Rally or retreat to end 2024? 12/17/24
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I'm Scott Wapner, and you're listening to CNBC's Halftime Report, the podcast, the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in.

all right carl thanks so much welcome to the halftime report i'm scott wobner front and center this hour rally or retreat what will stocks do over the final stretch of 2024 we will debate it with the investment committee today joining me for the hour josh brown stephanie link kerry firestone and bmo's brian belsky's backs good to have you with us we will check the markets here we're red across the board as you know by now we had retail sales stronger than expected the dow is now down nine straight days which would be the longest streak

since 74. The issue with that, though, is that half of the decline over the stretch of losses is related to UNH. So, you know, it puts it into perspective, at least, in what really has been a cap-weighted year anyway, as the S&P, Josh, is up 27.5% so far. And as we ask the question, what will the final two weeks bring?

Bank of America today out with their fund manager survey. Max Americana, super bullish sentiment, record low cash, record high allocation to U.S. stocks, and a three-year high in global risk appetite. So where does that take us?

I want to give you some more superlatives from that survey because my mind was blown as well. Small cap over large cap expectations hit the highest level since May of 2021, which was a full-blown bubble year for small caps, especially tech and SPACs.

Cash levels now at a three year low. 3.9% versus 4.3. Global growth expectations just turned positive for the first time since the spring. It's sort of reminding, global profit expectations hit a three year high. It's sort of rhyming a little bit for me with 2017.

And I don't know if you remember the shows we were doing in 2017, Judge, but the phrase that we repeated pretty much every week throughout the course of the year was global synchronized growth. We really haven't had that since. That's what this survey is screaming. They're even saying the most bullish catalyst for 2025 is somehow China growth acceleration. If you even got a hint of that,

I think it puts people in a situation where they're no longer second guessing the multiple on Nvidia and Apple, and they're starting to think bigger. I like seeing people feel positive about global growth. We haven't needed it in the S&P 500 over the last couple of years, but it wouldn't hurt if we had it. And that's a really important, I think, sentiment shift.

What we do have, Kerry, is a belief in terms of markets and economy relative to everything else is American exceptionalism. It seems to be the phrase of the moment.

as to how investors are thinking about where they should be within this market. When I tell you that record low cash, record high allocation to stocks, and you have a risk appetite in the market that you haven't had in the last three years, at least to the degree in which you do now, does that portend that we're going to have a rally still to come and not a retreat, even with some weakness over the last couple of days? It's certainly very bullish.

But the signs of the bullishness are somehow so extreme that it makes us a bit nervous. If you have a week that we've had in Broadcom where the stock basically goes up 40 percent, not because its earnings were so great, but because so much money went into Broadcom, it's as if it is a symbol stock, a symbol of the enthusiasm about the market, a renewed

excitement about AI, not in video, but just generally about AI. And it gives me a feeling that's meme-like.

that, oh my God, here it's a stampede to get into the stock. If that's what is fueling this market and not earnings or not what we're going to see out of consumer spending and about the economy as a whole, it worries me. However, this momentum is so strong, it's hard to see what derails it right now. Well, Brian, I mean, what's fueling it and funding it, if you will, at least according to Bank of America, but I think a lot of investors would agree,

is the prospects of Trump 2.0, right, and Fed still cutting. And we're going to be reminded of that tomorrow when they likely cut interest rates yet again, irrespective of whether they pause for a bit afterwards. They are still in the nascent stages of what is going to be a cutting cycle. No, we agree with that. And we agree with a lot what Kerry was saying. I think there is a very good chance that things are overheating, Scott. However,

I do believe that based on our conversations with not only institutional investors but private wealth investors, there was really quite frankly a wait and see with respect to the election. And I think given the fact that we've seen this buying frenzy, we like it when stocks go up. We like it when the skies are blue. However, there is a little bit too much bullishness here at the end of the year. I think we can get stocks a little bit cheaper, but the bull market continues. Where do you think there's too much bullishness?

Because crypto continues to rally? Where do you think it's...

looking a little bit uncomfortable. - On the risky side of things, we've never been believers in crypto, we've not played the Bitcoin thing. I think there's a lot of different stocks to buy, to take advantage of. The stock market is a market of stocks. And I'm worried about, like one of the things that Kerry said, all this money piling into Broadcom, is it because people are worried about Nvidia so they jump to another stock?

And so I think that type of short-termism, quite frankly, worries me. You think that's short-termism? I do. I do because people are chasing performance at the end of the year and they're chasing the momentum like the Bitcoin thing. Now, again, we're believers of this big, giant secular bull market. And we believed in this American exceptionalism trade for the last 15 years and ebbs and flows. And we've been positioned accordingly. But on a near-term basis, we could see a bit of a pullback to start the year. And I think that's OK. I mean, some step look at

Broadcom and say, well, their non-AI business has bottomed and turned the corner and their AI related business is just getting started. That's not me saying that. That's Stacey Raskin.

And he's the preeminent chip analyst on Wall Street. Well, I've been saying for two years, it's nice to finally get the respect. It's had a heck of a run, though, Scott. Forty percent in a couple of days' time. I mean, the total addressable market or the serviceable addressable market, which is what they're talking about at Broadcom, something like $60 to $90 billion over the next few years versus $15 billion today. So it's three to four times the expectation.

That's great. Numbers are going higher. That's great. But the reaction is really extreme. But to Brian's point, I think the winners are going to continue to win into the end of the year because you have portfolio managers chasing. They're behind their benchmarks and the losers will continue to lose on tax loss harvesting. I mean, we have been seeing it. You mentioned it in December.

The equal weighted S&P 500 has underperformed the market cap weighted S&P 500 by 400 basis points. Value stocks are down 11 straight days, the most in its history. It's the most since May of 2000. Just to add some to what you're saying, and I'll give it right back to you.

In one month, the MAG7 is up 15 percent. The 493 up 1 percent. Year-to-date growth up 38, value up 14. That's one of the most acute signs in this market of a still rising risk appetite. And unprofitable tech rose yesterday alone 6 percent on the day. I mean,

I mean, unprofitable tech. That's crazy to me. So I do think, again, the winners will continue to win into the end of the year. But I do think it's time to look at some of the laggards, which I have been doing and I will be adding to in the next couple of days, weeks. Companies like Boeing. That's like my favorite 2025 story. Las Vegas Sands, Target, Rockwell. I don't want to own all

of the laggards into 2025. And I don't want to sell my technology as well, but I am looking for opportunity, because I do think it should be -- I don't know if it will be, but it should be more balanced next year if, in fact, the Trump administration can continue the economy to grow in the 2.5 to 3 percent range, which, in all likelihood, it looks like it's going to. JOHN YANG: I mean, you talk about where is risk appetite most evident.

NASDAQ coming off another record closing high. Growth crushing value. Bitcoin above 108,000 earlier today. As Steve Weiss continues to buy more of that, he joins us to tell us about that. You're just going to keep riding the momentum here?

I am, Scott. Right now, we've seen momentum and expectation of what's going to happen in the next administration. But we've got Paul Atkins, who's pro-Bitcoin, pro-crypto. That's going to be the new SEC commissioner, once confirmed. And then we have scarcity. And then don't forget, you have the halving, where they cut the amount of Bitcoin out there in half.

And finally, if Michael Saylor keeps buying more Bitcoin, keeps leveraging it, then we're just going to see it go higher. So, look, I still don't see what the case is for Bitcoin in terms of where you're going to use it, where you're going to spend money. I'm not convinced it's a store of value either. The only thing I'm convinced is that it will keep going higher because the momentum is going to take there. We see targets of 200,000 on the street.

i recall two years ago three years ago we saw targets of 100 150 and look it took us three years to get there so i think the direction continues to be higher because the scarcity and and a new you know cohort behind this so i'm i'm there until i'm not and i i don't know when people you know think there's going to be some kind of upset that causes bitcoin to to fall um

You have any like what what would that be? You know, you could have a market pullback, which would be an obvious answer. But in the interim, you may have a market pullback. And yet people are treating Bitcoin as some sort of safe haven play now, because what was a speculative play is now deemed safe in some respects because you have such momentum in Washington behind it in ways you have never had.

Yeah, look, you know, I do think about what can go wrong. But right now, I don't really see it unless momentum dies quickly. And then, again, with people like Michael Saylor not only buying Bitcoin, but leveraging it and leveraging it some more, potentially that's an issue. Now, he's held on through through decline. So I'm not really expecting that.

But it is a risk asset and it's not a store of value. So they used to make the case that, you know what, it's not correlated at all, reverse correlation or inverse correlation to other risk assets. That's just not true. So on some days like today when the market's bad, you'll see that. But that's momentum.

So, you know, I'm going to be very in tune with when the momentum dies and I'm not going to hang it around and wait for that to to reverse. Weiss, I appreciate it. Thanks for joining us. We'll follow it. I mean, it remains a big story and it's certainly captured the imagination of the American public, certainly on Wall Street, still to work on Main Street, as Steve Leisman showed us in his recent survey. Josh, leaders lean in, laggards play. What's what do you think?

the best strategy is, right? Steph says, okay, I've had enough of the leaders. I'm not saying, like, get out of them, but let's get into some of these laggards because it's starting to get kind of absurd with the outperformance from the top down. I like that idea. And just like listening to Weiss, you know, that story of how behind

Bitcoin is, uh, how behind Bitcoin the administration is. Like, I feel like even that's gotten carried away and everybody understands it. And sailor is on his way to accumulating like 3% of all the outstanding Bitcoin. Um, if, if we had talked about, uh,

Bitcoin bullishly in 17, 18, it was still very controversial. And now it's just like, yeah, yeah, yeah. I get it. I get it. It's maybe a reserve asset and Trump loves it. Fine. Um, so I do think that, you know, a lot of these trades that have worked so well throughout the course of the year, there's probably going to be a reversal at some point. Um,

and it might last longer than a day. Like a week ago, we were having this conversation about a big momentum sell-off, and all of a sudden, everybody was buying the value cyclicals. It lasted 24 hours. We could experience a version of that that goes on for a month. We've seen that before. So I think Stephanie is on the right track. From an investing standpoint, energy 11 times earnings.

Materials, 14. Financials, even with a huge rally this year, 16 times. So you don't have to be buying communication stocks at 30 or tech at 28. You have options.

If you're trading, though, it's different. If you're trading, you probably want to stay with where the momentum is. And health care just ain't it. So I think, again, we talk about this as a recurring idea. You have to know who you are and what you do in the market so that you don't end up taking the wrong train, a train that you don't know how to ride.

And so for most people, for most people that have been successful in financials and in tech this year, like I wouldn't recommend start throwing darts at oil stocks you know nothing about. Stephanie knows what she's doing. Majority of people don't.

You see the streets still, you know, getting all bulled up on these tech names. Alphabet, Amazon, top picks for 25 at BMO. Belsky Shop, Meta, price target to 700 from 650. Our halftime headliner is with us now, Dubrovko Lekos. He is head of global market strategy, J.P. Morgan. It's good to see you, man. Welcome back. Good to see you. Thanks. So we began our show talking about this big appetite for risk, partly on the idea of American exceptionalism.

Trump 2.0, our economy is going to grow unlike anybody else in the developed world. It's already been so remarkable relative to others. You're going to have tax cuts, deregulation. You're going to pour more gasoline on what is an already robust fire burning underneath this economy. You mentioned it as well in terms of U.S. exceptionalism within your note, but you have one of the lower price targets on the street. Square that for me. You're looking for only 6,500 next year. Why?

So I think the story remains a positive one and especially for the US. I think the rest of the world

We need to see how things shake out. Strong dollar, higher for longer, trade uncertainty. I think there's a lot of question marks we have around emerging markets and even various segments within Europe. For us, the big theme for next year is one of dispersion. And to me, that means a lot of different types of rotations within the market, which means that you don't necessarily have to have the big four, the big five, the big six sort of leading the way up.

And that's why we see upside, but we see a bit more of a broadening in terms of leadership. And, you know, that's why to us it's a positive story, but just I think the upside is a little bit more capped.

in terms of sort of the big cap names, but we do think there's a lot of opportunity for some of the laggards to re-rate higher. Well, what do you think this last month has been about then, where the Nasdaq has once again distanced itself from the pack? It's up 8%. I mean, it's crushing everything else. So I think since the summer of this year, you've had a broadening in leadership, and now you had a bit of a reversal. So again, I think that basically what's happening is

Every sort of three to six months, you'll have these reversals that are taking place. I think Tesla is obviously the center of this reversal here, and I think it's driving a huge percentage of the move in the Big Ten. But I think as you sort of think more broadly about 2025, I think there's a lot of opportunities outside of the Big Ten. Why aren't people going there now then in anticipation of all of that?

I think it's just Momo. Just some of it is retail participation with respect to some of these names like Tesla. So, for instance, we see a lot of option activity within a Tesla. Broadcom is also something where we've seen a lot of retail participation. So momentum, I think, builds, builds, builds. And then I think it starts to spill over into other areas. But I mean, it's certainly far more than just Tesla. Now, as you said, the percentage gain from the election for Tesla is unbelievable. But it's...

It's Amazon hitting a new high every day, every other day. Alphabet, new high every day, every other day. NASDAQ at all-time highs every day, every other day. Money continues to want to go there. Even when people suggest the broadening is going to happen, it's going to happen. And it does, it just doesn't last long enough. So I think there was broadening into the election and briefly after the election. And I think the momentum crash, in other words, this broadening was pretty sharp.

So, I think you're just basically seeing some reversal of that. And I think as you sort of go into January, I wouldn't be surprised that you see some degree of bottom fishing that I would call. And in fact, when you look sort of historically, the value factor tends to do actually quite okay early in the year as people sort of place their bets elsewhere. So, I think the broadening trade or the dispersion trade that I would call is something that

still has room to run in 2025. - But why you wanna sort of swim against what is a really strong tide in terms of being underweight discretionary? When you mentioned what Tesla's doing,

I mentioned what Amazon's doing. Tesla and Amazon are essentially carrying the entire discretionary sector. But if that's going to continue, why would I want to be underweight that area? So I think discretionary is a funny one because it depends how you sort of define discretionary. And I'm not sure that an Amazon just sort of checks the box of discretionary. There's other sides to an Amazon. But that's where it is, though. It is. It is. Right. But I'm thinking discretionary more in terms of the traditional discretionary retail consumption related stocks.

I think that's the area that to us just doesn't have the best risk reward. And there are some exceptions like the airlines where we as JP Morgan remain very bullish on. But there's other segments, I would say, of the market, including financials and banks that we think have more upside, that are more isolated and more sort of protected from potential tariffs and trade uncertainty.

Gary? Yeah, so it sounds to me as if there's two ways to talk about this. One is, you're talking about more of what the stock market is doing with good information. We have good information and we have a good economy. Scott is saying, hey, there's a really good economy. Everything's, why would you fight it? And you're saying, well, maybe you don't have to

fight it but you don't have to keep participating if the price is too high because value caring about the pe doesn't matter until it does you think the valuation is too rich is that that's what carrie's alluding to i think at the market level it's on the high end of the historical range and i think where valuation is the richest by far is within a specific segment of the market which is called quality quality stocks are trading at the highest premium i want to say ever ever

on a relative basis. So people are basically, they have loaded up into these, call it secular growers. And that's another reason why I believe there's opportunity elsewhere. Josh? That sort of fits the dispersion theme. You want to weigh in? Rob Coe, do you...

Do you think that a rally in non-quality or a rally in deep value cyclical or a rally in small cap is sustainable past, like, at most a couple of months? Is the reason why market participants

are quote unquote crowding into quality because it's just a more durable theme and you don't have to try to catch the next sector rotation every few weeks. Because for my perch, that's what it seems like is happening. Even if you look at the global, let's say the global 100 stocks,

the best, most high quality companies in every country around the world look better than the overall international indices. It just feels like people are tired of trying to anticipate the next low quality rally. They just want to be in the more durable theme and leave it alone. Is there some like veracity to that approach? You think that's what's going on here?

Look, I think what you're saying is something that's been happening for many, many years. I think IWM is not on the long momentum side. It's something that works. As you said, I agree with you, you know, for a period of two, three, four months, and then it stops working, right? And money generally, secularly continues to go into these, call it semi-oligopolies, and the secular winners are these winners that continue to benefit from secular tailwinds. But I think we're now at a point where positioning and valuation

spreads are, again, quite extreme that I think warrants some kind of, call it shorter-term mean reversion or dispersion. And I do think that a lot of the policies— So it's tactical? Yes, tactical. Correct, yes. I'm not saying that this is a one-year play, but certainly a few months' play. And I do think that a lot of the policies that we'll be hearing more about from the incoming administration in 2025, I do think stand to benefit some of these other areas that are less bid up and that are, quote-unquote,

And again, you don't have to buy low, all right, low quality. I think there's a lot of quarp and garb out there that has value on its side, but still has relatively decent fundamentals. So sort of an in-between. You mentioned at the outset the idea of higher for longer, which I think people are getting their arms around. Fewer cuts, obviously smaller ones. We're not...

going to get 50 again unless we have a problem. And then obviously that portends bad things for the stock market. T. Rowe today is talking about 6% on the 10-year being possible. First of all, you expect a cut tomorrow, I would assume. Yes? Our house call is for a cut tomorrow and then a skip. Okay. So they cut, they pause. If rates remain elevated but growth is stronger than we thought, is that okay?

I think it's OK for the economy. I think it's OK for fundamentals. I think it's less OK for the multiple. So going back to the question you asked me earlier, why sixty five hundred and why not seven thousand? I think part of the reason is because we don't know how the disinflation story is going to continue to play out in the coming months. And we don't know if the Fed is going to deliver on all the cuts that are still being priced in. What if earnings deliver, though, good enough that it offsets whatever worry we have about that?

So again, I think it's okay for fundamentals, but I think from a pure valuation, if you think about the multiple, if you think about the equity risk premium, I do think that sort of has some friction if you believe that at some point in the coming months, there's a chance that the Fed opens up the doors, I'm just saying, to a potential hike. And again, they don't even have to hike. They can just mention it and financial conditions start to tighten. Well, why would they do that? Because of a strong economy.

That's it. A lot of the numbers that we're seeing continue to surprise to the upside. So then you add in animal spirits, you add in the wealth effect. This economy is doing well. And if anything, I think if there's room for a surprise economically, I think there's maybe some more room for surprise to the upside and to the downside. And so the question is, how does the Fed respond to that? And then how does the multiple respond to that? So, again, not a negative for fundamentals. And if anything, if you look at fundamentals and earnings expectations for next year, I think that

65% of earnings growth expectation for next year is coming from just 20 stocks. So I think there is room for a lot of other stocks to sort of surprise to the upside earnings wise. But again, multiple, I think can be a bit of a different story. All right. Well, we'll leave it there. It's good to see you again. Good to see you. Thanks for coming by and sitting on our set. That's Tobrako Lekos of JP Morgan. He's the head of global market strategy. Coming up, it is the most overbought stock in the entire market right now. You probably own it.

We'll tell you what it is. We will debate what to do with that next.

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Welcome back. Apple hitting another record high today. And according to our data team at CNBC, it is the most overbought company right now in the S&P 500 with a relative strength index, RSI, something Josh talks about all the time, of 92. It's posted 25 all-time closing highs so far this year. The question is, Josh, what's the record?

If that's something that you look at and tell our viewers to pay attention to in the way we should think about what to do with stocks, what do I do with that? The message of Apple is whenever Warren Buffett is selling something, you want to be buying with both hands. Um, JK, love you, Warren. All right. Uh, what's going on here is, is, is absolutely remarkable. They obviously had a product cycle this year with the new phone. Um,

Did not get the critics to be blown away by any of the stuff they did. They're slowly rolling out AI features. They put this Image Playground app on my phone yesterday. Fine, I guess I'll try it. The iOS 18 refresh was a disaster. I heard the all-in guys trashing that last week. It really just hasn't been a great year for headlines at Apple, but the

fundamentals remain so powerful, it was like enough for this stock to continue to be accumulated. It also doesn't hurt that we're shattering every record on the books for ETF inflows.

Apple's in every ETF. It's in the dividend ETF. It's in the shareholder yield ETF, buyback ETF. They're a leader in CapEx. They're a leader in R&D. It's in the tech ETF. It's in every index, Dow, S&P, NASDAQ, XLK. So when you have money pouring into ETFs and this is the largest or second largest holding throughout the course of the year, plus the buyback, like it's not crazy to understand why this thing has been melting up.

I don't think at a 92 RSI, it's a great purchase. So I'm not like adding to it, but would I sell it with a gun to my head? I probably still wouldn't. So I think a lot of people are where I am with this stock and that's just what it is. - So you read it more of a potential bad sign of getting in or buying more, but not necessarily a bad sign that you need to worry about it turning down because it's so overbought.

If you own it for the last... I'm in this stock literally forever. I can't even tell you what price it would have to get to for me to feel it. So I wouldn't be shocked if we saw a 10% correction in Apple to start off the year as money rotates. Keep in mind, the RIA channel is $7 trillion. Do you know what RIAs do in January? Okay, they rebalance. Any...

form of rebalancing at any

at any large wealth management organization is going to involve selling Apple. You have to understand that. If you don't understand that, you don't work on Wall Street, you don't belong here. So 100% you're going to see selling come out in this name, but how extreme is that selling really gonna be? Are people like walking away from the stock? Absolutely not. So you have to be willing to endure that correction if and when it happens, if you're gonna belong this name. And most people are.

Carrie, client calls you up later, right? And it's like, look, I was watching Halftime and I saw you guys talking about Apple being so overbought. Stock's been up and I'm up a lot in it. What are we doing about it? What should we do about it? Yeah, well, I think that there are a couple of important factors. One is,

What's the tax hit? And many of our clients are taxable most. They care about paying capital gains. Stocks like Apple, it doesn't matter where we bought it. It's all a big gain right now. So to the extent that people say, oh, we thought it was a 4% position and now it's a 5.5%. I understand the rebalancing point that Josh brought up.

But also there is the tax hit. And I honestly think that since most people are underweight, these names, they are underweight Apple. And the idea now to continue to be underweight is less attractive because the rest of the market has done so little for people. I mean, to give you an idea of what we're talking about, Steph, right, you don't own Apple anymore. No.

But at 92, for a stock like Amazon, which I think is more like 77-ish. It's had a nice run, yeah. It's had an incredible run, but it's not 92. No. But how do I think about the types of overbought stocks? And what I want to do with them as we approach the end of the year and make the turn.

Well, as you know, I sold Apple because I made 40 percent in four months time. And I didn't think and I still don't think that this version of the iPhone is going to be the super cycle from AI. I definitely think in the out years it will be. But next year, I think it might struggle. And I think it's ahead of itself. And I took some games. But what I did do as a portfolio manager, since I'm underweight, a 7 percent weighting in the S&P 500.

I made Amazon huge. It's a huge position, my largest by far, so that if it does participate, if it does outperform, I'm not going to get hit by being quote unquote short Apple because I don't own any Apple against my bench. So it's a little technical, but quite frankly, I like Apple. I mean, excuse me, Amazon much better than Apple because...

because I think there's a lot of ways that they can win. It's retail, they're taking share. It's AWS, we all know about the cloud. And it's accelerating. Advertising never gets talked about. They have huge amount of cash. I think they're going to announce some sort of a dividend or a bigger buyback. And yeah, it's expensive.

at 35 times, but it's at 14 times EBITDA, and historically it's traded at 17 to 18 times. And so I still think there's upside. I still want to own the behemoth in the discretionary sector. Is this a sign for you of the excess that you were talking about when you see something as overbought as the data team says that Apple now is? No, because we don't sell things on technicals. We buy and sell on fundamentals, Scott. Are there fundamentals?

the fundamentals are behind this move higher, as we said? - Well, I think what's behind this move higher, quite frankly, is liquidity. I think people are chasing liquidity at the end of the year because they, quite frankly, don't know what else to do, so they're continuing to own these big stocks, number one.

Number two, there's a difference between owning and trading. We're not traders, we're owners. We've owned the stock on behalf of our BMO clients for 12 years. I think this is a juggernaut. And so, there's two rules to have. - Juggernauts can go up with lack of like,

fundamentals behind it. Are you telling me there's fundamentals behind the last 13% in a month? I think there's fundamentals to owning this stock. And it's cash. They have more cash on the balance sheet than several developed countries. Number two, they're buying back stock. Number three, they're paying dividends. Number four, you can make a value component to this. You can buy a growth component. And lastly, here's the rule to Apple. Never bet against the U.S. consumer and never bet against Apple. Period. Mic drop. All right. See, I knew I'd get you going. Yeah.

Come back at you a couple of times. All right. Silvana now has the headlines. Hey, Silvana. Hey, Scott. Good afternoon. The White House is asking Congress to pass legislation that would give federal, state and local governments more power to address drones that fly in U.S. airspace. Now, that's according to National Security Council spokesman John Kirby in an interview on NBC's Today show. Sources tell NBC News members of the House Intelligence Committee that

will receive a closed-door briefing today on the drove sightings.

The Federal Trade Commission passed a rule today banning junk fees in hotel and event ticket prices. The rule will require ticket sellers as well as hotel and vacation rental sites to add charges such as service fees to the advertised price instead of tacking them on at the end. The Biden administration has tried to crack down on hidden fees, but businesses and corporate industry groups have challenged the new rules.

And New Jersey lawmakers are considering changing a law to make underage gambling no longer a crime. Instead, it would be subject to fines between $500 and $2,000. Money from the fines would be used toward prevention, education, and treatment programs for compulsive gambling. Scott, I'll send it back to you. All right. Silvana, thank you. That's Silvana Hinal. We'll do calls of the day next.

One of Steph's newest buys, top pick at one firm. One of Josh's recent buys, top pick at another firm. And everybody's playing because I got calls on stocks that you have too. We'll do them next.

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Welcome back, Calls of the Day. We begin today with Block. It's a Josh name. And it was just named the top 2025 pick at Barclays. Tell us more.

- Yeah, look, this is a situation where the technicals got me into the stock, but the more I look at the fundamentals, the more I understand why it's finally rallying. I would also point out, when this stock hit my list of best stocks in the market, it did so along with a lot of other names in the group. PayPal, which is about 91, looks like it wants 100.

SoFi is breaking out. Robinhood has already broken out, one of the big winners of this year. A lot of these stocks have been left for dead since 2022. But what happened was, even though nobody was interested in owning them, they continued to find ways to grow, Block included. The one negative here is Jack Dorsey appeared in a photograph at a conference last week. He looked like somebody going undercover

or almost like a Halloween costume. But then part of me feels like if he's comfortable enough to be rolling like that with a Satoshi Nirvana t-shirt and open-toed shoes, maybe the quarter is shaping up to be a really good one. So I'm going to stick around. We'll see what's going to happen. But technically, the stock looks really good.

Up as we speak. Steph, Zscaler, we said you bought it last week. Top pick at BTIG for 2025. Price target to $238. And they, of course, reiterate a buy there. It is their top large cap pick into 25. And they like it in part because it's controversial. Well, it is. It's down 9% on the year when its peers are up 40% to 50%. I am a huge bull on cybersecurity. I think it is bigger, yes, bigger than AI.

CTOs are spending two places, AI because they're learning about AI and what it means for their businesses and cybersecurity because they can't wake up one day and lose their business. And so the momentum is huge. I think you're gonna see massive consolidation. Perhaps maybe Zscaler is one of them. In the meantime, they beat

they raised operating profit was up 50% and the stock fell 7%. So as I mentioned, it's in a laggard. I think it's going to be a good 2025 story. Okay. Carrie, EPAM systems upgraded, overweight. Barclays price target 290 from 250. Macro uncertainty is dissipating. That is part of their bullish narrative behind this stock.

Well, we agree with that. We bought EPAM a year or so ago because the stock had been terrible. It was really hit for two reasons. One, so many of its consultants, it's a software consulting, has a focus on AI, but so many of their consultants were in the Ukraine. It made it very difficult to do business as the war was raging.

Those consultants have moved. So we've dealt with that problem. The next was that no one wanted a software stock. Everybody only wanted AI stocks. And that now is finally turning around and their business is getting better. Belsky, wrap it with Walmart. Target does a bump by six bucks. 111 from 105. Jeffrey says it's their top pick.

for 25. Yeah, we're underway at Consumer Staples as a sector, but you got to own Costco, got to own Walmart in your core and large cap money. We've been buying some Target in our value portfolio, but Walmart is the clear leader there. All right. We'll have more coming up after this break. More stocks we didn't get to just now and also some more committee stocks on the move.

Welcome back. Take a look at shares of Trade Desk. Let's show that stock, please. Reiterated by Truist today, they say it's a favorite. We think it's a favorite of Josh Brown's, too. Price target to 155. They're talking about strong secular tailwinds, Josh.

Yeah, I'm in this thing close to 100. I'm rolling my stops up as I hold it. Has not broken down technically yet. The fundamentals look great. This thing is a scotch bonnet. I don't really know why you would get off here. So what I'm going to try to do is trail this thing with a weekly look back each Friday just to make sure that the uptrend is intact. And if it breaks...

I probably won't second guess it too much. I'll probably take a profit. But if you're not familiar with the story, this is a good time to get up to speed because they're going to have an amazing 2025 from a fundamental standpoint. You're probably going to want to keep the stock on your monitor. Okay. Highs of the day. We'll keep it on ours for sure. Chipotle, Steph, top pick at RBC. Price target to $75.

They like the operational improvements. They like that it's driving traffic. They think there's upside to margins. The stock is still down 6% from its June high when Brian Nicol left to go to Starbucks. And I took advantage when the stock fell. It's the first time I ever owned Chipotle because it's always been so expensive. It's still expensive, but they're going to do a six comp, probably a six traffic. They have pricing power, great operational execution. So I'm sticking with it.

Baker Hughes, Josh, back to you. Top pick at Wells. Overweight price target 49 from 42. You know, again, this is one of the strongest stocks in the group. This was, uh,

originally on best stocks in the market list from a technical perspective. But it's not an accident that these names keep popping up on people's top pick list. These are the names that have the fundamental momentum as well as that tailwind. In the oil sector, there really aren't a lot of stocks that look as good as this one. And there's a reason. We don't have to speculate on which oil company is gonna have the most profitable year. What we know is that Baker Hughes is going to be involved

on the service side in pretty much everyone's business and they're going to benefit on this climate that we're heading into of just bigger more increased uh... drilling and services activity so i would stay long this name and i plan to salesforce carried the host their agent force two point oh today mark benioff c_e_o_ is going to unveil an improved version of their flagship a_i_ product

It seems as if Salesforce has firmly moved into the category of it is a beneficiary of AI not being competitively hurt by AI. And Benioff has done a very good job. The last quarter was good. I think the momentum is back in the stock. It's at an all-time high, roughly, and we continue to own it. You got something quick on Starbucks for me, which today is called undervalued at B of A. The stock has not done well, to say the least.

Not the last month or so, but over the last six months it has. It's down 3% year to date. We bought it in May as a contrarian purchase in our value portfolio, which you need to own some contrarian stuff in value. We bought a little bit more about a month ago. We think this is an excellent turnaround prospect for next year. All right. We will take a quick break. The setup is next. We have breaking news from the auto business. Phil LeBeau has the details for us. Hi, Phil.

Hey, Scott, this is a report out of Nikkei that has an impact for both Honda and Nissan. Take a look at shares of both companies, which we should report are at 52-week lows right now, but the stocks are moving higher on a report out of Japan that Honda and Nissan are considering a merger, a merger that likely, likely, I should say, would be facilitated by the Japanese government.

I've talked to some people in the industry over the last couple of weeks about the state of things in terms of the Japanese automakers, and Nissan is not in the best shape right now. It has so much capacity, it needs to rationalize that capacity, has a number of other issues, so it makes sense

on a certain level that perhaps, perhaps Honda would merge with Nissan. But again, this is just one headline from Nikkei out of Japan that this is a possibility. That's all we have at this point. Way too early to say that there will definitely be a merger between Honda and Nissan. Scott? The market likes Nissan certainly a little bit more.

as it relates to those talks. Phil, thank you. I appreciate that. Phil LeBeau on that really interesting report. We'll certainly follow it for the rest of the day. We'll take a break. We'll come back and we'll do finals next. Closing bell today, Lizanne Saunders and Adam Parker will join me and I hope you will as well. Three o'clock Eastern time. Josh, give me a final trade if you would, please. Baker Hughes going higher. Thank you, Mr. Belsky. Raymond James Financial, RJF. Okay. Kerry Firestone.

WAPTEP. It's electric. It's all sorts of electric vehicles and rapid transit and transportation, rail cars. Okay. Electrification. How about that? Okay. Good word. That's the word. Boeing, I mentioned it earlier. I think this is a great setup for 2025. Your favorite stock, you said, for next year. Yes, it is. All right. We'll see how that develops. And I'll see you on the closing bell.

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