SOTS 2nd Hour: Apollo Chief Economist, Wall Street's Week Ahead, & Chipping Away at the Semis 4/27/26

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Sara Eisen (0:57)

Good Monday morning. Welcome to Squawk on the Street. I'm Sara Eisen with David Faber and Mike Santoli. We are live as always from post 9 of the New York Stock Exchange. Carl Quintanilla has the morning off. Ahead this hour, Apollo's Torsten Slok with us as Kevin Warsh's path to Fed share confirmation becomes more clear ahead of what is expected to be Jerome Powell's final meeting as chief. Plus, a high stakes trial set to begin in California as Elon Musk's lawsuit against OpenAI heads to court. Also, more strength for the chips today led by a search for Qualcomm. As the Sox ETF rides an 18 day wind streak now, we're going to talk to longtime analyst Stacy Raskan about how long this rally can last. And then later, can't miss interview with Bridgewater founder and billionaire investor Ray Dalio with his read on the global risks and where to invest right now amid the war. But guys, we've got a big week ahead when it comes to the economic data, when it comes to earnings, just a few highlights of what we can expect this week. So we'll get tomorrow the weekly ADP jobs report, which has become kind of an interesting high-frequency look at job growth, consumer confidence as well. The big confirmation vote for Kevin Warsh on Wednesday, which now looks set to go through in time for the next Fed meeting, actually. Remember, Chair Powell's term as Fed chair ends on May 15th. And now that Senator Tillis has said that he's on board, looks like he's going to get the votes. The great decision from the Fed is on Thursday.

All eyes on what Fed Chair Powell says in what is likely to be his last meeting as Fed chair. They're not expected to do anything. But how they characterize the prolonged sort of nature of this war and the higher oil prices and whether that's a bigger risk to the jobs market, which they did emphasize in the minutes last time, or to inflation. And then we'll get the PCE, which is their preferred measure of inflation on Thursday as well. Higher headline expected. Core will obviously be more important. Big earnings on deck starting tomorrow with Coca-Cola and Visa. And then we'll get, you know, the MAG-7 Wednesday is going to be a crazy day with Alphabet, Amazon Meta and Microsoft all reporting after the bell.

We'll be looking for all sorts of read throughs, but I just want to level set of where we are in this market, which is 4% higher than at least than where we were since the war in Iran began and also outperforming global stocks. And that is the setup here as we go into a week, Mike, I think the market is still paying attention to what happens in Iran. But now that we have sort of this indefinite ceasefire, maybe we can focus more on earnings and fundamentals like the economy.

Michael Santoli (3:29)

Yeah, that's the hope or that's the implicit bet the market's making. Now, I would say, first of all, the rest of the world is still outperforming the US on a year-to-date basis. So there's been a little bit of a give back. The other piece of it is, I mean, almost all of the US outperformance at this point can be attributed to our heavy weighting in tech and semis and all the rest of it. It is a bit of a mix shift that has helped the S&P 500 In fact, the equal weighted S&P almost perfectly tracks the ACWX, which is the rest of the world. But still, it is holding up better. Obviously, we're better insulated from higher oil prices and all the rest of it. What's interesting, going into this busy week, is it feels like the market is trying to get back into balance a little bit. Semis are off their highs, super, super extended above their trend.