S&P Heads for 26% Annual Gain; Trump Announces Panama Ambassador
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Welcome back, Ms. Klein.

Bloomberg Audio Studios. Podcasts, radio, news. Good morning, I'm Nathan Hager. And I'm Karen Moscow. Here are the stories we're following today. Karen, let's begin this morning with the markets. Most major markets in Europe are staying closed for Christmas break, but trading resumes today on Wall Street and the S&P 500.

is coming off a gain of more than 1%. It is now up 26.6% on the year. Lori Calvacina, head of U.S. equity strategy at RBC Capital Markets, thinks stocks are headed even higher in 2025.

We think that's going to be another solid year of gains in the U.S. equity market, probably a little bit slower than what we saw this year. And we do think that we are going to have, you know, what some of my colleagues term as potholes, right? Some bounce of 5% to 10% type drawdown. So we don't necessarily think it's going to be a completely smooth ride. But at the end of the day, we think a continued moderation in inflation is going to help keep P.E. multiples elevated.

And we think a solid earnings growth fast drop and a solid economy are also going to help propel this market higher. But there may be some volatility here and there that we have to deal with. RBC's Lori Calvacina has a $6,600 price target for the S&P 500 next year. That's about a 10% increase from current levels.

So, Nathan, the big winner this year has been the Nasdaq. The index is up more than 33 percent. Dan Ives, global head of tech research at Wedbush Securities, remains bullish under the Trump administration. I think with Trump coming in, there would definitely be some white-knuckle moments with China tariff discussions, you know,

of high stakes poker going on, right? So there's going to be a lot of headline risk, but you tune the noise out. You focus on the winners. And again, the bears are talking about valuation. That's how they missed every transformational tech team in the last 20 years because you're not focused on paying up transformational

for the Ferrari going 90 miles an hour in the left lane. But that is AI revolution. You will have those moments, and you just have your pencils ready. And Dan Ives at Wedbush Securities also sees another bullish sign for tech, the departure of Lina Khan from the FTC.

He believes that will lead to more acquisitions in the tech industry. Well, Karen, Bitcoin has certainly been on a bullish run since Trump's election victory in November. It's up about 45 percent since that time, more than 130 percent on the year.

Checking the world's biggest cryptocurrency right now, it is down 3.25%, trading at about $95,200. We do have some companies making news this morning. Nathan Alibaba Group has agreed to merge its South Korean operations with e-mart's

E-commerce platform. The move is designed to better compete in South Korea's fast-paced online retail sector. Sources say the new entity could be valued at about $4 billion. Alibaba has been seeking to expand its international footprint.

to make up for slower growth in its core Chinese e-commerce business. Uber, meanwhile, Karen says it's still committed to Taiwan. That's after the island's antitrust regulator rejected Uber's plan to buy Delivery Hero's food panda business on the island for $950 million. The acquisition was rejected by Taiwan's antitrust regulator due to concerns about reduced competition and potential price increases.

Well, Nathan, shares of Netflix, they're up three-tenths of a percent this morning. The company is coming off a big night. The streaming service made its NFL debut, broadcasting two games on Christmas. Both games were not competitive and there were no technical issues of note. The highlight may have been Beyonce's performance during the halftime show in Houston.

And the 32-time Grammy winner rocked her hometown Houston crowd with a nearly 13-minute halftime performance. Well, let's turn now to the latest on politics, Karen. President-elect Donald Trump made a major diplomatic announcement on Christmas Day. He's naming Kevin Marino Cabrera his U.S. ambassador to Panama. It comes as Trump's been calling for lower fees for U.S. shipping through the Panama Canal and warning that the waterway could fall into the wrong hands. That's an apparent reference to China.

Cabrera is a county commissioner in Miami-Dade County, Florida, and worked on Trump's 2020 campaign. In his announcement, the president-elect said few understand Latin American politics as well as Kevin. And he also accused Panama of ripping the U.S. off, quote, far beyond their wildest dreams.

Meantime, Nathan, the current president is headed to St. Croix later today to spend the rest of the holiday season on the Virgin Islands. But before President Biden left, he delivered his annual holiday message from the White House on Christmas Eve. Too often we see each other as enemies, not as neighbors, not as fellow Americans. So my hope this Christmas season is that we take a few moments of quiet reflection, find that stillness in the heart of Christmas, and look at each other as who we really are.

The president is also focused on geopolitics after Russia launched a large-scale attack on Ukraine's power infrastructure on Christmas Day. Ukrainian President Volodymyr Zelensky said it included more than 100 attack drones and 70 missiles, some of them ballistic.

President Biden called the attack outrageous and said it was designed to cut off the Ukrainian people's access to heat and electricity during winter. Meantime, Russia is rejecting President-elect Trump's call for an immediate ceasefire in Ukraine. At the same time, Foreign Minister Sergei Lavrov says Russia is ready to open negotiations. And Karen, the turmoil in the Middle East continues this morning. Israel and Hamas are blaming each other for complicating ceasefire efforts.

In Gaza, doctors in the enclave say three babies have died in the cold in recent days, including a three-week-old girl overnight. It all made for a solemn Christmas observance in the traditional birthplace of Jesus in Bethlehem. Cardinal Pier Battista Pizzapalla led midnight mass at the Church of the Nativity on Christmas Eve. All these songs seem a little bit out of tune.

After a tiring year, full of tears, bloodshed, suffering. As for ceasefire talks, Hamas has accused Israel of introducing new conditions related to the withdrawal from Gaza, release of prisoners and return of displaced people. Israel says Hamas is reneging on understandings that have already been reached.

And in Syria, forces loyal to ex-president Bashar al-Assad killed 14 police members today and wounded 10 others. That's according to Syria's caretaker government. This is the worst surge of violence in Syria since Assad was toppled earlier this month.

It's time now for a look at some of the other stories making news in New York and around the world. And for that, we're joined by Bloomberg's Michael Barr. Michael, good morning. Good morning, Karen. An out-of-control taxi struck six pedestrians in New York City's Herald Square on Christmas Day. One of the victims was a nine-year-old boy whose mother was also struck. Another pedestrian was treated at an area hospital. Three others refused medical treatment, including this man's wife.

My wife got hit kind of up on her back shoulder, sent her spinning. She didn't knock her to the ground, made sure she was okay, and then noticed that the car had come up, hit I think the building or hit the post. I'm not even sure what it hit. Police believe the driver suffered a medical emergency.

Authorities are investigating what caused an Azerbaijani airliner with 67 people on board to crash in Kazakhstan. An official says 38 people were killed, but 29 survived. The plane was on a route from Azerbaijan's capital to the Russian city of Grozny when it was diverted and attempted an emergency landing.

Azerbaijan's president said that the weather had forced the plane to change from its planned course. Russia's Civil Aviation Authority said that preliminary information showed that a bird strike led to an emergency on board.

A grim discovery was made on a United Airlines plane. Officials in Hawaii are investigating the discovery of a dead body found in the wheel well of a United Airlines Boeing 787. The jet had flown from Chicago to Maui on Christmas Eve. How the body got there remains a mystery. United said the wheel well is only accessible from the outside. On Christmas Day in Philadelphia...

So we have a home-cooked meal. You made my day. Thank you. Thank you. Philadelphia's 14th police district spent the day distributing gifts and hot meals. Captain Stuart McCollum says it's the 20th year of the holiday tradition.

We select it based upon positive circumstances, kids have done exceptionally well, as well as some families that unfortunately fell on hard times or went through some extraordinarily unfortunate circumstances. In Washington, D.C., the 46th Annual National Menorah Lighting Ceremony took place last night, ushering in the start of the eight-day Hanukkah celebration. Homeland Security Secretary Alejandro Mayorkas gave brief remarks celebrating the history of the holiday.

Indeed, the key to our survival, despite all those who tried to destroy us, has been the beauty, joy, and rituals of Judaism. The start of Hanukkah happened to fall this year on Christmas Eve, while New York City lit the world's largest menorah last night. Global News, 24 hours a day and whenever you want it. With Bloomberg News Now, I'm Michael Barr. This is Bloomberg, Karen. All right, Michael Barr, thank you.

It is time now for the Bloomberg Sports Update brought to you by Tri-State Audi. For that, we bring in Dan Schwartzman. Dan, good morning. Good morning, Karen and Nathan. The Chiefs improved to 15-1 on the season while clinching the number one seed in the AFC. Worthy in motion. It's like man covers. Mahomes, rifles, touchdown! He hits Watson for the score!

That's courtesy of Netflix. The Chiefs knock off the Steelers 29-10 in Pittsburgh in game one of the Christmas doubleheader as Patrick Mahomes throws for 320 yards and three touchdowns. Head coach Andy Reid praising the defensive effort against a good Steelers offense, especially without his best defensive player, Chris Jones. They've got good receivers. They've got good running backs and quarterbacks playing well. Their offensive line is stout. I thought our D-line stepped up without Chris. The guy stepped up and

and did a great job there. That's courtesy of Chiefs.com. Travis Kelsey with a touchdown catch to pass Hall of Famer Tony Gonzalez the most touchdown receptions in team history. The Steelers, who have now lost three games in a row, fall to 10-6 on the year. In Game 2, the Ravens dominated the Texans in Houston 31-2 as Lamar Jackson threw for two touchdowns and rushed for another. Ravens are now 11-5 on the year, while the Texans fall to 9-7.

The NBA with five games on the Christmas Day schedule, starting out the Knicks outlasting the Spurs 117-114 at the Garden, despite 42 points and 18 rebounds from Victor Wimbanyama. Meanwhile, the Celtics lose at home to the 76ers 118-114, with the Celtics now losing three of their last four games.

Elsewhere, the Timberwolves hold off the Mavericks 105-99, the Lakers outlast the Warriors 115-113, and the Nuggets lose on the road to the Suns 110-100. Both Kevin Durant and Bradley Beal leading the Suns in scoring with 27 points apiece. That's your Bloomberg Sports Update. I'm Dan Schwartzman.

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Take your business further at T-Mobile.com slash now. Coast to coast on Bloomberg Radio. Nationwide on Sirius XM and around the world on Bloomberg.com and the Bloomberg Business App. This is Bloomberg Daybreak. Good morning. I'm Nathan Hager on this back to work day after Christmas for the final four trading days of 2024. The S&P 500 is coming off a

1.1% gain to kick off the Santa Claus rally period that began on Christmas Eve. Joining us now to help close out this year, look ahead to 2025, Michael Purvis, founder and CEO of Talbock and Capital Advisors. It's great to have you with us this day after Christmas as we watch futures move a little bit lower ahead of this morning's open. Do you see a Santa Claus rally, Michael? Good morning.

Good morning. I'm great to be with you. In terms of the Santa rally, it's been a slightly unusual one. We have had basically an upward drift to the markets over the last few weeks here. But I think, you know, you had a couple of things going on, obviously, coming into the year, coming into the end of the year. We had a very strong

equity market. We had a very important election in early November. There were traces of a whole bunch of questions as opposed to what we had before there. And then, of course, you had the FOMC, which was, you know, really kind of jolted risk assets in the bond market.

just two weeks ago. So I think there's a lot of processing the market has to do, if you will. And I think it's one thing for the market to be, you know, when you have these things like the Fed coming in with a hawkish cut as they did,

when you're coming into that condition at 22 and a half times earnings, it's different than if you were coming into it at sort of the low end of the valuation range, right? So 22 and a half times for the S&P 500 was a very robust multiple and a lot can be adjusted quickly on that. So long story short, like this Santa rally here, whatever we're gonna get in the next few days,

Feels like it's just more consolidation here, you know, sort of consolidating around the success and maybe 6100 level here. But it's not a classic Santa rally like we had last year where we had a spectacular performance in December.

Well, let's look ahead to 2025 then with the setup here with the Fed pulling the reins in a bit on cut expectations and this expectation that presidents like Trump could deliver market friendly policies. Is there going to be a cross current between the Fed and Trump going into 2025? Yeah.

Oh, I think absolutely. Absolutely. I think there's always a tension between fiscal policy and monetary policy. And as they're almost, you know, almost by design. You know, if you look at the last couple of years with the Biden administration, you had a loose fiscal condition and you had a pretty, pretty tight policy.

monetary condition there. You know, the White House had its foot on the accelerator and Powell had its foot on the brakes, if you will.

And so if we do get a continuation of a loose fiscal policy, I think Powell's instincts are absolutely to keep the foot on the brakes. I think the question of course is, is Trump's probably gonna want lower, not higher interest rates there. And I think Powell's going to have to revert more than ever to sort of, well, let's see how the data is. If the data continues to be in the first half of 2025,

uh what we've seen just in the last couple of quarters here whereas where inflation is resilient and jobs are resilient then i think you're going to see yeah a lot a lot of tension here and probably a lot of commentary on the front as well a lot of growing friction

This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond. Look for us on your podcast feed by 6 a.m. Eastern each morning on Apple, Spotify, or anywhere else you listen. You can also listen live each morning starting at 5 a.m. Wall Street time on Bloomberg 1130 in New York, Bloomberg 99.1 in Washington, Bloomberg 92.9 in Boston, and nationwide on Sirius XM Channel 121.

Plus, listen coast to coast on the Bloomberg Business app now with Apple CarPlay and Android Auto interfaces. And don't forget to subscribe to Bloomberg News Now. It's the latest news whenever you want it, in five minutes or less. Search Bloomberg News Now on your favorite podcast platform to stay informed all day long. I'm Karen Moscow. And I'm Nathan Hager. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.

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