The Record-Setting Rally 12/5/24

Summary

Halftime Report: The Record-Setting Rally (December 5, 2024)

Released on December 5, 2024

Overview

In this episode of CNBC’s Halftime Report, host Scott Wapner and a panel of top investors, including Josh Brown, Liz Young, Thomas, and Bill Baruch, delve into the dynamics of the ongoing record-setting market rally. The discussion spans various sectors, from technology and cryptocurrency to healthcare and commodities, providing listeners with comprehensive insights into current market trends and future outlooks.

---

Market Check-In

Timestamp: [00:57]

Scott Wapner opens the discussion by highlighting a mixed market picture with a focus on significant round numbers. Key milestones include:

• Dow Jones Industrial Average (Dow) approaching 45,000, a first-ever close above this mark.
• Bitcoin reaching $100,000 for the first time.
• Tech Sector achieving its first record close in nearly a month.

Wapner emphasizes the significance of these milestones, setting the agenda for deeper analysis throughout the episode.

---

Cyclical Rally and Market Sentiment

Timestamp: [01:46 - 05:07]

Josh Brown characterizes the current rally as a "pro-cyclical rally," driven by factors such as deregulation and post-election optimism. He notes, “The sentiment coming into this was decently strong” ([02:40]).

Liz Young contributes by mentioning aggressive price targets from analysts like Chris Harvey, who forecasts a 7,007 Dow target, indicating a potential 15% upward movement.

Wapner reinforces the bullish sentiment, clarifying that the rally is not merely a "Trump bump" but is underpinned by solid earnings fundamentals. He states, “It’s because earnings expectations were too low for the quarter that was just announced” ([05:07]).

---

Technology Sector Resurgence

Timestamp: [05:07 - 14:57]

The technology sector remains a focal point, with Liz Young highlighting record highs for giants like Apple, Amazon, and Meta. Anthony Scaramucci discusses strategic investments in tech stocks, emphasizing the importance of being ahead of market rotations:

“It’s a very bullish technical pattern... There was a trend line going back to the August low. It built an ascending triangle and it was breaking out above that. It’s a very bullish technical pattern.” ([06:17])

Scaramucci elaborates on specific stocks such as Workday and Oracle, noting their potential for future growth and the impact of AI integration.

Liz Young references UBS’s prediction that Big Tech will lead again in 2025, with Josh Brown agreeing that while tech is pivotal, not all tech stocks perform uniformly. Brown suggests focusing on software within the tech sector for continued growth:

“Software will continue to have a lot of opportunity. The earnings growth in tech is still expected to lead the Pack in the S&P.” ([08:41])

---

Cryptocurrency and Bitcoin

Timestamp: [16:52 - 26:00]

The panel shifts focus to Bitcoin, celebrating its milestone of surpassing $100,000. Bill Baruch shares his optimistic outlook, discussing Bitcoin as a legitimate asset class with substantial growth potential:

“We think it’s an asset class, and I think that was the point of the book... It will trade to $18 trillion, where gold is.” ([19:02])

Anthony Scaramucci adds that Bitcoin is isolating its momentum from the broader market movements, indicating a unique trajectory:

“MicroStrategy actually backed off the high. So it's sort of its own solitary thing.” ([41:56])

Baruch highlights the evolving regulatory landscape under the Trump administration, which he believes is poised to be more favorable towards cryptocurrencies.

---

Healthcare Sector Insights

Timestamp: [31:31 - 32:12]

The conversation turns to the healthcare sector, particularly Abbvie. Anthony Scaramucci discusses Abbvie’s strategic acquisitions and strong revenue streams from drugs like Skyrizi and Humira, positioning the company for continued success despite recent setbacks:

“The legacy drug Humira has done well and the revenues that they’ve seen from these up and coming ones have beat.” ([31:31])

Josh Brown underscores the potential for earnings growth in healthcare in 2025, suggesting it as a resilient sector amid regulatory uncertainties:

“Earnings growth in healthcare is expected to be pretty good in 25, in fact, the second-best sector in the index.” ([32:12])

---

Berkshire Hathaway and Regulatory Environment

Timestamp: [32:55 - 34:17]

Berkshire Hathaway’s strategic movements receive attention, with a target price increase to $510 from $470. Scott Wapner views this as a continuation of Berkshire's accumulation of reserves, albeit expecting only modest impact on stock performance unless major investments occur:

“It’s very unlikely that there’s going to be another position that could become as large as Apple.” ([33:11])

The discussion also touches on Jeff Bezos's comments regarding the potential impact of a Trump administration on deregulation, viewed positively by the panel.

---

Commodities and Energy Sector

Timestamp: [43:13 - 45:44]

Bill Baruch updates on commodities, specifically his recent purchases in the mining sector with Core Mining (CDE), following its acquisition of Silvercrest Mining. He anticipates further upside in gold and silver prices, suggesting mining stocks will outperform traditional precious metals:

“I think there’s a lot of upside in gold and silver from here after the post-Trump election fall.” ([44:23])

Liz Young and Josh Brown discuss the broader commodities landscape, with Brown advocating for gold as a stable investment amid global volatility.

---

Best Stocks in the Market

Timestamp: [37:13 - 40:03]

Josh Brown presents his list of three under-the-radar stocks poised for breakout:

1. Johnson Controls (JCI) - Positioned for a 17% earnings growth in 2025 despite a challenging 2024.
2. Ferguson Enterprises - Highlighted as a special situation with potential inclusion in the S&P 500 following restructuring.
3. Cloudflare - A mid to large-cap tech stock in cybersecurity and cloud services, breaking out after a two-year consolidation.

Scott Wapner emphasizes the strength of these companies based on their fundamentals and technical indicators, encouraging listeners to monitor these for potential investment opportunities.

---

Final Thoughts and Closing Trades

Timestamp: [45:53 - 46:44]

As the episode wraps up, the panel shares final trade updates, including positions in Core Mining (CDE) and commentary on fluctuating stocks like Marathon Petroleum (MPC) and Lumber. Scott Wapner reflects on his investment strategies, maintaining positions based on long-term prospects rather than short-term movements.

---

Conclusion

The episode concludes with a forward-looking perspective, highlighting the intertwined nature of market sectors and the importance of strategic positioning. The panel remains optimistic about the continued rally, underpinned by strong earnings, technological advancements, and favorable regulatory shifts. Listeners are encouraged to stay informed and consider diversified investment strategies to navigate the evolving market landscape.

Notable Quotes:

• Josh Brown on 2025 outlook: “The expectations I think for 2025 are more muted across the board.” ([02:40])
• Scott Wapner on earnings fundamentals: “It’s not Santi Claus, it’s not Trump Bump, it’s fundamentals.” ([05:07])
• Anthony Scaramucci on Tech Rotation: “It’s a very bullish technical pattern.” ([06:17])
• Bill Baruch on Bitcoin’s potential: “If it is an asset class, there’s probably 10x to go in Bitcoin.” ([26:00])
• Josh Brown on healthcare earnings: “Earnings growth in healthcare is expected to be pretty good in 25.” ([32:12])

---

Disclaimer: All opinions expressed in this summary are solely those of the Halftime Report participants and do not reflect the opinions of CNBC or its affiliates. Listeners should conduct their own research before making investment decisions.

Transcript

[Scott Wapner]

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[Josh Brown]

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[Josh Brown]

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[Liz Young]

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[Bill Baruch]

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[Liz Young]

I'm Scott Wapner and you're listening to CNBC's Halftime Report, the podcast the most profitable hour of the trading day. We record this live weekdays at 12 Eastern. Listen in. Alright Michael, thanks so much. Welcome to the Halftime Report. I'm Scott Wapner. Front and center this hour, the record setting rally. We'll ask the committee how best to position now as they make new moves in the market. Joining me for the hour today, Josh Brown, Liz Young, Thomas and Bill Baruch. We will check the markets. We do have a bit of a mixed picture today. Not much on either direction on either side, but we are focused on round numbers. 45,000 the first close up for the Dow ever yesterday. Bitcoin 100000 for the first time ever. Liz Tech's first record close in almost a month. What, what stands out to you today as you watch these markets?

[Josh Brown]

Yeah, I mean look, today is not that exciting of a day but the run that we've obviously had since the election, people are calling it a pro cyclical rally. We're talking a lot about cyclicals but if you look at actually the cyclicality ratios, they're kind of and really the stuff that's benefited is everything that would benefit from deregulation. I think the sentiment coming into this was decently strong. Got more fuel from post election rally excitement and now we're heading into a new year. Obviously heading into the holiday season. I think this can keep going for a while but as I work on my 2025 outlook, that'll come out next week. Really the expectations I think for 2025 are more muted across the board. From all strategists, you're looking at average ish returns in the and then above average earnings growth which actually mathematically could lower the multiple throughout the year. So maybe we don't get as overly exuberant as people fear.

[Liz Young]

Well, I mean, I still am getting targets like, you know, Chris Harvey 7,007. So I mean, that's like a 15% move.

[Josh Brown]

That's a big one.

[Liz Young]

But yeah, there's some 7,000 targets out there too. He's not, he's not on an island, you know. Josh, what, what's your, your current view on, you know, again? 45k on the Dow. Liz said this can keep going for a while. That feels like the prevailing thought from everybody that I talk to.

[Scott Wapner]

Yeah. Or even if the, even the people that are like, well, maybe we should be cautious. Okay, how cautious are you getting? What'd you sell recently? Nobody wants to get off the ride. When the ride feels the way that it does, it'll come to an end at some point. It's not profound to say that everybody gets that. Nobody knows the timing, big picture. If you miss this rally, it's not because you didn't know who would win the election. And a lot of people are dismissing or they want to put an asterisk on the run that we've had since the bottom in August all the way up until now. And they want to say, oh, it's the Trump bump. No, it isn't. It's because earnings expectations were too low for the quarter that was just announced. Yes, there's a sentiment bump, but there's a fundamental bump. And a lot of people just weren't upbeat enough. I want to walk you through a couple of reasons why people miss this rally. First things first, profits for S&P 500 companies. Now that we got Salesforce, we got all the companies that matter. 9% growth in earnings year over year for this quarter. For more importantly, 481 basis points better than the expectations for this quarter as recently as September. So that was the big catch up. 75% or greater. S&P 500 companies beat expectations. The average is 77. So right where it should be. Sales were up 5.7% too. So you can't chalk that up to buybacks or financial engineering. Revenues were better than expected. And the last thing I would say is that it's very widespread. Eight of 11 sectors had earnings growth this quarter. It's not quote, unquote, all tech, all mag 7, etc. Etc. So this is the climate where you get a situation like we're in right now. People just weren't upbeat enough about current quarter earnings. And not only did they have to catch up with upgrades of the stocks, they had to rethink their estimates for Q1 and that's what we're benefiting from right now. It's not Santi Clause, it's not Trump Bump, it's fundamentals. And people just weren't ready for that.

[Liz Young]

And the fundamentals around Big Tech Bill are being honed in on once again. As I said, we have the first record close in almost a month. Apple, Amazon, Meta, all record closing highs. The IGV software etf, A closing high. It leads me to moves that you've made around this resurgence in tech, which is what we've called it. Yesterday you bought more Metta and you bought more Apple.

[Anthony Scaramucci]

Why? Yeah, early in the week as this thing's breaking out, I want to take a step back and look at this. What's happened before. The Nasdaq broke out a couple of yesterday, really officially, the S and P was up 6% above its July high. The Nasdaq 100 was not above the July high at all. In fact, it had a very, very constructive technical landscape. There was a trend line going back to the August low. It built an ascending triangle and it was breaking out above that. It's a very bullish technical pattern. And then the names themselves, Apple and Metta and then Amazon, they're falling like domino's right now. All now setting record highs. As the NASDAQ is empowering this thing now you look across the landscape, these stocks have underperformed and everybody's focusing on cyclicals, but you have to be ahead of the rotation. And this rotation has been happening for about a week and a half now and it's really kicking in, helping the.

[Liz Young]

Performance, performance certainly since the election. Amazon's up 10%, Apple eight and a half percent, Microsoft is seven. And then subsequently you have, you know, gains, but they tail off a little bit new buys for you. Play into the software theme as we've showed you. You know, the last six months are a good story. IGV versus smh, outperformance of software relative to chips. You take advantage of that thinking that the momentum, I suppose, is going to continue there. There's the chart. Oracle and Workday are both new new buys for you.

[Anthony Scaramucci]

Yeah, I think Workday is really, you know, they've underperformed the market. They're really shifting and I think a big focus on profitability. Their margins were 100 basis points above expectations, though their current guidance for the over the guidance for the current quarter was a little below expectations. I think it sets the table for some outperformance here. And I don't want to get dive into AI here but you know, the software that they're implementing with through HR and throughout companies, they could be a big beneficiary of AI down the road. Could be something we hear next year and then Oracle we've owned and I made a rotation out of Oracle back in September. We moved a more cyclical to a name, Owens Corning, which has done well. I want to get back into Oracle here looking at what Salesforce was, was able to accomplish and you know, historical valuation of Oracle I think is underappreciated right now because it's looking back at what it's done in the past and it needs to be bumped up to fall into what it's going to do in the future.

[Liz Young]

You've got history with Oracle.

[Scott Wapner]

Yes, I sold it early. That's my, my history is I, I knew it was a buy and I underestimated the degree to which there would be growth in the cloud and they would capitalize on it. And so this is a name I bought under 100 and I'm embarrassed to say sold it way too soon. But I've watched Bill take the ride higher and at least somebody's making money.

[Liz Young]

Liz, UBS says Tech plus is going to lead again in 2025. I mean there were, you know, many people tried to not write the sector off but at least downgrade their own expectations about what it could do. It wasn't going to trade as a monolith. That may be, that may be factual. You may have, you know, dispersion between the gains of some of these stocks. But the fact is that firms are coming out now and saying that tech is going to lead yet again. Don't write it off and go for this big outperformance from the broadening trade or the equal weight trade or however you want to characterize it. Do you agree?

[Josh Brown]

Well, first of all, I assume that most people have an allocation at least to the Mag 7 and to tech, just given how big of a weight it is in the index. So then the real question becomes do you want to stay overweight? Do you want to become overweight if you're not? I think the answer to that is no. You don't want to become overweight if you're not at these levels. But here's the thing about tech. It is not a monolith. And if you split it up just into semis and software, I think in 2025 software will continue to have a lot of opportunity. The earnings growth in tech is still expected to lead the Pack in the S and P. So we're looking at 23% for the sector versus the S&P, 15% for the year. But some of the earnings downgrades that have happened or at least the revisions downward, they've been more dramatic in semis than they have in software. And I think software is poised for a catch up trade in performance. Not to mention if capex continues into 2025, if companies have more available for Capex, I think some of it can and will get directed to software and not so much to AI because there's criticism around how much everybody's spending on AI.

[Liz Young]

Tesla's market cap worth showing you. It's back above A trillion new 52 week high today. Stocks up 40% since the election. We'll do a Tesla Uber pairs conversation because both stocks are on the move. But Bill, I want your take on on Tesla as it's had this incredible run. And B of A says it's going to continue to grow in 2025 and beyond. Price target, they bump up to $400 now from 350.

[Anthony Scaramucci]

I mean this has been a name we've leaned into since the very start of July and really called it our second half of the year play and it's done a lot more than we've expected. Obviously Elon Musk has aligned himself with the incoming administration and President Trump and that's going to benefit regulations and, and things that are going to be a tailwind here. But you know, we still. For Tesla itself, I want to talk about position management. It's become a big position in our portfolio and we've tried to trade it a little bit, manage it a little bit and wind it down to keep it outside the top five because it's going to be a volatile name. It trades like a commodity. I think, you know, we have to treat it like that.

[Liz Young]

Yeah, Uber, I said shares are down. Today on news that Waymo is going to expand into Miami. We worried about this.

[Scott Wapner]

I actually don't think that's the reason why the stock is down. There's an ftc, supposedly an FTC investigation about whether or not it's too difficult for users to Cancel their Uber 1 subscriptions. The company has responded to that news saying that the average subscription cancellation is 20 seconds. One of the big things that the Biden administration wanted to get done while it was the administration in power was this kind of click to cancel idea to help people with things they have subscriptions to that they didn't want to be stuck with. And it just looks like this is one more inquiry into another company. Over the last couple of years, every time you've sold on some sort of a regulatory action headline related to Uber, it's been the wrong decision. Stock has made you feel foolish after. I don't think that's going to be any different this time around. With regard to Waymo, Uber is Waymo's partner in multiple cities. I think that's a trend that will continue. I think ultimately what the consumer wants is not five different ride hailing apps on their phone. I think they like the option of when they want to take away mo it's there. If there is no way more available on the same app, they could find a human driver. That will probably be the status quo for the next 10 years. And that's why I think that's a non event, so to speak, for Uber.

[Liz Young]

You mentioned regulatory actions and headlines and there have been a plethora of those under the Biden administration. We've talked about it from stock to stock to stock. I just want to focus on Amazon for a second. The stock's at a record high. I know you added to it the other day. Jeff Bezos will always be identified, obviously with Amazon, even though he doesn't run the place anymore. But he did speak to Andrew Ossorkin yesterday at Dealbook. I thought the comments were very interesting about his outlook for Trump 2.0. I want you to listen.

[Anthony Scaramucci]

If we're talking about Trump, I think it's very interesting. I'm actually very optimistic this time around.

[Josh Brown]

That we're going to see.

[Anthony Scaramucci]

I'm very hopeful about this.

[Liz Young]

His he seems to have a lot.

[Anthony Scaramucci]

Of energy around reducing regulation. And my point of view, if I.

[Bill Baruch]

Can help him do that, I'm going to help him.

[Liz Young]

All right, so there's Bezos. Very optimistic. He says you have a take on this. I just thought it was interesting. Number one, you don't hear Bezos talk publicly often. He rarely puts himself in position for an interview like this. But what do you make of what he said?

[Scott Wapner]

I take him at his word. I heard Kara Swisher last night say, well, Jeff just wants a space contract. I'm not as cynical as she is. I think that Bezos is looking at the state of regulation and how many regulations there are and all of the things that could potentially get done if. If the Trump administration truly wants to pursue that idea constructively. So I don't think Bezos is just like saying what he has to say for Blue Origin. I'm a shareholder in Amazon and I don't think that the market appreciates fully the rerating that's taking place here. The stock is not rallying on the deal book conference. The stock is rallying because a day before they had the reinvent conference for AWS and two things came out of that. Number one, this company is now a serious player in GPUs, the training chips and the training chip ecosystem and training three, which will come out next year. These are highly competitive with H1 hundreds and that's what the market likes to see. They actually brought Apple's head of AI and machine learning out on stage at an Amazon event to promote the training chip. The second thing is they shocked everybody by releasing a foundational large language model. This is not something people had on their bingo card for Amazon in 2025. So now there are six foundational models all performing at high levels relative to the benchmark. You've got ChatGPT, you've got Claude Sonnet, you've got the rest and you've got one from Amazon. That's why the stock just went 202 to 219 and in my opinion on the way to 250. And if we get some deregulation as like a cherry on top, nobody's going to complain about it.

[Liz Young]

Tech has felt undeniably under pressure and under attack under the current administration, trying to gauge now what Trump 2.0 is going to mean for the space. Barron's yesterday says Trump's antitrust pick spells trouble for alphabets, Google and other tech behemoths. The President Elect himself on a truth Social post yesterday. I'm pleased to nominate Gail Slater as the Assistant Attorney General for Antitrust at the doj. Jay Big Tech has run wild for years, stifling competition in our most innovative sector and as we all know, using its market power to crack down on the rights of so many Americans. And he goes on to finish that sentiment. But it's no wonder that you have had a line either on the phone or as we said, at the gates of Mar A Lago, trying to get in front of the President Elect. It was Sundar Pichai. Remember he called the President Elect after the election. Mark Zuckerberg went to Mar a Lago, had dinner, Tim Cook's try to develop his own relationship with the President, then President, now President Elect. Once again, I'm wondering how we're thinking about what regulatory headwinds could be existing in this particular administration versus the current and maybe the last.

[Josh Brown]

Yeah, I mean the market's going to take a while to digest this, but even if you just look across the single names, there's not that negative of a reaction even to this news right now. I think it's going to take a lot more than something like that to throw investors off of this trend. I would expect the first half of 2025 to bring with it a lot of back and forth and a lot of sort of two steps forward, one step back in the sense of okay, this policy got enacted, maybe not as much as we thought it did. There's going to be volatility and this is going to be a really tough environment to choose single names as either the winners or the losers. If you're doing it based on policy decisions. The reality is we're not really going to know the policies until probably midyear at best on some of this regulatory stuff and the pressure that CEOs are probably going to put on the administration. You can't underestimate that.

[Liz Young]

Well, one thing that's certainly gotten a boost on the expected more friendly atmosphere and environment, lowering of regulations, certainly bitcoin. We can show it 100k first time ever. I think it's still hanging out. It's right there. 100,700. Wolf Research today says it's overbought, but it's far from over. I think that's a point well made. Standard charter today, a roadmap beyond 100,000 to 200,000 in 2025. The block price target goes up today. These are all crypto related plays. If you looked at every stock within that universe today, MicroStrategy is front and center. Certainly their coinbase, these other names, Robin Hood are all getting a lift. What's your exposure look like right now?

[Anthony Scaramucci]

I mean? Well, I do run a commodity fund and it's known as a cta and we use futures and commodities. And I'm leaning into this breakout. That was a beautiful little pennant in bitcoin over the last few days or the last couple of weeks really. And it broke out of that pennant. Leaning into call exposure and how I'm managing leverage in that. As for wealth portfolios, we own 1% allocation iBIT. I do want to increase that personally. I'm leaning into calls as well and IBIT and bitcoin futures. I think this is that breakout and I think we can in this when this next little push up, maybe 120,000 could be tested.

[Liz Young]

All right, it's been a big move. And our next guest today, our halftime headliner literally has written a book on bitcoin. Anthony Scaramouche is the founder and managing partner of Skybridge Capital, the author of the Little Book of Bitcoin, what you need to know that Wall street has already figured out. Good to see you. Congrats on this new book.

[Bill Baruch]

Thanks, Scott.

[Liz Young]

I mean, what. What an amazing time. What an amazing time to not only have the book, but for us to have you. What do you think this moment signifies?

[Bill Baruch]

The 100,000 moment?

[Liz Young]

Yeah. Yeah.

[Bill Baruch]

Well, I think it's. Obviously, it's a big moment, but I think it's really just the beginning. And, you know, you've had me on before and I've had my ups and downs with bitcoin. We started buying it in October of 2020 at 17. It went to 69,000. And then unfortunately, I think it went back down to 15,000. And so I've been a hero and a goat in bitcoin over the years.

[Liz Young]

But you've been a hodl, though, right? That's that. We hold on.

[Bill Baruch]

Yeah, so we hold on. Our clients have benefited. They're 5 to 1, 6 to 1 on our Bitcoin investment, depending on entry point. But I. I really do see this as an asset class, and I think that was the point of the book. And I was very happy to get Michael Saylor write the forward, although he did yell at me. He made me change the last chapter of the book, Scott, because I was recommending in the back of the book a 2% allocation. And Michael said to me, well, do you have 50 other ideas as good as this? I said, I don't. And he said, well, okay, well, then you have to rewrite the last chapter. Just implying that people could start at a 1 or 2, but they could think more broadly. And I think that's where we are right now. If it's an asset class, it will trade to $18 trillion, where gold is. It's probably at 2 trillion right now at that $100,000 number. So I think it's still the beginning.

[Liz Young]

Saylor's trying to write his own chapter, obviously in his company's place in all of this. Do you feel like we're at an inflection point again? Another one as it relates to the new administration, what is widely expected to be much more friendly in quotes, if you will, towards this asset class that you suggest it is.

[Bill Baruch]

Yeah, and I think this was a fundamental failure by the Democrats, actually. They. They had the same opportunity that the Republicans did. They took for granted the crypto investors. They took for granted the lobbying around crypto. I think fair shake. I think, Josh, you probably looked at this. I know you've Written about a Fair shake, won 48 out of 48 elections. They put their money up. They knocked Sherrod Brown out of his seat. He was the head of the Senate Banking Committee. And so I think the President Trump, who I saw speak at the bitcoin conference last July, is putting a pro bitcoin team in place. You know, it's a combination of the cent and Atkins and others. And I think it's good for America. I, you know, Jerome Powell said yesterday at Andrew's deal book that this was a competitor to gold, it's not necessarily a competitor to US dollar. And I think if we think about it that way, the American government can get very comfortable with bitcoin as being part of a portfolio asset allocation strategy. Again, the dollar will remain supreme. We do need stablecoin legislation in the next congressional term. I think that will help the whole industry. And just remind people there are stable coins like Tether and Circle that own huge swaths of US Treasuries. I think Tether right now, I should say another question.

[Scott Wapner]

Yeah, you're book your book party this week. Barry Ritholtz was there. Michael Saylor is there. I'm just curious. You're watching what this guy is building. He's now got a hundred billion dollar market cap. Had you ever thought along the way, what if Skybridge builds a bitcoin reserve? Like, what would that mean to the people that are already investing with SkyBridge, people that have clients on the platform? You almost could have like beat them to the punch because you sort of were the first hedge fund platform to incorporate these assets in a traditional finance setting. Like you did this before anybody.

[Bill Baruch]

Well, I appreciate it. I took my lumps for doing it and some of the wire houses yelled at me for doing it. But I think clients that stayed with us have been rewarded and we sort of have had a seller strategy, frankly, not allowed to talk about our performance. But just think of these numbers. That Bitcoin was 17,000 when I bought it and it's 100,000 today. And we had a 40% position in Bitcoin. You can imagine we're doing very well.

[Liz Young]

Get your calculators out.

[Bill Baruch]

Get your calculator out. You imagine we're doing very well. And so the reason why Michael and I are close is that we see things the same way. And we do have a bitcoin standard at Skybridge where we have a ton of our balance sheet in bitcoin. And we were the first or maybe among the top 10 first companies to go into Fidelity, Josh and have our IRAs enabled in Bitcoin so you can buy up to 5% Bitcoin in your retirement portfolio at SkyBridge. And so, yeah, we put a. Listen, we had to adapt and pivot our business. You know, I've been. I've been on the air where I've taken blows. We got hit very hard in March of 2020. We were in a lot of structured credit then. Had the worst year of my life, And I think 12 trading days in the month of March of 2020. And we had to pivot ourselves. And so we made the decision and thank God it's working now. But trust me, like you, Josh, I've been humbled by life and market. So I'm knocking on wood and hoping things continue in the trajectory that they think that we think that it will.

[Liz Young]

You have such great perspective on it because you've literally lived through the turbulence of the growing up of this asset. You've. You've seen the scammers, the shysters, the phonies, the fraudsters in many respects. And here we find ourselves on what is a major milestone. What does that mean?

[Bill Baruch]

I was 6 foot 4, Scott, when I made my first bitcoin investment. But look at me now.

[Liz Young]

But you know what I'm saying? I mean, you've seen it from such a close level. Have we fully grown up yet? Are we still in danger of some of that nonsense that took place?

[Bill Baruch]

I think we've grown up and I think we have to, you know, we have to be objective about President Trump. I think he saw quickly that this is an industry that the United States needs to be in. If you want to maintain your mantle of financial services leadership, you got to get the regulation right in this industry. But I will say something about Gary Gensler that people would not expect me to say. He actually helped the industry. Perhaps it was accidental when he didn't approve the spot or Cash Bitcoin ETF right after the futures ETF was approved. He probably helped the industry in 20. Yeah. So the future. No, no, no. Futures were Approved 11-11-21. The expectation pursuant to the law was that the cash would have been approved in 1Q22. He blocked and delayed it. He. He lost the lawsuit subsequently. But I think that exposed all of those grifters and some of the fraudsters and lots of leverage. It wiped out three or four big companies, took out through bankruptcy, things like blockfi, et cetera. So weirdly, he helped the industry because he cleaned out a lot of the dregs in the industry. If you will. And so now when it eventually got approved and you brought people in like Fidelity and BlackRock, it sort of solidified the institutional story.

[Liz Young]

Scott, is the message that you, the individual investor who is going to pick this book up and they see 100k and if they're in it already at levels even close to you, they feel tremendously great. If they're not, they're wondering whether it's too late. They read the book and your message seems to be it's not too late, that there's going to be not maybe a straight line higher. But nonetheless, you're as optimistic today as you have been in the past.

[Bill Baruch]

Look, it's a high volatility asset susceptible to lots of corrections. But I think the message is if this is an asset class in a digital economy, is this digital gold or what Michael Saylor says, digital property? We think the answer is yes. We tell a lot of stories in this book about how different people came to Bitcoin. What I would say to everybody here is if you do the research on bitcoin, you go towards Bitcoin. These are people like Paul Tudor Jones or Stanley Druckenmiller. I know very few people that have done the homework, Scott, and then say, oh no, Bitcoin is not for me. And I do think it'll be part of a long term tactical asset allocation strategy, meaning Portfolios will have 1, 2, 3, 4% in Bitcoin. And so yes, it is early and if it is an asset class, there's probably 10x to go in Bitcoin. And yet it won't be even and it won't happen immediately. But I think over the next five to 10 years we can see that.

[Liz Young]

Certainly, I mean, we're talking about alternatives all the time and people certainly think that this should be part of whatever crypto strategy you have should be part of that. Congrats again. It's a little book of bitcoin. Anthony Scaramucci, thank you. To help make sense of it on a day where we have a orange.

[Bill Baruch]

Scott, Hermes, you pick them.

[Liz Young]

Well, that's Anthony joining us here. Angelica Peebles now has a news alert for us. I Angelica.

[Josh Brown]

Hey, Scott.

[Liz Young]

Yeah.

[Josh Brown]

Axios is reporting that last night at Mar a Lago, the CEOs of Pfizer Lilly and the head of the industry's lobbying group dined with President Elect Trump and also his HHS Secretary nominee, Robert F. Kennedy Jr. Now we've reached out to the companies because Axios is citing people familiar with the matter. Lilly declining to comment. We'll let you know if we hear back from Pfizer. But I will note that yesterday at the Dealbook Summit, Lilly was asked specifically about RFK Jr and Dave Rick said that, you know, he said some things that they would call anti science, but he's also talked about things that are pro health. And so Lilly is very interested in making the argument that they too are pro health. And so he is interested to work with the administration. And we'll let you know if we hear anything else, guys.

[Liz Young]

All right, thanks so much for the update. Angelica Peoples, thank you. Coming up, we'll do our calls of the day and later, Josh Brown is up updating his best stocks in the market list. He is flagging three under the radar names that are about to break out or are currently doing just that. The names are coming up next. First and foremost, the thing that powers your business is power. And when it comes to power, Ford Pro has options. Now scratch that, we've got every option. Diesel, gas, hybrid and all electric. Plus they're all connected so you're always in the driver's seat. The power is yours.

[Bill Baruch]

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[Liz Young]

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[Scott Wapner]

Yeah, it is one of my biggest winners of 2024. Obviously I like it better at 43 than I do at 38, but I have a trailing stop in here. I don't know if I'll get hit or not, but I understand the cut. The stock has gone crazy this year. If you look at where this thing was trading in September, 20 bucks. So it doubled. And I get the idea of locking in something that the analyst was right about. I don't trade that way. I'm not really listening to this. But if I end up selling, it'll be because it's breaking down.

[Liz Young]

All right, Abbvie overweight the call today at Morgan Stanley. What do we think, Bill baruch? It's down 13% since the election. We have a lot of focus on health care and I'll ask Liz about that in a second. But your take on Abbvie, they did.

[Anthony Scaramucci]

Make an acquisition for a drug that did not do well and that took it down. But I want to focus on Skyrizi and Redvark and even the revenues they've got from Humira. I think that really lays the groundwork for the stock to continue to do really well. The legacy drug Humira has done well and the revenues that they've seen from, from these up and coming ones have beat. We like the name. In fact, we use the sell off as a little opportunity to increase our exposure. And I think it's going to take time though, but it's going to be a little bit of a headwind for the administration as well. And the questions that that will result as we discussed earlier about the first half of the year.

[Liz Young]

Liz, what about this space? I mean you heard Angelica with the update as it relates to, you know, the, some of the vaccine related companies, pharma stocks. I should better say, what's your take here?

[Josh Brown]

Look, I mean I think there's a lot of bad news baked into the sector already and sometimes when there's so much bad baked in, it's time to think about stepping in. So if we get into 2025 and some of these policies that are anti health care don't come to fruition, you could see what would be considered a repricing back upward. The other thing is that I want people to keep in mind earnings growth in health care. If we're talking about fundamentals leading what stocks do, earnings growth in healthcare is expected to be pretty good in 25, in fact, the second best sector in the index. So keep that in mind. And you also want to keep in mind if people are looking for other options to find growth. Healthcare is one of those spaces in pharma and biotech, although maybe more further down the cap spectrum.

[Liz Young]

Berkshire Hathaway Today, target goes to 510 from 470 reiterated by at Argus. We believe that some of the $325 billion cash forward will eventually be used to invest in a distress situation, either an industry or individual company. What do you think of that?

[Scott Wapner]

I think it'll be exciting to see that happen because what we've been watching is this company effectively building up what looks like a central bank's worth of reserves. I understand that Mr. Buffett is in his 90s and not necessarily eager necessarily to do something, but it remains to be seen if the team, you know, comes to him with something that's worth doing. It takes a lot to move the needle here at Berkshire now. So even if they did like a $5 billion investment in a new company and people are surprised about it for one day, it's not really going to make a difference to the share price in Berkshire. It's very unlikely that there's going to be another position that could become as large as Apple. So if you're long the name, you should be long it because it's a great insurance company with a lot of industrial assets. You should not be long the stock because you think they're about to pull off some sort of like trade of the century.

[Liz Young]

All right. Dom Chu has a news alert for us on Boeing. What do we know, Dom? All right. Well, we have our headlines right now that the US Court in the Northern District of Texas has rejected a plea.

[Josh Brown]

Agreement between Boeing in a case there involving again the 737. It says right now that the court has ordered Boeing and the US Justice Department to provide the court with an.

[Liz Young]

Update on how they plan to proceed in this case no later than 30 days from now. Those particular headlines with regard to that case between the DOJ and the settlement.

[Josh Brown]

With Boeing driving a little bit of the share price down, you can see.

[Liz Young]

In Boeing shares just taking a slight leg lower in midday trading.

[Josh Brown]

Scott.

[Liz Young]

So we'll keep a close eye on this, but those are the headlines. I'll send things back over to you guys. All right. I appreciate you. Thanks, Don Chu. Let's get the headlines now with Pippa Stevens. Hi, Pippa.

[Josh Brown]

Hey, Scott. Amnesty International said today it has found evidence that Israel has committed genocide against Palestinians. It's the latest in a string of allegations by human rights groups against Israel over the war in Gaza. An Israeli military spokesman says the report's claims are, quote, entirely baseless. The Biden administration is concerned considering new rules that would require airlines to pay passengers for long delays within a carrier's control. The proposed standards would offer a tiered compensation scale including up to $300 for at least a three hour delay and up to $775 for delays of at least nine hours. The Department of Transportation says more than 60% of three hour plus delays last year were, quote, airline caused. And Taylor Swift's era tour books selling more than 800,000 copies over the Thanksgiving weekend, even though it was only available exclusively through Target. The only bigger nonfiction book launch was A Promised Land, the first volume of President Obama's memoirs. But that was available through all major outlets. Scott, Taylor Swift's year just keeps on continuing.

[Liz Young]

Sure does Pippa. Thank you. And Pippa Stevens. Up next, Josh's best stocks in the market list. The three new names he just added and they're under the radar. They're not on, not anymore. Off of his, though. Half time's back after this.

[Josh Brown]

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[Scott Wapner]

Eduardo.

[Liz Young]

Okay, welcome back. Josh's best stocks in the market list is growing because you see breakouts taking place in three other names. You want to talk about these? I'll tell you the first one you have on your list. JCI Johnson Controls.

[Scott Wapner]

Why, thank you for getting me started.

[Liz Young]

Yeah, there you go. That's what I do.

[Scott Wapner]

This is in the highly glamorous and cutting edge industry of H Vac. Basically this is an air heating, ventilation and AC company. And look, this space has not had a great 2024. In fact JCI probably when the year is over will have had earnings down 5%. But the outlook for 25 is earnings growth of 17%. And these stocks are starting to front run that turn in the fundamentals. If you take a look at what's happening with jci, it's being echoed by another ticker also hitting my list of the best stocks in the market. This one is called Fergus Ferguson Enterprises. And actually this is the one I want to spend more time on because it's a special situation. It's a Russell 1000 name $43 billion market cap probably first time ever being talked about on CNBC. The reason it's not in the S&P 500 is because prior to August it was a British company. Is originally a US company that was acquired by the English. They've just shed that. They did a restructuring in August. Now it's US domiciled in Delaware, not in any indexes right now. I think this one can get added to the S&P 500. You have a breakout happening pretty much as we speak. It hit the list last week. I think it'll stay. And this is a name again that could be discovered by large cap managers who previously had a different universe. The last one I want to do is Cloudflare. Can we put this up Net? This is one of these mid to large cap tech names. It's not mag7 but it's in the cloud space. It's also in cybersecurity. This stock hit a high back in 2022. It's been consolidating for almost two full years now. It's finally broken out to the upside. This is not an anticipated breakout. It's a breakout in progress. This is in all of the right sectors, all of the right areas of tech. And again it's one of these names that hasn't really been discovered because it made its high back in the 2021, 2022 bubble era. Now people going to find out more about it.

[Liz Young]

Okay, so we'll watch jci Net Ferg. Those are the three tickers that you need to keep your eye on. According to Josh trade updates you told us about Delta and Marriott. They were on the list before. They're both hitting new record highs today. Yeah, it was a month ago actually on November 4th. You said that they were about to explode on A technical basis, they did. As we said, Delta is up 15% and Marriott's up 14% since then.

[Scott Wapner]

Yes. And both benefited from the rally that we had on the heels of the election. But then they kept going. And what's happening here? Basically these are the two best in class companies in travel. Obviously Delta is the best airline. Marriott is the best operator in the hotel space. And consumer discretionary actually versus versus the S&P. The consumer discretionary versus S&P ratio chart is breaking out concurrently with this. So people were underestimating the health of the consumer. They're not doing that anymore. These stocks are two of the best stocks in the market over the last month. And that's the whole purpose of the list. We want to identify the strongest companies and then we want to look for these technical breakouts and hang around the net. When you hang around the net, you have a tendency to be able to score more often than not.

[Liz Young]

Okay, good stuff. We will talk to Mike Santoli next with his midday word. We are back with our senior markets commentator Mike Santoli here with his midday word. You want to give us your view of Bitcoin at 100k of the Dow at 45k round number day? Yeah, I think the round numbers I also keep putting on the radar, you.

[Anthony Scaramucci]

Know, NASDAQ Composite 20K which we haven't hit yet, but we were within a percent or so of that at the highs. I think it's just kind of a stop and assess and see if this makes sense kind of moment. It isn't necessarily a barrier.

[Liz Young]

Do find it interesting that there have been these days when bitcoin has been on a run and it kind of.

[Anthony Scaramucci]

Seems to draw energy from the rest.

[Liz Young]

Of the market in a way as opposed to kind of reinforcing it.

[Anthony Scaramucci]

I say that, you know, you don't.

[Josh Brown]

Have the broad NASDAQ moving.

[Anthony Scaramucci]

Some of the stocks are, are levered.

[Liz Young]

To it, are also actually down.

[Anthony Scaramucci]

Like MicroStrategy actually backed off the high. So it's interesting that it's sort of its own solitary thing. But I keep pointing out major indexes doing nothing wrong, hovering near the highs, rotating. Most stocks are cooling off this week actually.

[Liz Young]

And yet Palantir is up 4% and.

[Anthony Scaramucci]

Apple is up 5% because they open.

[Scott Wapner]

The market like that's the reason they're up.

[Anthony Scaramucci]

And this very, very strange dichotomy of the trading gambling market on one side and then the rest of it, which.

[Liz Young]

Is, which is being, you know, quite rational and orderly. Is there risk around the jobs report tomorrow? And if so how do you see that? You know, I suppose there's, I think.

[Bill Baruch]

There'S going to be so much noise in it.

[Anthony Scaramucci]

You know, you can make your assumptions about how much of a snapback after the storms. I don't think so.

[Liz Young]

I think the Fed is going to be focused on any weakness and using.

[Anthony Scaramucci]

It as an excuse to cut a little more. I don't think the one data point, point like a strong employment report is all of a sudden going to wipe the potential cups cuts off the board. So I would say it could be an excuse for the market to have a reflex move, but probably not a broader rethink.

[Liz Young]

All right, good stuff. I'll see on closing doll. That's Mike Santali, our senior markets commentator. Coming up, the commodities, the committee's commodities moves. Bill is making some new trades in that space. I'll detail them for you when we come back. All right. Committee moves related to commodities today. From Bill Baruch. You bought Core Mining cde.

[Anthony Scaramucci]

Yeah. They are located in Chicago, actually headquartered in Chicago. The stock is up quite a bit this year, nearly a 100%. But I think there's a lot more upside here. The important thing is they just acquired Silvercrest Mining. It does give them some assets in Mexico but ultimately there 60% of their other mining is in the US and I take a step back from gold and silver. I mean it's probably going to lead into I did sell CF sprout physical gold and silver. So tied to this. I think there's a lot of upside in gold and silver from here after the post Trump election fall. And I think that a mining stock and the mining name is going to outperform, especially a best in class one is going to outperform gold and silver over the next few months.

[Liz Young]

So you buy cde, you sell CEF and you also sold mpc, which is Marathon Petroleum.

[Anthony Scaramucci]

Yeah, that's a name that's really disappointed me a lot this year. It came, it's really come off of a high level. We like the name a lot but seasonality in January and December is not very favorable or at least maybe when the calendar year turns for Marathon Petroleum. We've been very overweight Energy. It's a good opportunity to tax loss harvest for you know, some new monies have come in this year. Move away from it. But we do like the name long term. I see us getting back in.

[Liz Young]

All right, Liz, commodity related. You did pick lumber and copper as your contrarian picks for 24. I mean what do you think about the space right now? Any Any part of it.

[Josh Brown]

Yeah. Well, so the copper pick earlier in the year was a contrarian pick and it was really on the premise of supply and demand mismatch. And that worked out through midyear. It was also an adjacent trade for AI, much like utilities was this year. But I think the big bump in copper is behind us now. I like gold here. I've liked it for a while. I continue to like it. I think the buyer of gold is different than the buyer of crypto. So we talk about crypto and gold being competitors. I don't know that that's really the case right now. There's a lot of central bank action in gold. Retail hasn't gotten into it yet. If retail starts get into it, I think you see more upside. And in 2025, I don't think that we're going to see lower volatility around the globe. So gold benefits.

[Liz Young]

Okay, we'll take a quick break. We'll come back and we'll do finals. On the other side of that.

[Scott Wapner]

I'll.

[Liz Young]

See in a couple hours on closing bell. I hope you'll join me then. Gabriel Santos, Marco Carter, Jeff DeGraff among those with me today. Let's do some final trades. Bill Baruch, less than a minute left. What you got?

[Anthony Scaramucci]

IB80 that this breakouts for real. It holds a stop about 10% away, which gets you below the monthly low and the 21 day moving average.

[Liz Young]

All right, Bitcoin. That is Liz Young Thomas, as a.

[Josh Brown]

Surprise to absolutely no one after the last segment, gold.

[Liz Young]

Well, you could have picked lumber.

[Josh Brown]

That would have been a surprise.

[Liz Young]

That's exciting. All right, thank you very much, Josh Brown.

[Scott Wapner]

Lumber so bullish. It's. It's very scarce. It doesn't grow out of the ground at all. All right, I like NASDAQ and the Q. This name is still in an uptrend and is the primary beneficiary when IPOs and capital formation come back in 2025. You want to be long this name.

[Liz Young]

Okay, so we'll. We'll see on closing bell. We'll follow Dow 45k, Bitcoin 100k. We'll see if we get 6100 on the S&P. 20,000 is in the offing for the NASDAQ. Got a lot going on. I'll see you then. You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live. Weekdays at 12 Eastern only on CNBC. All opinions expressed by the Halftime Report participants are solely their opinions and do not reflect the opinions of CNBC, NBCUniversal.

[Scott Wapner]

Their parent company or affiliates, and may.

[Josh Brown]

Have been previously disseminated by them on.

[Liz Young]

Television, radio, Internet or another medium.

[Josh Brown]

You should not treat any opinion expressed on this podcast as a specific inducement.

[Scott Wapner]

To make a particular investment or follow.

[Josh Brown]

A particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Halftime Report participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Halftime Report disclaimer, please visit cnbc.com halftime report disclaimer first.

[Liz Young]

And foremost, the thing that powers your business is power. And when it comes to power, Ford Pro has options. Now scratch that. We've got every option. Diesel, gas, hybrid and all electric. Plus they're all connected, so you're always in the driver's seat. The power is yours. Visit fordpro.com today to learn more.