WSJ’s Take On the Year: Market Trends to Watch in 2025

Summary

WSJ What’s News: WSJ’s Take On the Year - Market Trends to Watch in 2025

Episode Overview Released on January 5, 2025, the Wall Street Journal's podcast episode titled "WSJ’s Take On the Year: Market Trends to Watch in 2025" delves deep into the stock market performances of 2024, identifying key winners and losers, and extrapolating these trends to forecast the economic landscape of 2025. Hosted by Gunjan Banerjee and Telis Demos, the episode features insightful contributions from WSJ's "Herd on the Street" column colleagues Spencer and Aaron Beck.

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1. Stock Market Winners of 2024

Top Performers Identified:

1. Palantir Technologies
2. Vistra Corp
3. NVIDIA Corporation
4. Exxon Mobil Corporation
5. United Airlines

Key Highlights:

• Palantir Technologies surged by over 300%, transforming into a "cult stock" with a passionate fan base akin to Tesla and MicroStrategy. Telis Demos notes, “Palantir has turned into a cult stock... it’s kind of a meme stock” (06:19).

• Vistra Corp, an AI-adjacent company specializing in nuclear power, saw an impressive 200% increase. Spencer highlights, “Nuclear power is exactly what these energy-hungry data centers need... a match made in heaven” (06:57).

• NVIDIA Corporation climbed more than 150%, benefiting from its pivotal role in supplying hardware for AI development. Gunjan affirms, “Nvidia is selling the picks and shovels to all the companies who are trying to build AI systems” (05:36).

• Exxon Mobil Corporation joined the NASDAQ 100, propelled by its diverse business ventures, including manufacturing for police departments. United Airlines also saw a 130% rise, supported by strong domestic pricing power and increased air passenger numbers (07:38, 07:54).

Notable Quote:

"Palantir has turned into a cult stock... it’s kind of a meme stock and has this really passionate fan base similar to, you know, the fan bases of Tesla and Microstrategy."
— Telis Demos (06:19)

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2. Stock Market Losers of 2024

Bottom Performers Identified:

1. Walgreens Boots Alliance
2. Dollar Tree
3. Intel Corporation
4. Moderna, Inc.
5. Celanese Corporation

Key Highlights:

• Walgreens Boots Alliance led the losers' list, down approximately 60%. The company's struggles reflect broader challenges in the drugstore sector (09:41).

• Dollar Tree fell by around 50%, signaling difficulties for retailers targeting low-income consumers. Aaron Beck also points out the poor performance of health insurers, indicating sector-wide issues (09:22).

• Intel Corporation declined by 60%, exacerbated by competitive pressures and market saturation.

• Moderna, Inc., a major COVID-19 vaccine provider, plummeted by 60%, impacted by reduced demand for boosters and public skepticism influenced by figures like RFK Jr. (08:44, 09:19).

• Celanese Corporation, facing decreased demand in paints and construction, slashed production and dividends, marking a significant downturn (10:11).

Notable Quote:

"Moderna ... because they import some food. Now what do I do? Do I go and raise prices to consumers? A few years ago, the answer was yes, absolutely."
— Aaron Beck (17:46)

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3. Broad Market Trends and Analysis

AI and Energy Synergy: The top performers highlight a strong correlation with AI and energy sectors. Companies providing foundational technology and reliable energy sources for data centers have reaped significant gains.

Market Broadening: While there were periods of broadening in 2024—with gains spreading beyond the top-tier "Mag seven" stocks—the trend has been inconsistent. Spencer notes, “The equal weighted S&P 500, it's done about 30 percentage points worse. It’s a notable lag versus the S&P 500” (11:38).

Concerns Over Inflation and Tariffs: Aaron Beck expresses worries about potential new inflation shocks driven by tariffs, which could complicate the Federal Reserve's ability to manage economic stability. He emphasizes the delicate balance companies must strike in maintaining margins without alienating consumers through price hikes (16:04).

Notable Quote:

“Palantir is also like perceived to be close to Trump... That’s another important 2024 theme.”
— Aaron Beck (06:25)

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4. Forecasting Themes for 2025

a. Continued AI Influence: The AI sector is expected to maintain its momentum, with NVIDIA and other "picks and shovels" providers continuing to benefit. However, there is a need for tangible AI-driven productivity gains across various industries to sustain investor enthusiasm.

b. Rise of Sports Gambling and Sports Economy: Spencer predicts a boom in sports gambling, driving increased interest and investment in sports teams and related businesses. This trend could lead to higher valuations for sports franchises and greater public participation (21:04).

c. Potential Bullish Turn for European Stocks: Aaron Beck is optimistic about European markets, which have been underperforming. He speculates that political stabilization and increased defense spending could rejuvenate investor confidence in Europe by 2025 (21:54).

d. Introduction of Riskier Financial Instruments: Telis Demos highlights the proliferation of leveraged ETFs and other high-risk financial products, suggesting that Wall Street will continue to innovate in ways that attract risk-seeking investors (15:24).

e. Inflation and Tariff Impacts: Ongoing concerns about inflation and the introduction of new tariffs could create a bifurcated market landscape, benefiting some sectors while disadvantaging others. The ability of companies to navigate these challenges will be pivotal (16:22).

Notable Quote:

“If we don’t start seeing real-world applications that are making big differences to companies' bottom lines... then I think you might start to see a little disappointment creep into the AI trade.”
— Aaron Beck (20:03)

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5. Concluding Insights

The episode underscores the complexity of the current market dynamics, where technological advancements, geopolitical factors, and consumer behaviors interplay to shape investment outcomes. As the Wall Street Journal's analysts look ahead to 2025, they emphasize the importance of adaptability and strategic foresight in navigating an increasingly volatile economic environment.

Final Thoughts: Gunjan Banerjee aptly summarizes the strategic approach for 2025: “Sometimes the opposite happens the next year in the market. A very good strategy sometimes is just buying things that were down before because they tend to go up and vice versa” (13:08).

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Timestamp References:

• 06:19: Telis Demos on Palantir's cult status
• 06:57: Spencer on Vistra Corp and nuclear power
• 05:36: Gunjan on NVIDIA's role in AI
• 07:38: Discussion on Exxon Mobil Corporation
• 07:54: United Airlines' market performance
• 09:41: Discussion on Walgreens Boots Alliance
• 09:22: Aaron Beck on health insurers
• 08:44: Aaron Beck on Moderna
• 10:11: Gunjan on Celanese Corporation
• 17:46: Aaron Beck on pricing strategies
• 11:38: Spencer on market broadening
• 16:04: Aaron Beck on inflation and tariffs
• 06:25: Aaron Beck on Palantir and Trump
• 21:04: Spencer on sports gambling
• 21:54: Aaron Beck on European stocks
• 15:24: Telis Demos on leveraged ETFs
• 16:22: Aaron Beck on inflation impacts
• 20:03: Aaron Beck on AI trade sustainability
• 13:08: Gunjan on investment strategies

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This comprehensive summary encapsulates the critical discussions and insights from the WSJ podcast episode, providing a clear understanding of past market performances and future trends without requiring prior listening.

Transcript

[Gunjan Banerjee]

This episode is brought to you by Shopify. Forget the frustration of picking commerce platforms when you switch your business to Shopify, the global commerce platform that supercharges your selling. Wherever you sell with Shopify, you'll harness the same intuitive features, trusted apps, and powerful analytics used by the world's leading brands. Sign up today for your $1 per month trial [e-mail] tech all lowercase. That's shopify.com hey, what's news, listeners?

[Luke Vargas]

It's Sunday, January 5th. I'm Luke Vargas for the Wall Street Journal. This week we have something special for you, an episode from WSJ's take on the Week podcast. On Sundays, co hosts Gundjan Banerjee and Telus Demos bring you conversations with insiders about markets, the economy, and finance. And in today's episode, Gungeon and Telus are joined by colleagues from WSJ's Hurt on the street column to discuss 2024's stock market winners and lose and what those stock performances and other market trends could mean for investors and the economy in the year ahead. And if you like what you hear, be sure to check out WSJ's take on the week wherever you get your podcasts. Happy listening.

[Telis Demos]

So tell us, do you have any New Year's resolutions?

[Gunjan Banerjee]

I do. Get more sleep. 2025 is the year when I will finally grow up and say, no more of this. One more episode or let me just take care of e. It is time for me to go to bed at a good hour and get a full night's sleep every night. And that will make me a better person, a better podcaster, a better podcaster, a better human. That. That is going to be my 2025. It's going to be amazing.

[Telis Demos]

Love it. Love the enthusiasm.

[Gunjan Banerjee]

How about you, Gungen? Do you have any resolutions?

[Telis Demos]

You know, I'm not a big New Year's resolution person, but this year I think I really want to get better at poker. I learned for the first time in 2024, had so much fun, and I kind of want to dive in.

[Gunjan Banerjee]

Gun Jin Er. I feel like there's like an employment lawsuit brewing here where the Wall Street Journal asked you to cover, like, options and then kind of get into betting and gambling. And you, you wrote that story where you actually traded options and then you wrote about people in the markets who play poker. Like, are we gonna end up having to go pull you out of some, you know, underground poker club one day and you're gonna say, the Journal made me do this?

[Telis Demos]

Well, if you know of any games, let me know. I do think 2024.

[Gunjan Banerjee]

I'm in the market for an underground poker game, guys. That's terrific.

[Telis Demos]

Well, we have a lot to tackle here. Let's get into it. I'm Gunjan Banerjee, lead writer for markets here at the Wall Street Journal.

[Gunjan Banerjee]

And I'm Telis Demos. I write for the Journal's Herd on the street column. And for our first episode of the year, we are bringing you WSJ's take on. That's right, this episode is a little different than ones we've had so far. For this episode, we're joined by our colleagues Spencer, Jacob and Aaron back. Spencer, why don't you say hello?

[Spencer]

Hi, Telus.

[Telis Demos]

Hi, Gunja.

[Aaron Beck]

Aaron, Good to be here, guys.

[Gunjan Banerjee]

We're going to have a roundtable conversation this week about the winners and losers of 2024 in the stock market. We're going to talk about important themes and sectors to pay attention to, and we're going to begin to look into our crystal balls and think about 2024. Spencer is the global editor of Heard on the Street. That is the section of the paper I work for. So Spencer, special, welcome to you. And Aaron Beck is the deputy editor of Heard on the street, and he also covers a few different industries, including food and macroeconomics. Aaron and Spencer, welcome.

[Spencer]

Thanks for having us.

[Gunjan Banerjee]

We thought a fun way to talk about the winners and losers of 2024 in the market was to actually just open up FactSet. I've got a screen here in front of me with the top and bottom performing companies in the s and P500. And I want you guys to tell me what you think those companies are and we'll see how many of them you guys know and then I'll give you the answers. Some of them are obvious. Some of them are totally not obvious. And so I'm very curious how a group of market reporters, people who've been looking and thinking about the markets for years and years and who do it all day long every day, how well you know the winners and losers for the year.

[Telis Demos]

The real story is Telus has been quizzing me because I sit next to him for the past few weeks and I said, let's bring in Spencer and Aaron and we can do a little bit of trivia with them as well.

[Spencer]

Well, I'm going to get some of them wrong, but there's definitely a common theme in what is done well and what is done poorly. I mean, in terms of what has done well, most of them are AI or AI adjacent and by AI adjacent, I mean utilities like Vistra, Constellation Energy.

[Gunjan Banerjee]

Vistra number two, the second. So.

[Telis Demos]

So I can't believe you got that. I cannot believe Spencer got that right away.

[Aaron Beck]

I mean, Nvidia, obviously.

[Gunjan Banerjee]

Yes, yes. Nvidia number three. So by the way, quickly, I just want to establish that we are recording this podcast episode on December 18, kind of mid afternoon. So some of these things might actually change by the end of the year.

[Aaron Beck]

There could be a big swing on that.

[Gunjan Banerjee]

So, and so let's just. So. So I just want to. I just want to caveat that to anybody who might be consuming this show at a different point in time. So, Spencer. Yes. Vistra, that's the number two best performing stock in the S&P 500 so far through this year. It is up well over 200%. Aaron, you said Nvidia. That's up well over 150%. So now we've just got three more from the top five.

[Spencer]

Broadcom.

[Gunjan Banerjee]

Nope.

[Spencer]

Could that be. No. Okay.

[Gunjan Banerjee]

Nope. Nope.

[Telis Demos]

Palantir.

[Gunjan Banerjee]

Palantir.

[Spencer]

There you go.

[Gunjan Banerjee]

Number one. Why Gunjun? What is going on with that company?

[Telis Demos]

Palantir is such an interesting one. It's up more than 300% this year. And I think this really shows us a big theme of 2024 and one that I think is going to continue into 2025, which is that cult stocks have done really well. Palantir has turned into a cult stock. Right. People call its eccentric founder Alex Karp, Daddy Karp. They call themselves Palantirians. The followers do. It's kind of turned into a meme stock and has this really passionate fan base similar to, you know, the fan bases of Tesla and Microstrategy. And I think that's gonna be so interesting to watch in 2025.

[Aaron Beck]

Well, Palantir is also like perceived to be close to Trump. Right. Because I think Palantir is backed by Peter Thiel.

[Gunjan Banerjee]

Right? Yep.

[Aaron Beck]

So, so that's another important 2024 theme is, you know, obviously the Trump adjacent stocks, you know, have done well, probably Tesla's. Is Tesla up there?

[Gunjan Banerjee]

Tesla is not up there for the market overall.

[Telis Demos]

I mean, it's been on a tear this year. And that's because Elon Musk is perceived to be really close to Donald Trump and we'll see where that relationship goes in 2025.

[Gunjan Banerjee]

So there are two other companies in the top five. And Spencer, Vistra, as you pointed out, is an AI adjacent company. Vistra has nothing to do with software. It's a nuclear power provider.

[Spencer]

Nuclear power and nuclear Power is exactly what these energy hungry data centers need. They need reliable, uninterrupted power. And nuclear is carbon free. And increasingly you have these nuclear power providers signing deals directly with hyperscalers that have data centers. So it's like a match made in heaven right now.

[Gunjan Banerjee]

There was a great stat in a journal story the other day. It takes around six to 10 times as much electricity to process a ChatGPT query compared with the Google search. So that power's gotta come from somewhere.

[Spencer]

Yep.

[Gunjan Banerjee]

All right, so we're missing two of the top five you got. Okay, number one, Palantir, two, Vistra, three, Nvidia. What's number four?

[Spencer]

What's the four? I do think I know what it is and it has nothing to do with AI or power. It's Texas Land and Pacific that has.

[Gunjan Banerjee]

Been among the top.

[Spencer]

Right? Okay, I think that's up. That's in the top 10.

[Gunjan Banerjee]

No, no, it's not number four. Number four is Exxon Enterprise. That company has joined the NASDAQ 100 and they are the maker of Tasers and also other businesses including body cams for police departments. And number five is also not an AI company. It is United Airlines, up about 130% this year. As a journal story put it recently air service on many popular U.S. routes exceeded even record numbers of U.S. air passengers. And United said it was regaining domestic pricing power as budget airlines pared back flights on money losing routes. So as the spirits of the world sort of struggle, the Uniteds of the world are doing better. So what about the worst? Let's flip to the other side. Can you guys name any of the five worst performing stocks in the S&P 500?

[Spencer]

I bet I can, but I'll let. I don't want to hold on.

[Aaron Beck]

I'll guess Moderna.

[Gunjan Banerjee]

That is correct. That is the third worst performer up to this point. It's down in the neighborhood of say 60%. What made you kind of jump on that name, Aaron?

[Aaron Beck]

Well, I mean they were a big Covid beneficiary. Obviously it's a vaccine stock. Right. So they got, you know, they got hit with kind of slowing adoption of COVID boosters and just general, you know, the stock did great in the, in the pandemic sort of post pandemic period. So a lot of that has come off and there's obviously nervousness about RFK Jr. Coming in. So a lot of he has views.

[Gunjan Banerjee]

That notorious vaccine skeptic.

[Aaron Beck]

Right.

[Spencer]

I'm going to say the dollar stores have done very badly. Dollar Tree and dollar General. So anything relying on low income people, those are definitely down there. And then health insurers have done quite badly recently. I don't know if they've done badly enough that they're down at the bottom, but that's been a horrible sector.

[Gunjan Banerjee]

So Dollar Tree is in the top five worst performers. At this point it's down about 50%. And relatedly, I think to your point there, Walgreens is actually the number one kind of underperformer of the year. It's down about 60%. And so, so the full name of the company is Walgreens Boots Alliance. It's obviously the drugstore chain. And that stock has, has struggled.

[Aaron Beck]

I have two other guesses, just two notable train wrecks that come to mind are intel and Boeing.

[Gunjan Banerjee]

So intel is in that bottom five performers. As of right now, it's down about 60%. And then the other one, I don't think any of you guys are gonna guess this one, so I'm gonna go ahead and tell you. It is Celanese, which is a maker of many different kinds of chemical things. The company earlier this year said that it was significantly slowing production and slashing its quarterly dividend as it seeks to cut costs because of decreasing demand levels for paints, coating and construction applications.

[Telis Demos]

What's your read about what these Stock Winners of 2024 kind of tell us about the broader market? I feel like a lot of attention was paid to AI stocks, but a lot of these names we just name checked, they were not AI stocks. Did the stock market really broaden this year?

[Spencer]

It did not broaden. There was a period of broadening. What's broadening? Broadening is like, let's look at the S&P 500 and let's say what did the median stock do? And then what did the whole index do? And there was a period over the summer and then later after the election where that was the theme that strategists were talking about, the broadening, where all this good stuff that was happening to the Mag seven stocks was spreading to the rest of the market. And that's petered out a couple of times. So if you kind of zoom out a couple of years, you look at the equal weighted S&P 500, it's done about 30 percentage points worse. I mean, it's a notable lag versus the S&P 500.

[Gunjan Banerjee]

Well, everyone, thank you for playing along with our little guessing game there. After the break, we'll talk about how some of these big themes that we learned in 2024 will be maybe applied this year, in 2025, as we start our look ahead to this new year.

[Telis Demos]

Taxi.

[Spencer]

Imagine hailing a cab with no one in the driver's seat.

[Aaron Beck]

Welcome.

[Spencer]

Please buckle your seatbelt and enjoy the ride. Self driving car company Waymo has spent billions developing its tech.

[Gunjan Banerjee]

What's changed is machine learning.

[Telis Demos]

I'm not really thinking about who's driving.

[Spencer]

But will this big bet pay off for Waymo and its parent Google owner Alphabet? Find out in Driverless Waymo and the Robo Taxi race, a new series in the WSJ's Future of Everything feed.

[Gunjan Banerjee]

All right, so we know some stuff that worked or didn't in 2024. Sometimes the opposite then happens the next year in the market. A very good strategy sometimes is just buying things that were down before because they tend to go up and vice versa. But sometimes we just have to accept a new normal. There's just like a new baseline and it's time to accept that this business that this company's been in has just changed forever, or at least for the foreseeable future. So what are some things that you guys are thinking about thematically in 2025?

[Spencer]

One thing that stands out, I mean, yeah, the kind of last shall be first and first shall be last is tempting. It's kind of like a lazy type of analysis and it actually doesn't work. You'd be 50, 50 if you did that each year. There is this long held dogs, the Dow strategy, which is more of a value strategy, which actually has worked where basically you just, and you don't have to do this with the Dow, but you pick companies that have the highest dividend yields because those are the ones that have done poorly and there's some reversion to the mean. And it's done okay, but not every year. No guarantees, but let's look at some extremes in the market right now. Let's look at healthcare stocks, for example, which we were talking about earlier. They are now in terms of their valuation at their lowest relative to the s and P500 in 16 years. What was happening exactly 16 years ago? Barack Obama was about to become President of the United States and people were freaking out about what he would do with health care. And there was this sense that it would gut the industry and gut its profitability. And actually the exact opposite happened, at least for insurers. Not to say that history will repeat itself, but when there's this extreme pessimism about one business that's not going to go away, health care obviously can't go away. It can just transform that's something interesting to look at.

[Gunjan Banerjee]

Kun Jin, what are you thinking about in 2025 to your point, about do.

[Telis Demos]

We find a new normal in certain industries or certain corners of the market? I think the market in 2024 just got a lot riskier, and I think that's a trend that's going to continue. I think it's going to keep getting riskier. I think Wall street is going to keep introducing crazier ways to play tech stocks, to play crypto, to play the stock market. We saw that in things called leveraged exchange traded products, right. Promising triple the exposure to the NASDAQ or single stock ETFs that also offer leverage. And these ETFs basically borrow heavily to turbocharge exposure to individual stocks to major indexes. And there was a huge boom in those in 2024. I mean, people really could not get enough of just the riskiest trades in the entire market. So that's one area I'm watching closely because I think it's going to keep changing and I think people are going to keep piling into them.

[Aaron Beck]

I have two themes that I'm very interested in. One negative, one potentially positive, but depends how it breaks. So the thing I'm most worried about is a second or a new inflation shock. We've already seen the inflation is stopped slowing. It's leveled out around 2.5 to 3% now. We don't know exactly what's going to happen. But tariffs are inflationary. Okay. There's no way around it. The question is how much new tariffs are we going to have on how many countries, on how many classes of goods, how high are they going to be? I don't know. I'm willing to bet there's going to be a significant amount of tariffs.

[Gunjan Banerjee]

And how does that play out in the market though? Are there companies that that is good for their business either because it chases out a foreign competitor, or then they can raise prices on top of that and pad their margins. Like that isn't necessarily a. That that kind of inflation is not necessarily bad for the stocks.

[Aaron Beck]

So there's going to be winners and losers to your point. Okay. But my concern is more if we get a kind of broad inflation because of tariffs. All right, so if we just have like just, just some targeted tariffs on China, again, that won't happen. Okay. But if we have sort of these across the board tariffs of the type that Trump has is talking about, that will be inflationary for the entire economy and then I think that could be extremely negative for the market. Because it means that the Fed might not be able to cut anymore. I think one difference this time between last time is we've clearly reached a point where the public is kind of fed up with price rises. Okay. Yeah. And you see it especially in a sector I cover, which is food. So food companies are all, you know, raised prices massively during the pandemic and for a couple years after the pandemic and lately have been taking incremental, cutting prices, maybe 1%, doing more promotions, things like this, because they see that the public is really upset with high prices and they need to keep their sales up. So they're starting to cut prices now. Let's say we get tariffs. A lot of food is imported. Or let's say we also get a crackdown on immigrant farm labor, okay? That's going to make food more expensive. People do not want to see higher food prices at the grocery store. If there's anything, there's any takeaway from the election, it's that, I mean, it.

[Gunjan Banerjee]

Was Gunjun and I have talked about it many times. Like the price of eggs, which is, by the way, if you look at the CPI, it's like something in the neighborhood of 10 cents out of every hundred dollars. And yet people really keyed in on it.

[Aaron Beck]

The price of eggs is the price of eggs, okay? But if I make a packaged food or if I'm McDonald's, okay, or if I'm General Mills, I sell cereal, okay? My input costs will go up because I import some food. There may be fewer immigrants working on farms. Now what do I do? Do I go and raise prices to consumers? A few years ago, the answer was yes, absolutely. Raise prices to consumers, protect your margins. Now that's a much harder question. People do not want to see that right now. And so that means that those companies are gonna see hits to their margins if they can't pass through price increases.

[Gunjan Banerjee]

So even though inflation in the past was associated with a pretty well performing stock market, you're saying it might not play out.

[Aaron Beck]

This because companies could be out of room to pass those costs on to consumers. So that's one thing I'm very concerned about now. One thing I'm very curious to see, okay, is, you know, we talk about stock market broadening. I want to see some AI broadening. All right? So right now, the biggest winners, we went through it at the top of the show are basically people who sell picks and shovels for AI, right? So picks and shovels is an old expression like rather than go mine for gold, you sell the picks and shovels to the gold miners. You make money whether they find gold or not, right? Okay, so Nvidia is selling the picks and shovels to all the companies who are trying to build AI systems. All right? They're making money. Same thing with the power companies. Okay, they're making money. So far I have yet to see really, really compelling end use cases for AI that make money. Okay, We've all seen impressive chat bots, things like that. But I think for this AI rally to keep going, we need to start hearing about real world applications that are making big differences to companies bottom lines. You know, like there's speculation it'll help with drug development. You know, it could even be someone like United Airlines saying, look, we're using AI to, you know, massively reduce delays or what have you.

[Gunjan Banerjee]

That's interesting because I think that that means that the AI trade, which today we think of as either companies investing a ton of money in AI to create a specific products and that might be Alphabet or meta, or the picks and shovels like Nvidia and you know, the people selling the tools for AI, but maybe at some point the AI trade just becomes a productivity enhancement trait. And so the best AI stocks to buy are not AI companies, but you know, a bank.

[Aaron Beck]

Right, which, which things that I would like to see. One is someone like Google or Microsoft making real money selling AI tools to customers, which so far I don't see a ton of evidence that that's actually happening. But the second thing to your point is evidence that AI is really boosting productivity, you know, throughout the economy, you know, as happened with the Internet in the 90s, you know, for example, that would be positive for the entire market, positive for the entire economy. If we don't start seeing that, then I think you might start to see a little disappointment creep in to the AI trade.

[Telis Demos]

Either way, it seems like the AI trade is going to keep kind of trickling through the stock market in 2025. So when we come back, we are going to ask Spencer and Aaron one last question about 2025. Spencer and Erin, can you name one thing that you think is going to be a huge hit in 2025?

[Spencer]

I'll go first. And this does have, there are some indirect ways at least, and increasingly I think there'll be some direct ways to play it, which is you've had this, I think it's unfortunate, but like a boom in sports gambling, which has made people much more interested in sports, it's brought more people into it. People watch games and contests that they might not have paid attention to instead of just their hometown team and their favorite sport. And I think that that has trickled through in the private market to sports team valuations. And you have a lot of things like msg, which is considered to be very undervalued, or the sphere or whatever, all these things that public investors can participate. You're probably going to have more of those, more access to that, because people are champing it the bit to get access to the sports economy.

[Telis Demos]

Aaron, what about you?

[Aaron Beck]

I'm tempted to say that I'm bullish on Europe. The European stocks have been underperforming for decades, and I just think it's reached a point where people are just too pessimistic about Europe in general. I know there's political turmoil right now in France and in Germany and, and, and that has people very down. But I wouldn't be surprised if we look back, you know, maybe five years from now and think that this was actually the time to buy Europe. I think the election of Donald Trump could have a kind of galvanizing impact on Europe, where they really decide they have to get their act together. I think you're going to see higher defense spending. I think you're going to see more stimulative economic policy, both monetary and fiscal, in Europe, and you might even start to see more of a sort of a push to develop their own technological champions. So I'm not sure if this is something that's going to play out in 2025, but I think it's something that could start in 2025. I think 2025 could be the year to kind of get bullish on Europe again.

[Telis Demos]

That's a bold call, Aaron.

[Aaron Beck]

Yeah, I'll probably regret it.

[Telis Demos]

Thank you, guys.

[Spencer]

Thanks for asking us.

[Telis Demos]

And that's everything you need to know to take on your week. This show is produced by Jess Jupiter and Trina Menino. Michael Lavalle and Jessica Fenton are our sound designers. Michael also wrote our theme music. Aisha Al Muslim is our development producer. Scott Salloway and Chris Zinsley are the deputy editors. And Falana Patterson is the head of news audio for the Wall Street Journal. For even more, head to WSJ.com, i'm.

[Gunjan Banerjee]

Gunjan Banerjee and I'm Telis Demos. Until next time.