Halftime Report: Is a Year-End Run Likely? (12/13/24)
Hosted by Scott Wapner, CNBC

Introduction

In this episode of CNBC's Halftime Report, host Scott Wapner delves into the pressing question on every investor's mind: Is another stock market run expected in the final weeks of 2024? Joined by industry experts Josh Brown, Bryn Talkington, Steve Weiss, and Kevin Simpson, the panel dissects current market dynamics, the influence of mega-cap tech stocks, investment strategies, and the evolving landscape of cryptocurrencies.

Current Market Overview

Scott Wapner opens the discussion by highlighting the general market trend:

"Today, we're in the red across the board, but our big question, Josh, today is two and a half weeks to go in the trading year. Do we have another run left in the tank?"
[00:57] Scott Wapner

Kevin Simpson responds by emphasizing the seasonal factors:

"Seasonally speaking, yeah, we probably do. This is a year where you don't have a lot of tax law selling..."
[01:50] Kevin Simpson

Simpson also points out the impressive performance of stocks compared to the index:

"A lot of people are pouring into those stocks to dress up their books. It happens on the heels of every type of year that went the way this one did."
[02:30] Kevin Simpson

Mega Caps and AI Influence

The conversation shifts to the dominance of mega-cap tech companies and their impact on the market. Steve Weiss shares staggering valuations:

"Mega cap tech companies have seen a collective valuation surpass $18 trillion for the first time ever. That means their shares are now worth more than the annual GDP of every single country in the world, with the exception of the US and China."
[03:53] Steve Weiss

Josh Brown elaborates on the internal market dynamics:

"If you have the misfortune to own international stocks this year, the IFA is up around 7 and a half percent year to date. And so it's like there has been this vacuum and this sucking sound going out of every other country into the US and then even more so and I would say mid-cap growth companies and these mega caps."
[04:29] Josh Brown

Bryn Talkington highlights the strategic moves by major companies:

"I've never left that. So the only time cut back positions is after I've added to them for trading positions when they've sold off like Google, like Meta, etc."
[07:05] Bryn Talkington

Stock-Specific Discussions

Apple Inc. (AAPL)

Apple remains a focal point of the discussion. Josh Brown shares insights on stock movements and valuation concerns:

"From a valuation standpoint, I'll give you a few stats as to why we might be able to get a re-entry point a little bit lower."
[09:27] Josh Brown

Kevin Simpson praises Apple's resilience despite market fluctuations:

"This is just. We have never seen anything, we have never seen a stock like this ever included inclusive of Nvidia."
[15:30] Kevin Simpson

Amazon.com Inc. (AMZN)

Amazon is lauded as a prime candidate for continued growth:

"If I had to only own one MAG7 name into 2025, this would still be the one even at today's."
[16:03] Kevin Simpson

Bryn Talkington underscores Amazon's strategic investments:

"They paid 10 billion to Microsoft to use their cloud tools. That's in addition to the other expenditures they have on data centers, etc."
[17:46] Bryn Talkington

Broadcom Inc. (AVGO)

Broadcom's recent milestones are discussed, emphasizing its role in the AI boom:

"Their AI revenue for the year has more than tripled."
[18:35] Steve Weiss

Josh Brown highlights Broadcom's valuation and growth prospects:

"At 35 times earnings is not egregious by any means. Especially if they're five-year projections of 21% earnings and 44% revenue can continue."
[19:21] Josh Brown

Investment Strategies

Options Trading

The panel explores advanced investment tactics, particularly options trading. Josh Brown shares a unique strategy involving MicroStrategy:

"We wrote a covered call with the $700 strike price... it allows us to double our money on MicroStrategy from 350 to 700."
[39:32] Josh Brown

Bryn Talkington warns about the risks associated with options:

"It cuts both ways... you sort of are stuck with what you have here."
[41:33] Bryn Talkington

Bitcoin and Cryptocurrency

The discussion transitions to cryptocurrencies, focusing on Bitcoin's stability and adoption:

"Is it time to reimagine your future? The right business skills may make a difference in your career."
[34:58] Bryn Talkington

Josh Brown explains their strategic position in Bitcoin and related assets:

"We have a position in the equal weight RSP and really since Thanksgiving you've seen this breadth under the market of those stocks just more deteriorating while the mega caps are going higher."
[08:59] Josh Brown

Additional Stock Picks and Market Moves

The experts share insights on other investment opportunities:

• CME Group (CME):
  "We are getting a 5% yield on CME. Great company."
  [28:28] Josh Brown

• Raytheon Technologies (RTX):
  "Very low price to earnings ratio which we like... living in a scary world, Scott."
  [29:00] Josh Brown

• Robinhood Markets Inc. (HOOD):
  "Their assets under custody have gone from 100 billion to 100990 billion... looking for revenue and earnings growth of 70 and 200%."
  [27:14] Josh Brown

Market Sentiment and Survey Insights

Steve Leesman of All America Survey provides data on cryptocurrency adoption and investment preferences:

"13% of all adults surveyed say they own crypto... 40% saying now it's a good time to invest in stock."
[36:34] Steve Leesman

Closing Remarks

As the episode wraps up, the panel reiterates the cautious optimism surrounding the year's final market movements. With mega-cap stocks leading the charge and strategic investments in technology and cryptocurrency, the experts suggest that while challenges remain, the potential for a year-end surge is plausible.

Notable Quotes:

• "Mega cap tech companies have seen a collective valuation surpass $18 trillion for the first time ever."
  – Steve Weiss [03:53]

• "This is not a value strategy or trying to buy a dollar for 60 cents. That's not what we're doing here."
  – Kevin Simpson [44:32]

• "We wrote a covered call with the $700 strike price... it allows us to double our money on MicroStrategy from 350 to 700."
  – Josh Brown [39:32]

• "40% saying now it's a good time to invest in stock. That's the best we've had since 2022."
  – Steve Leesman [36:34]

Conclusion

The panel provides a comprehensive analysis of the current market landscape, underscoring the influential role of mega-cap tech stocks and the burgeoning significance of AI in shaping investment strategies. While acknowledging potential headwinds, the experts collectively lean towards a cautiously optimistic outlook for a year-end market run, driven by strategic stock positions and evolving investment strategies.

For a deeper dive into today's discussions and more expert insights, listen to the full episode of CNBC's Halftime Report.