Halftime Report: "Keep Buying the Rally?" – December 6, 2024

Host: Scott Wapner
Guests: Jenny Harrington, Steve Weiss, Jason Snipe, Steve Liesman, Kevin Simpson, Mike Santoli, Julia Boorstin
Release Date: December 6, 2024
Air Time: Weekdays 12-1 PM ET on CNBC TV

1. Introduction

In this episode of CNBC’s Halftime Report, host Scott Wapner delves into the current market dynamics amidst rising stock prices nearing record highs. The discussion centers around whether investors should continue capitalizing on the ongoing rally or exercise caution as some experts signal potential market froth. With inputs from top investors and economists, the episode provides a comprehensive analysis of market sentiments, investment strategies, and specific stock performances.

2. Market Overview: The Goldilocks Economy

The conversation kicks off with the term "Goldilocks economy", highlighting a balanced economic state that’s neither too hot nor too cold. Following a robust jobs report showing unemployment ticking up to 4.2%, Scott Wapner introduces guest Steve Weiss, who agrees that the economy has been experiencing Goldilocks conditions for an extended period.

Notable Quote:
Steve Weiss [00:49]: “I mean, there's no reason not to believe that... there's been Goldilocks for a while.”

Weiss emphasizes optimism around a potential market soft landing and a supportive Federal Reserve (Fed) stance. However, he cautions about upcoming tax changes under the Trump administration, suggesting potential market volatility in the new year.

3. Fed’s Monetary Policy and Market Reactions

The discussion shifts to the Fed's monetary policy, with insights from Steve Liesman and Mike Santoli. The guests analyze recent comments from the Cleveland Fed President, Beth Hammack, indicating a possible slowdown in rate cuts. This nuanced stance has the market pricing in approximately three rate cuts over the next year, a view supported by market contracts.

Notable Quote:
Mike Santoli [39:10]: “If you look at the gross income, right, all payrolls, number of jobs, hours worked, it's still holding up at a pretty healthy level.”

This optimistic outlook suggests that the Fed is managing to balance growth without triggering significant inflation, thereby maintaining the current restrictive stance without over-tightening.

4. Investment Strategies: Momentum vs. Fundamentals

A significant portion of the episode is dedicated to contrasting investment strategies between momentum trading and fundamental analysis.

• Steve Weiss advocates for a momentum-based approach, allocating 20% of his portfolio to trading positions capitalizing on market trends, such as Bitcoin and high-performing tech stocks like Meta and Amazon.

  Notable Quote:
  Steve Weiss [16:54]: “80% of my portfolio is bottoms up fundamental... but I also have 20% where I can trade it.”

• Jenny Harrington, on the other hand, prefers fundamental investing, focusing on individual stocks with strong earnings and growth potential rather than chasing market momentum.

  Notable Quote:
  Jenny Harrington [14:12]: “I pick off individual stocks... I expect to earn 8 to 10% a year on average over the next three to five years.”

Jason Snipe supports a thematic momentum strategy, believing that current market trends are likely to sustain, especially in high-growth sectors.

5. Key Stock Performances and Analysis

The panel discusses several high-performing stocks, evaluating their growth prospects and investment potential.

• Bitcoin and Cryptocurrency:
  Steve Weiss highlights significant inflows into crypto assets, with Bitcoin nearing support levels at $100,000.

  Notable Quote:
  Steve Weiss [12:36]: “It's purely momentum.”

• Netflix (DocuSign):
  Jenny Harrington clarifies that her investment in Netflix is based on fundamental strengths, such as profitable growth and expanding international revenues, rather than mere momentum.

  Notable Quote:
  Jenny Harrington [15:42]: “...we bought this September of last year when it's trading at $42... delivering extremely profitable growth.”

• Uber:
  Both Jenny and Jason hold positions in Uber despite recent performance drops, citing the company's extensive network and strategic partnerships like with Waymo as reasons for continued confidence.

  Notable Quote:
  Jason Snipe [24:16]: “Uber has a tremendous network... partnering with Waymo.”

• ConAgra and Honda:
  Jenny Harrington explains her strategic moves to add to ConAgra and purchase Honda, viewing them as stable investments with strong fundamentals and growth prospects.

  Notable Quote:
  Jenny Harrington [32:29]: “...a drama-free spot in a world that may be chaotic.”

• Applovin, AutoZone, Costco:
  Jason Snipe discusses the impressive year-to-date performances of these stocks, attributing their success to strategic expansions and catering to affluent consumer bases.

  Notable Quote:
  Jason Snipe [41:49]: “Autozone up 26% year to date... OpEx is always the expense.”

6. News Highlights and Market Sentiments

Beyond stock analysis, the episode touches on broader news impacting markets:

• TikTok Ban:
  Julia Boorstin reports on TikTok’s plans to appeal a Supreme Court ruling that allows its ban to proceed, emphasizing the potential market implications for tech stocks like Meta, Snap, and Alphabet.

  Notable Quote:
  Julia Boorstin [40:59]: “...the law was... resulting in outright censorship of the American people.”

• Goldman Sachs and Climate Initiatives:
  Goldman Sachs’ exit from the Net Zero Banking alliance amid regulatory pressures signals shifts in how financial institutions are aligning with climate change efforts.

7. Final Thoughts and Closing Remarks

As the episode concludes, the hosts summarize the key takeaways:

• Market Momentum: There's a strong consensus among guests to continue leveraging market momentum, especially in high-growth sectors and innovative companies.

• Fed's Role: The Fed's cautious approach to rate cuts is perceived as supportive, maintaining an environment conducive to sustained market growth.

• Investment Diversification: Balancing momentum trading with fundamental investing remains a pivotal strategy for navigating the current market landscape.

Notable Quote:
Scott Wapner [43:15]: “...the panel continues to put money into the market and they continue to put it into places that, you know, you just find interesting.”

8. Disclaimer

All opinions expressed by the Halftime Report participants are solely their own and do not reflect the views of CNBC, NBCUniversal, their parent company or affiliates. This podcast is for informational purposes only and should not be construed as investment advice.

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