← CNBC's "Fast Money"
CNBC's "Fast Money"
Stocks Wrap Up A Historic Year… And Overseas Opportunities in 2025 12/31/24
00:42:20
A big 2024 for stocks as the S&P 500 notches it’s best 2-year gain since 1998. And with the MAG7 stocks doing most of the heavy lifting, will tech continue to carry the weight in 2025? Plus Global opportunities in the new year. Where your money could do the most traveling, and the markets that could ring in the new year with some strong growth. Fast Money Disclaimer
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- [00:00]
PGM Representative
At PGM Expertise across public and private markets today helps build resilient portfolios tomorrow. As a leading global asset Manager with over $1.2 trillion in AUM, PGUM has navigated over 30 market cycles with active investing and disciplined risk management. Our combined global expertise and local insights give us these strategic perspectives we need to help you reach your long term goals. Pjum our investments shape tomorrow. Today, get a head start on 2025 with CNBC's Big January, the hottest tech event, CES from Las Vegas, the data, the jobs report and meet the future of biotech and Pharma at JPM Healthcare. Check out the AMEX Golf tournament from California, Inauguration Day and the meeting of world leaders in Davos. Plus the first Fed decision of the year. The investing edge you need to start the Ahead of the game.
- [00:59]
Courtney Reagan
CNBC Live from the NASDAQ Marketsite in the heart of New York City's Times Square. This is fast money on New Year's Eve. Here is what's on tap tonight. What a year. Despite a down December, it's been a year full of records from AI to crypto to broad tech and beyond. So will the markets roar higher in 2025? Or is the long December a bad omen for the new year? Plus polar vortex December is going out like a lamb, but January is supposed to come in like a lion. We'll break down the impact this coming cold snap could have on travel, energy and more. And later, a look at next year's returns in retail. Who's hot and who's not, around the globe and ticking off our trading regrets and resolutions for the new year. I'm Courtney Reagan in this evening for Melissa Lee coming to you live from Studio B at the NASDAQ Marketsite on the desk tonight. Tonight we have for you Steve Grasso, Guy Dami and Von and Eisen. Thank you all for being here. Of course on this New Year's Eve we are going to start with a historic year for markets. Major indexes all setting multiple multiple record highs in 2024. The S&P doing it 57 times. That's more than one all time high per week. The benchmark index rose 23% this year after an already stellar 2023. It was the S&P's best two year gain since 1998. The NASDAQ and Dow also posting big returns this year as mega cap Tech led the way. The so called Magnificent 7. Responsible for 95 95% of the broad market's gains, these stocks have added nearly $5. 70 trillion in market cap this year. But it wasn't just tech seeing gains in 2024. Consumer stocks and financials also outperforming. Meanwhile, on the downside, energy, real estate and health care. And then there was materials, the only sector down on the year. So as we close the books on 2024 and we turn our attention to what's to come, how should investors set themselves up for the new year? Guy?
- [02:59]
Guy Adami
Yes.
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Courtney Reagan
Are you marking in your playbook as we close the pages on this year to the next?
- [03:05]
Guy Adami
Thanks. Comment Courtney, I know it's a tough night to be at CNBC's Fast Money, but you are here. Thank you for that. And you know, you mentioned all the records. The real I think the record that sort of sets all those things up is the fact that we saw $1 trillion of inflows into ETFs this year, which is a record. And that suggests again, some of we talked about this. Passive investing is everything you mentioned at 95% of the performance of those stocks. So the whole broadening out story really doesn't hold a lot of water given what you just said. And the other thing that we should mention is not only do we have a record in terms of the stock market, but 10 year yield closed at the highest levels we've seen I think now in 18 or so years. And I think of all the stories in 2025, the move in interest rates I think going to be on top of the list.
- [03:48]
Courtney Reagan
I mean the broadening out that we've all been waiting for, as Guy says, just hasn't happened. I mean it is unbelievable. Those stats that we ran through with that magnificent seven. If you weren't in that trade, is it too late to get into it in the year ahead?
- [03:59]
Steve Grasso
Well, I think you want to wait for a pullback, right? So you nailed it at the top of the show. There's only been three spots. You said it's the best performance back to back since the 90s. There's only been two other spots besides now and the 90s, the 30s and the 50s where you had, you know, two years that were better than 20%. Are we going to have a better than 20% year next year? Odds would favor no odds would favor that we get a drawdown. Is the drawdown 5 or 10%? But it's got to be some sort of a drawdown. So maybe to Guy's point, if we're looking at interest rates, that could be the catalyst for a drawdown. But if you look at where Powell is, where President Trump is, where we think growth is a lot's been pulled forward. Doesn't mean that a lot more can't happen. He's not even president yet. So I'm a firm believer in you could only pull so much forward.
- [04:56]
Courtney Reagan
Yeah, I mean obviously we had a really strong year and then we saw this major rally after we got the results of the election, but then a lot of that faded. I mean we're talking about the end of the year, even sort of the last couple trading days. Not much to write home about really for the bulls at least. Bonwin, what do you think that that portends for the year to come? Are we in a holding pattern until the new administration takes place, until maybe we know a little bit more about what we think the Fed could or couldn't do? It does seem like that last statement a little hawkish. Surprised at least some, at least by that market action.
- [05:27]
Bonawyn Eison
I'm hesitant to read too much into an entire and extrapolated entire year's worth of performance based off of a week or two, to be quite honest with you. I know that we're all excited about 2025 New Year's resolutions. We're going to lose a few pounds, we're going to read that book, we're going to get out there, we're going to spend more time with the kids or meet that significant other. But the truth of the matter is that I think we should be a little bit hesitant to essentially assume that 2024 has to be so much different than 2025. Now, will fiscal stimulus continue the way that it has? Unlikely. So I think to the to Steve's point, I think that might be a headwind where you look to buy a pullback. But is the a high undercurrents? Do those still serve as tailwinds for the market? Very much so. Is there going to be continued Capex then? Very much so. Will it be pulled, will it be pulled back? Will there be further delays when it comes to Blackwell? I think all these things you want to kind of keep a pulse on to understand if the currents have shifted. However, I would say you will likely cost yourself significant performance if you try to get out and end up going against the current before said current has actually shifted.
- [06:35]
Guy Adami
It's interesting, Courtney. You know the SMH and bond we talked about, if you look that topped out in the middle of July of this year, around 283or so traded lower, it's been trading sideways ever since. And if you think about the importance of semiconductors to this market, they really have not been a Performer now for the last five or six months, which I think is interesting. You know, we talk about Nvidia, but below the surface there are names that have not traded well. AMD has been a disaster. Qualcomm has been a disaster. Sort of tangentially, Micron's been a disaster. So for every sort of Marvell and Avago, there's an AMD and a Qualcomm and some other names that haven't performed. I think if you want to watch something closely in the early of the year, it's how semis perform going forward.
- [07:15]
Steve Grasso
And if you think about it, Guy talked about ETFs and passive investing on top of the show. Think about what's been the catalyst for a lot of these ETFs. Crypto. So we've had Bitcoin ETFs, we have Ether ETFs. Maybe we're going to have more approvals for, for crypto, but that has been a huge chunk of this. Passive investing has been the crypto space that you could see in Guy and our. In my lifetime, right, we've had Rare Earth, we've had crypto, right, We've had AI. Now we're looking at Quantum. So we have quantum computing. So is that way off, off in the horizon? Possibly so. But there's a lot of these other things that could be the catalyst for a lot more push into different areas of, of semis. When you think about intel, it's been terrible on AI. Will it be that terrible on Quantum? I think that that's possibly where they could actually shine a little bit, where they can get a little bit more attention. So I'm looking forward to intel being something better, which the bar is very low, pretty low.
- [08:21]
Courtney Reagan
We're talking about what happened this year.
- [08:22]
Steve Grasso
Something better in 2025. But you have, you do have a lot of catalysts after the market. The market needs, we've all been doing this way too long. The market needs to feel as if you're giving it a bargain. So you need a little bit of a pullback to have people jump in.
- [08:38]
Courtney Reagan
Very interesting thoughts there. And we're going to get some more on the market's reaction. Let's go ahead and bring in Jim Bianco, Bianco Research. Jim, thank you so much for being here. You know, I think it's very interesting that we had you on just about a year ago, I think is about January 3rd, so give or take a couple of days. And at the time we were asking you about what your take was for the ten Year Treasury, I think you said about five and a half percent. And you think that's kind of where we're going to stick going forward still?
- [09:02]
Jim Bianco
Yeah. You remember that In October of 2023 the 10 year treasury hit 5%. And I thought at the time a year ago that we were probably make a new high somewhere between five and five and a half now we got the four and three quarters back in April. We got very close to it last week. I still think we'll probably sneak out a new high, you know, above 5% and we're closing the year for 56. So that's not that bold a call anymore. It's only about 40 basis points away. So it doesn't have to redefine the world. But I do think that the trend in interest rates is still going to stay higher at least for the first half of the year.
- [09:38]
Courtney Reagan
And then how are then is your assumption playing out with what the Fed will do? Because it hasn't been as correlated with the 10 year yield as you might have assumed at least recently.
- [09:49]
Jim Bianco
That's right. You've seen that the 10 year yield has gone up almost 1% while the Fed has been cutting rates the last 60 odd years. That's only happened one other time and that was 1981 when the Volcker Fed cut off of 20% and the bond market didn't like it. So this has been quite a move to see that rates have been going up while the Fed's been cutting. Why? I think the market's rejecting the rate cuts. It saying we don't need them, they're not necessary and if you're going to continue to cut rates, you're just going to raise inflation expectations. And that's why as the Fed continues to cut and talks about cutting in 25, the bond market just reacts to it badly. I think if the Fed wants to see yields down, maybe they should stop cutting.
- [10:33]
Guy Adami
Yeah, I'm with you on that Chairman. Your work has been extraordinary here. And here we are, you know, somewhere between four and a half percent and 4.6%. I don't think a lot of people thought that was possible. Where does the market start to care? Because it's seemingly carrying now over the last week or so, but where does it really sort of pick up its ears and say hey this is a problem?
- [10:53]
Jim Bianco
Oh, I think it's starting to care now like you said and I think you know, if it gets to 5 or above 5 it will really start to care. And why will the market care? It gets back to an earlier conversation you guys were having a few minutes ago. The valuations in the market are very high. That doesn't, that's not a timing tool. The market continue to go higher, but it is an expectations tool. If you have a high valuation market, you should have lower expected returns into the future. And if you look at the work by Bob Shiller and JP Morgan and some others, the valuations, the market suggests that you should get about a 5 or 6% return over the next couple of years. In the stock market, I know it's not the 20% we're used to, but look at bond yields, they're at 5%. And if the bond market is going to offer you the same thing that the stock market could offer you with a lot less volatility, that's a problem for the stock market because it's just a more volatile way of getting the same thing for the bond market it's going to offer.
- [11:44]
Steve Grasso
Jim, when you look at your thesis, in all of our businesses collectively we have to decide what can make it go wrong. So in your thesis, what are those, what are those ideas that might change the end goal for the 10 year for you? What could you get wrong or what could the market get right?
- [12:04]
Jim Bianco
Yeah. So I mean the big one that you can get wrong would be a recession. You know, it would be a slowdown in the economy. Now I know that, you know, people have said on and off for the next several years that the economy slowing, we're going to go into recession. But the data is not showing that right now. But if somehow something happens, an event that scares the market and it turns the, you know, the trajectory of the economy south, then it'll turn the trajectory of interest rates south. But right now the reason that they're staying up and going higher is, is at the top line. The economy is not showing any signs of slowing down. It's part of the reason why every market has been, every risk market with stocks, it's, it's corporates, its crypto has been rallying this year because there isn't a problem at the top line.
- [12:47]
Courtney Reagan
Jim, thank you so much for joining us here tonight. Happy New Year to you.
- [12:51]
Jim Bianco
Happy New Year to you, Bono.
- [12:54]
Courtney Reagan
And what do you make of some of Jim's comments? I guess particularly his expectation for the 10 year yield and his worries for the 2025 year to come.
- [13:04]
Bonawyn Eison
I think they're well founded. You know, as you mentioned, at this point we're only talking about 40, 45 bits of movement and we've seen incredible volatility this calendar Year in terms of the. In terms of the 10 year. I also think it makes a very interesting point in terms of yields, essentially rejecting what we're seeing on the front of front end of the curve. And we've had inversion and we've had reversion and we've kind of had a bit of an oscillation there. So in terms of under. And the last thing you know, earlier we mentioned the proliferation of passives and then how that feeds into optimism and capital flows. I think those are three points that he really highlighted. And then what we should be expecting in terms of forward returns, my pushback would be that if the VIX remains relatively capped, then it's tough to make the argument, at least from a perception standpoint, that you are going to have that increased volatility around returns. And then moving over to fixed income and issuing equity returns essentially means that you will be missing out on the Broadcoms and the Nvidias and the bitcoins and things of that nature if you elect to lock in 5% and not, you know, the point being that volatility cuts both ways. Yes, you will dampen the downside, but you also will be foregoing the upside. And I think that is something where, you know, I might push back a little bit.
- [14:26]
Courtney Reagan
All right, fair enough. Well, meanwhile, we did mention intel, but it's been a year to forget for that semi stock, the chip giant sinking 60% in 2024, its worst year since going public 53 years ago. Intel trading near its lowest level since 2010. It's also the year's second biggest loser in the S&P 500, only Walgreens boots alliance performing worse. So is intel stock a bargain going in to 2025? We kind of got Steve's early read. So, Guy, I'm turning to you on this one.
- [14:52]
Guy Adami
Well, I mean, if you played it on a bargain thing, which I've tried to do for a while now, it's been a loser's. It's been a bargain for the last $15 to the downside, number one, just in terms of valuation. But if you look into place sort of something that could be a Homeland Security play, you know, so bad it's good. We've heard that story all the time. And it could come in the form of Intel. And again, you think about a company that's missed the entire move, not only in the stock market, but in semiconductors over the last five or six years, you know, they've been putting out the pasture, but just something incrementally on the Margins and get this from being a $20 stock stock to a $27 stock. And nothing has fundamentally changed with the business. So, yeah, I think it's one of those names that actually could surprise people. Early in 2025, you had a $20.
- [15:34]
Steve Grasso
Billion investment in Intel. You do the sum of the parts, it's worth more than, than you're getting in the stock price right now. CEO had to go. That was very long in the tooth. It took way too long for him to leave. You're going to see the stock perform better going forward, even if there's even. You have to think about this as a stock trader. Even if you get the same performance, it's going to be viewed as in a better light because you're going to be closer to the end of the nonsense versus the beginning of it. So I think it does have the capability of trading higher in 2025, bottom without Gelsinger.
- [16:12]
Courtney Reagan
Do you think that helps anything, remove any handcuffs on the stock?
- [16:18]
Bonawyn Eison
Well, yes, because that's, I mean, we essentially have a proven path. I mean, that use case has been proven and it wasn't working. I mean, the whole argument now is essentially that, you know, they're really going to be investing in manufacturing. Clearly, they haven't been able to design and keep up with the likes of the top performers, the AMDs of the world that have taken market share. So now it's really a question of is the foundry business going to get to a point where it can essentially compete with Taiwan semi. I don't see them losing more market share. So the fact that you have new leadership and you at least know that the previous path is now going to be pivoted. Yes, I do think that's a catalyst, although I, I mean, I think this is tough. They've, they've missed AI, they've missed gpu, they've missed bitcoin mining, they've missed all of these secular tailwinds for chips, as Guy has said. And you just really wonder what that next catalyst is.
- [17:10]
Courtney Reagan
This is one we're certainly going to be watching going forward. Well, coming up, retail's resolution or revolution altogether, the XRT underperforming the broader market in 2024. But can the group stage a comeback in the new year? A top retail analyst joins us next to lay out the names. He is seeing the biggest opportunity. And speaking of retail, you may want to grab a parka. Frigid temperatures inbound as a polar vortex. Hence for the US where Americans could face the biggest impact and what it might mean for energy prices. That's ahead too. And as we head to break, check out the celebrations and firework from around the world as we ring in the New Year. Fast Money from Times Square back into.
- [17:48]
PGM Representative
As a global leader in alternatives today, PGM is capturing the potential of tomorrow. So as you look to diversify your portfolio, PGM offers expertise in seeding, developing and managing a broad range of liquid and illiquid strategies. With over $320 billion in alts across public and private markets, we are helping clients achieve their long term goals. Pgum Our investments shape tomorrow today and now a next level moment from ATT Business. Say you've sent out a gigantic shipment of pillows and they need to be there in time for International Sleep day. You've got AT and T5G so you're fully confident, but the vendor isn't responding. And International Sleep Day is tomorrow. Luckily, AT&T 5G lets you deal with any issues with ease so the pillows will get delivered and everyone can sleep soundly, especially you. AT&T 5G requires a compatible plan and device. 5G is not available everywhere. See att.com 5G for you for details. Get a head start on 2025 with CNBC's Big January the Hottest Tech event, CES from Las Vegas, the data, the jobs report and meet the future of biotech and Pharma at JPM Healthcare. Check out the AMEX Golf tournament from California, Inauguration Day and the meeting of world leaders is Davos. Plus the first Fed decision of the year, the investing edge you need to start the year ahead of the game.
- [19:16]
Courtney Reagan
CNBC welcome back to Fast Money. Retail stocks closing out the year 10% higher as measured by the XRT Retail ETF at least, but the group trailing the S&P 500 by more than 13% over that same period of time. Value oriented names were in vogue this year. Walmart, Burlington, Amazon, Ollie's Bargain Outlet and Costco among the biggest winners in 2024, each up double digits. Our next guest thinks the trend set to continue in 2025. For more, let's bring in Cowan Senior Retail Analyst Oliver Chen. He's also adjunct professor of retail at Columbia. Oliver, it's great to see you. Appreciate the look tonight as well. Great stuff for New Year's Eve. So let's get started and talk about what you expect for 2025. Obviously Walmart major winner, up something like 72% year to date. You think that can keep winning?
- [20:05]
PGM Representative
Yeah, we're excited about Wal Mart in the year ahead because Courtney, as you know, this story here is about ultra value and ultra convenience and being ultra fast. Wal Mart checks a lot of boxes in terms of what they're offering to the consumer with everyday low prices. In addition, there's a technology opportunity at Wal Mart too. Given that it's harnessed artificial intelligence in the loyalty program, digital advertising is a big opportunity. I bought this jacket from Walmart's Marketplace. So as we think about what happens going forward, it's this whole retail ecosystem. Another idea that we love is Costco as well. And our focus for next year is BJ's. If you like Costco, we think you'll love BJ's. In part because the BJ's P E multiple is 21 times and Costco is 46 times. Bottom line, consumers are looking for value. And the consumer is also somewhat bifurcated where the higher end is doing a little better now in light of the S and P performance as well.
- [21:05]
Courtney Reagan
So, two questions or thoughts there. You talk about bifurcation, which I want to hit and I want to come back to. But you gave us the name BJ's wholesale as well as Costco. And of course, Wal Mart has its Sam's Club business too. So how much of the value in Sam's Club is actually reflected in the price of Wal Mart stock? Or is it? I feel as if we often don't talk about that, but that is a huge business on its own.
- [21:26]
PGM Representative
Yes. Sam says 600 stores, and they've been a leader in technology and also pioneering their own private label. We've been impressed. Crestwood Sam's, obviously, Costco has been a huge winner and we've liked that for many years. As you think about BJ's, it's only 250 stores. Costco and Sam's have about 600 plus. So we think there's room for all of these players, which is a wholesale business model focused on value being off price. You really pay to shop here and you pay to get access to these low prices. It's a very good market to be in as shoppers continue to have pressure at the middle and low end. So we're looking forward to the growth ahead at BJ's as well.
- [22:06]
Courtney Reagan
And so I want to get back to that bifurcation thought. And you're talking about pressure on the middle and low end. But it feels like I've been covering retail for, I don't know, 13 years. It feels like we're always bifurcated, are we not? It feels like everyone always picks TJX and Wal Mart as a winner. It Seems like it's the same story.
- [22:22]
PGM Representative
Yeah, Courtney, you and I go way back in the mall and it's really this problem that we've seen for decades. You don't want to be stuck in the middle. You want to offer a really super premium product or you want to offer extreme value. Right now you're kind of getting the best of both worlds. For example, I bought caviar at Costco. Costco is getting a higher household income customer. Also with the marketplace at Walmart, they're also getting a higher household income customer too. So everybody likes value. But this bifurcation theme will continue. And part of that is retailers have to have these core competencies around what they do. And offering low prices will always be in style.
- [23:02]
Guy Adami
Oliver, you're in style. You look great. Your namesake Ollie's is done extraordinarily well. I don't know if you cover that, but that's been on fire as well. But will this be the year where the dollar stores finally have priced all the bad news out? The tariffs, all their miscues? You look at a dollar general, I think it basically closed within earshot of a 52 week low guy.
- [23:22]
PGM Representative
It'll be a very competitive environment in part because Wal Mart offers such a low fee for delivery. And what's happening is consumers are staying at home and Walmart's competing quite hard with everyday low prices and also they have a nice advantage with their suppliers. So I think it'll be a rocky road. I also think it will be winners and losers and that will be increasingly apparent as well. What we'll look for on the horizon is hopefully lower interest rates that will help the consumer. But as you know, we're all focused on what may happen with tariffs and the unintended consequences of inflation and potential price increases as well. So go with retailers with scale.
- [24:02]
Courtney Reagan
And that was going to be my final question for you, Oliver, is how you're factoring in tariffs into your assumption for your recommendations going forward. How should we think about that when it's still an unknown? And obviously it could be a moving target as well.
- [24:15]
PGM Representative
It's been riskier for Target, Courtney. It's been a better situation in our opinion for Wal Mart and Costco, in part because they have big food businesses and they also offer lots of scale. So it's something we're watching. It will definitely impact earnings per share. Our sensitivity indicates about mid to high single digit increases in terms of hurting earnings per share by that much. Part of the magic is what increases will be priced through the consumers. That will be painful to the consumer because the consumer at the middle and low end is so price conscious. So not an easy solution. But retailers have had many supply chain problems for many years. So we're in a better place in terms of managing with this.
- [24:58]
Courtney Reagan
And we've been dealing with tariffs for some seven years now. It's not necessarily a new concept for us. Oliver, thank you so much. Send me the link to that jacket. I love it. I want to see if they have it my size. Happy New Year. Bonawin, I want to turn to you and see if there's any names on your trading list that you might be interested in in the retail space.
- [25:18]
Bonawyn Eison
So I like Costco. Listen, I don't think it's cheap, but I like the recurring revenue subscription model. I think that should trade at a premium. I also like Walmart. It's one that we own. And essentially being able to go to one place and get everything and have much more of an experiential type of situation, necessities and desires then I also like Ulta Beauty. I just like the fact that it's something that you're going to need to repurchase on an ongoing basis. So when I look at the life cycle of customer retention and return to store, I think that continues to propel forward and we all care about how we look and how we present to others, especially after we've been released from the whole Covid lockup. So I think that just is the lifeblood of what it is to be here.
- [26:05]
Courtney Reagan
And every preteen in my life is obsessed with skincare right now. I could not believe the request for Christmas from the preteens. They have beautiful skin. Why do they need Ulta skin care?
- [26:15]
Steve Grasso
I classify a guy as a preteen so he's doing it again.
- [26:19]
Guy Adami
Facial scrub.
- [26:20]
Steve Grasso
It's cyclical.
- [26:21]
Courtney Reagan
Jade rollers.
- [26:22]
Steve Grasso
You know, you talk about Walmart and talk about BJ wholesalers and Costco. Well, Costco's up 39% year to date. BJ up 34% year to date. Costco up 79%. So you could see where the Sam's Club value is in there. That's going to be a perennial winner. Wal Mart dollar stores probably the margins are still at risk with inflation going forward. The high end though, Ralph Lauren and Tapestry. Tapestry Probably a one off because the.
- [26:51]
Courtney Reagan
Something like 39% year to date.
- [26:53]
Steve Grasso
Right. And the Capri deal Tapestry is up double that. No, because the Capri deal fell apart and so it doubled its year to date returns.
- [27:02]
Courtney Reagan
Right.
- [27:03]
Steve Grasso
I would say RL is probably a more stable earner than Tapestry right now. But keep an eye on Capri. I know it's been a terrible year since the deal.
- [27:11]
Courtney Reagan
Yeah, absolutely.
- [27:12]
Steve Grasso
Or lack of the deal.
- [27:13]
Courtney Reagan
Exactly. Well there is a lot more fast to come.
- [27:16]
PGM Representative
As a global leader in alternatives today, PJUM is capturing the potential of tomorrow. So as you look to diversify your portfolio, PGUM offers expertise in seeding, developing and managing a broad range of liquids and illiquid strategies. With over $320 billion in alts across public and private markets, we are helping clients achieve their long term goals. PGUM our investments shape tomorrow today and now a next level moment from AT&T business. Say you've sent out a gigantic shipment of pillows and they need to be there in time for International Sleep day. You've got AT and T5G so you're fully confident, but the vendor isn't responding and International Sleep Day is tomorrow. Luckily, AT&T 5G lets you deal with issues with ease so the pillows will get delivered and everyone can sleep soundly, especially you. AT&T 5G requires a compatible plan and device. 5G is not available everywhere. See att.com 5G for you for details.
- [28:16]
Courtney Reagan
Welcome back to Best Money. Millions of Americans could be kicking off 2025 in a polar vortex. Record breaking frigid air expected to make its way down from Canada and hit parts of the US in early to mid January in the cold could cause major power outages and test the nation's infrastructure in a really big way. So for more let's bring in senior meteorologist at the weather company, Dan Lenner. Dan, thanks so much for being here with us. I mean we showed the map, but just kind of tell us what is your expectation for this cold air mass that we could be seeing? Who's it going to hit for how long?
- [28:47]
Dan Lenner
I mean what better way to ring in the New Year Courtney than with a polar blast coming in for January? This is fun stuff from a meteorologist perspective. We had one last year at this time. Remember last January, even though it was a warm winter overall we had that big cold shot right in the heart of winter, right in the middle of January. It was impressive. Wasn't as impressive as the February 2021. Remember that one? That's the one that froze Texas and there was no problems with the grid, the electric grid down there. We had tremendous infrastructure problems with that one. It doesn't look like it's going to be quite that bad this time around. It's going to be close. There's going to be a Lot of really extreme Arctic air in association with this polar front. But I think most of that is going to shift more into the midwestern and eastern U.S. so it's a glancing blow for the Southern Plains. Texas is really where the traders care about these days. We've had a huge population boom obviously in Texas over the past 10, 20 years or so. So there's a lot more on the line in Texas than there used to be. So if you get really extreme cold into Texas, that can really drive the markets. But it looks like this time around it's really more focused on the Midwest, more of a glancing blow for the Southern Plains.
- [30:06]
Courtney Reagan
So I understand you speak with a lot of hedge funds on a daily basis. What are they most concerned about when it comes to trades associated with this frigid air blast?
- [30:15]
Dan Lenner
So the primary thing that we're talking here is natural gas, because that's really what drives the demand for natural gas. This cold weather. You have to heat your home somehow. So really it's a natural gas play with this cold weather incoming. And really there have been two questions that they've been focused on lately. That's how expansive is the cold? Does it get into places like Dallas and Houston or is it mostly an east coast hit it? And also how long does it last? Longevity. One thing we've noticed a lot in this, this sort of modern times of winter weather, we're a lot warmer in general than we used to be. That's, that's pretty obvious. Our winters are just the baseline has shifted upward in temperature. But we still get these really impressive cold snaps. They just don't last very long. But what's interesting about this upcoming event, it does look like it has a little bit of legs. It's going to come in next week and could last for an additional week, perhaps two weeks. And that's not something we've had a lot of in modern times. We tend to get these really quick, fleeting cold shots. But this one actually might last a little while. And that's what really has traders that I've been talking to sort of perking up and saying, wow, this isn't just a couple of day cold shot. This could last a couple of weeks. And it's, yeah, this is, could have some potential duration with it, which is unusual in this day and age.
- [31:32]
Guy Adami
And Dan, they come to you because, you know, they want to understand what's going on. In my prior life when I traded commodities, we used to call natural gas the Widowmaker for a myriad of different reasons. But it has now doubled since the spring. I think people are trying to figure out exactly what you're just talking about. You know, how much duration do we have for this cold spell? And is there any sort of gas left in this, no pun intended, natural gas trade? And I think there is and there's some great ways to look at it and I'm sure you know these names, but Cheniere Energy, for example, and I'm not, not asking to play stock market, a company called Equity are really poised, well to take advantage of this, Courtney.
- [32:07]
Courtney Reagan
I mean you would know, right? You and your former life as a commodities trader. And as you're thinking about what Dan was talking about with the, the warmer winters that we have generally outside from some of these cold snaps, I mean, how does that change the game when you're trying to play a commodity?
- [32:20]
Guy Adami
Like, you know, it's usually, you know, when you try to play the weather game in natural gas, it's typically a losing proposition, duration. But this one feels like it might catch people off guard because so many people are sort of getting used to that run up into an event and the sell off. But if this has legs, if there's duration here across the country, Nat Gas could surprise some people. And the underlying stocks, I mean put up a Cheniere chart. Karen Feynman talks about this all the time. Lng this has done extraordinarily well and I think there's some upside here as well.
- [32:48]
Courtney Reagan
It is interesting all the impacts of whether we talk about it in retail a lot people sort of shake their heads at it, but it's a real, real thing. I mean I haven't bought my kids winter boots in a couple seasons because we haven't had snow.
- [32:57]
Steve Grasso
That's cuz you're cheap though.
- [32:58]
Courtney Reagan
That too. Oh, don't tell everybody.
- [33:00]
Guy Adami
They're watching right now. I know now they feel bad if.
- [33:04]
Courtney Reagan
It, if it snows, I'll buy them.
- [33:05]
Guy Adami
Now when they're gonna go to school, they're like, oh my goodness, my mom.
- [33:08]
Courtney Reagan
My mom doesn't buy me boots. If it snows, I'll buy the boots. As long as they're on sale.
- [33:12]
Steve Grasso
Right?
- [33:13]
Courtney Reagan
Anyway, thank you, Dan. Appreciate you being here with us tonight. Happy New Year.
- [33:16]
PGM Representative
Anytime, guys.
- [33:17]
Courtney Reagan
Well, coming up fast money is going international. The outlook for global markets in 2025 and where your money could see the best return. Don't go anywhere. We're back into. Welcome back to Best Money. Stocks closing slightly lower in the final session of 2024 with the Nasdaq leading the losers down nearly a percent. But it was a record year for markets. The dow climbing nearly 13%. The S&P 500 hitting 57 record closes up more than 23% this year and seeing its best two year gain since 1998. And the tech heavy NASDAQ leading the charge up nearly 29% in 2024. Shares of U.S. steel surging nearly 10% today. Japan's Nippon Steel is sending the White House a new proposal and a final bid for support, including giving the US Government a veto over any reduction in US Steel's production capacity. Well, let's take a look in Latin America. Those markets this year quite mixed. Argentina's ETF having its best year since its inception in 2011, up 61%. But a very different story elsewhere in the region. Colombia's ETF ending 2024 slightly lower down 1%. Whereas the Mexico and broad Latam funds down about 30% for the year. So for more on what to expect for these markets in 2025, let's bring in CNBC contributor Michelle Cruz Cabrera. She is also the CEO of MCC Global Enterprises. It's great to have you here. Well, let's start off with Argentina. I mean what another year it's had. That's two years of really impressive gains. Can that really continue?
- [34:44]
Michelle Cruz Cabrera
That's the big question. Right. So the reason this is happening because they have a new president, Javier Milei, who came in and did what everybody knew needed to be done for decades because that economy was a basket case and finally did what needed to be done. Told the central bank to stop printing money that's helped reduce inflation dramatically. He cut government spending 30% in one month.
- [35:08]
PGM Representative
Wow.
- [35:09]
Michelle Cruz Cabrera
It was any balanced the budget. So all of those things are super important to get their fiscal house in order. He's done a lot of deregulation, but they need to do more. And so the question to your point is can they keep going on this path enough to have such incredible performance? I mean some bond investors In Argentina made 100% last year or more.
- [35:28]
Courtney Reagan
Wow.
- [35:29]
Michelle Cruz Cabrera
Right. So that's a big dramatic outperformance. He is on the right path.
- [35:32]
Courtney Reagan
Path.
- [35:33]
Michelle Cruz Cabrera
Let's see if it can keep going.
- [35:34]
Courtney Reagan
Well, that's going to be a good one to follow. And then on the flip side, Mexico ETF worst, I mean sitting at two year lows, got a lot on the horizon with the United States and policy. I mean what are your expectations for that region?
- [35:44]
Michelle Cruz Cabrera
So it really depends on what the outcome is when it comes to negotiating with Donald Trump when he becomes president. You know they're going to renegotiate the usmca. Now, some of that weak performance that we're showing everybody right now is due to self inflicted wounds. They had an election where the left got far more control of the legislature than anybody expected. And so they've been doing things that are market negative and negative for the economy and also negative for rule of law. But at the same time they're getting lots of investment because of onshoring and near shoring and the fact that they have a good relationship and a good trade relationship with the United States. However, Donald Trump has promised that on day one, he's going to impose 25% tariffs on everything coming from Mexico and Canada unless they solve the issue of fentanyl and also immigrants coming to the border. So she's got to negotiate. The new president of Mexico's woman, Claudia Sheinbaum, she's had two conversations with President Trump thus far. I'm told by people familiar with that conversation that they thought it went well. That's from the US side. So let's see the one thing I would say about Mexico. The last time Donald Trump won, everyone predicted the Mexican peso would get hammered. And at first it did. Did. And then because of onshoring and the renegotiation of nafta, NAFTA to the usmca, it became one of the best performing currencies that year. So I think Mexico is much harder to predict.
- [37:03]
Steve Grasso
Do you see a power grab geopolitical wise with China and the US in Latin America? Do you? Where do you think the sensitive spots are? Because I think all of us not have fallen asleep on this. But China is pretty, pretty in deep with a lot of different Latin American countries.
- [37:21]
Michelle Cruz Cabrera
Yeah. Starting in 2000, they started to make very, very aggressive investments into many parts of Latin America. Donald Trump is very concerned about this as well. And this is going to be an issue with every single country that he gets involved with. How much business are you doing with China and why and what are you doing in exchange? US Investment in Latin America has actually kept pace with China and if not, it's a little bit more. However, the way the Chinese invest, they do it in a big way. Right. The state does it. They do it state to state. They do business with governments that our government would not do business with.
- [37:54]
PGM Representative
Right.
- [37:54]
Michelle Cruz Cabrera
They don't hold businesses and countries accountable in a way that US Investors tend to do because they have to deal with the Foreign Corrupt Practices act because they believe in rule of law, because they care about returns, whereas the Chinese government often doesn't care about returns. They're trying to achieve something else. So it's absolutely center to the battleground between the US And China.
- [38:15]
Courtney Reagan
So much to keep track of around the world. Michelle, help us do it in 2025. Come back.
- [38:19]
Michelle Cruz Cabrera
A pleasure.
- [38:20]
Courtney Reagan
See you next year. Bono. And what do you make of all this sort of political hotspots, different areas of the world. United States has obviously had such an amazing year. Many of these countries have not, with the exception of Argentina. Where would you put your money to work in the new year when you're looking around the world?
- [38:38]
Bonawyn Eison
Well, I spent a lot of time covering Brazil when I was working for a Brazilian company there. And a lot of resources were invested in trying to get the political landscape and understanding what would be the outcomes if one or the other candidate were to win giving our viewing public and that they don't have those resources. I think it's tough to essentially suggest that they should be taking a binary trade trade in that area. Conversely, what I would say is look at the underlying makeup of the relevant ETFs that we're discussing for let's take EWZ or Brazil, for example. You're looking at Petrobras, you're looking at Valley Rio, you're looking at Banco Bradesco. You're looking at essentially a natural resource trade and a financial financial firm trade. So if you're bullish those sub sectors, I think it can make sense. But I still think that the strength of the dollar right now makes it very tough to invert us to invest in the emerging market landscape.
- [39:34]
Courtney Reagan
Got it. Yeah, it is a tough area. Michelle laid it out for us. There are so many things we didn't get to currency, of course, makes it a minefield too. Well coming up, boo. Stocks losing their buzz this year. Many of the big names down double digits. But can the new year put some spirit back in the group? How our traders are sipping on this space when Fast Money returns, we're back into welcome back to Fast Money. You may be ringing in the new year with a glass of bubbly, but alcohol stocks got hammered in 2020, increasingly shying away from hard beverages. Check out some of the biggest decliners. Boston beer finishing the year down roughly 13%. Anheuser Busch dropping over 20% while Jack Daniels maker Brown Forman and 33% lower. Steve, you flagged this one for us. What sparks your interest here or doesn't?
- [40:20]
Steve Grasso
I think people's habits have changed. I think younger, younger people and I know people probably share this on Twitter at me the article but but younger people are drinking less Alcohol, they're drinking more seltzer, they're drinking more non alcoholic. And this is sort of like the Nike syndrome, right? You have a lot of small non public players eating their lunch. So you have small non public players.
- [40:45]
Courtney Reagan
Drinking their lunch because like craft beer.
- [40:48]
Steve Grasso
Exactly. You get craft beer, you get no name and you have the ability through social media for a non public public company to actually compete with, with a Heineken or a Bud. So is this, is this a one off? I don't think so. I think this is a, you know, a sea change guy.
- [41:06]
Courtney Reagan
I want to grab your thoughts real quick before we go on Anheuser Busch. Obviously they sort of had their own missteps when it came to marketing. And I'm saying missteps not as a judgment call, but based on what we saw, the performance of the company. I mean how much of this is self inflicted and how much of it is potentially fundamental shifts?
- [41:20]
Guy Adami
Well, I think most of it was self inflicted inflicted and then said the icing on the cake was this fundamental shift we've seen over the last maybe a year and a half, two years and then throw on top of everything, Steve mentioned GLP1 as well. I think definitely plays a role in this. But at a certain point valuations going to take over. Goldman Sachs had a note out on the 19th, something called Beverage Bytes where they talked about stars, STZ, Constellation Brands being actually well positioned. If you look at a chart, you know this level that we've stopped at has been support. It was prior resistance way back in 2018 so. So this is one actually looks interesting.
- [41:51]
Courtney Reagan
Into the new year, calories be damned. I'm having some bubbly tonight. Coming up with just hours to go into 2024 we're getting the traders biggest wins and losses from the year, the names they're regretting and the resolutions they're picking up for the new year. More fast and too. Welcome back to Fast Money. We are just over six hours away from the start of 2025 here in New York. Here's a look at the celebrations in some cities that have already rung in the new year. Bangkok, Hong Kong, Sydney, Taiwan and Athens. Just celebrating in the last hour. So we thought on the last day of this year that we would reflect on some of our regrets from 2024 and make some New Year's resolutions for 2025. So Steve, you get to kick us off with your biggest regret and your resolution.
- [42:36]
Steve Grasso
So my biggest regret was part of my acronym. It was AMGEN was in. My acronym is down basically 10% year to date had issues with headwinds in oncology, immunology and glp. One space and for my look forward, bitcoin. So it was, it was my half year, you know, real bullish call in bitcoin and etherium and I just think that the tailwinds, the stars are aligned. I'm looking for a great 20.
- [43:02]
Courtney Reagan
Even though we've had such a big run already in bitcoin just recently.
- [43:04]
Steve Grasso
Like I said, he's not even president yet. So this is going to be the most pro crypto administration ever, right?
- [43:10]
Courtney Reagan
I think that that is the expectation. Bono, when you're up next, what is stock was your biggest regret? And then which One is your 2025 resolution?
- [43:19]
Bonawyn Eison
MSOS is my biggest regret. And it's not just because of performance. I just didn't frankly, it's the end of the year. Let's all eat some humble pie here and be honest and make 2025 better. I didn't scale it right. I didn't really look at the cross correlation between some of the other parts of my portfolio. When it comes into sizing and then piecing into the trade, frankly, I just didn't do a good job. And it's a lesson Learned. Heading into 2025, Nvidia is my resolution. And it's not just about performance here. Again, it's always easy to look back and say, well, that was a great winner, much like MSOS was a big loser. It's just that I think that valuation alone should not be determining whether or not I invest in something if those earnings can support said valuation. I think you should still look at the names.
- [44:02]
Courtney Reagan
I like the lessons learned. See, we all learn something every year and hopefully we can inform our viewers. Guys, what's your biggest, biggest resolution being negative in Apple.
- [44:10]
Guy Adami
Trying to point out the flaws. Valuation, number of different things. I mean, since that announcement in June, the stock has been unbelievable. Almost traded up to a $4 trillion market cap. So that was clearly a mistake. And in terms of looking forward, I do think energy stocks are going to perform. Exxon has been flat to sideways for the majority of this year, but I think there's a really good chance that big cap integrated energy names do well. So Exxon's what I'm looking forward to next year here.
- [44:33]
Courtney Reagan
All right, regrets behind us. Resolutions full steam ahead. Coming up next, your final trades. It's time for the final trade, the final day of the year. Let's go around the horn. Bona when you're up first.
- [44:46]
Bonawyn Eison
I'm sticking with Costco. It's coming approaching a 10% decline. I think it's looking interesting here.
- [44:52]
Steve Grasso
See look for President Trump to talk a lot more rare earth MP materials and guys.
- [44:58]
Guy Adami
Happy New Year everybody. Courtney, your kids are watching. Your mom's going to buy you boots. Don't worry, everything will be fine.
- [45:05]
Michelle Cruz Cabrera
Stz that's absolutely right.
- [45:07]
Courtney Reagan
I'm not going to let him go cold. Thank you all for watching Fast Money.
- [45:11]
PGM Representative
All opinions expressed by the Fast Money.
- [45:13]
Courtney Reagan
Participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal.
- [45:18]
PGM Representative
Their parent company or affiliates, and may have been previously disseminated by them on television, radio, Internet or in other media. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an.
- [45:33]
Courtney Reagan
Expression of an opinion. Such opinions are based upon information the Fast Money participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it.
- [45:43]
PGM Representative
Should not be relied upon as such. To view the full Fast Money disclaimer, please visit cnbc.com fastmoneydisclaimer Get a head start on 2025 with CNBC's Big January the hottest tech event, CES from Las Vegas, the Data, the Jobs Report and Meet the Future of Biotech and Pharma at JPM Healthcare. Check out the AMEX Golf tournament from California, Inauguration Day and the meeting of world leaders in Davos. Plus the first Fed decision of the year, the investing edge you need to start the year ahead of the game. CNBC.