11AM Hour: Hugging Face CEO, IMAX CEO & Big Tech's Earnings Distortion 8/3/26

**Sara Eisen** (0:00)
The board recommends approving.

**SPEAKER_2** (0:01)
Regarding that seat on the committee, we're promoting.

**SPEAKER_3** (0:02)
To boost quarterly earnings.

**SPEAKER_4** (0:04)
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**Sara Eisen** (1:00)
Good Monday morning. Welcome to Squawk on the Street. I'm Sara Eisen with David Faber. Today, live from Post 9 of the New York Stock Exchange, Carl Quintanilla has the day off. Today, the CEO of Hugging Face joins us after it was hacked by a rogue OpenAI agent. How Hugging Face is moving forward and the implications for cybersecurity and AI at large.

**David Faber** (1:18)
Then IMAX posting its highest grossing month in history for July. We're going to speak to the company CEO about how the Odyssey is boosting its business plus its expectations for Spider-Man's US debut on IMAX this coming weekend.

**Sara Eisen** (1:30)
And are Big Tech stakes in companies like Anthropic and OpenAI distorting the earnings picture? We'll discuss just how intertwined all these companies have become. First up, though, in the markets, pretty positive day here. And we're near the highs of the session. You've got most sectors rallying today except for energy, health care and consumer staples. Energy is falling on the back of those weaker oil prices, on deal talks with Iran. Yields are falling. Treasure yields are falling. We're below 470 on the 10-year yield. So reversal of where we were and some of the concern around that last week. But it's communication services that are the stars of the show. Mag7 names are doing the best today. We're talking Alphabet and Amazon. Tesla is rallying at the expense of the momentum ones like Micron, Apple, Broadcom that had been working before. For more on the market setup to kick off the week, let's bring in HSBC chief multi-asset strategist Max Kettner. What do you think is causing all of these reversals in terms of what's favored around the AI trade, Max?

**Max Kettner** (2:29)
Yeah, good morning. Look, I think it's largely really positioning driven.
We see that particularly in the last sort of two weeks when you look not only at this side of the pond, when you look at emerging markets as well, you look at that from a sort of India against Korea perspective. I appreciate not the stuff that probably people look at every day, but India is one of the classic funders really and has been in age one. And whenever that's been rallying, that's been basically because semis have been sold off and then the day after it's been the other way around. I don't think that is very fundamentally driven. That's largely positioning driven. But having said that, when we look at semis, we've updated a lot of our semi positioning, technical indicators, both in Asia and in the US. And a lot of them do look really pretty close to rock bottom. So I think it is time to call it perhaps the bottom in that momentum reversal as of last Friday. I think that we're really, really starting to see a lot of those technical indicators now at the point where really it's tough to see them go down significantly more.

**Sara Eisen** (3:29)
Speaking of calling bottoms and tops, do you think we've seen the peak treasury rates last week when there was concern about that? I mean, big signal from treasury when they intervened in the Japanese yen.

**Max Kettner** (3:41)
Yeah, Sara, I think so, because let's face it, the time to be hawkish and the time to put the hawkish trade on is when people are dovish and not when we're at 470 and people are shouting, oh, Fed credibility and shouting about US exceptionalism. That hawkish trade was at the end of last year and perhaps January and February this year, where really Fed communication on average was still marginally dovish despite some worrying signs back then around inflation. Now, when you look at some measures, you look at some text-based measures, for example, around Fed communication, when you look at, for example, the Fed minutes, they're almost as hawkish already on aggregate as they were in 2022 That's not when you want to put on a short rates trade anymore. I do think also when you look at the data in some varying degrees, but we've just had seven months of positive economic activity surprises in the US. But let's not forget that in the first half, we had almost 20 percent higher tax refunds. We had the OBBA really those impulses. We had much lower growth expectations. Now growth expectations with regard to the US will be compared against the Eurozone. They're twice as high compared to the start of the year. So I do think a lot of the peak impulse, peak hawkish and peak bullish growth impulse is behind us.