Bloomberg Open Interest 01/02/2025
Happy New Year to all of you from all of us here. 30 minutes until the start of trading. I'm Matt Miller. I'm Sonali Basak and i'm katie greifeld. Bloomberg open interest starts right now.
Coming up, a new year rebound. Stocks are kicking off 2025 with tech leading futures higher after a four day slump. One stock that's in focus is Tesla. The EV maker gaining ahead of a critical report that may show quarterly deliveries hit a new record but failed to exceed last year's total. And it's not just Tesla. Bloomberg Intelligence has a list of 50 companies worth watching.
In the year ahead, we'll highlight just a few. That and more coming up. Let's take a look at where markets are trading on your first trading day of 2025. GREEN across the board right now, of course, we had a brutal finish to 2024. Wouldn't know it by looking at the movement today.
You can see the S&P 500 of about 7/10 of a percent before the bells rang. The NASDAQ 100. Similar story here. Big tech with a slight lead, though. The Nasdaq 100 of about 8/10 of a percent. The bond market a bit coming into the long end. Of course, we were knocking on the door of 4.6%, maybe talking about 4.7%. Today, though, you can see we're down
another two basis points at about just about 4.55% that I'm going to pick up right there where you left off, because this could be a problem. This is the ten year in wait for stocks, also for the Fed in red. You see the Fed funds target rate. And as the Fed cuts, the ten year has
risen. That could really be an issue for the rally going forward against that 4.5% danger zone. That's my favorite chart of the year. I think, Matt, it's going to lead to a lot of good discussion so far this year. So far this year, there's going to be much more ahead. I know some stocks are watching as Matt
was talking about, Tesla down 1%, pre-market to Tesla delivered 495,000 vehicles in the most recent quarter. We expected 512,000. CEO Elon Musk has predicted 20 to 30% sales growth in 2025. We're going to talk a lot more about that. But Tesla below that $400 per share level right now. Also looking at crypto linked stocks, looking at MicroStrategy on the rise, 2.7% pre-market. It's rising alongside Bitcoin to start the year. Bitcoin is not back above that 00,000
level though. Also watching top golf, Callaway shares surging. Jefferies upgraded the stock to buy from hold, saying it appears oversold a bit wrong best tailwinds actually golfing more this year. Matt is one of my resolutions.
All right. Well, that's fantastic because I ride Harley-Davidson motorcycles with your husband. You can be out on the golf course. I'm going to take a look. She's not married. I don't know why I said husband.
I want to take a look right now just again, at Tesla deliveries because they missed expectations for the quarter. And that means that Tesla delivered fewer cars in 2024 than it did in 2023. So we're looking at less than fewer than 500,000 deliveries, 495,570. The estimate was for 512,277 and they would have had to post 515,000 to beat last year's record.
That's the thing. Even if they had met expectations, it wouldn't be enough to see growth in 2024. And you can see that disappointment in the stock of Tesla shares down about 3% or so right now. Of course, it had been higher, pre-market in anticipation. And that's just one of the stocks we're
watching because it is the first trading day of 2020 for you. Think about the last week. I blissfully have been on vacation. I know you guys have been in seasonality. It didn't work in December. Of course, we were down in in the month and brutal two and a half percent. Yeah. Typically, you would expect to see a little bit more January.
We'll see if seasonality can be our friend because typically it's a pretty good month for the S&P 500. Well, one big problem also is the fact that in December you lacked a lot of breadth. We saw into December, a lot of investors looking at broadening out in terms of the trades. They made. The S&P equal weight really lagged in December. And then you had this note by BTIG that I had been watching.
Also, interestingly enough, less than 60% of the S&P 500 was above the 200 day daily moving, moving average. That was the weakest reading since late 2023. And that divergence, they believe, could lead to some issues early in the year in terms of stock market performance. All right. Well, let's put these questions to Lisa Shalett. She joins us now, Morgan Stanley Wealth Management chief investment officer. Happy New Year to you, Lisa.
Thanks to you so much for joining us. Let's talk first about the big miss. I mean, is everybody got norovirus in December? Traders sold off the index to the tune of two and a half percent. Typically, it rises 1% in December, at least over the past 25 or 30 years.
Why did Santa Claus not show up? And is it a bad omen for 2025? Well, I think it may be too soon to call it a bad omen, but I'm not particularly surprised that during the month of December, as folks were looking forward to 2025, they saw it with some skepticism. And the reason I say that is when you think about what earnings have actually done over the last two years, S&P 500 earnings have actually only grown at about 7 to 8%. And yet the forecast over the next two years is that we're going to triple that growth rate and increase earnings per share for the index about 25 to 26%. And so I think folks are starting to
realize that 2025 when it comes to earnings is a show me year I and that some of these expectations that are built into these ebullient stock prices may just be too ambitious. I like that. So 2025 it's a show me year for earnings Talk about what that means for big tech specifically because even with that broadening out that we were hoping for that we saw fall apart in December, this is a big tech driven market and many are saying that that's what we're going to see again in 2025. What is the earnings picture look like specifically when you focus on that industry? Yeah, when when we look at the tech names, look, folks, I think may have slipped their minds a little bit is remembering that big tech had a big earnings recession, actually AI at the end of 2022. And that earnings recession set up some
very easy comparisons over the last 12 months that allowed big tech companies to put up just spectacular year over year earnings growth numbers in 2025. We think things are going to normalize and that while big tech may lead the charge in terms of earnings growth, that earnings growth is only going to be about 15 to 18% when you look at the Mag seven. And so that deceleration in growth may surprise, you know, some of the the diehards who are betting on these very high double digit earnings numbers. Lisa, I think the other problem here is when you look at the Magnificent Seven and the more than 66% rise they had last year, I want to pull up a component chart on just how much these firms have diverged. You had Nvidia up 171%, but Microsoft lagged. Even the S&P 500 was only up about 12% last year.
So even within the Magnificent Seven, you are not seeing knock out returns all over the place. How much does even that divergence make a difference given that NVIDIA comprised so much of the returns for the broader index as well as a mad seven? Yeah, I think you bring up a fantastic point because we're getting to a part of the cycle where differences in individual company exposures is really going to make a difference. Whether we're talking about different exposures to the AI growth story itself, whether we're talking about exposure to antitrust risks. More recently, we've had to talk about exposure to a very strong dollar. These are all issues that I think are going to start differentiating between and among the Mag seven and this idea that they as a group can trade together and lead the market may falter in 2025. Lisa Daniel Maurice from BNP Paribas was
on Bloomberg Television this morning. He said, Even if we don't get the 20% earnings growth for NASDAQ that some analysts might suggest, even if it's only 15, markets will do well, Is it possible that we can continue to gain, you know, at these multiples even with an earnings miss? So I think this is where the key to 2025 is going to come in. I think it's about having realistic expectations and picking stocks as opposed to just looking at the passive index. I think that there are handfuls of stocks and multiple handfuls of stocks in the quote unquote for 93 or the non mag seven who are valued realistically, who have realistic earnings expectations and can be expected to generate a good 7 to 10% returns in 2025 because they have the opportunity to actually surprise expectations on the upside. I think what we have to watch out for is
where some of the disappointments may be, and our best guess is that the disappointments are going to land in the places where some of the enthusiasm has been most robust. Well, Lisa, let's talk about some of the factors other than earnings, of course, and the corporate fundamentals. I want to talk about the bond market. We'll be speaking to Julian Emanuel at
930. One of the points that he makes in his notes is that rising long and bond yields are the biggest challenge to the current cyclical bull market. The ten year Treasury yield, it's at four and a half percent right now. Where do things start to get dicey for you? I think we're right on the margin of it again. I think we've seen it in the last three
weeks. The weakness in December in large part, I think can be attributed both to this Q4 83 basis point move in ten year yields, as well as the shift in Fed guidance with regard to their expectations for only two cuts next year. I as you buy into this vision that rates will be higher for longer. Very high. Multiple stocks face headwinds. And I think we started to see some of that, especially those stocks are where the engine for this earnings growth may or may be a little bit more opaque. All right, Lisa, really great to kick
off 2025 with you. That is Morgan Stanley Wells, Lisa, Shalett. Let's get a check on these futures. Of course, 20 minutes until the bells ring. You can see there's green in the pre-market, but a little bit less than we had about an hour ago. The S&P 500 currently higher by about 6/10 of a percent. Big tech.
You can see a little bit better. The Nasdaq 100 up about 7/10 of a percent. The Russell 2000 putting up a fight after an absolutely punishing December for the small caps. The Russell 2000 currently up about 9/10 of a percent.
We're going to go micro next, though, because Tesla in focus missing delivery estimates by about 20,000 cars. We'll bring you their fourth quarter sales numbers next. This is Bloomberg. Let's get out of high interest to look at what's making headlines around the world. A gruesome attack on revelers celebrating New Year's Eve in New Orleans is putting US domestic security back into the spotlight just weeks before Donald Trump is sworn in as president. The tragedy killed at least 15 people and injured dozens more. And the attack also set off panic in the historic French Quarter. And pope postponed events, including a
major football game. Hours later, a deadly explosion of a tesla cybertruck outside President elect Trump's hotel in las vegas further rattled americans ringing in the new year. Morgan Stanley, Citi and Bank America are the latest lenders to leave the Net Zero Banking Alliance, a global climate group following Goldman Sachs and Wells Fargo. The exits come as financial institutions are receiving pressure from Republicans to distance themselves from groups supporting carbon emissions reductions. And the luxury Swiss watch brand Rolex
is raising prices by as much as 8% on some of its most popular models after gold values surged last year. Rolex typically raises prices once a year on January 1st. Price increases can be indicative of the demand for premium luxury products. The cost of materials as well as inflation. Last year, Rolex raised prices by only about 4%, and Tesla's fourth quarter sales figures are hot off the press.
They're in below estimates. Let's dive straight in and bring in Bloomberg's Detroit bureau chief, David Welch. So, David, with fewer than 500,000 deliveries in the quarter, Tesla had its first annual decline in deliveries in more than a decade. Is it a demand issue? I think it is.
You know, this has been an issue with Tesla for some time now. Analysts, investors questioning whether there was still great growth in the EV market, which we know there is growth, but it has slowed. Tesla has more competitors in the U.S. now. GM has a lot of EVs out. Hyundai and Kia do as well. And then in China, of course, they've got big competition with Biden and the other domestic players there. So Tesla no longer has this this
stranglehold on the market that's been happening for a while. And I think it's gathering steam. Look, I'm a little surprised here because there was a lot of chatter in the fourth quarter when President elect Donald Trump was saying he was going to get rid of the 70 $500 tax credit on EVs. There was a lot of chatter that people would rush out and buy these. We don't have data supporting that. People do that. But in any case, we do know that there
have been 0% financing deals on EVs from GM, and we know that Tesla has been offering discounts in the U.S. in China. So I thought given that kind of competition, we'd see some bigger numbers. And so I think that is one of the reasons the stock is reacting so negatively right now. What's the bigger narrative here that their first first annual decline in a decade, investors are saying, okay, you know, Tesla's EV sales growth momentum is is in the rearview mirror. And now the story is about whether or not they can deliver robotaxis and get some new models out in 2025 that will regain sales momentum for the EVs. You know, David, if this were any other car company, I would say, okay, what they sell would be the number one kind of thing. You look at the profits they make on
that, but you look at Tesla's run up after November 5th, and it has been quite staggering. You saw the stock hit almost 480 by the middle of December, but it's sold off since a little bit. It's still above that November high. One major question is with Musk's closeness to the president elect, is there something else that investors are really buying here beyond the fundamentals? There's a story we broke, I think it was late November that one of the Trump administration's priorities will be to have federal standards for autonomous vehicles, which you don't have right now, which means it's very difficult to have a vehicle, an autonomous vehicle with no pedals, no steering wheel, no human controls. And that's something that the the cyber cab is supposed to have.
And, you know, General Motors had given up on that idea because it was tough to get that through. So I think investors are looking at you on wanting to turn Tesla into an AI robotaxi company, and maybe the Trump administration can clear the way for that. I think there's also sort of baked in here an assumption that whatever it takes to give Tesla an easier road to sell electric vehicles, whether it's preserving tax credits, which Trump doesn't want to do or getting rid of them because that would make life tougher for the new competitors in the U.S. Yuan will get because he's close to Trump. I think that's where what's going on here is investors figured, okay, he's close to Trump.
He's going to get what he needs for Robotaxis for EVs. And and that gives him a lot of space to fly. And but he still has to sell cars. So here we are. We think about some of the competition, especially from Chinese automakers, particularly from Vidi. BYD has seen a lot of momentum with plug in hybrids specifically. And I've asked this question to Ed
Ludlow and he shouted me down, But could we ever see a Tesla hybrid or is this always going to be a pure play EV company? Oh, I think it's always a good question. I don't look, they don't have engine operations, transmission. That's a huge set of factories and things they would need to do it. They'd have to change their assembly. They could probably partner with someone to do it if they wanted to.
But it's it's just not in their brand to have anything with carbon emissions. And that's what's been their selling point all along. It's just I don't think it's going to happen.
I could be wrong, but I like Tesla is the EV company and I think that's where they're going to stay. I hadn't even thought of it, but I think it's a provocative question. I think, look, Elon Musk is not beyond throwing a curve ball, Right. I mean, he's written an op ed and developed supporting the far right party in Germany is calling for new elections in the U.K. I mean, this guy does things differently. A wild card is he is he is a bit of a
wild card. So that I think is is fascinating. Look, just to get back to the valuation, David Tesla is now valued at more than literally every carmaker in the world combined, right? I mean, at well over ,000,000,000,000 and you're looking at the Detroit carmakers valued at like 50 billion or less. What is it, do you think, that investors are betting on here? Is it A.I.? Is it autonomous taxis? Is it a robot? What what what justifies that kind of evaluation? Well, look, I think someone over the weekend actually sent me a note saying this has to be the easiest short there is. Look, I'm not going to give anybody
stock buying advice. A lot of people have lost money betting against Elon Musk. But I think it's everything you're talking about. So you are Musk is a guy.
He's got SpaceX. He's got a boring company. He's just an executive. An entrepreneur who comes up with ideas and they don't always work. They're often late to market. But I think investors are just betting on, okay, if you want to says he's going to make an AI company with robots and with self-driving vehicles, it might not happen in 2026, which he's targeted, but it will happen.
And and he's great at keeping a narrative going. But he does deliver a lot when it comes to technology. He always has a growth story and investors are looking at him more as a Steve Jobs type of character than just a good auto executive.
And so he's got stories to tell that the big older car companies don't have. They're all slugging it out to gain a little bit of market share here. And they're selling automobiles and he's doing a lot of other things.
And, you know, so look, Waymo, which is Google's autonomous vehicle company, you know, they haven't gone public, but I think there'd be a lot of interest there. People see that as a real growth business and they think Tesla can do the same thing. And look, they deliver when it comes to technology so that that's, you know, all of these things you're talking about, they're sort of hope springs eternal because Elon Musk is a technology person and not just an auto executive.
David, we have to leave it there. Of course, that is David Welch of Bloomberg News. You're watching Tesla shares now down more than 4%. And remember, it's been sliding over the past week fairly significantly. Interesting to see how the start trade starts. You know, one thing I'm watching out for
is actually Tesla's relationship to A.I.. Speaking of A.I., because if you don't have open AI as a company and you have Tesla as a public company, then is Tesla kind of like a backdoor way? If they build a further and further relationship or even an investment, as he's been talking about, then is it a way to get deeper into that A.I.
trade? Well, I think for Tesla, a lot of people in the stock who love the stock are buying because they love Elon Musk and they want some exposure to the Elon Musk universe. And Tesla is the easiest, most accessible way to do that. And you talk about that often on your podcast.
Yes. Matt Levine What's that called? It's called Money Stuff, the Money Podcast. I will just point out that a buddy of mine last month, Alex Roy, drove a Tesla in full self-driving mode across the country.
So he gave me he had a cannonball run. And as he did that, driving from New York to California, he only charged for 6 hours. He only needed 6 hours of downtime to charge, which I had that all on video that we had. Tesla, among the companies Bloomberg Intelligence says are worth watching in the year ahead. We'll highlight a few more later this hour. This is Bloomberg.
Nice to kick off the year with a bump. We have futures higher, 20 seconds away from the opening bell. This is Bloomberg open interest on that. See futures up half a percent on the s&p, about 6/10 of a percent on the nasdaq. Russell 2000 futures up the most with small caps rallying about 9/10 of 1%, at least on the index level. You hear the opening bell is there. The New York Stock Exchange.
You've got the American Red Cross ringing the opening bell to kick off the new year down at the Nasdaq marketsite. You've got new era helium. I think they also do natural gas deliveries. But fascinating company there in terms of the averages.
We had a very tough December down two and a half percent for the month. We were down the last four days in a row to, I think 58, 81 to close out 2024. Katie Greifeld What are we doing for the first trading day of 2025? Yeah, all that bad news. That was last year. Let's take a look at the board right now on your first trading day of 2025. And I have a lot to talk about right now. The S&P 500, the NASDAQ 100, you're smallcaps all green right now.
Of course, we're taking a look at a half a percent gain when it comes to the big benchmarks. As Matt said, we had been looking at bigger gains pre market, but still a healthy start to the new year. You take a look at the small caps. The Russell 2000 was down 8.4% in
December alone. So it makes sense. You're seeing a little bit of a bounce right now the Russell 2000 up about 8/10 of a percent. Meanwhile you take a look under the hood. We do have some bad news and that's coming from Tesla reporting 495,000 deliveries in the most recent quarter. That was well below the expectations of 512,000. And annual vehicle sales actually dropped for the first time in more than a decade. Now, remember CEO Elon Musk, he's
predicted 20 to 30% sales growth in 2025. Many analysts expect that this forecast is a little bit too aggressive given all the headwinds facing EV sales. And you certainly see a lot of pessimism in the stock right now. Tesla is down about 4.2% currently. I'm also looking at some things in the green here, Katie, because we have crypto related stocks really rising this morning. Microsoft, MicroStrategy among them up 3.3%. As the market opens, you have Bitcoin still below that 00,000 level.
It hit roughly 07,000 at the end of last year. But with it back on the rise, MicroStrategy, remember this week had said that it had bought Bitcoin for the eighth consecutive week. You have to watch next week for that ninth week riot platform is also up nearly 4% as the market opens. Matt are also watching top golf. Callaway those shares rising on an upgrade from Jefferies. Top golf is now a buy there as the stock appears oversold, Jefferies said. And US golf activity is likely to pick up from 2024.
I know Chanel, you will be hitting the links. So what's what's behind that? You're going to get you're going to start playing golf more. I played all through high school. I was actually on my high school golf team. I was the only woman on it. So how did you learn on this program? There you go, right at the opening bell. We've got a lot to talk about. So let's talk about, of course, the year ahead.
We're going to do that with Evercore ISI chief equity and quant strategist Julian Emanuel. He has an S&P 500 price target of 6800 by year end. And I want to do the math there. So you think about, of course, where we are, we're 900 points away right now.
What is a portfolio designed for 6800 on the S&P 500 look like? Sure. So the first thing I want to calm everyone's nerves about December, you'll remember that December of 2022 was a miserable month. Stocks are supposed to go up in December. They obviously ended the year difficult
with difficulty, but we had a great 2023 nonetheless. So seasonality doesn't always work. Good news. Was it tax loss harvesting? That was very much the story in 2022. And frankly, when you think about things like small caps, it was tax loss harvesting again this year. It's just that the year was so positive that people were caught up in the psychology of this momentum, but it didn't. And kind of the story of the magnificent
loss of the Magnificent Seven here. And you get into 2025, you saw a sell off in a lot of those names going into the end of last year. And then you have Tesla this morning delivering with a disappointment. How much does it matter if you see any of those seven start to lag, especially when you consider that Tesla was the third best performer of those seven last year. So I'm going to tie that question in to what Katie just asked about what you need to own for this year and actually this morning is informative is that that stock, which has been leading the charge certainly since the election coming off, it really started coming off about a week and a half ago is typical of the high flyers having a more difficult start of the year after you've been up that much.
But what it also says is and you look at the tape this morning, is that the market doesn't. Need stock X or stock Y or Z for the broad type to go up. There's a huge amount of liquidity out there. The backdrop for earnings is favorable. The Fed is behind us long term. We think the bull market leaders in general, high infotech, communication services, consumer discretionary, the names that are leveraged to the AI revolution will lead in 2025.
But we also like small caps because they're going to work in the beginning of the year. So we have priced in, I think, all of the good expectations for the Trump administration, right? We're super excited about tax cuts. We hope the small cap gets lifted and deregulation is on top of everyone's mind. But people seem to be pushing away the idea that we're going to get massive tariffs causing a trade war or that we're going to get these mass deportations. And everybody was holding those signs right at the RNC, like that was the crux of the campaign. So if you do get those two latter events, does that hurt the momentum that we've seen on the stock market? It certainly can.
There's no question about it. Look, our policy people have been very clear about their view that, you know, tariffs and immigration are likely a net drag on GDP and are likely a net boost to inflation. That's not a great mix. But the thing that we've learned since the election is that the bond market is the ultimate disciplinary tool. Okay. And so from our point of view and part of the reason we've had this volatility at the end of the year is because coming out of the Fed, we got beyond that four and a half percent ten year yield where over the last two and a half years has proven difficult for stocks.
The bond market is going to discipline, in our view, the extent to which policy is going to be able to be implemented. And if we all know one thing is that Trump has proven in the past to be a very market savvy type of president, and maybe instead of quoting the Dow Jones Industrial Average in 2025, he'll quote the ten year yield. Crazier things have happened as we've been discussing. But I want to wrap this into the context of your bear case. Of course, we talked about the base case
for year end 6800. Your bear case is 5200. What is the most important element there? Is it the bond market or is it something else? It's definitely the bond market. And so meanwhile, in a year where we expect volatility, the fact is that 5200 number may seem scary, but in light of where we are now, it's actually not that scary given the fact in in any average year. And that includes up years. The typical drawdown is on the order of 11 to 13%.
So and if you go back to last August, you had that in a couple of weeks and the markets recovered. That is contingent on the bond market saying we can't really deal with valuations where they are, but we don't think there's going to be a recession. Incredible, because you pointed out during the holiday season, a lot of people were gone.
Not only did we get above one of the barometers you're watching for that 4.5% level, you've also targeted the danger zone. Yeah, the danger zone. MANCHESTER, N.H. Music. The danger zone. The danger zone before the market. Look at how far we've come just over the last three months. Last week, we did hit about 4.6%.
You're watching 475 and then 5% as the next key markers. What happens if we blow right through that ultimately? Do you think that this means that risk appetite will just be drained from the market? It's entirely conceivable. So here's the blueprint. And if you think about this from a
policy backdrop, whether it's tax tariffs, immigration or friction with the Fed, even 2025 is likely going to be a lot like the second year of Trump's first term, 2018. And ultimately what happened in 2018 is that bond yields got to a level 3%. It was back then where the market was no longer comfortable with the mix of valuation and policy and etc. And for us, that's 5% this time around. And as I said earlier, we just think that the administration and if you look at it, the appointment of doesn't cause a huge rally in the bond market. And that's the kind of feedback we think
they'll be listening to very carefully as the year goes on. All right, Julian, great to have an entire interview with you without mentioning the Fed. Let's not ruin it. Happy New Year. Happy New Year. Julian Emanuel there from ISI. Coming up, going to take a look at
Bloomberg Intelligence out of the report. 50 companies to watch as we kick off the first day of trading in 2025. Happy new year. This.
Is Bloomberg. Charger. This is Bloomberg open interest. You're looking live at the principal room. Coming up, an interview with Nik Pinchuk, the CEO of Snap-on. In our next hour, 10:30 a.m. Eastern, this is Bloomberg.
Welcome back to Bloomberg Open Interest. You take a look at the stock market right now, that momentum we were talking about at 930 fading and then some. The S&P 500 only up about 2/10 of a percent. We were higher by about 8/10 of a percent in the pre-market. Meanwhile, big tech actually it dipped negative. Now it's back to unchanged. Continue to watch this one because
actually big tech had been outperforming the S&P 500. You take a look at small caps, though, holding on to gains on the Russell 2000, still higher by about 9/10 of a percent. We will continue to watch the big benchmarks closely here. But let's get to our top calls. Some of the analyst action in Focus this morning. And first up, Topgolf Callaway getting upgraded at Jefferies to a buy.
The firm says that the stock appears to be oversold at a time when the golf market is supported by, quote, robust tailwinds. You can see the stock higher by almost 17%. Next up, JMP Securities downgrading Alphabet, saying it's no longer a buy. The analyst cites the possible impact of antitrust penalties on Google's revenue, down about 2/10 of a percent. And finally, we have Goldman Sachs double upgraded Cloudflare to a buy from a sell, saying that it's also raising its price target from $77 to 40. Shares currently higher by about 4.4% currently. And stocks are kicking off 2025 on a
rebound and it's ending a four day losing streak. We are, however, still below that 6000 level on the S&P 500, but we're going to hone in on certain stocks to keep our eyes on. In 2025, Bloomberg Intelligence has compiled a list of 50 companies to watch this year. Tim Craighead, global chief content officer for Bloomberg Intelligence, joins us now. Tell us how you dove into which companies to keep an eye on, because there are some really large high flyers that have had significant run ups already last year on them. Yeah, you guys still see some more gains. Indeed.
And equally, there is a number that have come under a lot of pressure where we see an inflection and a chance for change. The overall nature of the list comes from our broader list of focus ideas. These are high conviction, fundamental views that our analyst around the globe have combined with catalysts that we think are coming up.
They can change the market's focus in view on these companies. All 50 of these have specific catalysts coming up in 2025 that we think are going to make make turning point, make inflections. I see high there. Obviously, it's something we talk about every day, Tim, and something investors are mega pumped about. Is it still just a US story? Are there European companies, Asian companies working on this as well? Well, it's interesting, Matt. I guess there are a couple things changing in our mind with the story.
Certainly it's been US centric. There's been a lot of focus on India along with the large language models, and we had some of those on our list last year. At this time this year we're focused more on some of the enabling technologies and a lot of those are US oriented. Think Broadcom, whether it's
semiconductors in software driving networks or KLA with its test and measurement equipment, that's quite critical. There's others on the list as well, but there are non-U.S. names. There's a little company, probably not a household name in the states VAT group. And of all things, they make valves.
And you think what? Well, they're high performance valves are critical to creating a vacuum, which in turn is critical to manufacturing semiconductors. And so as you see AI in semiconductor growth, it's great for VTI. And one of the categories you also focus on, of course, is new CEOs. And that was definitely one of the biggest narratives in 2020 for all of this C-suite turnover.
And what companies are you specifically keeping an eye on as some of those new executives really get their sea legs here? Yeah, it's always important. There's always opportunities. One stands out in part because of this and some of the dynamics taking place is HSBC new CEO focused on not only cost cutting but really shifting the agenda towards asset and wealth management. This plays in well with our view of China as well, where we see an awful lot of asset flow going from property into markets and they're primed for this with a new CEO to take advantage. Another one that comes to mind is Norfolk Southern. Now this one is one where there they have a new management in place that's shifting focus towards precision scheduling.
We saw that work with Union unveiled in Union Pacific last year, also with new management. We think the same is going to happen with Norfolk Southern as we look forward. I think another interesting thing about this, you mentioned all these companies going through key inflection points. You're looking at product innovation here as well as you're making decisions. Talk through which companies have the
biggest opportunity to surprise and what they're bringing out to market. And this is always a fun group of companies as we look through this year by year. One that comes to mind that hopefully comes to your eyes as well as IMAX. You know, the big screen film company, they you know, they are the bellwether for this type of big screen, but it's now being applied and adapted to a broader set of screens with with theater operators. And we think that there's a big revenue growth story there.
Insulet is another one smaller cap company in medical devices. They have a wearable insulin patch that's becoming the standard of care that we think will be driving new product growth. And another one on that list that's similar to new products is is Tesla.
Now, I realize, you know, it's getting kicked up a bit today, but the reason why it's on our list is because of what we are looking forward to. And that's a launch of a low priced car as well as the refresh on the Model Y. Porsche, interestingly, is another auto company that's on the list again, for five new products coming through, including a hybrid 911. I think that's one you need to be taking a look at. Absolutely. I'm I'm down for the all gas version but
a big 911 fan and the shock has done the stock has done shockingly poorly since the IPO. So it's about time Porsche picks up the slack a little bit. Tim. Great roundup. I highly recommend people check it out on bloomberg intelligence on the bloomberg terminal and Bloomberg Businessweek tim craig head there from bloomberg intelligence talking about his list that you can see on your terminal or online if you are in the terminal. By the way, be i space focus, go buy focus go is the command.
Coming up, Donald Trump's return to the White House is dominating this year's Wall Street predictions. We'll discuss what the finance world is expecting in 2025. That's next. This is Bloomberg. Well, Wall Street predictions for the year ahead, usually defined by a number of economic indicators. But for 2025, the outlooks outlooks are dominated by one person. And his name is Donald Trump. Of course, his return to the White House coming in just a couple of weeks time.
Bloomberg senior editor Sam Potter joins us now with more. And Sam, you have the task of compiling the year ahead outlooks every single year. And I guess it's hard to talk about 2025 without talking about Donald Trump. Yes, absolutely.
I have the dubious honor of sort of collating hundreds of these things. And it's absolutely the case that this year Donald Trump's imminent return to the White House hangs over everything. I think that this is a guy who certainly talks a very strong game in terms of global trade, foreign policy, but also domestic agenda. We've got the red sweep as well, which gives him a pretty, pretty generous powers.
But still, no one is quite sure exactly what will happen, what policies he will pursue when he is in office. So he has added this layer of uncertainty and unpredictability over all the usual outlook calls for for the year ahead that we get. Sam, One interesting part of this is when you think about the president elect and the Doge effort, this idea that they're going to rein in parts of the fiscal impulses you're seeing out of Washington, one question remains around what that does to growth. And of the estimates you've collected, it's pretty fascinating. You have Bank of America and Apollo saying that you could get GDP coming in at 2.5% or less consistent with a soft landing.
But Charles Schwab still seeing GDP above 3%. Does that dispersion create an issue when you do have a lot of a lot of returns here, banking on a pro-growth agenda? Yes, certainly the action we've seen in markets has been pretty, pretty optimistic since the election. I think he's seen as a ultimately, let's call it a pro-growth, pro-business president.
This could be good for listed public assets. Good for Wall Street. He's expected to be light on regulation and potentially on taxes. And these are all good things for the
business of finance and for listed companies. So on balance, the calls overall, they do lean relatively bullish. I think it's important as well when we talk economic growth and that potential soft landing that a lot of what these these outlooks are doing is is looking globally as well. And compared to the rest of the world or most of the rest of the world, certainly the U.S. is still seen as kind of leading the pack.
So it's once again an expected story of U.S. exceptionalism compared with everyone else compared with Europe, for example. Hey, Sam, I saw the word diversification. We keep getting these broadening out head fakes. It's almost like betting on European stocks or small caps.
Is this going to finally happen? You 30 seconds. Well, I tell you, the the idea of diversification here is. Because US assets in particular are so expensive after the run up we've had, there is always going to be that caution that you've got to lock into returns, you've got to make sure that you're not caught out. So they're talking hedge funds, they're talking private markets as a way to insulate yourself and insulate insulate yourself as well from that unpredictability that we just talked about from Trump's unknowns. So it's something they do typically add, though, I have to say, every year it's got a caveat every year. Diversification.
Well, you got to stay safe, Sam. Thanks so much for joining us. Sam Potter there. Coming to us out of London. Coming up in the next hour, Marianne Bartels from Sanctuary Wealth explains why she sees the S&P topping 7200 this year. We are 30 minutes into the trading day. Welcome to bloomberg open interest. I'm Matt Miller. I'm Sonali Basak. And i'm katie greifeld. And coming up, hedge funds gaining d
shop plans to return billions of dollars to clients after two of its funds produce double digit returns last year. Trump and Musk back Mike Johnson for House speaker, but some lawmakers had reservations about allowing him to retain the gavel. And another threat of a port strike looming. We'll discuss what's at stake with talks set to resume next week. All that and more coming up. Let's take a look at these markets. Like Matt said, 30 minutes from the opening bell. You can see it's a choppy trade.
We're going to get it up. And there it is, The S&P 500 higher by about 7/10 of a percent. Of course, we had veered to about 2/10 of a percent higher, even more volatility. If you take a look at big tech, of course, the Nasdaq 100 briefly dipping negative in the last 30 minutes, but now higher by about 9/10 of a percent.
A very choppy trade on the first trading day of 2025 in the equity market, things a little bit calmer if you take a look at the bond market, the ten year Treasury yield lower by about two basis points, a little bit of a bid coming into the long end after also a very hectic couple of weeks of trading in the bond market, still in the danger zone. Where do we get that, by the way? Max Kettner okay, you were off actually, yeah, but I like the term he was great or any reason danger. So let's take a deeper dive right now in the markets on this first trading day of 2025.
We're joined now by Mary Anne Bartels, chief investment strategist at Sanctuary Wealth. And Marianne, we've been teasing you. We've been touting your target, 7200. Is that is that at risk if we see the ten year yield hold above 450? And if it holds above and gets to five, yes, I do think you get a correction, but I don't think it stalls the rally. You know, when when we're entering 20, 25, we've got GDP growth growing about two and a half, 3%. We're seeing analysts really raise their numbers for the year. I've seen numbers as high as 15% for the S&P 500. And we're already starting to see
productivity rise in. Part of the whole story is to enhance productivity. So I think a lot of stars are aligned. The other big bonus is that we're in a lower interest rate environment, at least for the front end of the curve. And, you know, even though the Fed may be slowing down its rate cuts, rates are coming down and that's stimulative. And then, you know, talk about this almost $7 trillion in cash on the sidelines. Everyone is not in yet.
So I do think that the markets will do well this year. There may still be some bucking. We certainly saw the bull buck going into the end of the year, but I don't think it's going to derail the bull trend for the market. It's interesting because you think about the bull trend and what will be driving it. And so many investors, Marianne, have been banking on that broadening trade. But I want to pull up this note that we got from BTIG, the breadth breakdown that we saw in December, which they say is either a warning sign or an opportunity. They say they saw a similar set up in
late 21, which was for telling of underlying issues ahead of a bear market in 2022, but similar set ups in 1996, 2000. For 2014, 2018, they were opportunities ahead of a strong rally. This time they think it could create some problems in the first half of the year. With that said, you are seeing the S&P equal weight into 2025 first day of trading.
Get a bid once again. Do you think that the broadening trade has real legs given so many risks that are out there? So the breadth of the market is very important indicator to technical analyst, but it's not a timing tool. But there are some indicators out there that help you time the market. One of them is the McClellan oscillator, which actually has given a buy signal on the market. The breadth, the overall trend of the graph can peak a year, year in advance before the market's peak. So that's why it's not necessarily a timing tool. What's more important to me is what is
the leadership of the market doing? Because if you lose your leadership, you lose your bull market and the leadership is tech and tech related. You know, we call the Magnificent Seven. They used to be called Fang because they're spread out in tech services and in discretionary. And I see nothing wrong with the leadership of this market. This leader is very, very strong, and I expect it to be strong, which is why I have such a bullish target for the market this year.
And I do want to bring you some breaking news right now, of course, is coming from Hindenburg, taking a short position in Carvana. We don't have much details. Yes, but you take a look at the reaction and Carvana shares dropping about 8% with Hindenburg saying it's short. We'll continue to follow that one. But again, the market position not exactly waiting for details here after that news.
CARVANA shares down about 8%. After the report. You can see they rebounded a little bit right now, currently lower by 3% and they've been on a tear. Exactly. Carvana was trading for damn near close to zero, you know, two years ago and it's up at 250 last year, more than Nvidia at 284%, if you could believe it. So obviously attracting that interest from Hindenburg. We'll bring you more details as we have them, Maryann. But let's talk a little bit more about the leadership that is big tech.
So clearly, of course, you're not giving up on big tech by any stretch of the imagination. But I'm curious what could spoil the party here? We have a lot of known unknowns when it comes to the Trump administration. What a second Trump administration will look like when it comes, of course, to the bond market as well. Some of those danger zone levels that we've been talking about, what could actually upset the apple cart? The risk that I've outlined is inflation if you really start seeing core rise. Not only will the Fed stop lowering
rates, but the market may even price in that the Fed may have to reverse course and raise rates. That would be a big game changer for me in this market. So what's your expectation for the terminal rate? I mean, how does the Fed move on from here, or is that really just a big unknown? Well, the terminal rate is a known rate that's unknown. Nobody really knows what the true level is, but the market is really probably pricing in around three and a half to 4%. And I think that's where the Fed would like to go as long as inflation allows it to do that. Because if you look at the services side of the economy, it's really on fire.
What's not on fire is the manufacturing side of the economy. And we are starting to see some slowness in employment, which is on watch at the Fed. So I think they want to get to this terminal rate that they're approximating around three and a half to 4%, but inflate if inflation starts creeping up, they're not going to be able to do that.
All right, Marianne, always great to speak with you, especially on the first trading day of 2025. That is sanctuary wealth chief investment strategist Mary Anne Bartels. Let's get a quick look at Carvana again, though, because it's extremely volatile right now.
We were talking about that 8% decline after Hindenburg disclosed its short position. You can see that move has been faded and then some carvana shares currently positive, higher by about half a percent. So I've been reading through the short report from Hindenburg as well. One of the things that they're looking
at is potentially major economic headwinds because they believe that 44% of loans for cars purchased since 2022 are underwater and they cite car edge for that. That's going to be a theme we're watching, guys, not just for Carvana, but how credit quality performs over the next couple of months. You know, we're only 13 days away from bank earnings. Fun little fact discounting that, you know, is absolutely fascinating because used car loans are like double digit percentages. And of course, at the end of 2021, 2022, you had used car prices, often eclipsing the MSRP of the new version of that car.
Interesting enough, they cite an ally executive telling them that they've pulled back from Carvana pretty significantly. I would want to see how Ally also reacts to that because of course that is a big customer there. And we should point out, of course, Bloomberg News has reached out to Carvana for comment. We will bring you that comment if we get it. But you can see Carvana shares shaking off that Hindenburg. Short repair report down 8% after news broke, but currently higher by about oh, rounded up about 1%. Let's go to look at some of the other
stocks moving this hour, though. We'll do that with Bloomberg's Alex Semenov. And let's start with MicroStrategy. That, of course, is one of the big outperformers last year. How is it looking on the first trading day of 2025? Yeah, it's looking good, Katie. Risk assets are broadly up across the board. It was a little bit of a mixed picture for equities, but Bitcoin back above the 97,000 level.
And of course that's lifting MicroStrategy, which is seen as kind of a proxy for bitcoin. It was under pressure recently into the end of the year down the past five trading sessions and 23% down over the past month. But obviously an incredible rally in 2024, up more than 300%. And actually analysts at Bernstein, TD Cohen and Barclays, their rating on the stock implies further upside into 2025.
The Trump administration is obviously seen as embracing crypto, so that should do well for the assets and for MicroStrategy as a result. But on the flip side of that, obviously, as we saw last week, if the if Bitcoin does move in the opposite direction, that's not a good thing for the company. Also watching over here because of my personal interest in golf, but also very interesting movement in top golf. Callaway after an upgrade interesting to see analysts now coming back and creating such movement in stocks once again. Yeah, and indeed a really big move there. 14% up right now.
This is after an upgrade from Jefferies to buy from hold. They say that first and foremost, the stock is oversold. It fell about 45% in 2024, but they say it's oversold, particularly particularly at a time when the golf market is supported by robust tailwinds, which means people like to golf. So that should do well for the company. Their price target on the company is 3 per share. That implies a roughly 65% increase from its last close.
There's a stock called I'm going to Say No More. Yeah, I was I was thinking new, more neutral. Sounds too much like just say it fast. I yeah. And in any case, it's a company that's out with a drug that is supposed to treat major depressive disorder. But apparently in the final stage of trials, it didn't work. Yeah, apparently it didn't work on
people who participated in this trial program. It's down about 80% right now. RBC analysts say that this is basically the worst case scenario for the stock, but they do say that they expect that management will help recover this trial. They have a diversified portfolio of these types of medication, and that should do well for the company.
And also, they're supposed to give additional updates at the J.P. Morgan Health Care conference, which begins in San Francisco. Generally, there is someone going to that I am. You're going to that. I am glad that I'm really up already. Yeah, yeah, yeah. No, it should be huge. And of course, we will be expecting that sort of news.
People sort of wait to drop their news at that conference. Alex, it's great to see you guys. Happy New Year. That is Bloomberg's Alex salmon over. Meanwhile, coming up, a new Congress begins tomorrow and House Speaker Mike Johnson fights for his political future. We'll have the details next. This is Bloomberg. It's getting out of high interest to look at what's making headlines around the world. Russia is halting natural gas flows to
Europe via Ukraine. Closing off a route that's operated for 50 years. The stoppage was a result of Kiev's refusal to extend a pipeline deal because it helped fund Moscow's war effort against Ukraine. The halt will force some European
countries to find more expensive gas elsewhere, compounding pressure on supplies and driving up household energy bills and a Rose Bowl rout. There's been an upset in college football in the playoff semifinals. Top seed Oregon was undefeated before they got crushed by Ohio State last night with a final score of 42 to 21. The Buckeyes face off against Texas next Friday at the Cotton Bowl. And House Speaker Mike Johnson says he's
confident he'll win the leadership post again in the vote scheduled for this Friday. That's tomorrow. Johnson, speaking on Fox News, insisted he has Trump's endorsement. Well, let's keep that conversation going now with Bloomberg's Michael Shepherd joining us from Washington. So Mike Johnson, he has the backing of Donald Trump. He has the backing also of Elon Musk. But with all of that in mind, how much of a fight are we expecting when it comes to this vote? That's a good question, Katie, because we have seen this movie before with Republicans trying to elect a speaker with a very narrow majority in their chamber, the House.
And the difficulties that they have encountered with that. Remember, back in January 2023, Kevin McCarthy won that role as speaker after 15 votes. And then when Mike Johnson took the job replacing Kevin McCarthy, there was a three week gap between McCarthy's ouster and Johnson's eventual ascension after a bitter fight within the party. And so we see Donald Trump and Musk and a lot of other Republicans, including Johnson, trying to project this mandate and this unity across the party. Yet the spending battle that we saw last month highlighted that there are still some factions within the party that could and risk undercutting Johnson in his bid. He only has a five seat majority with
which to work. And if he loses more than that, it could be a tough battle for him That could take more than a day or so. Yeah, I want to step back a little bit and ask a little bit more of an existential question, because you are seeing that kind of fracturing and you've seen it online with even more supporters of the far right with what you saw with immigration as well. I want to point out that Fox is now reporting that Trump is hosting a rally in Washington on the eve of inauguration. So on January 15th, what they're calling a victory rally at the Capital One arena in downtown Washington. Mike, what's the mood in Washington days before the inauguration at this point? Well, you know, Sonali, we have been here.
We've been down this road before so many times. Every four years. We, you know, celebrate the peaceful transfer of power. But four years ago, you know, we were thrown a bit of a curveball. The events of January 6th, 2021, you know, really shook a number of people's faith, not only in the security apparatus, but in everybody's willingness to be good faith participants. The hope is that some measure of peace and tranquility will be restored to the process.
And this event on the eve of the inauguration is another one of Trump's signature rallies, where he tries to show support, where he tries to show that he has a wide scale backing and he will be bringing together a very friendly and favorable audience at a at an arena just really blocks away from our news offices here in D.C., the Capital One arena. This is where all the big sports teams play. So it's a well-known venue right in the heart of town. And the mayor herself had recently met with the president elect and, you know, really expressed some hope that with the new administration, there will be more workers coming back to the office and hopefully back downtown to help stir the economy here. So there is a mix of trepidation as we
think back to January six, but also some hope that maybe we will turn the corner from that. Is there any bipartisan legislation shift that we expect to get done? I mean, there are things like the tcja that Trump really needs to get passed soon, I imagine. But I'm not sure if he's going to have buy in from the Dems on that. He will have a tough time getting buy in from Democrats unless there are some significant concessions, for example, on things like salt, the state and local tax deduction. A lot of New York and area and Los Angeles area Democrats would probably like to see that cap lifted, whether or not they're willing to also accept some of the big tax cuts that Trump is pushing, including a cut in the corporate rate.
That remains to be seen. And he will need to actually include salt in there any way just to be able to get some of the Republicans in those blue states, those blue areas as well. Mike, I also want to point out that during the holiday, many people might have m
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