Bulls on Course, Valley of the Deals, and CNBC Investigates 7/7/26

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**Kelly Evans** (0:49)
Thank you very much, Scott. The Nasdaq is selling off again today after Samsung's earnings failed to meet a very high bar and SpaceX shares are under pressure, hovering just above the 150 open price from its IPO. I'm Kelly Evans and welcome to The Exchange. Generac and GE Vernova down about 10% today, Generac's worst day in three years. Intel, SanDisk and Micron under similar pressure. The stock's ETF falling 5% in three of the past four days. We're going to talk to Paul Hickey about that in a moment. Plus Sarat Setti's new breakout names for the back half, as markets cast around for new leadership. And we'll talk Sun Valley. Is it a curse for media deal makers or is more consolidation exactly what the industry needs? Plus Walmart cutting prices, coming off its worst quarter in four years. An analyst warned a grocery price war could be next, but is bad news for the food stocks, good news for consumers. We'll talk about all of that ahead. Let's start with this tough day, another one for the high-flying memory and chip trade. It all started last night when Samsung reported earnings. It's 19-fold jump in profit, not enough for investors. Paul Hickey is the co-founder of Bespoke Investment Group and he's here for our opening exchange. It's good to see you.

**Paul Hickey** (1:57)
Good to be here.

**Kelly Evans** (1:58)
Unpack this a little bit. What is 5 percent down days in three of the past four tell you about this leadership group?

**Paul Hickey** (2:05)
Well, on the surface, you'd think that's a very worrying signal, but then you just have to look at what the SOX has done. I mean, it's down to levels. It was last seen in mid-June. So, I mean, we've had a big pullback, but we had a ridiculous run-up, and the expectations bar you brought up, Samsung, in the intro, it got very high along with the stock price, and I think we were talking last week, we needed a reset in tech. It had come very far and coming into earnings season, you have high expectations because of the revisions. We have overall earnings estimates going way up, but most of it's concentrated in technology.
I think you have the bar set high there, this gives us an opportunity to reset expectations lower.

**Kelly Evans** (2:49)
You're saying broadly speaking, lower expectations, good thing, that's fine. A number of strategists have come on the show in the last few weeks, not one of them has said they're moving to overweight in tech. Almost every single one of them has pulled back from an overweight tech position in some cases for the first time in years.
We know investors can move in herds sometimes, but what does that reallocation of capital tell you?

**Paul Hickey** (3:11)
I think what's interesting is you're seeing other sectors doing well. You're seeing financials and health care. So it's just a wholesale exit from the market. We're seeing rotation within the market. So tech, it got very far ahead of itself, and that's just an unsustainable level. I think the thing to remember is this bull market, it's focused, we call it an AI bull market, and it's focused on tech. So if this bull market is going to continue, tech is going to have to participate.

**Kelly Evans** (3:40)
That's exactly what I was going to ask you. You've got some great stats in here about the bull market typically goes eight years, or more, or more in many cases.

**Paul Hickey** (3:47)
Bull markets that last this long usually typically last at least a year more, and sometimes much more.

**Kelly Evans** (3:53)
Right, but my question is going to be, in all of those cases, is the thing that defines the bull market the area that remains in leadership the whole way through?

**Paul Hickey** (4:02)
You don't normally tend to see a market driven, during the early 2000s, we saw financials led the market, and then we had the financial crisis.
It was mostly financials leading the things on the way up there, and home builders, and financial related assets. But so in that respect, you don't test it within a bull market, you're not necessarily going to see a shift from one theme to another. So in that respect, I think tech, long term, that's somewhere to look and be attracted, but short term expectations, especially coming into earnings season, we've seen expectations get very high, so you need that reset.