10AM Hour: OpenAI Chair Bret Taylor, Taiwan Semi Pressures Chip Trade, Netflix Earnings Preview 7/16/26

**SPEAKER_1** (0:00)
The board recommends approving...

**Oliver Renick** (0:01)
Regarding that seat on the committee, we're promoting......to most quarterly earnings...

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**Sara Eisen** (1:07)
Good Thursday morning, welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and Mike Santoli. Today, we are live as always from Post 9 of the New York Stock Exchange. David Faber has the day off.
Chip stocks are seeing big gains and big swings this morning, actually, as Taiwan Semi's report raises questions for analysts. They're lower right now. We'll talk to Ben Wrights as familiar about the volatility. Plus, OpenAI chairman, Bret Taylor, with us this hour as his AI startup Unicorn, Sierra, launches new enterprise AI tools. And Netflix getting ready for quarterly results after a rough year so far, down around 20 percent. We'll get you ready for that report.

**Carl Quintanilla** (1:42)
First, though, two big pieces of housing dated across the tape. Let's get to Diana Olick. Morning, Diana.

**Diana Olick** (1:47)
Good morning, Carl. Let's start with pending home sales in June, down 5.4 percent from May and down 0.3 percent from June of last year. That is a big miss. The street was looking for flat. Now, this count is based on signed contracts. That's people shopping in June when mortgage rates bounced around a narrow but higher range. Regionally, sales were down everywhere with the steepest drop in the Midwest, and that's actually where homes are the cheapest. Now, the realtors said in the release, this is about higher rates and higher home prices. So again, all about affordability. Now, that's the buyers. Let's move to the builders. Home builder sentiment in July fell two points to 34, down from an upwardly revised reading of 36 in June, according to the National Association of Home Builders. That's also a miss. Sentiment has stayed below 40 for 15 consecutive months, the longest such stress since 2012 Now, anything below 50 is considered negative sentiment. Of the index's three components, current sales conditions fell one point to 37, future sales expectations down two points to 43, and buyer traffic fell two points to 23 Now, the NIHB's Chief Economist, Rob Dietz, said affordability remains the homebuilding industry's primary challenge as elevated mortgage rates, costly land, rising material prices, and persistent skilled labor shortages continue to affect the market. A growing share of builders are now cutting prices 37 percent in July, up from 35 in June, and 32 percent in May. Now, let's head over to Rick Santelli with Business Inventories. Rick?

**Rick Santelli** (3:20)
Yes, thank you, Diana. This is our May read on business inventories, expecting the number up three-tenths of a percent, and it delivered. That's exactly what it was. In last month, up a half percent becomes now up six-tenths. And here's what's noteworthy here. We know the conflict in the Middle East started at the end of February. March's read, which was up one percent in inventories, was a four-year high, and it's been decelerating since then. And since this is a second quarter number, we want to pay attention, because even though the inventory number is positive, the deceleration effects are going to be a bit of a drag on GDP. So we want to pay very close attention, of course, to this deterioration in building of inventories. And at some point, we try to match it up with getting ahead in terms of supply shocks versus how much is actually moving off of the shelves.
Sara, back to you.

**Sara Eisen** (4:12)
OK, Rick, thank you very much. Wanted to also continue on the data theme, because we got some information on the consumer today. And it was pretty good. Retail sales coming out for the month gained 0.2% in June. That was basically on par with what was expected down from the previous month. But the previous month was really reflecting those higher gas prices and higher prices people were paying at the pump. The reason I say it's good is because, you know, if you go in and look at the spending and then compare it with inflation for the month, which was actually negative, it shows real positive consumer demand. Break it down by category. We know gas stations were weak. Why? Because oil prices came down. That makes sense. Grocery stores. Also, I think restaurants were a little bit disappointing, but there was real strength in the auto business, motor vehicles and parts up 2 percent, sporting goods as well.