11AM Hour: CVC Marathon's Bruce Richards, Kalshi Board Member on Prediction Markets & Meta Trial Begins 8/18/26

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Good Tuesday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Leslie Picker here at post nine of the New York Stock Exchange. Sara Eisen is off today. This global bond sell off deepens. We're going to discuss it with CVC Marathon's Bruce Richards. We'll get his take on private credit today and where he does see some investment opportunity right now.

Leslie Picker (0:59)

Then the regulatory landscape for prediction markets will speak to a Kalshi Board member and former CFTC Commissioner about a new probe into mentioned markets that's ahead of an expected White House meeting tomorrow with prediction markets executives.

Carl Quintanilla (1:12)

Also this hour, opening statements are set to begin in this landmark trial from Meta over child safety concerns. We're going to break down the risks that it may pose for some shareholders. Shares down about 3% and what's essentially a little bit of a soft tape here, IT down about 2%, industrials down about 1%, we've had yields obviously be a little stubborn today, VIX is a little elevated as we pointed out earlier. Although on a net-net basis, kind of like yesterday where you saw momentum outperform and then the tape didn't really reflect that. That was only down about 60 points at the moment.

Leslie Picker (1:46)

Yeah, a lot of cross currents beneath the surface there. We'll start on the global bond market sell-off. Rick Santelli joins us now with more. Hi, Rick.

Rick Santelli (1:55)

Hi, Leslie, indeed.

Advanced economies are watching their yields really soar. Maybe part of the callous was last night, actually Sunday night, when the debt clock in the US started to tick over 40 trillion. But there's a lot more to the story, whether it's AI and issuance to fund some of the issues going on with the build-out there, or of course, just sovereign debt in general. As many countries from the UK to Spain to Italy, Germany, they all seem to, Japan, want to fuel and stimulate economies that are already definitely under huge debt loads. Look at the US, okay? Now, this is going back to July. The current high yield close for our tenure is 473 plus. We traded just a whisker under four and three quarters today. We didn't touch it, but we need to close above 73.5 to have a new high yield close, open the chart up. That would take us back to JAN of 25 We're not quite there yet. Now, let's look at Japan. There's Japan hovering in the mid-290s, 30-year highs on their 10-year. Let's look at France. They're trading at 410-ish, 18-year high. Let's look at Germany. This is the benchmark for the EU, 325 That's a 15-year high. Let's go to Spain and Italy. Now, the comps aren't that far back, but they're still every bit as frisky to the upside. Spain, 370 That's a 3-year high. And Italy, at 407 That's a 2-year high. So we see that there's a very similar dynamic across the globe. Sometimes the rate varies, and of course the interest rate differentials are taken care of via currency and other issues. But at least in the EU, of course, we know that they're all under the euro, and really the German benchmark is the driving force there. But ultimately, we want to pay really close attention to the spreads, that's the add-ons to some of these corporate securities in the AI space. They add on to the highest credit, which is the US sovereign debt, and whatever those spreads are, should they widen, we want to pay very close attention. They're still very well behaved, but I will tell you this, investors at some point are going to have to sell certain parts of their portfolio on the fixed income side to make room for some more of the issuance that is yet to come. And therein lies the issue that many are paying attention to, is the tipping effect and what portfolios are going to suffer. Are they going to sell treasuries to buy a much higher yielding corporate debt or are they going to stick with the highest credit? Time will tell. Carl, Leslie, back to you.