knicks are the most valuable viewership. >> and they are good this year! they are actually good. >> the rangers are not good so their rights fees aren't going anywhere and unless catastrophe came and it went into bankruptcy in which case we still would have fees renegotiated lower. >> not a good sign. big change in the could be nego lower. >> big change in the media landscape. >> thank you. good to be here. >> happy new year. >> see you tomorrow. >> you too. thanks for watching "power lunch." >> "closing bell" starts now. welcome to "closing bell ." this mike or break hour begins with an unsettled start to wall street. stocks unable to take full advantage of new money expected to enter the mark net january after december's pullback. the index is on pace for a rare five-day losing streak straightling the turn of a year. the s&p 500 rally attempts failed to hold with big nasdaq names applying the heaviest pressure. you see the s&p 500 down over

half a percent. apple and tesla, big winners in 2024, leading to the downside today on a mix of profit taking and concerns about product demands in both cases. you see them down 3% and almost 7%. the surge in the dollar index to a two-year high giving pause to ies as china announced new export controls on some companies within three weeks of a new trump administration stepping in. that takes us to our talk of the tape. what does the recent choppiness suggest for the markets in 2025 after two years where reward for index investors vastly exceeded downside risk? we'll start with liz ann saunders, charles schwab chief investment strategist. great to see you. happy new year. >> happy new year to you, mike. >> obviously we don't want to make a tremendous amount about a few days worth of choppy downside action in the markets, but i wonder what you think it might reflect about the starting point for 2025 in terms of market field position,

aluation, concentration of the market. >> well, you know, we're only one day into trading in january. but that old adage of january goes, so goes the year. there is validity to that. some people extrapolate that into a weak december, suggesting something about how at least the first part of the year is going to unfold and there hasn't been a strong correlation in the past. in fact, periods where you had a weaker december and then a stronger january have actually been followed by pretty decent market returns. so i think it is a little too soon to tell. the setup for this weakness was probably very sentiment driven. we had gotten to a lot of frothy conditions in the aftermath of the election that post election rally period, especially when we went back into the concentration problem, you know, top ten stocks are now 39% of the index, and i think that was the setup for some of this weakness. i don't think there was really any kind of prime catalyst. i think it was a little bit more

of an exhaustion from a sentiment standpoint. >> and to that point, i should point out that, you know, market breadth is okay today. not skewed to the downside. it is the large megacaps weighing on the index. and obviously that's a little bit of a shift from december. do you think that the sentiment reset is pretty much complete or kind of did what it had to do here? i guess i ask because i'm still seeing some of the smaller kind of story stocks move quite a bit. you did see a bit of rekindling in crypto related stocks today. >> i think there is still pockets of froth. the good news is that a lot of the froth witnessed outside of just broad market type froth. that's one differentiator, say, between the current environment and the late 1990s where the froth has been a bit more concentrated. whether it is in crypto or zero dated options or, you know, bananas and duct tape a couple of months ago. so, i think that that's maybe akin to what we saw a couple of

years ago when we saw it in the original meme stocks, in spacs and that's a less frothy environment than one that is pervasive across the market. i think this is also part and parcel of many of these rotations that we have been talking about, these fierce rotations that happen within the market at the sector level. frankly at times back into the darlings, the max seven type stocks. i think this is just a continuation of some of those rotations. and i think that's likely to persist the first part of this year. >> yeah, i guess in addition to just a general welling up of enthusiasm among investors following the election, you did also have this playbook that people tried to execute, you buy cyclical stocks, small caps, a template from 2016 and '17, but it seemed to really not have legs and in fact in december, you know, industrials were down substantially, like, 7% or 8% as a group. banks down a similar amount. i guess that speaks to what

you're saying about these kind of violent rotations, but what is the macro message if anything as bond yields go up, for example? >> i would be really careful about ripping out the pages of the 2016 playbook and applying it to the current environment. i think 2018 in terms of tariffs, how they get announced via social media probably still has relevance. but the backdrop in 2017 was entirely different. much more of an inflationary backdrop right now. there was the enthusiasm with regard to major tax cuts coming in 2017, which, of course, came to fruition at the end of the year. that's not on the table. yes, you have the potential for an extension of the 2017 tax cuts, but that's not until end of year 2025. and in the beginning of this year, we're dealing more with the immigration policies and the tariff policies, which all else equal, it is hard to argue against them putting some downward pressure on growth and some upward pressure on inflation. so i'm not really sure that that 27 playbook is an applicable one

given the backdrop now and the key differences between now and then. >> i guess tax rates staying status quo in 12 months is not quite the same carrot that held out in front of the market that it was back then. more broadly, in terms of how you would recommend positioning for this current environment, we talked about two great years coming into this, valuations have been challenging, but hasn't stopped the market from going higher, where within the market still seems like it is a relatively good deal. >> mike, as you know, we have been very factor focused, not instead of sector focused, but at least as an additive to sector-based investing. with this rotation type backdrop, you're seeing huge week to week, month to month swings in terms of sectors and which ones are at the top of the leaderboard, which ones are at the bottom. that is a tricky thing to try to navigate even from a trading perspective. but there has been more consistency in performance at

the factor level. one shift, not that the world or the market thinks in pure calendar year terms as if everything shuts off on the 31st, from a factor perspective as we think about over the next year, we still think you want to stay up in quality, focused on balance sheet oriented factors, return on equity and strong free cash flow and earnings oriented factors like positive earnings revisions that forward looking positive trajectory, maintenance if not growth in profit margins, but i think the one subtle shift we may be in the midst of is one where level mattered last year, strong versus weak in terms of balance sheet, high interest coverage versus low interest coverage on that factor. now i think it is more rate of change oriented, where you want that leverage to any kind of improvement in the economy, especially if we can get back to an environment where the fed is in the easing mode. i don't see that very much near term, but i think that would be a force that might only some of these rate of change benefits

accrued at the factor level while still staying focused on those higher quality factors. the last thing i would say is going down the cap spectrum, be mindful of moves in longer term yields. we're not seeing the same type correlation between moves in the ten year. but when you go to the russell 2000, the cap spectrum to companies that have more variable rate debt and tougher interest coverage, backdrops, i think moves in the ten-year is going to be the key to outperformance or underperformance down the cap spectrum. >> yeah. certainly has largely been the case for a bit. liz ann, stick with me. let's bring in brynn talkington and before brian levitt, brynn a cnbc contributor. welcome to you both. brian, how does all that sound in terms of where we begin this year? i guess the kind of basic case was the economy is in decent shape, the fed is perhaps doing some cutting, earnings are

broadening out, and, you know, credit looks great. what else do we need to know? >> i think that all still exists. i think the broad backdrop exists. the challenge we're dealing with now is there is a little bit more policy uncertainty than we were dealing with last year. i liked what liz ann said about this being more like 2018 than being like 2017. think about 2018, there was uncertainty around the fed. they raised rates, they're not going to raise rates this time. how quickly are they going to bring rates down, re-adjusting a little bit as well as the uncertainty around what the trade policy is going to look like. so, i think for investors, what are we down here, 5%, 4% or so, we didn't feel a lot of that last year because there wasn't a lot of policy uncertainty. we have a little bit of that now. to me that doesn't mean end of cycle. these markets will be volatile as long as policy uncertainty persists. the backdrop to your point, brazilian economy ultimately rate cuts, all of that should continue to be good for risk assets.

>> brynn, part of the story of the past year has been, of course, dominance of megacap tech, but not all at once sometimes. so they rotated and sometimes some of them acted as defensive plays, sometimes driving momentum higher. how do you think about that group within the overall market at this point? >> i think we're going to continue to see much more so in 2025 than we even saw in 2024 this dispersion of the mag 7. we like to call them all one homogenous name, but microsoft was up 13% last year versus meta or tesla. and i think that within that group, to me apple is by far the most expensive just because the lack of growth and if you look at apple's price to sales ratio, which is just one ratio, but still currently has got about a ten price to sales ratio, i don't think they ever had a price to sales ratio that high. the last five years it has been

about six and a half. so i think apple remains expensive as a name. i think microsoft, you know, satya talked about in last quarter that they had 10 billion of a.i.-related revenue. but they have spent, what, you know, $50 billion, going on another $40 billion to $50 billion. i think investors will be more discerning within those names. i continue to believe the one of the seven names that has the most clear line of sight is going to be nvidia. we know blackwell sold out. so of those names i think you'll see dispersion. i think nvidia will do well this year. and i think, you know, valuations do matter and the starting point right now is not great for a lot of these names. >> yeah, as we keep holding out, nvidia has consolidated and invited its time in the last six months or so. we'll see if that's a launchpad or a little bit of a further churn. and, brynn, just while we're on

this topic of the give and take within this group, tesla a big downside mover, i know you thought the stock got ahead of itself. how are you thinking about it right now? >> i have been talking the last few weeks, fundamentally, they need to sell more cars. we got a peek that, hey, their cars were light, but the market wanted half a million in sales, and while china sales were record for 2024, you still have in china there is so much competition and so i think this is a gut check for investors that valuations and fundamentals do matter. so i think the stock probably has a few more days of weakness. this is a great time, last week i sold calls on the name. you get huge call premium. i'm long-term bullish. i'm happy the stock has come down, especially going into earnings at the end of the month. it is going to be a much better setup than if the stock had mid400s going into earnings.

i think that would just be too lofty expectations. >> yeah, i mean, before anybody really stopped to look at it, tesla is like 22% off its high and i know there is plenty of call buyers willing to pay you for those contracts that you're looking to sell. liz ann, you mentioned the yield effect on smaller companies and more leverage companies. i'm wondering in general right now about where say the ten-year sits, relative to fed funds rate and relative to inflation, whether it creates any kind of a restraint on the real economy or housing. in other words, should we worry about yields near this level for equities in the broader economy? >> i think there are thresholds including psychological thresholds with yields that start to maybe cause some trouble within the market. as we talked about earlier, i think it is a small cap issue as yields are going higher. a lot of attention given to the fact that up the cap spectrum,

larger companies, many turned out their debt, they have been earning more on their cash and paying interest on their debt which means that if we go back into an easing mode and rates start to go down, you can't assume that that is a philip to larger companies, that's a benefit to smaller companies, but it doesn't work in both directions. in terms of impact on interest-sensitive areas like housing, we know that a lot of homeowners essentially turned out their debt, turned to fix rate mortgages at the peak in mortgage rates. so it is going to take a lot more to really open up those interest-sensitive areas of the economy and given that the fed appears to be in stall mode right now, we might have to be a bit more patient for that effect to take. >> brian, you mentioned 2018 as a maybe resonant analogy for where we are right now. if you want to walk it back, it was a really strong year in 2017, very low volatility. and then you had that explosion in january of 2018 and market recovered from there.

actually had pretty decent upside until, like, the third quarter and then things fell apart when it seemed like the fed was too tight. you don't want to be too literal about it. how would you try to navigate something that might have a similar cadence. >> i would think about it from the perspective of the policy clarity that we ultimately got. and so at some point the market moves and cause the actors to adjust how they're approaching it and what you saw in 2018 was the fed back off their tightening stance in this instance it would be okay, we're not just cutting rates twice, we may need to continue to move on this. and you would need clarity from the trump administration. the biggest challenge was, it eemed that time every handful of days or weeks we got a new tariff or some new exchange on that. and once we got the first round, the phase one of the trade deal, we were -- we seemed okay until we hit a pandemic. so, it is going to be critical to get clarity. i don't think there is anything magical about that one having

happened in the fourth quarter. this market is a little concerned right now because the fed put a little bit of policy uncertainty into it and we're waiting for the trump administration. but, again, the setup for the markets remains strong, even though we may have to deal with a little bit of uncertainty here. >> sure, and, brynn, i guess in terms of themes that seem a little bit more trustworthy, or predictable, probably more deal-making activity, a little more latitude in terms of companies being able to combine with other ones. is that something that you feel as if you can actively, you know, try and handicap and front run? >> i don't know about that. i'm not sure, there are certain areas during run-up to the election where i thought jd vance was more aligned with, like, a lina khan. i don't think -- i don't see a line of sight in being able to play an m&a. maybe the hedge funds that do

m&a can come back from the dead and make some returns. but i think in the public markets, maybe you'll see some smaller transactions. i don't think that's going to be -- that's really a clear strategy that you can implement at this point in time. >> yeah. i mean, i know the m&a bankers are ing they're busy. liz ann, brynn, brian, thanks so much for starting things off this year with us. now over to kristina partsinevelos for a look at the biggest names heading into the close. >> shares of synaptics jumping now after announcing a partnership with google. they would be combining google's machine learning core with he hardware as well as their open source software. cybersecurity firm cloudflare up 4% now moving on a goldman sachs upgrade to buy from sell with a nearly doubling of its price

target. this is a 12 month price target to $140. the stock is trading at $112 right now. that signals over 25% upside for the next year or so. shares are up 4%. the analysts point to improving sales, better marketing and traction with developers. mike? >> kristina, thank you. i want to note, the markets have firmed up here. the russell 2000 on the verge of going flat. the s&p down just over a quarter of 1%. we're just getting started. up next, jason hunter is breaking down the charts and flagging one sector he thinks has more room to run this year. he joins me here at post nine after this break. we're live from the new york stock exchange u' wchg losing bell" on cnbc. crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even a term policy? even a term

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its highs this morning. here to help chart out the rally road ahead is jason hunter, head of technical strategy. good to see you. >> thank you for having me. >> thank you for coming in. kind of a noisy churning action over the last several days. anything significant about, you know, where this market continues to kind of test this post election range? >> absolutely. we have seen a range since the election and even today coming back again to test the bull gap that opened up on election night. so, the lower end of that gap, 5780 for the s&p, we viewed that as a key near term support. so far, it has held. if that breaks, the next big support and really for the medium term trend are down surrounding 5600. >> which would get us back to the middle of last year, right? kind of like most of that rally from the summer on took place above 5600. that would still in your mind, you know, be the context of a longer term uptrend. >> that's right. if you look at that 5600 area, there are a couple of key things there.

you look at the spring summertime range, that was the upper end of the range, where the market broke out after the fomc meeting, if you look at the november, december price action, even if you look at that as a short-term distribution pattern, that measured move objective sits right on top of that same zone. so, i think that's likely to hold if we do pullback and sentiments has come off a good bit with the december churn that you talked about. aai down to 35%. some of the lowest numbers since april when bonds were moving higher during that period. the market has done a good bit of work with what happened in december already in terms of taking some of the froth out of the -- >> there is a lot of attention as there always is about market breadth and whether it is a broad rally or under the surface you're seeing wear and tear. been negative for a while. to the point where it is looking oversold for the majority. >> fitting with that, if you look at things like the percent of the s&p above its 50-day

average, back to levels you saw in april again. and that corrected price action started earlier in december for a brief period in november, you saw small caps really outperform a reference back to the 2016 post election trade. december that gave up all of that and then some. and like you said, it took the breadth metrics down to levels we haven't seen for some time. >> not everything certainly kind of flips like a switch on the turn of the year. wondering about some relationships, you've been looking at semis and software. semis, leadership grew into the middle of last year. >> we have seen a couple of potential longer term transitions. small versus large has been basing for many quarters now. starting in early '24. you say a fairly clear base pattern and different than small versus large. software versus semis broke out late last year. now software underperforming in the month of december, those ratios for large and for small

cap software versus semis pulled back to the breakout levels. as a technician, that's where it should find support from a risk/reward perspective. an opportunity here that represents an interesting risk/reward cycle. >> in software as -- to resume its relative outperformance. gotcha. you mentioned yield in having given the equity markets some pause over time. where does that set us up right now, we have been stubborn here, well above 4.5% and ten-year since the fed meeting. >> you look at the yields, they backed up not just with the fed meeting. you've taken 100 basis points of priced eases out of the forwards. you moved the intermediate sector about as much to higher yields and at this point, you know, as a technician, you look at the charts, the yield rise looks like it is getting exhausted. some of our indicators looking at call ratios and things like that are at or near extreme levels. the trend decelerated a good bit with key support just overhead

for the ten-year note around 470. and equally as important, you look at the shape of the forward rates curve, not to get to the nuance of that too much. you look at where the terminal easing prices is right now in the forward, it is priced right on top of what some view as market neutral five year. if you think about the fed pivoting to tightening, it seems like the front end moved as much as it is going to move for the most part, in which case that pressure that came to a head in december particularly on small caps, that should start to abate now because rates should find a level and stabilize. >> that certainly is, i think what the market is itchy to see evidence of. final point i guess would be this dollar move. it has been aggressive breakout and does it seem like that's exhausting itself? >> that's been much more aggressive, not quite parabolic, but more so than the markets we talked about. sentiment is starting to get lofty for the dollar at this point.

it was already even before this last move for euro dollar down to 1 or 2 handles. 1 or 2 has a lot of technical levels for your u.s. dollar, which is one of the big drivers for the dxy. watching for that to decelerate and show further signs of exhaustion. we don't quite see the deceleration yet. i wouldn't necessarily try and catch that falling knife for the euro. but there is a level where we think you could see some pause and stability on a near term basis. >> in terms of the dollar index, that would follow in a similar path, given how big the euro is? >> euro is the biggest component. you look at dollar yen, that's largely -- for the last several months, it has been a rate story. if we got the rates technical set up right, that should allow dollar yen to stall. >> we'll see how that this early year kind of sloshing around of new flows impacts all this stuff. jason, great to see you. mas egt ext, one stratis kehis case for some serious

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welcome back. stocks losing earlier gains in a rocky beginning to the new year. though there is a recovery attempt under way in the last little while. while it is an unsettled start, our next guest is betting on a broad rally in some of last year's beaten down corners of the market. it is great to have you on here.

big picture, you got a formal s&p 500 target of 666, 6,000 points higher than the 2009 low which would be a great year for the index, 13% from here. you think it might get there in a somewhat different fashion. explain that. >> yeah, thanks for having me today. our target of 6666, the way we get there is through the market broadening which we haven't seen yet. last year was also a very narrow breadth market again for two straight years. i think, first of all, i think the macro cycle is favorable for equities. we are in an easing cycle. we may not get as many cuts as one might hope for. fewer cuts because of a good economy. i don't think that's necessarily bearish for equities. i think that's bullish for stocks in general. earnings are accelerating. also, we are expected to see more companies participating in that earnings growth.

if you look at consensus numbers, 96% of ies are expected to post positive eps growth. i think the reason why the market was so narrow was because earnings growth was narrow. we couldn't really see any positive eps growth outside the mag 7. the i think as the market -- as earnings broaden out, i think so should the market. i think that's going to be the name of the game in 2025. >> does that imply -- i know i think you're sort of underweight tech which has been the area of the market which has been driving the earnings story. you think the s&p can really do without technologies, big upside power and still get to that target of yours? >> yeah, it is not like we are bearish on tech per se. it is just that we think there is more juice to the upside in the other sectors. so the sectors that we like are

more cyclical oriented sectors, financials, consumer discretionary, materials, real estate and utilities is our hedge against things going wrong. i think the biggest driver of the rotation is driven by earnings broadening out and the driver of that is going to be manufacturing cycle coming back. if you look at the manufacturing cycle, it has been in a downturn over the past two years. the reason why that matters so much for equities is because half of earnings for the s&p 500 is tied to the manufacturing cycle. it has been the longest downturn in history for manufacturing. as the manufacturing cycle comes back, because the election overhang is removed and i think capex cycle is going to accelerate again, if that's the case, i think that's going to be a major boost for earnings for an average stock and i think that's really going to be the driver of the market broadening out. >> yeah, it is fascinating that

essentially the s&p had two up years with manufacturing on the downswing and consumer confidence largely way below what you would expect. clearly it has been an odd cycle in that respect. do you think that, you know, bond yields are at any level might be a threat to the manufacturing story or just in general to the cyclical upswing? >> yeah, i think the current level of rates at around 4.5%, that's probably largely neutral to the manufacturing cycle. manufacturing obviously is very sensitive to the rate environment. so if you were to see higher rates from here, that could potentially pose threat to the potential rebound in manufacturing. but in the near term, i think we are going to be -- get the cyclical rebound in manufacturing regardless of where rates. i think tariffs are initially going to be positive because a lot of companies are going to preorder and could kick start the restocking cycle that we haven't seen over the past two

years and i think that was one of the biggest reasons why we saw a manufacturing downturn over the past two years. also, the election being removed, if you listen to what retailers are saying, in december, they're talking about how there was a lull in consumer spending before the election and after the election we saw a surge in onsumer confidence and capex as well. so if that's the case, the election overhang being removed, i think that could unleash both consumer spending as well as corporate spending going forward, and i think that's going to be a -- that's going to drive the cyclical rebound in manufacturing as well. >> yeah, that was fascinating a lot of the consumer companies talking about a pause around the election. when it comes to financials, one of your preferred areas, been a pretty aggressive upside move in a lot of those stocks since the election. what is the basis of you liking the financials on a fundamental basis from here? >> yeah, i think financials is

still the cleanest way to play the cyclical rebound in manufacturing, and the pmi cycle. it really feels like financials, especially the banks are firing on all cylinders, so, first of all, the capital markets are probably coming back after a couple of years of basically recession. trading is still being good. net interest margins are still pretty healthy. and valuations are still okay. it is not that expensive and the yield curve continues to, you know, widen. so if that's the case, i think financials still looks pretty attractive. it is basically the sector you can play the cyclical rebound without being exposed to potential tariff risk. so it is one of our favorite sectors in 2025. >> yeah, seems directionally things are favorable at that point. ohsung, great to have you. thank you very much. >> thank you. up next, we're tracking the

biggest movers as we head into the close. kristina has them for us. >> i also have a doozy for you. that's a meme of rick james, a kitty and a stock caught in the middle. all make sense or try to make sense of after the short break. at betmgm, everyone gets a welcome offer. so whether you're courtside trying to hit the over... or up here trying to hit the under. whew! or, hitting that win with your crew. ohhh! yes, see defense! or way up here with a same game parlay. yaw!

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18 minutes until the closing bell. back to kristina for a look at

the key stocks to watch. >> it looks like roaring kitty's influence is going to continue in 2025. the meme stock er posted a gif on x featuring a chappelle show sketch where he played rick james that you're seeing on your screen right now. unity is one of james' songs and some traders believe this was a reference to the video game stock, actually doing this on the tweet, unity software is up almost 7% on just this. lyft shares switching gears getting a boost after the information published its annual predictions piece saying the ride share giant could be acquired by amazon this year. the news pointed to growth in robo taxies and forecasted that ride hailing companies to see disruption. the information wrote that uber is preparing for a future of autonomous cars but lyft is a ripe acquisition target. just prediction, but shares are up 5%. mike? >> interesting thought.

yeah. totally normal market that stocks are moving on this kind of stuff. we have to see what the half life of a roaring kitty tweet, you know, stock move is. >> it is the new normal, though. markets are moving on similar things last year too. new normal. >> it is true. i guess it goes back to early 2021, maybe not new normal. just what it is. kristina, thanks so much. after the break, shares of neumora plummeting in today's session. we'll sell you what's behind that next. inspired by the best of vintage american design smithey ironware company crafts heirloom quality

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welcome back. we're tracking a big move in neumora therapeutics. angelica peebles here with what is behind that. hi, angelica. >> that's right. neumora is down 81% after a depression drug failed in a phase three trial. the drug didn't show any improvement over placebo, and this is the first of three late stage studies that they're running for this drug. it is obviously not a great first look. rbc analysts calling this the worst case scenario. we should get the results from the other two trials later this year, and we're also watching for results from an experimental drug from johnson & johnson that they're testing also in phase three. and like neumora's drug, j&j's works differently than the depression medicines that we currently have. there is a huge need for drugs that are more effective and come with fewer side effects than what we have today. neumora saying it will share more later this month at the

jpmorgan healthcare conference. for now, a lot of disappointment. >> for sure. bad news for patients and shows you the binary nature of some biecoth investments. thank you. up next, tesla shares sinking. we'll break down the data driving that stock lower. that and much more when we take you inside the market zone. cash payment. call coventry direct to learn more. we thought we had planned carefully for our retirement. but we quickly realized we needed a way to supplement our income. our friend sold their policy to help pay their medical bills, and that got me thinking. maybe selling our policy could help with our retirement. i'm skeptical, so i did some research and called coventry direct. they explained life insurance is a valuable asset that can be sold. we learned we could sell all of our policy, or keep part of it with no future payments. who knew? we sold our policy. now we can relax and enjoy our retirement as we had planned. if you have $100,000 or more of life insurance, you may qualify to sell your policy. don't cancel or let your policy lapse without finding out what it's worth. visit

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jerry, you've got to see this. i've seen it. trust me, after 15 walks, it gets a little old. ugh. i really should be retired by now. wish i'd invested when i had the chance... to the moon! unbelievable. stop waiting. start investing. e*trade ® from morgan stanley. >> the market zone is sponsored by e-trade from morgan stanley. we are now in the closing bell market zone. gas exploration stocks on track for an eight positive session in a row. pippa stevens has the details. phil lebeau on tesla's first decline in annual deliveries. and a cautionary historical

trend for apple. steve kovach will discuss that. pippa, feels like energy is a pretty popular comeback >> that's right. working. energy stocks are continuing that recent run of outperformance. the top sector today with all but one component in the green. and pacing for the best week since november as wti hits a three-month high. the xop is on track for the eighth straight positive session for the first time in a year as oil and gas prices move higher. and it is now on the cusp of overtaking the 50 and 100 day moving averages. the refiners pointed weakness all down double digits in the last month as we approach a seasonally weak period for driving demand. finally, over in the youth space, look at constellation, they're popping today after the company announced the new contract to supply nuclear power to the u.s. government. the news also lifting shares of

vistra and nrg. >> that is not the reversal trade. that's momentum. thank you, pippa. phil, a miss for tesla. put it in context. >> it wasn't a huge miss. they only missed by about 9,000 vehicles compared to what the street was expecting in terms of q4 deliveries. they delivered 495,570 vehicles for the quarter. the estimate was for just over 504,000. the one bright spot in their report on q4 deliveries, they now are reporting energy storage deployments with their deliveries, 11 gigawatt howard . that's a record for tesla. the deliveries get the most attention because people can sit there and say, well, how far does this company come and is it continuing to grow. we should point out that for the year of 2024, they delivered 1.79 million vehicles, that is the first annual decline in

deliveries, just 20,000 fewer than in 2023. but it was a decline nonetheless as you look at shares of tesla over the last three months. ever since the election, the shares have been offer to the races in anticipation of what 25 might hold in store in terms of development of the robotaxi and how the trump administration looks at autonomous vehicle technology. january 29th, after the bell, that's when e get the q4 results from tesla, during the conference call, you can bet there will be plenty of questions for elon musk about what is happening with the robotaxi. >> no doubt about that. it is anybody's guess exactly how much of tesla's market company is really attributable to the current car business as it stands right now. but, you know, the stock is only back to where it was like the first week of december. even after being 22% off its high. so clearly the story lines are far bigger than -- i guess i would ask, and i continue to ask this question. what at the federal level really

is there to be done in the foreseeable to, i guess, unleash this robotaxi story in a regulatory basis? >> well, i think you could see the trump administration say, look, when it comes to regulating autonomous vehicle technology, we're going to take a very hands off approach. whether it is through the national highway traffic safety administration or any other way that they might be able to regulate that technology. but, mike, this is going to come down to states rights versus the federal government. i am convinced that you will see states like california say, you know what, we can still set the rules of the road. and tesla may say, you know what, maybe we should go to federal court and fight this out. i suspect somewhere way down the road, not in 26 or 25, but somewhere down the road that's likely where this plays out. >> a lot of waymo vehicles operating in state of california. clearly there is a way through it. >> yes, there are. yes, there are. but that depends on how much regulation that tesla wants to

fight against. and what rules may be set up there. >> yeah. obviously a lot of hurdles to jump through. we'll see how it plays out. phil, thank you very much. steve, apple tough start to the year. and maybe not that unusual. i was looking at those years where we have been in a bull market and apple had a really strong run to finish a year. it has had a bit of a giveback trade with 9%, 12% pullbacks from high to low. that's the big picture. what seems to be at work today with this sell-off? >> let's talk about what is going on here. apple shares are starting the new year, pessimism around the name, that's following the big run last month. shares are off nearly 3% right now going into the close. this is off a ubs note from the analysts over there that came out yesterday. they're now predicting fewer iphone sales in december quarter than they originally thought. that's after seeing some weakness in iphone sell through for the month of november. let me break down what they're saying here.

they're lowering their iphone revenue estimate for the quarter to $67.2 billion. they did have it at 69.7 billion. that had come out to 3.5% drop in year over year iphone sales if that does play out. that is not the story investors want to hear. this was the first full quarter of iphone 16 sales, that december quarter. along with the launch of apple intelligence. the hope was, of course, that the a.i. launch would drive sales growth for the iphone because you need the iphone 16 in order to use apple intelligence. but on the positive side here, the services business, everyone sees that growing at just this remarkable clip. ubs in the same note raised estimates for services business on the strength of app store sales. data in november, very positive there. not going to get the full results though until app earnings. that's late this month or maybe in early february. only guidance for the company is what to expect, top line revenue growth in the low to midsingle digit percentage points. >> yeah, steve, it is funny, you

wonder exactly how much traction this story might get in terms of, okay, maybe we have to deal with somewhat disappointing iphone sales because we have seen this before with apple, when there is a little bit of a near term short fall, people say that's that many more phones left to be upgraded. here we are in a situation where it is ingly believed that the way to play consumer interaction with a.i. is going to be through the device and so therefore whenever it does come, the notion is apple will be right there. >> yeah, and by the way, there is more to come. we're not done -- apple is not done with the rollout of their artificial intelligence features. we're waiting for that final bucket of features with that big upgrade to siri that can talk to your third party apps. that's not expected for a couple more months. and we'll be halfway through the iphone 16 cycle, talking about the iphone 17 in the fall with some different kind of devices and form factors expected there. usually that drives sales a lot

more than these artificial intelligence features we're seeing so far. it is interesting to see how that dynamic plays out, if estimates change, if we hear of anything from tim cook about how apple intelligence is or is not driving demand. it is an interesting earnings report in a couple of weeks here. >> yeah, for sure. i recognize, of course, that apple intelligence is not going to initially be available in china in iphones sold there. i wonder if we have kind of are lapping some of the really weak china results for apple in the coming quarters. >> maybe not. that same ubs note, they noted that apple continues to lose market share in china, that's according to their research and also just having trouble getting this apple intelligence off the ground there. and just not just losing market share too, sales overall in china are down. you got competition from huawei, you got this holdover of when apple intelligence does come to the iphones in china, that the chinese government needs to approve. so it is going to take a lot of

work out. >> seems like not the immediate growth engine. steve, thank you very much. as we head to the close, the s&p 500 is still down, just about a quarter of 1%, though up off the afternoon lows. we do have one day left and that so-called santa claus rally. that started with that right no. that is going to do it for "closing bell." we will send it to "overtime." >> that is the end of regulation. statement arts ringing the bell. the stocks giving up early gains and finishing in the red to start the year. we saw apple lows, 100-point swing. energy, utilities and the chips. that is the scorecard on wall street, but the action is just getting started on this first trading day of 2025. >> will tesla's rally hit the brakes in 2025? shares falling after the company