10AM Hour: The Market’s Reliance on the AI Trade, A Netflix Buying Opportunity? SpaceX Scrap Launch 7/17/26

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

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

**SPEAKER_3** (0:04)
Every day, shareholders meet to discuss important matters about the companies you invest in. Now you can easily make your voice heard. Vanguard Investor Choice gives you a say in the companies you invest in. With just a few taps, you can set your proxy voting preference for your index funds. Visit vanguard.com/investorchoice to learn more. Vanguard Investors own shares of our index funds, which own shares of the companies they invest in. Available for Vanguard index funds that participate in Investor Choice. Vanguard Marketing Corporation Distributor.

**SPEAKER_1** (0:30)
How do you turn your strategy into action and action into impact? Bold leaders do it through transformative strategy and transactions. Ones that work in practice, not just on paper. At EY Parthenon, we use an investor mindset to help you create value. How?
By combining deep sector experience with AI powered technology, so you can reimagine your business for tomorrow while building it today.
Shape your future with EY Parthenon. Learn more today.

**Sara Eisen** (1:06)
Good Friday morning, welcome to Squawk on the Street. I'm Sara Eisen with Carl Quintanilla and Mike Santoli. We are live from Post 9, as always, of the New York Stock Exchange. David Faber's off today. More pressure on technology. The Nasdaq leads to clients for the major indices on pace for its first negative week in three. Apollo's Torsten Slok will join us in a few minutes to break down just how much of the economy's fate is tied to this AI trade.
Netflix also getting hit hard. It's the biggest laggard on the S&P after disappointing guidance. We'll talk to an analyst who says, this is a great buying opportunity for the stock. And with SpaceX below its IPO price of 135, what the options market is signaling about how traders are navigating the weakness.

**Carl Quintanilla** (1:44)
Let's get some Umich here just crossing the tape with Rick Santelli after a busy week. Hey Rick.

**Rick Santelli** (1:51)
Good morning Carl, indeed a busy weekend. There's some surprises here folks. Now this is our June, July preliminary read on University of Michigan sentiment. And do remember the headline number hasn't been above 50 since March. But boy, we're expecting it to be 51, 54.4, well above expectations. And that would be the best reading since 56.6 in February of this year. If we look at current conditions, very similar. We're expecting a number a bit below 49, hasn't been above 50 since April, 54.9, that would be the best read since March of this year. If we look at expectations, it was the only one coming in that was above 50 We're expecting 51.9. It comes in at 54
54 would be the best read since February when we were at 56.6. Now, the inflation numbers. 4.2 is the one year, two-tenths less than expectations, four-tenths less than the 4.6 in the rear view mirror. 4.2 would be the lightest since March when it was under 4 percent. And finally, the long read on inflation, five to ten year. Expecting 3.3, it is 3.3 and last month was 3.3. And those reads, well, we also had January and February. So the low read of the year was March at 3.2. We're getting a bit close. If you look at yields, they're down across the board and curve flattening. So the steepening cycle, which was so aggressive from 6.24 is 24 basis points to earlier in the week, touching almost 42 seems to be over. We dip below 40 and do remember both maturities are down for the week in terms of yield minus nine basis points at 4.12 for a two year and at 4.52 down four basis points for a 10 year. A 10 year hasn't closed under 4.5% since July 6
Sara, back to you.

**Sara Eisen** (3:50)
Okay. Thank you, Rick. It's good news on Consumer Sentiment. The survey says it was pervasive across the population, age group, income, wealth, and even political party. So a lift in sentiment probably due to the lower oil prices we've seen over the last few weeks. But guys, today I wanted to put the AI trade very much in focus, the weakness in tech again. Look at one of the developing risks around use of cash from the hyperscalers, the Googles and Microsofts and Amazon, the big spenders on AI. I think this chart is pretty stunning.
From Big America, which just shows the 12 month forward free cash flows and just how much of a shift we have seen. The hyperscalers in orange, they're the ones spending on the data centers, billions of billions, trillions of dollars. And where a lot of that money is going is right into the semiconductor companies. Look at how much their cash flow has gone up. But this is, I think, one of the sort of defining charts right now of the AI trade.