Market rotation, the Fed’s Kevins, Netflix’s ‘Star Wars’ moment and more in Morning Squawk – CNBC

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Here are five key things investors need to know to start the trading day:

Rotation was the word on Wall Street’s lips last week as investors iced out high-flying artificial intelligence stocks in favor of more traditional and cyclical names. Now, the question is whether that divergence will continue, as focus shifts to upcoming inflation and employment data.

Here’s what to know:

• The Nasdaq Composite dropped more than 1.5% last week, dragged down by sell-offs in key AI plays like Broadcom, Oracle and Nvidia.
• The S&P 500 was also pulled into the red for the week, in part thanks to a more than 2% slide in the information technology sector.
• But the Dow Jones Industrial Average and Russell 2000 bucked the downtrend. Both indexes rose more than 1% as traders shifted their exposure to blue-chip and small-cap stocks.
• Weed stocks had a record-breaking day on Friday after a source told CNBC that President Donald Trump could sign an executive order reclassifying marijuana as soon as today.
• Follow live markets updates here.

Former Federal Reserve Governor Kevin Warsh has made his way to the top of Trump’s list of candidates to lead the central bank.

Trump told The Wall Street Journal on Friday that Warsh is a top contender for the role, joining National Economic Council Director Kevin Hassett as a front-runner to succeed Jerome Powell. “I think you have Kevin and Kevin. They’re both — I think the two Kevins are great,” the president told the paper, adding that “there are a couple of other people that are great.”

Trump also repeated his belief that the next Fed chair should consult the president on interest rate decisions, saying, “I’m a smart voice and should be listened to.”

A new CNBC investigation found that in the midst of this fall’s record-setting government shutdown, dozens of U.S. Food and Drug Administration staffers traveled to a Singapore resort.

Thirty-one staffers ranging from deputy directors to a program coordinator traveled to Singapore in mid-November to attend a conference of the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use, according to internal FDA documents obtained by CNBC. In total, the trip cost the agency more than a quarter of a million dollars, or nearly $8,000 per attendee.

The travel was approved even as the FDA operated with reduced staffing and resource constraints amid the 43-day shutdown. The trip also comes as the agency faces a proposed 11.5% budget cut, broad layoffs and tumultuous leadership. In a statement to CNBC, the FDA said that sending employees to the conference was “mission critical.” A spokesperson for the agency also noted that this year’s delegation of staffers was smaller than that of the past two years.

Trump wants to make domestic shipbuilding great again, but as CNBC’s Lori Ann LaRocco reports, he’ll need help from international companies.

China wins as much as 75% of new ship orders and has more than 200 times the building capacity of the U.S., data shows. There are currently eight active U.S. shipyards, compared to China’s more than 300.

As it tries to bolster the U.S. shipbuilding industry and make up ground, the Trump administration is tapping companies like South Korea’s Hanwha through investment deals. As Peter Sand, chief shipping analyst at Xeneta, told CNBC: “When you look at the orders, making American shipbuilding great again is a tall order. Foreign expertise needs to be brought in.”

Netflix will release the final episodes of its hit series “Stranger Things” at the end of the month, marking the end of an era. After being passed over by studio after studio, the underdog series has become one of the biggest success stories of the streaming world.

As CNBC’s Sarah Whitten reports, the streaming giant has launched dozens of partnerships across merchandise and food tied to the 9-year-old series. Netflix Co-CEO Ted Sarandos said the franchise was akin to a “‘Star Wars’ moment” for the streamer, given the show’s role in shaping pop culture and leading to live events.

Here’s what we’re keeping an eye on this week:

• Tuesday: Nonfarm payrolls data for November
• Wednesday: Micron earnings (after the bell)
• Thursday: Darden Restaurants earnings (before the bell); FedEx and Nike earnings (after the bell); Consumer Price Index data for November

CNBC Pro subscribers can see a calendar and rundown for the week here.

— CNBC’s Sean Conlon, Brandon Gomez, Jeff Cox, Paige Tortorelli, Scott Zamost, Melissa Lee, Jeff Cox, Lori Ann LaRocco and Sarah Whitten contributed to this report. Josephine Rozzelle edited this edition.