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why do you think money is going to the mega caps now in the manner that it is up 1 and 3/4% today the NASDAQ up almost 4% over a month and able to achieve this Milestone one reason is Mega caps have been leading um so it's sort of what people reach into the Shelf when they're risk on but second we know that when interest rates fall uh the mega caps actually are very sensitive to that and I think today was a day where the odds of a December cut increased you know the probabilities are are now solidified and that's actually bullish for Tech because Tom Lee discusses the strong market performance in 2024 driven by cash reserves and optimism for the year ahead he attributes the rally to Mega cap companies which benefit from falling interest rates and expects stocks to finish the year strong Lee also anticipates a Federal Reserve rate cut which would support the economy and stock market and emphasizes a trump put PR Market policies under President Trump's second term encouraging risk-taking by investors Lee forecasts that the sanp could reach 7,000 by midyear due to optimism surrounding the new Administration however he expects a weaker second half influenced by macroeconomic risks like geopolitical tension he believes Mega cap stocks like Nvidia will be crucial for the Market's performance as their strength will dictate the likelihood of a rally um should we be surprised at this Resurgence um this melt up and it's um maybe caught some people by surprise um I I think investors should realize 202 before has been a year of uh surprising strength the market has avoided so many opportunities for weakness and now we're entering the final weeks of the Year where we know there's still 7 trillion of cash on the sidelines and quite good visibility next year so I I think stock should finish very strong the CPI was you know some would say sticky but it was largely in line is that how you read it that yeah that's right and I think it's allowing the CPI print today allows people to imagine a path to 2% because shelter now is cooling to a level that's in line auto insurance which was at 25% earlier this year year-over year is now down to 13 so the two biggest contributors CPI are in a downshift I don't think the fact that used cars are going up is going to reverse the fed's view I don't think the fed's going to tighten because used car prices are up all right so fed's cutting next week that's your base case yes and then what happens after that all bets are off wait and see what do you think uh I think the fed put remains in Play Because neutral is let's say 2 and a half to 3% we're at 4 five after the December cut so we know the fed's in a cutting cycle I actually think the best case is for the FED to do the fewest number of cuts next year that means the economy is pretty strong that's right it's strong they don't they're not harming the economy by keeping rates here and the labor market is is holding up and now we have a lot of Firepower for future cuts which support stocks okay you talk about a fed put you also talk about another put and that's a trump put yes is going to be here tomorrow by the way ringing the opening bell people are excited about that uh down here for sure um but you say that that is a substantial part of your outlook for the new year the Trump put explain uh the Trump put is on the simplest level it is the a white house that is going to measure its success by how the stock market performs but it's also a president that's coming in into a second term but with a lot of EX previous experience so this is a cabinet that has good private sector acceptance and I think very markets friendly overall I I think investors who might have been cautious for the last few years now want to be risk on next year all right so your outlook to me is interesting the way you sort of game out where the S&P can go because you say we're going to 7,000 by mid year which sounds amazing cuz most targets that I've seen are 7,000 at the top end for the entire year your full year forecast though is 6600 why uh part of it cyclical we're coming off two backtack 20% years and there are five precedents to look at five of the five precedents since 1880 had a weaker second half so I'd say that's the base case the reason I think markets do better in the first half is that there is going to be a lot of enthusiasm about a new White House some of the headlines that come whether it's uh deregulation Etc and we know there's still a ton of cash and a lot of low leverage on the sidelines that's why stocks can rally and by the way 11% in in a few months we've seen that routinely the last couple of years but in the second half I think markets start to worry about the larger macro risks like the Middle East the potential risk of tariff and executing that and potentially the fact that Doge could be so successful that it could slow the economy you're you're worried about too being too efficient cutting too much and what the impact is going to be yes hey thank you Aman Aman Javers Nvidia joining the big cap Tech party that we're seeing going on today Apple to shares hting alltime highs right now the tech giant releasing new versions of its iPhone iPad and Mac software that include the long awaited chat GPT integration with Siri there also reports that Apple's working on an AI chip with broadcom broadcom Shares are rallying big today as well you know it's funny Rob I heard a lot of folks say well if Nvidia stumbles or if video doesn't do anything the market as a whole is going to have a problem uh not really not really because that stock hasn't done anything um certainly not month to date it's the lagered since the election and these other stocks have picked up the slack so maybe those calls were not correct um does it matter though at some point if Nvidia doesn't work given the size of the stock I mean we're talking about Apple near 4 trillion so Nvidia is not even the largest market cap stock in the market anymore it was for about a hot minute but that's about it well you you know we own that Scott we bought it when it got uh got a little cheap here Midway through the summer and uh you know occasionally these names are going to give you opportunities so getting back to your point are we buying the mag 7 or not I think you got to be selective and when you look at the mag 7 you have names like Google which was a lagger year to date until here recently but if you just look at the fundamentals of a business like that it's PE trading at 20 times right in line with its history is the cheapest of all its mag seven peers profitability is among the highest two times the sector average that it competes in high Capital efficiency three times the sector average and they're starting to see a return on AI so while we own all these it's the when matters of how you buy them why have you fallen out of love with Nvidia so we haven't fallen out of love with Nvidia we still love Nvidia but our one concern is its recent price action I would argue that Nvidia is going to dictate whether or not we have a Santa Claus Rally or not it is still one of our largest Holdings but it's broken to 50-day now we do think that it will ultimately break back through and get to New highs as we go into January but if Nvidia breaks it will take the the rest of the market down with it that's one of the problems when you have a name that's so highly concentrated and highly owned uh but right now we would be buying this dip in Nvidia but being a very short leash if it does continue weakness but you can't have Nvidia not Rally uh and have the market rally that in our opinion I don't think that's going to happen okay looking at the movers let's start with Nvidia some news out of the Supreme Court on envidia so Nvidia was sued by shareholders for misrepresenting their Alliance on cryptocurrency Mon Nvidia appealed that the Supreme Court today in a one-sentence opinion said the case should not have been taken up but the Practical effect of that decision and their wording means it can proceed that's a little complicated isn't it you think I do and video's up hey there Carl we had a Supreme Court decision this morning on Nvidia now the Supreme Court is saying it's not going to take up a case involving a shareholder lawsuit against Nvidia they say that was improvidently granted initially by the Supreme Court mean meaning basically oops we're sorry we shouldn't have taken up this case in the first place so what that means is that the Lower Court ruling involving Nvidia will stand the lower court allowed a shareholder lawsuit against Nvidia to proceed so presumably that will now proceed a pace all of this is about an initial shareholder lawsuit against Nvidia suggesting that Nvidia did not properly disclose how much exposure it had uh to crypto mining as opposed to gaming uh in terms of use of its chips the idea here is that crypto mining is a much more volatile segment than gaming and if they didn't disclose properly how much people were using chips for crypto mining that might have given investors a bad feel uh for how volatile potentially the earnings would be back in 2018 so uh this case now suggesting that uh that that lawsuit can go forward also has some impact potentially for other publicly traded companies that are deciding how much Nuance to share in their disclosure as they file with the SEC how much detail and and sort of investor Insight do they need to provide on the mix of customers they have the volatility of that custom customer base all of that so this will give people across Corporate America something to think about here and it gives a potentially new risk to Nvidia that they might have to settle this shareholder lawsuit at some point down the road guys we've reached out to Nvidia uh we'll bring you their comment as soon as we haveen okay Tom Lee discusses the strong Market in 2024 fueled by cash reserves and optimism for the future he sees Mega cap stocks benefiting from lower interest rates with a potential Federal Reserve rate cut boosting the market Lee also highlights the Trump put predicting that prom Market policies will drive investor confidence looking ahead Lee expects the sanp 500 to reach 7,000 by midyear though he foresees challenges in the second half due to macroeconomic risk he stresses the importance of stocks like envidia in sustaining the rally.
doou agree with Lee's Market predictions for 2024 how important will Mega cap stocks be in shaping the market next year
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