? (?) 00:00.160
There is a lot to do, a lot to discuss. We can also look ahead to where we go next year. God damn me. Great to see you. Happy New Year. To you. Got a New Year haircut, a new new cut, new you. Yeah. Well,
Guy Adami (?) 00:14.800
it's the same me. It's the same you.
? (?) 00:17.520
What do you see for next year?
Guy Adami (?) 00:20.200
Always great to have you here. It's fun to come into Times Square on New Year's Eve. What do I see for next year? Does volatility come back? I think April well, I shouldn't say a lot of people, definitely surprised me by how quickly the market recovered from what was a pretty
Guy Adami (?) 00:33.560
significant sell-off and a volatility event that we hadn't seen in many, many years. That surprised me. I think we're in for another type of volatility event in 2026. I can't tell you when. I think it's going to be early. I also think the bond market is something that not enough
Guy Adami (?) 00:48.120
people are paying attention to. So very quietly TLT selling off, yields going higher. I don't think the market cares until we get to about 4.5% in the tenure, but I think we're going there. And I also
? (?) 00:58.640
You think think so. so 4.5% I do.
Guy Adami (?) 01:00.360
Now, I'm probably the only one here that thinks that, but I absolutely Well, let's
? (?) 01:03.120
talk about it because you by the way, you that was not music to the ears of a lot of people out No there hoping to buy a home in 2026 because mortgage rates largely tied to that 10-year treasury. Sounds like Guy Dommi might think mortgage rates could be going up, You
Guy Adami (?) 01:17.960
know, not down today on our call at 12:30 that the 10 the 30-year yields are as low as they've been in quite some time, which is a good news. I think the bad news is, I do think 10-year yields go higher for a number of different reasons that we've talked about on on this desk,
Guy Adami (?) 01:30.800
not least of which, what's going on globally with interest rates and obviously a global debt problem and this de-dollarization thing. I also think, in terms of home builders quickly, as much as about interest rates that we talked about this last night, it's equally about that
Guy Adami (?) 01:44.840
the employment situation where I think it's going to deteriorate next year as well. You
? (?) 01:48.720
know, it's an interesting point, Dan, about this year because in your reference last night, you talked about Open AI and we can get into that a little more about what happens. We forget though, what happened in April, two weeks, the tariff turmoil markets collapsing. We talked
? (?) 02:01.720
about, you know, how low does this market go before one of the fastest rebounds. Are you seeing some kind of and it it by the way it would be historically accurate Yeah. to have one of these 10 or 15% drops No, we get
Dan Nathan (?) 02:14.520
them every year. And and that one was just a bit violent and to guys point there it was also that every risk asset went a bit haywire. And so that was one of the things that if you've been a long-term market participant, you don't see those sorts of breaks that frequently. Um
Dan Nathan (?) 02:26.440
you know we saw you know correlations basically go to one and that's where some bad things happen generally in the market. So the likelihood of having another situation like that come all at once is probably not that great. But I think going into the new year, we obviously know
Dan Nathan (?) 02:41.920
where a lot of the performance came from this year and we know why, right? We saw multiple expansion in a big way here. The expectations for earnings growth are again, low teens I think going into 2026. And so I I would just say that there's a strong likelihood that whether
Dan Nathan (?) 02:56.440
we're up or down, let's say in the first quarter, the first half or the whole year that the equal weight S&P starts to outperform the S&P 500. It almost doubled it up this year, the market cap weighted one. And I just think that if we're going to have legs to this AI trade,
Dan Nathan (?) 03:10.360
there's going to have to be some demonstration of return on the investment that a lot of these companies have made, the ones that have accrued most of the market cap, right? Because of this sort of theme. And then it's going to be the ones who are purchasing this technology or
Dan Nathan (?) 03:24.040
building on top of it if you think about this kind of application layer there. And so to me, I think that's where the opportunities are going to be across lots of different sectors. You know, Caterpillar was a name that we also talked about on the 12:30 call. They have this
Dan Nathan (?) 03:37.680
power business. It's growing really fast. It's 50% of their revenues in the last quarter. If you go look at the stock, you look at the chart, it looks like one of the semis that is selling these sorts of GPUs. So, to me, there's going to be stories like that they're going to
Dan Nathan (?) 03:51.080
have to kind of take over in my opinion.
? (?) 03:53.120
The continue Yeah, I the mean third derivative I mean but here's here's a good example. I mean JP Morgan doubled up the performance
Dan Nathan (?) 03:57.080
of the and P500, trading at a multiple that has not traded a very long time. A lot of that I think is anticipation of them getting a return on the investments they've made, but also the fact that they're not going to have to hire as much. They're going to get better
Dan Nathan (?) 04:10.680
productivity. So those are some of the themes that I think are working through the market right now. 02 200 02 02 02 02 02