Market rotation, the Fed's Kevins and more: Morning Squawk

In the latest developments on Wall Street, a notable shift has occurred as investors are turning their backs on high-performing artificial intelligence stocks, opting instead for more traditional and cyclical sectors. This pivot raises questions about the sustainability of this trend, especially with significant inflation and employment data set to be released soon. Meanwhile, the race for the next Federal Reserve Chair is intensifying. Former Fed Governor Kevin Warsh has emerged as a leading candidate for the position, as President Trump recently indicated in an interview. Warsh is now at the forefront alongside National Economic Council Director Kevin Hassett, both touted as strong contenders to replace Jerome Powell. Trump expressed confidence in both candidates, stating, "I think the two Kevins are great," while also reiterating that the next Fed chair should seek his counsel on interest rate decisions. In a separate yet concerning revelation, a CNBC investigation has uncovered that during the current government shutdown, numerous staff members from the U.S. Food and Drug Administration (FDA) traveled to Singapore for a conference. Internal documents reveal that 31 FDA employees, including high-ranking officials, attended this event, costing the agency over $250,000 despite operating under significant resource constraints. The FDA defended this decision by labeling the conference as "mission critical," although it has faced severe budget cuts and ongoing leadership turmoil. On the maritime front, the Trump administration is striving to revitalize the U.S. shipbuilding industry, which is currently overshadowed by international competitors. Data shows that China commands approximately 75% of new ship orders with a staggering 300 shipyards, far outpacing the U.S. which has only eight active shipyards. To counter this, the administration is seeking partnerships with foreign firms, such as South Korea’s Hanwha, to enhance domestic shipbuilding capabilities. As the week progresses, attention will also be on Netflix, as the streaming giant prepares to release the concluding episodes of its acclaimed series "Stranger Things." This marks a significant moment for Netflix, with Co-CEO Ted Sarandos likening the franchise's impact on pop culture to that of 'Star Wars.' The series has not only captivated audiences but has also led to various merchandise and food partnerships over its nine-year run. Stay tuned for more updates as we continue to follow these key stories shaping the markets and beyond.