potato. this grow-tato is outfitted with a pair of wings and will fly down at midnight. in the cheese ca capital of the world, prelim myth -- plymouth, wisconsin, the 18th anniversary of the big wedge drop at 10 p.m. and the first 250 families in attendance will receive a gift bag of cheese. and lehighing, pennsylvania's, going to have the peep fessments fans gather to watch the 4-9, 400-pound lit-up peep chick drop to close out the year. there you go. that'll do it for us here on fox business. however you celebrate, have a very happy new year, and we will see you next time. ♪ ♪ ♪ ♪

♪ jack: welcome to barron's roundtable where we get we behind the headlines and prepare you for the week ahead. i'm jack otter. coming up, uncertainty is dominating the markets as we head into this new year and a new administration. liz an sonders is here with what we know, what we don't and what to do about it. and later, beaten down but not out, stocks that got hammered in 2024 and could be poised for a comeback in 2025. but we begin with our expert if panel and three surprises that may lie ahead for investors. on the "barron's roundtable", ben levisohn, elizabeth o'brien and al root. ben, one of the most widely understood and even more widely ignored realities of wall street is it's not whether it's a good or bad company, it's all about surprise that actually moves markets. what will surprise people in 2025 the? >> i think what will surprise people is that these weight loss

drugs that are so popular right now, they're going to solve the shortage issue, and that's actually really a bad for the stocks. jack: those have been very had stocks. >> especially eli lilly. it's been one of wall street's favorites. it has a pe multiple that is sky high, but if they're able to make enough of this drug and get more competitors coming in, margins will come down, and that won't be great news for the stocks. jack: everybody knows obesity drugs are hot. everyone also knows the health care sector in the dump. don't investigation there. right? >> it is a terrible sector outside of eli lilly. but you look at them, there are a lot of stocks that are very cheap and i think are overly hated. it's not a bad time to start looking around and thinking which ones might be worth buying. one of my favorites is gilead signs. it's done -- sciences. it's been hated since 2016, and there are a lot of stocks that fall into that same camp that i think are probably worth a look, things like pfizer or bristol meyers, what not.

jack: al, there is a lot of skepticism about the so-called department of government efficiency which isn't actually a government. it's being run by two people, and in early pronounce appointments doesn't seem to understand what government spending does. >> i sense your skepticism. [laughter] so my surprise for '25 would be that doge is okay, that doge actually does something if useful. it's being run by elon musk and vivek ramaswamy. it has a fixed end date, july 4th, 2026. you know, ramaswamy noted, oh, we can save the -- floated, oh, we can save the u.s. government $2 trillion a year. that's probably fantasy land are, but there are some concrete things that they could do do that would make things better for us. low regulations is one. musk is essentially steve jobs in china, and any sort of stabilization of that trade relationship, that's good for america, that's good for markets. lower regulations, we hit on. and then also, you know, there are hundreds of billions of

dollars in potential savings, you know, i take a look at defense companies, lockheed martin, northrup. we could move -- jack: just to be clear, you're not the owner or the ceo, you cover -- >> no. they're like my little teddy bear, and i think about them daily. our defense budget at $4.7 trillion federal budget, it's approaching a trillion dollars, moving away from cost-plus contracts, updating how people bid and what is allowable, how bids are evaluated. moving to performance-based awards. you know, you could be talking hundreds of billions x. if like the old saying, a hundred being here, a hundred billion there, suddenly you've got real money. jack: and there are a lot of young bucks in silicon valley who think they can do defense better, and with all this drone stuff, maybe they're right. >> yeah. it count have to be a disaster. -- it doesn't have to be a disaster. some of the existing players can earn more money than they used

to. jack: gotcha. so, elizabeth, if doge can't solve the deficits, maybe bitcoin can? >> yeah, no -- [laughter] you know how to push my button it is. no question bitcoin had a great year, it's up 150%, but i think a lot of that is based on especially since the election the expectation of sort of an institutional embrace. bitcoin proponents are hoping trump create a bitcoin reserve. i think that's still a fringe if idea whose time has not come yet, and i think on the private sector side a lot of complaints departments don't want to touch bitcoin with a 10-foot pole. bitcoin is 16 years old, it's still a teenager. i don't think it's going to get a seat at the big kid table and that could lead to more volatility and disappointment. jack: do you guys agree with elizabeth? >> bitcoin might already have that seat at the table. you look at the etf, it's already being embraced. i don't like the thing, i don't understand it.

at least gold has a 1,000 a year history behind it as a source of value, and i'm not sure what bitcoin does. but i also can't argue the fact that it's been embraced by a lot of people. >> i think it sets up like that negative surprise where everybody's expecting an allocation, and any hint, you could see a downdraft, which would be a surprise. jack: i think it used to be that professional investors felt the career risk was owning bitcoin. that might have flipped where it's not owning bitcoin, and if it does go down, well, hey, larry fink likes it, donald trump likes it -- >> fail together. jack: absolutely. thanks, guys. 2024 has been a booming year in the stock market. will 2025 the deliver more of the same for investors? if charles were you worried the wedding would be too much?

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jack: 2024 has been a year of economic resilience and stock market records. the dow, s&p 500 and nasdaq all up double digits as of mid december, but what's in store as we head into 2025 the? joining me now, charles schwab chief investment strategist liz ann sonders. great to see you again. >> nice to see you, jack. thanks for having me. jack: let's talk about 2025. in your most recent report, you poked fun at the idea that wall street hates uncertainty, but it's always uncertain. >> right. [laughter] jack: one of my favorite headlines reads good luck figuring this one out. [laughter] so you start with some history which is, you know, it's facts. you have a table that shows what happens when the gop controls all three branches of government. can you run through some of that for us? >> yeah. so you can see the data the up on screen. and this is just purely based on what has happened in the past when we had gop control in all three components there.

you know, decent stock market performance. not the best of any, you know, combination. little bit of an uptick in inflation. okay gd the p growth. gdp growth. but, of course, every year is different. and when you're talking about an every four-year kind of thing, you're not talking about a huge sample size. is so it was just a basis for, okay, what's happened. it was not meant to to go in there as a, okay, you can bank on this in terms of all these metrics, particularly in the year 2025. jack: the sample is pretty small and also there's economic cycles that have nothing to do with point but let's talk policy briefly. we'll start with the good news. you say that tax cuts and deregulation could be a tailwind. >> yeah. except that they're probably more end of year, and for the most part, those require certainly on the tax front congressional approval, and the 2017 tax act doesn't expire until the end of the year whereas policy proposals on

tariffs and immigration for the most part can be done via executive order and are seen as something near term in terms of priority. so we've got a timing mismatch. and in the case of the deregulation and the tax cut side of things, yes, that's seen as pro-growth, but it's hard to argue against the combination at the extreme on tariffs and deportation. it's hard to argue against them being, putting downward pressure on growth and upward pressure if on inflation. i think that was reflected in some of the uncertainty that we not out of the december federal open market committee meeting and some of powell's comments. i think there's just a lot of uncertainty that could be with pretty big needle movers in terms of the growth trajectory and the inflation trajectory on those two policy areas of tariffs and immigration. jack: so thanks for that. how does this play out in the market? what do you see as -- let's talk market overall, s&p 500.

we've got a lot of momentum right now, as you point out, but also valuations are kind of steep. not a timing measure, but still expense i. and sentiment is awfully frothy right now. >> sentiment is frothy, and i think that represents a bit of a contrarian risk and could help to to explain why you saw i such a negative reaction while the december fomc press conference was going on. i do want to point out though that, you know, there's been so much attention on the resilience of the market this year and how many record highs there were. but there's been really a tale of two markets in 2024. the first half of 2024 you were so dominated, the market was so dominated by the magnificent seven, it kept the cap-weighted indexes afloat, but there was a lot more churn and rotation underneath the surface. then you saw broadening out from mid july up until the presidential election. but the point from the election going forward even before that selloff that kicked in with the fomc meeting, you had the market

still looking great, the market, but the average member maximum drawdown in the nasdaq had hit bear market level declines just from election day forward to the point with where you and i having this conversation. so i think to really understand what's going on in the market -- i know i keep doing the air quotes -- requires a lot more depth of analysis than just look at what the cap-weighted indexes are doing or have done. jack: yeah, that's a really important thing to point out. thank you for that. so when investors are trying to figure out, okay, what do i buy you -- now, you lay out factors that you think look attractive. improving profits, strong return on assets, balance sheet strength, ample interest coverage. those are all things that sound like things you'd want at any time in the market. why is now especially important to be looking at those factors? >> well, they are high quality factors, and you're right to suggest why wouldn't we always

want to suggest in high quality company. but there are times when you actually want to go into the more indebted companies, the weaker profitability companies particularly, say, you've come through a recession, you're coming out of recession. that's where the leverage so to a big upturn in the economy. i just don't think we're at this point in this cycle which is why you want to maintain that focus on quality, especially for investors that want the look for opportunities outside the mega-cap, you know, tech and tech-related names, looking for those positive profitability trends, strength of balance sheet, high interest coverage especially given how sticky longer term yields have been even in the course of this fed cutting cycle. so, yes, generally you want to buy quality, but there are specific reasons why in this backdrop you don't want to sacrifice that quality element. jack: got it. if you're buying small caps, stick to the profitable ones. liz ann, we've got to talk again in 2025. >> i'd love to.

thanks, jack. jack: beaten down but not out, ♪

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jack: u.s. stock indexes have had a great run in 2024. plenty of individual names have been taken out to the wood shed. so we with went looking for stocks trading near their 52-week lows that could be poised for a comeback in 2025. andrew berry joins the panel to the tell us which companies are worth another look. andrew, let's go bargain hunting. in my neighborhood, i often get stuck behind a ups truck, but that stock is down in the dumps. what's going on? >> stock's down about 20, it's been trading in the 120s, there's concern about weakening margins and weakening earnings and also the net from the amazon logistics network, plus it's a unionized company, and a lot of investors don't like them

because they feel they can't be competitive. but ups has a great network. it's integrated, and it's got a productive and motivated work force. stock trades around 15 times next year's earnings with a 5% dividend yield, and that yield looks pretty safe. jack: all right. let's talk about dollar general. that was supposedly, you know, the savior for rural america. it hasn't worked out that way. >> exactly. the haves and have nots in retail, costco's done very well. dollar general's stock is in the 70s now, it was over $250 not too long ago, two years ago, and it's trading much more reasonably. it's around 12-13 times next year's earnings at 3% dividend yield, and it plays a vital role in rural communities. many lower income consumers shop there, and it's easier, more convenient than going to walmart. so i think there may be a growth story and and a good investment story. >> yeah, i don't know, i still like target. s it is true that a larger share of its inventory is

discretionary, so it does get hurt when the consumer's more pressured, but they have been on the essential front lowering grocery prices. management knows what it has to do. it's trading at a record discount to walmart, and i don't think all that possess nhl is justified. -- pessimism is justified. jack: i was there last night, long lines. andrew, one of the ugh -- uglier charts is intel. you think they're too cheap to ignore? >> it's a very controversial stock. stock's been trading around 20 now which is a near multiyear low. the u.s. government wants it to succeed. the market cap's under $100 billion right now which compared to nvidia, around $3.5 trillion. so you may have -- you'll have a new ceo, you've got more technological expertise on the board. the knock is that they're so far behind taiwan semi, nvidia and some of the others in the field, but this one could be a turn-around for to 20 that. -- 2025.

>> i just can't get behind intel. and i know we're supposed to have stocks that are come -- compelling, but i look at mamd, analysts love it, jim cramer loves it -- [laughter] jack: maybe that's the kiss of death. >> we picked it this year, it hasn't done well, and i can't figure out why. it's one i would also stay away from. jack: al, you're a car guy. which one? >> i wouldn't stay away from ford. it was a pick of ours. it hasn't worked out well. it's close to its 52-week low. buts there is reason to hang on. one is, you know, this discount target, walmart, it's underperformed general motors by 60 points roughly over the past year, and it has had two very bad quarters. but we're headed into a very difficult auto market in 2025, and it has the potential for self-help. quality problems have hit profits. if they can get it turned around, you could see the stock close some of that gap relative to gm. and if you to get a couple more bad quarters, you will hear

rumblings about management change. jack: got it. >> if you're looking for beaten-down auto stocks, bm if w and mercedes are trading near 52-week lows, their market caps are low against tesla. the concern is they're not competitive on evs and that tesla has a big lead on autonomous driving. but you're paying a very low multiple with very good balance sheets. if you want higher quality, look to japan and toyota. jack: i want to get to elizabeth. you've been looking at united health care which has been hit in a number of bad ways. >> yeah. the december 4th killing of the ceo, you know, brian thompson, was a shock and a tragedy. and since then the stock has been down as much as 21% at times or more. but from a purely business point of view, i think it's an overreaction. they still have good things going for it. trump is expected to be good for its medicare advantage business, for example. jackie: all right. up next, our panel will let us in on their best and worst

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jack: ben, the end of the year is here. of let's look back at some of the things you're most proud of and maybe something you'd do differently. start with a stock pick that you're standing by from 2024. >> i really liked my pick of bank of america. jpmorgan on one side, it's unassailable, then citigroup up and wells fargo among the big banks and they have so many problems, but they can be fixed and that gets people excited. then you have bank of america which is kind of blah. but when i picked it back in april, i said the stock will do okay. it's up more than 20%, and i think it's going to continue to do well into 20 that. -- 2025. the fed has cut rates and, you know, will keep doing a little bit of that. and then you have trump which is a very good thing for bank stocks.

jack: okay. what's one you could take back? sem, and, a company from mexico that picks cement and gavel. i thought this was a cheap way to play u.s. stocks that have high multiples and, boy, i got it wrong. i think the biggest problem is it's from mexico, and that's not a great thing right now. investors aren't looking for that, and it's just not as good a company. jack: all right. elizabeth, you had an interesting pick here. it didn't do so well, but you are sticking firmly by it. >> yes, i'm standing by nike which is down about 2 11th since i -- 21%. inhasn't add -- it hasn't had as much sneaker innovation, but it just had a new ceo who left and came back to run the company, and i think this story just needs more time. if i liked it in june, i like it even more now. jack: incredible global brand. i heard from if one bull who is. watch watching people come in from a marathon, he didn't see

any hoka tattoos, he saw a lot of swooshes. >> i wish i could take back verizon, it's down about 25%. it's a company that consistently lands on the best run, best companies to work for, it provides an essential service which is backup childcare. however, it's just hurting in our work from home or, rather, our hybrid world. that's a headwind that's hard to overcome. jack: cow don't need that emergency backup childcare, although yo i -- you and i have used them. >> they are good. jack: al, maybe one you're not so proud of. >> well, and i told people to avoid it intuitive machines, ticker lunr -- jack: well, they didn't lose any money. >> no. space technology company. they sent america back to the moon for the first time in a long taoism. it was a reblinder just how carefully you have to watch

understand and small caps. jack: a stock to you picked that did well and you're still bullish. >> veryive. it's a.i. data center infrastructure provider -- vertiv. a.i. is eating the world, but i like what happened to this one. we picked it around $8ing 0. it's continued to work. and it -- i just like how it happened. the earnings growth accelerated. the stock went from 20 times earnings to 30 times earnings. business got better and everyone reacted. jack: thanks, al, elizabeth, and ben. great working with you guys. great insights. check out their work in this week's edition at barron's.com. i hope everyone has a happy new year, and we'll see you in 2025 the right here on "barron's roundtable". ♪ ♪ >> from the fox studios in new york city, this is maria bart row blow's "wall street. -- bartiromo's. cheryl: welcome to the program that analyzes th t