Trading the Year’s Final Stretch 12/2/24
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Carl, thanks so much. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, what the year's final stretch will hold for stocks. We'll debate it with the Investment Committee today. Joining me for the hour, Bryn Talkington, Joe Terranova, Steve Weiss, and Jim Lamenthal. We take you to the markets here. We know the S&P is positive. Dow is negative. We do enter this month at record highs. We are coming off the best month of the year. Joe, we have a busy week. ADP, ISM, jobs reports, some notable retail earnings. And how about this from Bespoke as we

Really think about what the last handful of weeks is going to hold. No 10% plus corrections yet in 2024 for the whole year. Since 1928, the S&P has averaged a 10% plus correction once every 346 days. We have not had one this year, which speaks to the year it's been. One of momentum.

and of resiliency. For sure. And also this week, we're going to get a little bit of Fed speak. But we spent a lot of time coming in this year trying to forecast where would we be in the Treasury market? Where would yields go given the adjustment in monetary policy? And it's interesting. If we could throw up this chart,

Here we are today with a 10-year treasury at 420. And if you go back one year ago, one year ago, the first trading day of December in 2023, a 10-year treasury was 420. So what we really did was we had this roller coaster ride to basically nowhere. We drove ourselves nuts trying to figure out where our treasury yield is ultimately going to go. And what was able to shine through all of that was a really strong consumer, earnings growth, and a

good equity environment and i think when you have that type of combination it sets you up for the year that we're having and the year that we're going to continue to have as we move to new year's i love i love um that let's throw that chart back up because i think that really is telling weiss as we look it's like the guy gets the hand off you know and he runs

like 75 yards all around. He goes to the other side of the field and whatever, and he looks like he's going to break, and he looks like he's going to lose yardage, and then he ends up in the same spot.

that he did after a long run to nowhere. But we've been a lot of places, right? You could probably track volatility in the stock market this year if you overlaid the S&P to the 10-year Treasury chart over the last 12 months. It would probably be pretty telling. But what does it tell us now about what these last handful of weeks are going to hold? Yeah, look,

Seasonally, you're in one of the strongest seasonal periods that you can be in throughout the year, and that's through New Year's. And when you take the addition of perhaps optimism over the business environment,

Look, path of least resistance continues to be higher. You still think that because that's what Krinsky says at BTIG as well. And sometimes it can be easy. Now, we both know, all of us know that it's never really easy doing this. Otherwise, a lot more people would be doing it well, and they don't with 75% of managers underperforming the index every year. And it's not always the same 75%.

But nonetheless, you have to take what the setup gives you on occasion. And what the setup gives you is a very strong move into the end of the year. Now, some of it, of course, is attached from the reality of valuations. But I do think we've seen a new paradigm set with higher valuations in general and somewhat being people being agnostic to valuations by investing in the ETFs, which now make up over more than 50 percent of every publicly held company.

So that's helped drive valuations up, be less of a barometer on where the market should go. So I continue to be very long. I will point out as far as interest rates go, they're still higher than they've been in any other period of time since 2009, where we are now. So we talk about 420.

which is great. It's lower than where we were on the peak, but it's also higher than what we're typically used to. Well, because what we're typically used to was so warped from the financial crisis almost until now that you had zero interest rates forever. We're still warped by the freebies from the government that keep replenishing that consumer and business pocketbook with these gimmies. So look, so I think that

I'm one of those who thought that when rates were above five that

I thought it would weaken the economy, frankly. I was certain of it because it always has, but I was wrong on that. Fortunately, I've been invested and in the right beta to overcome that. But if I had that idea before that we could do so well with rates where they are and where they still are, my position may have been a little different. Because we're just as, you know, so many have said so many times, Bryn, we've just been normalizing. Yeah.

Tom Lee gives today four reasons why you're going to see a December rally in the S&P 500 to 6300. So about 300 more points in the in the S&P. We're seasonally strong. December's up 83 percent of the time. Interest rates, as we've already suggested here, are declining significantly.

Sentiment is cautious. Now, I don't know, you know, it doesn't really feel like sentiment is all that cautious at this point, which he suggests is a contrarian positive. Plus, you have now a Fed put plus the Trump put, which means you should buy any dip. And then you're going to get to 6300. In other words, December is going to be a really nice finish of the year. Do you see the same thing? I agree with one, two and four. And maybe he's looking at like real sentiment numbers, but.

It definitely feels like we have some YOLO in the market when you look at like MicroStrategy and some of the other leveraged ETFs, which are just really gone bananas since Trump was elected. And so I definitely agree that the bias is to the upside. I think to be a bear, you have to have this case of some exogenous event, which is like in and of itself unpredictable. And so I think the bias is to the higher. I also think to hit on a point that Steve made earlier,

about passive flows. I think that technology like writ large this year and next year will continue to perform because you do have what 30, 36 cents of every passive flow into the S&P going into the same seven or eight tech names. And so I do continue to think we'll see a broadening

And I think that the broadening will say catch up. I think that you're going to continue to see tech because although those earnings are coming down, you still have, if you aggregate them all, double-digit earnings growth projected for next year, especially with like the NVIDIAs and the METAs really picking up some of the weaker ones like Apple or Microsoft.

And so I do think you're going to have more broadening, but also you're going to have tech continue to outperform. It doesn't make sense to me that the S&P continues to make new highs, yet tech doesn't follow along with that. I don't think mathematically that's really possible. Jimmy, you're playing for a path of least resistance being higher.

You bought more small caps. You made a number of other individual moves that I'll get to as well. But buying more small caps means small caps have had a nice rip here after sleeping for a while. Russell 2000 is up 20 percent now year to date. Why? Because the last month has been a 10 percent ripper. Yeah.

Well, look, I do think it's got further to go. I think this is what Bryn was just saying, continuing the broadening of the rally. And as much as it's up 20 percent, maybe year to date, let's remember it's languished, as you pointed out, Scott, for quite some time. I think the fact that the economy continues to expand, of which there is no question, there really is no question, combined with lowering interest rates, that's a pretty powerful elixir for further small cap growth. And sentiment really plays in here as well.

But more than anything, my actions are a very strong agreement with what's been said by Bryn, by Joe and Steve so far, which is to say the rally is likely to continue. And I'm in cyclicals. I got kind of I got kind of bullied out of General Motors. I'm not happy about it. But the

But the facts on the ground changed. I had to sell it. It was a very big position for me. And that meant my cash balance raised pretty high. I wanted to get that money back to work pretty quickly. And I did. Not just small caps, but industrials like Wabtec, materials companies like CRH. Also bought On Holdings, where the momentum is terrific.

And then finally, Adobe, which is a nod to technology. We haven't been talking about technology leading for quite some time. It just hasn't. It's been handed the leadership over to financials and industrials. It's still going to do okay, and I see a great opportunity in software where the money seems to be flowing right now. That leads to Adobe. Been talking a lot about the prospects of a...

everything rally that people are positioned that way, at least hoping that, you know, from election to inauguration, at minimum, you're just going to have this tide that continues to lift a lot of boats, some more than others. But nonetheless, it's going to be still an attractive environment for a lot of stuff. Well, here we are the first day of December and you have a reversal.

of the recent trends. Now, look, it's one day. What are we, two hours into the trading day? But in November, it was all about equal weight. It was about momentum. High growth was the best performing factor in November. So you had financials performing well. You had utilities performing well. You had emerging software performing well. Now we walk into December, and what do we see? We see a little bit of a reversal there. The mega caps making the comeback. You have a lot of semiconductor names that seemed...

as though they were dormant previously. Lamb Research is up 5%. Applied Materials up about 4% today. You also have KLA Corp. So you've got the semis coming back a little bit. And I think it speaks towards exactly what you're saying, which is you could find opportunities in the totality of the equity market. You just don't want to isolate yourself into one particular factor.

or equity sector. Joe, I just want to point out, corroborating what you're saying, if you look at the SMH, it's up about 2.6%. You know what's not leading in the SMH? NVIDIA. I have nothing against NVIDIA. I have a big position. But the names that you spoke about, KLA, or in my case, AMAT, or something like a Qualcomm,

Those are all outperforming today. My point being, we're talking about the broadening of the rally. It was actually very narrow, the rally in semiconductors, for most of the last several months. It seems to be broadening right now. Look at AMAT. It's up something like almost 5% as I'm speaking. Well, take a look at Taiwan Semi, but... Is there an echo in here? Hmm.

Yeah, well, Jimmy does want to be right every once in a while, so that's why I repeat what Joe and I say. I feel like I added value. I feel like I added value. I'm glad you underscored that. You did, you did. Well done, Jim. You know, speaking about those who are speaking right now, we do have breaking headlines from the Atlanta Fed President, Boss Dicker. Steve Leisman joins us now with those. What are we learning here, Steve?

Well, we're learning that there's conflict among Fed officials. Bostick's certainly giving it a lot of airtime. We had an essay out as well as speaking to reporters in just the last hour. This conflict over the idea that rates need to come down over the long term, but not necessarily...

knowing when to do so. He says basically the December cut is not preordained, even though he does believe that over the long term rates need to come down. Every meeting he says is live. He said he had 75 bips built in for this year. So we got what he was sort of forecasting. This is in September. And he forecast another 125 for next year. But that forecast could change coming up in the next meeting. He says he's not going to the meeting with an expectation there needs to be a cut.

but he could well do it. Policy rate is still, he says, in a restrictive stance. He's unsure how restrictive policy needs to be to get back down to that 2% more precisely, but also be mindful not to seriously damage the labor market. He sees inflation reaching 2% by the end of 2025, and a downward trajectory of inflation has been bumped

he does acknowledge, concerned about some geopolitical uncertainties both at home and abroad. He could renew inflationary pressures that are out there. Finally, he sees economic growth and the labor market both as cooling, which is the direction he wants things to go in. But the economy is on solid footing. I'll leave it there, Scott. But just there is this sort of idea, we're restrictive now, the Fed needs to come down. But whether it has to happen in December is not entirely clear. The market trading with a

63% probability of that rate cut coming in December. Steve, thank you. Steve Leisman, our senior economics reporter. So, I mean, Joe, a better chance than not of December, but does it even matter at this point? I mean, what happens if they didn't go in December? Is the market care?

It's 50-50 right now. And no, I don't think the market would get it. Well, it's 60-40, actually. OK. 63. I was going to say that, but I didn't want to be echoing. That's why I'm here. I got it. So I don't think it upsets the market. No. If they don't go, because I think at some point you have the confidence that if they need to go in the first quarter of 2025, they will, or if they go in the second quarter, I

I think you know the direction. The direction is what matters. It's not really the pace that matters so much to the marketplace right now. - That's why Evercore is positioned for higher stocks. As long as you have the rate cut playbook out there, then you're gonna wanna stay overweight tech and comp services.

and then Jimmy's small caps and Tom Lee's small caps. How come I don't hear a lot of other people talking about Weiss small caps? Like, why aren't you buying small caps? Well, there is a financial element to it. So in terms of small banks, I personally don't think that that story is done yet in terms of the exposure small banks have.

And in order for me to buy small caps, I'm pretty much fully invested. I have some cash. What am I going to sell? So the stocks that I own are pretty well positioned for the future, pretty well positioned for now. And I think small caps have seen so much capital come into them that I don't want to chase that momentum. So that's one of the reasons. I do think they can play for a little while, and I do think they can run through the end of the year. But

I just don't see myself getting more in small caps. I'm getting in a metaphor example. As a matter of fact, you take a look at the valuation of Meta in terms of sickles that you were talking about. The valuation is dead on with Deere, for example. Now, Deere is going to have EBITDA declining substantially this fiscal year. They're there in October year earnings declining, revenues declining. Yet Meta is priced at the same multiple. So

I think there's risk to that 25 basis point nothing, in other words, that it doesn't happen. It depends what the commentary is, because a lot of these stocks are trading based upon rates coming down, and that, in fact, may not happen. They've got very inflated multiples. I've said Mark doesn't really care that much about valuation, but what would you rather own, Meta at this valuation or Deere?

Would you rather own Cap, which has had a big move, still price the discount to the Meg Cap tech, but I'd still rather own Meg Cap tech? Well, a lot of people, I mean, you know, Jimmy's probably one of those who says you want to own a good amount of both. That's exactly the point I would make. It's not a win-lose equation here. I'm more concentrated. I run a much more concentrated book. I run a concentrated book, too, and I'm not taking any shot at meta. That's fine. I'll tell you, dear, right now, since you brought it up,

You're factually correct that this fiscal year you are going to see revenue and EBITDA decline. And the market is looking through that, whether it's right or wrong. The market is looking through that and saying, this is the trough that we've waited for. Management has done a very good job of controlling inventory. And the stock has rallied to new all-time highs because of it. My point, Steve, is not to be you versus me. We do that enough. It's simply that not ever enough. We can reignite that right now as far as I'm concerned.

Less filling, Scott. Less filling, Steve. No, but my point is, choose your poison. You know, Bryn likes the equal weight S&P 500. Totally on board with that. I happen to prefer small caps. Steve wants meta at this valuation. Absolutely fine. I might counter with Google, but it's not a counter. It's a there are a lot of opportunities out here. If you're queasy about Microsoft,

at 35 times more earnings as I am. I trimmed it. And what did I put money into? Things that are a lot cheaper and I'm more comfortable with. I mean, mega caps, Bryn, have been showing some signs of life, not just today. You know, obviously, they're the better performing stocks in the market today, as almost all of them, as I look on my screen, are having a nice day. And since the election, you know, NVIDIA really is the only one that hasn't done anything. And it's been down for three straight weeks.

Yeah, but it's the best performer of those stocks we have up on the board year to date. And so whereas Apple, and I continue to think like an Apple, you're going to get a market perform, right? So as the market has gone higher, as the Q's has gone higher, the S&P, Apple has followed along with it. Like once again, as I said earlier,

These stocks are, what, 35 cents of every dollar that goes into the S&P 500. And so I think that if you're going to trail the market, you have to be doing something wrong. And so I think these names overall will continue to market perform. But I do think there's names next year like in Amazon,

Obviously, you know, Tesla has been a huge winner, which we'll probably talk about later since the election. But I do think you're going to continue to see a disparity between these numbers. I mean, Microsoft, relatively speaking, has been a dog this year. And so I think that you're going to continue to see this dispersion. So I think Amazon next year could be an outperformer, Apple market performer. But Microsoft, I think, needs to get its act together because to Jim's point, he trimmed it because there are so many other opportunities to buy.

in these even big names when you're not seeing the performance even just staying relative to the S&P 500 and the Q's. - It's funny, on any other year, you would say a 15% return for a Microsoft or any stock, you name it, would be just fine.

But not this year. No, not this year. When you look at the NASDAQ, double that, up 30, a 15% move in Microsoft, especially when you compare it to some of the other moves in the other mega caps, you're like...

oh it's a joke it's underperformed it's a dog so i think what happened for portfolio managers is as a result of 2023 and that narrow concentrated performance from the magnificent seven you come into 2024 and what's on your mind i gotta chase beta i gotta make sure that i chase that beta and i think as you turn the calendar into 2025 now you're thinking about no no you're not chasing beta you're actually looking at where can i generate more alpha and if i look at the mag 7 i'll tell you to me the

biggest disappointment in twenty twenty four without question is alphabet i think coming into twenty twenty four everyone said this is the year that alphabet is finally going to catch up in terms of performance relative to its peers it's cheap it's cheap be patient joe it's cheap relative to everyone else going you know is this the year that everybody said that i

I don't think there was a lot of excitement coming into this year. No, I think it was the exact opposite. Coming into this year? Yeah, I think this was the year where people were like, yeah, they lost the lead. If you talk about Gerstner, Gerstner only, early on, to your point, before he reversed again, he said, I'm out of Google. Yeah. Right? They're going to be a loser. I think the narrative was they're going to be a loser. That was more of a controlling dialogue than Google's a winner.

That was early on. It switched later on when you got the opportunity. And like anything else, it depends where you buy these stocks. If you buy them on a correction with Google, like where I added to quite a bit, it's still okay. Still, you know, there's a lid on it. Microsoft, you know, to everybody's point,

15% is normally good, but I picked it as the number one beneficiary of AI early in the year. And it didn't work out that way. What about names that are among the best of the S&P this year? Besides NVIDIA's 181%, we've mentioned Vistra a thousand times because of the power play related to AI.

Palantir up almost 300 percent just this year. You know, look, and the valuation is extremely rich. This has been the emerging software play to own. There are some others that more recently are doing well. Twilio, which I got into a couple of weeks ago. But this is something that I think you're you're just trailing with a stop and you're letting the momentum play out. Ultimately, Jimmy's laughing over there. I mean, do the winners keep the winners? Do these winners keep winning?

I think the answer to that is yes, to an extent. You would think that it would because momentum stays in place. But you've said this on the show many times. I don't disagree with you. Momentum works until it stops working. And I think you have to be reasonable and understand that there could be a moment where the momentum falls out, a name like that. And that's why I'm telling the viewers, you have to trail this with a protective stop. You can't own a name like Palantir. And if someone says to you, where are you out of the stock? I

I don't know. I mean, that's not an answer. You have to have a stop at a name like this. It applies to Palantir. It applies to NVIDIA. You know, these names that are up 300% over 12 months, you have to expect. I think Palantir is a little different than NVIDIA because it's so much. It's quite different. It's quite different. I want to explain why I was snickering. It wasn't at you, just to be clear. Scott said something earlier. Was that me? Was that you?

No, no, no. You said something earlier, like in any given year, 15% would be great. As you mentioned Palantir, I thought to myself, why don't I own Palantir? I own Oracle, and I looked at the year-to-date return, 75%. I should feel good about that, but I'm looking at Palantir, I'm like, I feel like a schmuck. So that's what I was laughing about. Well, you'd feel worse if you owned Intel. Yeah.

That was rough. It's down 50% year to date. They've never done that. I was trying to segue to my next thing, but go quick. On Palantir, I kept looking at it and looking at it, and I just couldn't come to grips with the valuation. And now it's even worse than that, and your stop's not going to help. They've got to perform now with precision every single quarter, which maybe they will do. Well, the stop will help, but I'm saying it's not going to let you out.

if they miss on the quarter, what I mean by that-- - No one sells the top. - If you're putting out a stop that's five or 10% below, you're gonna blow right through that if they miss the quarter. - If I buy the stock at 16 and it's 66 right now and I sell it out at 56, I'm okay, I'm good with that. - And my point is you're not gonna see 56 if they miss a quarter.

Oh, it's going to go to 46? Yeah. I don't know about that. All right. Let's talk about Intel, our chart of the day. By now, you know of Pat Gelsinger's retirement. Jenny Harrington joins us now. I mean, she's had the stock in one of her funds for a while. And, you know, you've been holding out hope, I guess, that Gelsinger was going to be able to turn this ship around, Jenny. The stock has had a decent move recently.

But it's still down substantially this year, and you finally got out with today's move higher. Why?

Well, okay, hold on. First, I need to defend myself since your lead-in was such a knock on how bad you feel about Intel. Thankfully, this is not the only position in the portfolio. We have things like Meta up 62 percent, URI up 50 percent, XPO up 74 percent. I know, I know, I know, but we're talking about Intel here, specifically. Okay, so let's get to Intel. We didn't say your whole portfolio was 1,000 percent into Intel. We get it. Right, okay, good, thank you.

All right. So our guess is that this is like the culmination of the battle of long-termism versus short-termism. When the board hired Pat Gelsinger, he came in clearly with a long-term mandate to turn around this behemoth, huge company. And to give him three and a half years to do that is totally unrealistic. So I think the board probably hired him and said, yeah, yeah, yeah, that's great. We want long-term. You know, you're the man for the job. And then they succumbed to the share price and they succumbed to short-termism and gave up

on a pretty quickly and we see that we see that as an overall trend in the broad market right the broad market does not reward long-term at the many mark the way it used to be a half years is short-term ism i mean that you know years and the context of a company like intel with the turnaround that did that it needed it short-term at them you know if we think back to that delivering alpha conference uh... i'm going to get some really really remarkable insight around that concept of long-term at the men's short-term at the men's picking with that you know it's got how

we look at things and how we invest. So when we read the notes this morning, you see Frank Ury, who's the board chair, saying, we know we have a lot to do and are committed to restoring investor confidence. That's the first thing he said. Then he says, yes, the products are important. We need to serve those clients, and we'll pay attention to that. And that's first and foremost. But the first thing he said is focused on, in my opinion, share price. So

So you see that on the one side representing the board. And then you see Gelsinger, I think it was over the summer where he was at a conference, and he kind of had a little fit. And he said something to the extent of, if you're short-term focused, I don't really need you as an investor. I'm exaggerating this, but I don't really need you as an investor anyways. I want investors who are long-term and focused on this for the long-term with me.

And then you see things like the board of director, Litt Bhutan, who is the CEO of Cadence, who's a real veteran in the semi-industry. You saw him stepping off because he's saying there's just too much bureaucracy. Like, I'm unhappy with the way this is going. And, you know, and to me, I see the lack of commitment of long-term, of like the long-term turnaround that it needs.

So maybe the board will force some short-term revenue improvement, earnings improvement. But in the long term, I don't think it's doing the company any favors. So I don't think today's upward move is sustainable. There's something else that was really missing from the press release this morning, which was there is no mention of 4Q business trends. And so what we did was we finally, which I know will make you all happy, we finally sold our position. And, you know,

Kind of joking around, but kind of not, like thinking about those big positions that are up. We've had huge capital gains this year, realized huge capital gains. So as much as I hate giving up on this, the tax loss harvest offsets some serious capital gains and knocks down our clients' tax bills a little bit. So I hate doing it. I hate the way this went. I hate the way it's ending. But the loss harvest is not unwelcome. Okay.

OK. All right. Jenny, thank you. Thanks for giving us the explanation there. As we want to know, it's a big story today. We set our chart of the day. Intel's moving higher, but Jenny's out. It's Jenny Harrington. We'll do calls of the day next. We have big calls today about Tesla. We'll talk about it. Brent owns it. Price target goes up. Some other commentary around that name, too. Plus, the plot thickening in the developing feud now between Elon Musk and Sam Altman. We have the latest just ahead. We're back in two minutes.

Nearly 1,000.

That's how many price hikes Big Pharma imposed on brand-name drugs in just two months this year, raising prices on drugs for serious conditions like HIV, diabetes, heart disease, and cancer. And just like in previous years, Big Pharma's price hikes once again outpaced inflation. Tell Congress, Big Pharma sets the price, and their patent abuse enables egregious price hikes. Hold Big Pharma accountable. Pass corn and Blumenthal. Paid for by CSRXP.

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All right, we're back. Let's do our call of the day. Roth Capital, they upgrade Tesla Brin to a buy from neutral. They say, quote, the world's changed. Target goes to 380. Now, the target was also moved higher today at Stiefel. On that notion, though, that the world's changed, I don't think you need to be a rocket scientist to figure out how the world has changed in their eyes because it's changed in many eyes.

And the stock has had an incredible move since the election. Is that is it sustainable? Is there is there you know, has the world changed enough that the trajectory of this stock is just continued to be straight up to the right? I don't know how to assess it. You know, I don't know. You own it. If I go back to that, was it we robot day and then that date and time and what's changed since then?

Really nothing's changed except Trump won and Elon supported Trump. And then you have like the two most powerful people in the world that are besties. And so I think that clearly the stock has had a huge halo effect from that. I think longer term, right? But I think that's a big part of the narrative. So I'm not sure which one had a sell on it before Trump.

That went from 85 to 285 or what have you, the guy that was bearish forever. But I think a lot of people don't want to be in the crosshairs of the two biggest tweeters in the world. And if you're negative on the stock and you have a sale price of 85, I just think you're missing that. You're missing not only the narrative, but where the price is bent. Can I ask you a question? Yeah. Let me ask you a question real quick. I'm sorry to interrupt you because you said it's a big part of the narrative, right? These besties, right? Yeah.

Is that the whole narrative that's gotten the stock from Election Day until now? And has this the world has changed dynamic behind it? I'm not sure. I think that.

Less regulation, you know, people will say that. But really, I think for autonomous driving, that wasn't Tesla's issue at the point. They need to get their own comfort around their FSD. So I think it's definitely part of the narrative. I think longer term, Optimus is really interesting. I don't think anybody had Optimus in their numbers a year ago.

So we'll see. I mean, the stock has huge call premium. So, I mean, if you're going to go into the stock today, I would highly recommend selling calls because you can get some massive premium because I think it will be a volatile ride.

because when their numbers come out in January, they need to deliver. And I think historically where, where, where, where Elon has always been, I think correct long-term and the short term where, you know, we're not going to get a cyber cab next year. They said that's 2026. And so I think at some point next year we'll get a three, but to me right now, there's this big halo between, between, you know, Trump and Elon. And I think that will continue, continue until it doesn't. Yeah. Yeah. Yeah. I mean, I,

I think there was a downgrade. Somebody downgraded it last week, and I think my reaction to that was, yeah, good luck. Good luck with that. What are you doing?

right? I mean, you used to have this. We used to have it. You want to get in front of the momentum that's there now? It rebuilt itself so rapidly and you could clearly say, okay, it was attributable to President Trump winning the election in the relationship with Elon Musk. But whatever the reason behind it, the momentum right now in Tesla is arguably one of the strongest momentum conditions you're going to see in an S&P 500 stock. Yeah, you could respect the respect

The trend. Respect the momentum. I think the return must go on whether you put $100 or $140 million into the campaign in terms of his increase in wealth and the stock price. Man, I don't know if anybody's ever had that kind of performance. As the greatest ROI ever? Without a doubt. Without a doubt. And as Bryn and I went at it earlier this year on Tesla, and I think I won for about two seconds in terms of the short.

which obviously quickly covered because I know too many shorts have been put out of business on Tesla. But she's been dead right on it. They still have to deliver at some point. I mean, robo taxis, unproven, still don't know the launch date. You know, full autonomous driving. Well, I think that's much closer now when they have an ability essentially to rewrite the rules to accommodate that. So momentum will continue. All right. You want to give me something on block, Joe? Best idea.

uh... at bernstein today the target goes to one twenty from ninety they stay out perform on it under underappreciated long-term optionality from a coin for people that that pay attention to fundamentals that they're they're not to appreciate what i'm about to say but the market is becoming so much more oriented towards technicals and algorithms week earlier in the year bought this name we've bought it

We bought it purely on momentum. It's not as if the fundamentals are there. And now the analyst community is coming around. They're raising price targets. 12-month price target, and this is $92. What do you mean the fundamentals? It's not like the fundamentals. The fundamentals are not there. You could say the world's changed also for the Bitcoin outlook. Okay. So if part of the positive thesis going forward is related to that, then the fundamentals are there.

The fundamentals have changed. And that's perception. Perception, which is reflected. Isn't that reality? Perception, which is reflected in momentum. Reality is, I look at this company. What's the revenue growth over the last three years? 36%. What was the revenue growth in the last quarter? 9%. What was the revenue growth in the last four quarters? 12%.

So the revenue is actually declining. Are we talking about where the puck was or where it's going? I want to see a reacceleration in the revenue growth if I'm going to say, okay, I've got the fundamental condition now contributing to what is clearly a purely positive momentum condition. All right, let's get the headlines with Pippa Stevens. Hi, Pippa.

Hey, Scott, President Biden making history today as he becomes the first U.S. head of state to visit the West African nation of Angola. The president landed minutes ago. He's expected to meet with Angola's counterpart in the country's capital city, where he is also scheduled to give a speech. Senior administration officials said President Biden will announce initiatives related to global health and security cooperation.

Five million people across the Great Lakes and southern Appalachians are under winter weather alerts as snow and rain cover the northeast. Parts of New York have received nearly five feet of snow, while areas of Pennsylvania have seen at least 30 inches since the winter storm began. The weather is impacting holiday travel and lake effect snow warnings are expected to last well into the week.

And Elton John says he has lost his eyesight months after suffering a severe eye infection. The tiny dancer and Rocket Man singer attended the launch of the Devil Wears Prada musical in London on Sunday, where he told the audience he had been unable to watch the performance. John wrote the score for the show and said he loved to hear it. Halftime Report is back right after this.

Nearly 1,000. That's how many price hikes Big Pharma imposed on brand-name drugs in just two months this year, raising prices on drugs for serious conditions like HIV, diabetes, heart disease, and cancer. And just like in previous years, Big Pharma's price hikes once again outpaced inflation. Tell Congress, Big Pharma sets the price, and their patent abuse enables egregious price hikes. Hold Big Pharma accountable. Pass corn and Blumenthal.

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All right, we are back. Bob Pisani has today's ETF Edge. Hi, Bob. Got it. Good to see you, as always. A record year for ETFs, nearly a trillion dollars in inflows, over $10 trillion in assets under management. What is next in 2025? Let's talk with Jay Jacobs. He's the U.S. head of thematics and active equity ETFs at BlackRock, one of the big industry experts.

out there. One big theme you have in 2025, you already told me, acceleration of AI infrastructure and how that's impacting ETFs. We're entering this new phase, you're telling me, where AI is going to be a lot more integrated into the overall consumer issues. Tell me what ETFs are going to matter here and why you think this is accelerating. Exactly. So we see the AI theme as having three distinct stages. The build phase, where you have hundreds of billions of dollars being spent on

infrastructure. We think semiconductors like SOXX or digital infrastructure like IDGT are ETFs that benefit from this stage. The next stage will be mass adoption across enterprises and individuals. That's where you might see more software names benefit. And then finally, you have the transformation stage. This is maybe five, 10 years out, but this is where entirely new industries will be created using artificial intelligence. You've got a future AI and tech ETF, ARTY, you want to talk about. You've also jumped into the mega cap

exposure business here where you're talking about whole new companies here. You've got one that has just the top 20 S&P 500 stocks and the top 30 NASDAQ 100 stocks. I know mega cap concentration has paid off so far, but is there any reason why you and BlackRock thinks this may continue into 2025? You just launched this S&P 500 top 20 ETF a short while ago. Well, there's really two use cases. One is if you look at the end investor space, 50 percent of investors in the U.S. don't have exposure to stocks.

And a lot of them just want to get into the markets with companies that they're familiar with. So if you look at these top 20 very familiar household names, at the other end of the spectrum, you have professional investors who are actually underweight, these top 20 names. You hear about how big they are in the S&P, but actually a lot of investors

have moved away from them over the last few years. They need to tactically upweight mega cap tech exposure. I got to let you go, but the first anniversary of Bitcoin ETFs coming up middle of January. We're going to have you back for that. You've got 50% of the assets under management for that enormous success. So we want to have you back and talk about that in the next couple of weeks. We got to go, folks. We've got much more coming up on the big ETF trends for 2025.

That's on ETF Edge at 1.10 p.m. Eastern Time. I'm going to have Jay back. He's going to be joined by financial futurist Dave Nautic. That's ETFEdge.CNBC.com. Scott, back to you. All right, Bob, appreciate you. Thank you. Bob Pisani, straight ahead, the battle over AI. Elon Musk escalating his feud now with Sam Altman. We're following the latest developments. We're going to get the committee's take on it as well next. We are back. The legal battle between Elon Musk and Sam Altman's open AI heating up. Our Steve Kovach joining us now with...

This battle of the personalities and companies, I guess. Yeah, exactly. And what bigger personality than Elon Musk? He's been ramping up this lawsuit that's been going on for months against OpenAI. And this is coming, Scott, just as he's expecting to launch his own competitor from XAI. And he's also competing with OpenAI for VC funding for all these artificial intelligence ambitions like...

Let's rewind back to Friday. That's when Musk asked the court in this case for a preliminary injunction, which would block OpenAI from turning into a for-profit company, as it's widely expected to do. Also alleges OpenAI is blocking its investors from also investing in rival AI companies, which would, of course, include XAI. And this is part of that

ongoing lawsuit Musk has against OpenAI, its CEO Sam Altman, Microsoft and some other individuals. Overall, this lawsuit alleges OpenAI has abandoned its original charter to be a nonprofit company. Also saying OpenAI and Microsoft have an unfair advantage because of their partnership with Microsoft getting access to early technology from OpenAI before anyone else. We asked OpenAI about these latest allegations and they said Musk

quote, "recycles the same baseless complaints," and they referred us back to emails the company released back in the spring, which showed Musk proposed making OpenAI a for-profit under his control, either as CEO or joining Tesla. In the meantime, you had Wall Street Journal reporting last week that Musk is planning to launch that consumer version of XAI. XAI is, of course, according to this report, a small business and not getting most of its revenue from other Musk companies like X and SpaceX.

And by the way, the Financial Times also reported last week Twitter acquisition backers, they're getting a 25% stake in XAI. That's, of course, after the valuation has plummeted. I will note, though, just this weekend, Axios reported that Fidelity, one of the big backers of that Twitter acquisition, raised its valuation of the X investment, but mostly likely tied to that XAI shares that they're getting. By the way, you got that latest valuation out there for XAI?

$50 billion. That's actually bigger than Anthropic, considered the big OpenAI competitor, but it's still just a third of the valuation of OpenAI, Scott.

But growing fast. Growing very fast. As we know. Do you have any sense of a time frame of this lawsuit that we've talked about now on numerous occasions? Yeah, this one they're asking for, I believe it's an early, I think it's January 7th. Sometime in early January, they're asking the judge to make this preliminary injunction, which would pump the brakes, so to speak, on OpenAI transitioning to a for-profit. We don't know exactly when OpenAI was planning to do that, but Musk at least seems to think that it's coming early next year. All right.

Steve, thank you. Steve Kovac. Santoli is next with his midday word. Mike Santoli, our senior markets commentator here at Post 9. First trading day of December. Momentum and seasonality are on the bull's side. There's just no denying that. You have to basically give a nod in that direction and say, you know, all else being equal, you expect some upward drift, if nothing else. Obviously, you have a big gain in November to digest.

That's what the market's doing today. It's kind of doing nothing special in either direction, meaning you have negative breath in the New York Stock Exchange. Tech's getting a little bit of a bid. Banks in particular are just watching that. J.P. Morgan is pulling back from a really, really aggressively strong spot. I feel like going into next year, the thing we might have to contend with is pretty lofty expectations being built upon a pretty elevated base of valuation and expectations of the economy. It's not

This is the belief phase of a bull market, and that can go on for quite a while. But I feel like pretty much everybody loves banks and other financials. So you have to be aware of where consensus thinking is right now. Crowded trades can be crowded and productive for a long period of time. I don't even mean it. It doesn't even have to be that it's so crowded that people are like over their skis, you know, owning a ton on leverage or anything like that. Oh, no, no. It does. It does define what the hurdle is.

in terms of being pleased because we were benefiting last year from very low expectations. People really thought the recession was going to be a likelihood, and that's not the case this year. Yeah. I'll see you on Closing Bell. That's Mike Centoli. Finals are next. We will take you through the final stretch today on Closing Bell with Cheryl Young, Kristen Bitterly, Christina Hooper, Stephanie Link, and Jason Hunter, and I hope you'll join me then. Bryn, let's do finals. What do you got?

I'm going to give you Tesla with a covered call. You can buy Tesla here. You can sell the February 400 strike price and collect $26 in call premium, which is 7%. And that will also take you through Q1 earnings. Okay, it's up another 4% today. Thank you very much for that.

Farmer Jim. Going with wind resorts. Very good numbers in November from Macau, but also it looks like it's coming out of a one-month consolidation. The momentum's clearly there. Thank you very much. 3% mover today, Steve Weiss. IBIT. I bought some of it last week when Bitcoin took

you know, trade down a little bit. It's a cheap way to play in terms of fees and some of the others like Grayscale Bitcoin Trust. All right. We still watch for the 100K watch. Still going to get through it. All right. Thank you. Joe T. Very powerful intraday reversal in CrowdStrike today. Pay attention to that. I think the stock is positioned to trade to a new all-time high. Thank you very much. I'll see you on the bell.

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Nearly 1,000. That's how many price hikes Big Pharma imposed on brand-name drugs in just two months this year, raising prices on drugs for serious conditions like HIV, diabetes, heart disease, and cancer. And just like in previous years, Big Pharma's price hikes once again outpaced inflation. Tell Congress, Big Pharma sets the price, and their patent abuse enables egregious price hikes. Hold Big Pharma accountable. Pass corn and Blumenthal.

Paid for by CSRXP.