Meta and Microsoft. Seeing opposite reactions to earnings and the hero of the day, we'll talk to the CEO of Jersey Mike's making their public debut today here at the New York Stock Exchange, along with maybe a couple of surprise guests.

David Faber (1:39)

Let's bring in CNBC's Senior Market Commentator Mike Santoli to talk about just the price action, Mike, that we are seeing in tech right now. Meta, as Carl just said, down, Microsoft higher. I guess the recipe for success right now is don't raise your AI capex budget.

Mike Santoli (1:53)

Well, that is exactly true in terms of the specifics with Microsoft. I also think everybody's been waiting for this moment when it seemed like positioning got cleared out. We already kind of punished the semiconductors, the hyperscalers and the momentum stocks enough. And maybe we have a cleaner view. Yesterday midday, I was saying sometimes a Fed meeting and a couple of Bellwether earnings are clearing events where basically you just have to get past it and figure out where the scene is set. I have a pretty good picture of a reset this market has undergone, which is the momentum ETF relative to the equal-weighted S&P 500 on a year-to-date basis. It was basically a shutout being thrown by momentum going into the end of June. And now you see they came down as of yesterday's close, perfectly met, and now of course momentum is up 5-6%, something like that. So the market did broaden in the sense of the majority of stocks were able to absorb this gut check in semis and everything else.

Maybe we went from over-belief to disbelief in the course of one month. And as we've been talking, David's been talking all morning, there obviously was some portfolio stress that created a bit of a flush on some level. We don't know how much is left to go. I will point out it's a very narrow gain today. So it's the reverse of what's been going on all month, which is equal weight is down, cyclical is down, yield is still up, pressuring that trade, while you do have Microsoft accounting for something like half the upside in the S&P.

David Faber (3:19)

Mike, you mentioned, of course, potential for selling. Let's get to this story that we've been following all morning, and frankly, I've been following all week, but it's sort of come to a head over the last, let's call it 24 hours, involving a giant hedge fund called Situational Awareness run by a young man named Leopold Aschenbrenner. We've talked a bit about his bio, of course, worked at OpenAI briefly, valedictorian at Columbia, graduated at 19, clearly a very smart fellow, but also willing to take a lot of risk. Now, that had accrued to his benefit enormously with incredible gains in this hedge fund, the likes of which it began life as $150 million, $200 million hedge fund and soared to values in excess, I'm told, of $24 billion. In fact, net asset value may have been even far above that, though I haven't confirmed it. Why do I mention all that? Because it no longer is in the public investing game and actually it also may be pairing back some of its private investments. Sources familiar with the situation tell me that after significant reversals on both its long equity portfolio that was concentrated in names such as SK Hynex and so many of the semiconductor related names and the AI names that we've seen go up for so long until let's call it July 1st. And short, those names right there that have soared over let's call it the last month. You can see there. Well, that is a recipe for pain, particularly when you're as much as four times levered or more.