The fate of the rally 12/20/24
Halftime Report
Deep Dive
Why did the market react positively after Austin Goolsbee's comments?
Goolsbee's statement that the policy rate is still far from neutral and that rates will likely come down further to 2% reassured the market that the Fed is not done cutting rates, which was a relief after Powell's confusing commentary.
What did Stephanie Link learn from the Fed's economic projections?
The Fed is primarily focused on inflation, with the core PCE numbers showing a year-over-year increase of 2.8%, which was better than expected. However, the projections were inconsistent, raising both growth and inflation rates, making them seem almost meaningless.
What opportunities did Stephanie Link see in the market this week?
Despite holding 2% cash, Link saw opportunities in stocks like Morgan Stanley, Truist, D.R. Horton, and tech names like CrowdStrike and Zscaler, which were down significantly. She also mentioned a list of potential buys but didn't act due to the market's overall decline.
Why did Jenny Harrington buy TripAdvisor?
TripAdvisor was purchased due to its attractive valuation (10x earnings, 14% free cash flow yield), strong earnings growth prospects, and the removal of the Liberty Media overhang. The company's Viator business, which generates $800 million in revenue, also offers significant growth potential.
What was the market's reaction to the S&P 500 and NASDAQ 100 index reconstitutions?
The inclusion of companies like Palantir and MicroStrategy in the NASDAQ 100 and Apollo Global Management and Workday in the S&P 500 led to significant stock price movements. Palantir, for example, saw its stock rise after announcing its transfer to NASDAQ to gain index inclusion.
What did Kevin Simpson say about Tesla's recent performance?
Simpson trimmed Tesla due to its rapid post-election rise, using covered calls to manage risk. He sold Tesla at $470 and wrote a covered call for $440, netting a $26 profit. He views this as a risk management strategy rather than a fundamental change in the stock's outlook.
How did the market's sentiment shift after the Fed meeting?
Initially, the market was negative, with the S&P 500 down 3.5% and the Russell down 9% due to Powell's hawkish commentary. However, Goolsbee's comments about additional rate cuts reset the market's sentiment, leading to a rebound in stocks.
What did Stephanie Link say about the S&P 500's performance this year?
Link noted that while the S&P 500 is up 30%, most portfolios, including those of normal investors and Ivy endowments, are up around 10-13%. This is due to asset allocation, as most portfolios are not solely invested in the S&P 500 but include other asset classes like bonds and international stocks.
What was the key takeaway from Mike Santoli's midday analysis?
Santoli highlighted that the market seized on Goolsbee's comments about the Fed's rate path, which helped the market rebound from oversold conditions. The PCE numbers were benign, and yields came off their highs, allowing the market to exhale and move higher.
Shownotes Transcript