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:
- Johnson Controls (JCI) - Positioned for a 17% earnings growth in 2025 despite a challenging 2024.
- Ferguson Enterprises - Highlighted as a special situation with potential inclusion in the S&P 500 following restructuring.
- 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.