i think you stick with a large caps. you want more small caps than a year ago and be patient. be patient for the rotation as opposed to trying to press that it's happening now. i would say i would not give up on big tech yet. >> you set your alarm you thought the segment would be over at 3:16 and not 3:17? >> i do not know you would give me on this long but i appreciate the extra time. >> the alarm goes off i need to call you off. keith, thank you. liz, thank you. >>> let's get a check on top stocks to watch. steve is with us today for that. >> plug power and blue energy are under pressure as morgan stanley issues a downbeat forecast for the fuel cell industry analyst say rising rates in renewable electricity prices are creating poor economics and uncertain futures for the companies. as a result their cutting price targets for both stocks and avis budget is jumping after the car rental giant announced a special cash dividend of $10 per share. the company says it plans to continue buying back stock through the end of the year pictures up roughly 60% year to date outpacing hertz

as the economy - about large cap.cycle isn't great but because smokehouse o underperform for so long, in a really acted like they were -- we were in a recession there is some room for catch u for a while. we've had a nice catch up th last couple of months with small caps so i think there is maybe some room for small caps to run, bu if you're thinking about a really, you know, multi year run in small caps, maybe it' better coming out of nex recession, then in a mid t late economic cycle period >> that doesn't seem the way the script works, usually. great to see you, we appreciat you coming out today >> thanks for having me, happy new year >> happy new year. >> straight ahead, we're tracking the biggest movers as we head into the close with a standing by - pippa. >> longer the stocks droppin today, but popping this year we'll bring you the names, right after the break. (sfx: stone wheel crafting) ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently

greg komanages the firm's small cap core.to have you on set with us. >> thanks for having me. >> the small cap story is an interesting one because it blends in so much about the economic interest rates, the economic prospects out there, and whether or not there's a catch-up trade to be had. what do you think? is the small cap earnings in the trade right now? >> we think so. there's a catch-up trade that's ahead of us. a lot of the things you've been talking about, the financial conditions tightening, even going back to november 2021 when chairman powell was reappointed, you saw a very high velocity of tightening of financial conditions which had a large impact on small cap stocks. it really exacerbated the move and made it quite substantially painful for most of this year. the last month or so, we started to see what we think is a more realistic picture of what we expect for next year as the earnings are quite good, and we're very, very optimistic with some everyday behind us that this is -- you know, this is the start of a v

mid caps and small caps are both 14 times forward, but evenly more interestingly, even in the large cap universe ex-tech the s&p 500 26 times. pull out tech, it's 17. so if i tell you, you can buy the average nontech s&p 500 name at a 17 forward p/e and the next move for rates is more likely to be down than up, you probably would look at that and say, okay, great. i already bought a lot of cash this year. i'm part of that group that added to $6 trillion in money market. my next move should probably be to add a stock, even if it's a large cap. if it's nontech and you're buying something at 12, 13, 14 times earnings, it's probably a more productive move if you can think about it from a three to five-month standpoint. not, is this the right decision for the next 30 days? >> in equal weight, josh, trades at a discount to where it typically does. >> equal weight is at 15 times, right? 14, 15. >> history is north of 16. >> it may be growing as we're watching the market go down the tracks. speaking of buying names, not small caps, jimmy bought united health. >> bought united health. there's a

of course, the large-cap banks are really good plays on a cap- x cycle. to me, it's easy to see the 20% or 30% moves in those groups. small cast, maybe 50, where it is harder to say, fang can do 50 next year. >> the other, making despite the car to get at 5200 is suggesting that mega caps, tech, not going to lead next year >> that's right. >> why? >> is that i think the earnings growth thing does look a special of the pmi's turn up. if the s&p earnings grow in 15% or 20%, then in terms of multiple expansion, i think people are going to be more willing to feed the fang multiple expansion, where they will buy a financials multiple extension. >> to e clear, you think that there's going to be a rotation of mega cap into some of these, critical, unloved areas? >> yes. fang is still a number-three pick which means we can outperform. if somebody saying where were they get the best risk/reward, i think it is clearly financials or industrials. >> when you say, fang still outperforms, the word you use, but some context to that. what does that mean? >> let's see, sm

on the other hand, you know, the big cap, the mega cap are probably going to stay in a good trend here because it is really about earnings i don't see these earnings being downgraded so quickly just because we are getting short correction rates >> ben, when you look at overbought, obviously overbought stock can be overbought, the market can be overbought and it can work that off. as far as the second pivot, i think the second pivot is going to come from inflation falling a lot quicker. have you calculated that do you think that could fall in a precipitous fashion and leave powell sort of trying to catch up >> yeah, i think it is a good point, steve, in a sense that if you look at the pc deflator that came out the other day, you know, in that basket that's deflation now. it is about what i calculated, about 10%, 15% of the index is in deflation for the last sort of six months. a lot of the categories are influenced by supply, so maybe to an extent not so surprising, but it is telling. so say that that deflation starts spreading further in the core pc deflator, then you get the scenario

. >> goldman describes a small caps mania trade which is why tom lee says you'll go 15% up on small caps. people look at the russell right now, which has done 15% in one month. their scenario of inflation coming down, five rate cuts, that lights an already, ready to burst small cap trade on fire, doesn't it? >> i think so. what we saw is rotation and i think that will continue into next year. i don't like the idea it could be mania or manic, that it might be up -- >> that was my word because that's what it would be if you're up 50%, you would have what happened to mega cap this year happen to small cap next. >> and it would be disappointing. yes, they do deserve to have a huge run. by multiples, historic valuation range. when i think into 2024, the rotation we saw that started at the end of october continues, and that's where small cap benefits, value benefits, international benefits, everything that didn't participate in the huge moves up, i think benefits next year on a relative basis. and then the argument of magnitude. will it be manic or is it going to be steady? you know i would lo

large caps, mega caps, into small caps. i think that's going to be the rotational play in the early part of january into february. but expect some weakness, the kind of work off some of the gains we've seen here in november and december, and i think the market will steady itself, but i think it's a back half of the year story probably more about q4 than any other quarter. >> steph, that becomes then the debate -- rbc today said the time is now. bullish on small caps into 2024. katie huberty, wait for a better entry point to play small caps. there are those looking for a rotation as you begin the new year, some money coming out of mega caps and going into the other areas whereas we've had notes the last week that have suggested small caps are a value trap. that you will be able to get those lower. it's just too early. what would you say? >> i don't invest in small caps. i would if i can find some names. i own more mid cap names. i think if you're going to focus on small caps, you focus other value, they will both trade toget

believe it or not last week i bought mid-caps, the mid-cap index i thought it was that and small capsover. how long it lasts how far it goes i don't know but definitely a changing of the guard right now. and you can see they're pressuring some of the megacap names that i loved so much for so long and i did a little selling in them last week myself. charles: there is no doubt money is rotating out of them which is fine. i don't think it is an indictment of the companies per se. you mentioned financials. does that include any regional banks or some of the bigger names? >> symbol kre, the etf has turned the corner around has turned up, simple as that. you're actually seeing some names near new yearly highs amazingly after crashing from february but overall it looks like it want to go higher. by the way the small cap indices do have a lot of these regionals in them. that's what has them moving to the upside here. charles: yeah. >> until it stops i think you ride it out. remember, there are still way off the highs of february because of what happened with silicon valley bank. charles: you

doesn't have to be something bad and on average broad market cap with u.s.tocks are expensive and not as bad as a couple years ago but we'd expect muted returns for the broad market and that's the bad news. good news is there's plenty of places to invest other than market cap, s&p 500. >> for starters, we should go on twitter and fun in there and roaring 20s and nifty fifties and not quite old enough to have remembered those times well enough and dot come bubble around and interesting thing about that period and for awhile, nasdaq was getting thrashed and coming years what do you see as the opportunities that might do well? >> yeah, very similar to the late 90s and early 2000s after the global period and 2000, 2003 small cap market outperformed for 150 percentage points and feels familiar and recently small caps massively underperformed and large cap and on average value has not done great this entire psychoand will we think that changed in 2021, 2022, 2021 was actually worse than 1999 for value stocks, which is crazy, cheaper versus expensive and setting th

in terms of small caps, scott, i'm not involved in small caps. i don't think the transparency is there. i think they're very volatile in general. there is limited sell side, analyst coverage, so you don't get a lot of infortion and a lot of ways to analyze, but i do think the same factor of small caps is valu and the russell 1,000 value, right today, is trading at 13 times forward, the rusll 1,000 growth is at 24 times. i think there isetter risk/reward in value, versus growth, but you know, i do hav some growth ames, it is not all value. i'm core by definition. >> on that note, i see that this is right, you trimmed meta? that's kind of surprising to me. >> yes. >> again, because you've been -- i mean you trimmedt all for, i don't know, the last eight months, i think, you bought alphabet again but why are you trimming meta? >> because i'm up a lot. i mean it isp 170% year to date. it has had multiple re-ratings from 13 times, to 23 times, i think the story is still great, i still own a bunch of it, but i didn't he cash to buy a new position that

these arhyper large-cap stocks. what about large-cap tech stops and mid-cap? >> okay.o look at semi-. semi-have had the best year in what feels like 20 years. >> after they had a horrendous previous year. i do think semi's is an interesting theme. whether it's related to artificial intelligence in the mail from cpus to gpu's number for which there's not just one winner, but more broadly the turnaround in the demand for electronics cycles which seems to be taking place around the world if we look at exports from taiwan and korea. that's just one example but there are other themes. we could include cybersecurity. we could include software to process all the a.i. data. >> i was talking about crowdstrike is up 150% this year. there was a positive call on the scaler today which is up 100%. so many of these stocks have gone up so much pick the biggest problem i see for investors right now is over the last month almost any sector you pick, stocks have surged a lot. double digits, if not more. now what do i do? do i take profits? what do i buy if i believe? >> and that's where

one in three small cap companies is probably going to be on their next year. i look at tech, it shoul generate 10% earnings growth which is two times any other part of the market if we have a steep inner in th rates market, which is our expectation, the best sector i that contest historically is tech again, you're going to have th best companies in the world fo the new theme to buy every par of the underrepresented part o the market that doesn't make sense to me. >> what is the one area of the market that you've got your ey on, this is the one that could likely surprised investors thi year we are going to sit on my desk who saw that coming? i did. >> and i'll give you a new economy, old economy barbell old economy industrials, it' the onshoring, the unite states focusing on the green theme. it new company, biotech. the feds frying pan, th laundering frying pan. a huge amount of innovation, you get that from big pharma that's the primary beneficiary >> tony pasquariello, thank yo so much. >> tha you, scott. >> up next, a couple of th charts, top technician chri

>> for a small cap, it is sooner. large cap, 2029. >> before all of these companies, they have loans, for a viewers who do not know, loan prices almost immediately by, the so-called maturity wall hits. small cap companies, they tend to be -- the tangent of this conversation, if you know interest rates are coming down next year, what do you do with that? well, you don't want to be in t bills, you don't want to be in t bills, obviously, rates will come down. who is likely to benefit from the reduction interest rates? well, a lot of biotech companies, technology companies, earnings around the future for evaluation perspectives. that is sort of the easy stuff, small caps. if you are talking to leslie picker earlier today about some of the kkr and carlisle type companies. >> private equity firms, the stocks have gone crazy this year. many are up 70 plus percent. >> what if i told you lower interest rates might spark a boom in m&a activity? or blending activity? maybe the financing markets are easier than they had been. wel

having said that i want to talk large caps versus small caps because small caps you have the russellto-date which compares to a 24% gain in the s&p 500. since the end of october small caps are up 30% versus the bump in the large-cap players. small caps, it depends on the u.s. economy and that rate moved by the fed, what do you think could be the scenario for small caps? >> i am and have been a proponent of small caps largely because the long research suggest you outperform there. the smallest growth stock is not the case but small caps tend to outperform over long haul. so given investors should have some kind of time span there even if you get in this environment which i don't see anything coming in the near future. so if you are getting in you are probably still enjoying some of this momentum. you probably still have -- even if you get in and there some exogenous event, something changes. holding onto the small caps now and waiting it out is -- still behooves you. as long as it's small value. i think this has legs to run and it's amazing how we get this bull market, up to your poin

small caps and mid-caps really like easing conditions by the fed. lot of people expected a recession. they talked about the recession for two years. i cannot believe he is saying that again. >> are you suggesting -- let's be honest. it remains to be seen whether earnings will live up to the hype or whether we get the cuts that we think we are and whether the economy will continue to stay out of the mud. are you suggesting that we could get double-digit gains out of the s&p next year? >> that is what usually happens. with the expansion we saw in the breath from the october lows and into november, we had a huge (indiscernible) and that was back to even. so they were trailing the whole year and everybody was talking about the magnificent seven and the breath expansion is positive for the market. the more stocks involved, the better it will be for everyone. value is obviously favorable in that environment with rates and small and mid-caps which have trilled for a long time. you see the s&p is doing better since the lows in october and november. that is

or large cap story is going to lie with interest rates. because the ten-year yield has dropped more than 20%, if you want to look at it in percentage t terms. a lot of pros do not. it's a full percentage point lower. on october 19th, it topped over 5%, so you carter, you think that we've actually hit a, quote, mature intermediate decline and there could be a bump up in yields, that sounds fancy for it's goes to bottom out and head higher. >> that works for me. but i think the point is, what's moved the most is the rate -- look at the regional bank kre, small cap, of course, that is almost doubled that of the bkx or home builders. up 40%. that's simply a rates thing. at this point, the move from above 5% to now 3.83%, it's nine weeks in the making and sequencing would suggest you get some sort of bounce. and remember, when you start to hear a moniker, higher for longer, guess what happened? the exact opposite. now we're hearing rates are going to go lower, they'll cult 55 times, all going to go down -- you want to traffic in the other direc

>> i believe small caps are more attractive. quantitative services is not quite a small cap.ticker symbol f-i-x which is a small-cap sdindustri. that is the name that looks terrific. i think the small caps are something you have to keep on your radar. in our portfolio, we have a passive bucket. we are overweight on the s&p small caps. >> bill, we have to leave the conversation there. mega cap tech and industrials. thank you very much for being here. thank you for watching. agn,heoweto ent ai t d s top aa record high. "squawk box" is coming up next. >>> good morning. the dow topping 37,000 for the first time. this after the fed pencilled in several rate cuts for next year and relatively explicit about it. we will have analysis straight ahead. >>> attention turning to the bank of england and ecb. both set to announce rate decisions this morning. we'll talk about it and bring you the news. >>> adobe shares are dropping after the company's guidance saying the boost from a.i. may take longer than expected. >>> it is thursday, december 14th, 2023. "squawk box" begins right now. >>>

>> beyond large caps and small caps, companies will do well with cap ex. the consumer sector will do well. we are still adding jobs and income and consumers will continue to spend through the new year. >> when you say the consumer sector, what kind of names? >> i think where you have direct benefits to people being put to work and having income. places like retail and you have to be selective. i agree with lindsey on the quality point. places that are growing with incomes. >> robert teeter and lindsey bell. time to take a closer look. great to see you both. have a great friday. >> thanks, frank. >>> time for the check of the morning's top corporate stories with silvana henao. silvana. >>> frank, good morning. let's start off with gm. it plans to layoff 1,300 workers michigan next year as a number of vehicles will end production. including the chevy volt. the layoffs are set to take effect on january 1st. gm says it the will retool the fa the sl sthe facilities to bur trucks. >>> investors led by blackstone won the bidding for the largest exchange for the $

small cap value.ho on earth -- by the way, historically, we know, over time, small cap tends to outperform big cap. value tends to outperform growth over long periods, but when is it -- when this is actually happened recently? well, maybe a little bit in 2020, but not recently. there's your leadership. >> that's the sauce. >> that is exactly the soft landing. the nasdaq 100, which, by the way, is at an historic high, is underperforming here, although underperforming is a relative term here. you see it's doing great, actually, and there's the s&p. so, here's this endless whining that the magnificent seven has taken over the stock market. it's not true. what we needed was for interest rates to come down and make the market a little more attractive for broader groups of people and be convinced that the soft landing is real. >> but the question is, does the broadening out continued? there are plenty of left-behind sectors and stocks, even with this v-shaped recovery that you're talking about in places lik

mega tech cap does not have to fall apart. if you look at valuations adjusted for growth in earnings, they are not that stretched when you look at the forward pe to growth multiple. and if you do have a solid economic environment in the fed is pivoting, that's a fine environment for big tech stocks. i think money comes out of money markets which pay 5.5% roughly today but chances they won't be able to pay that six months down the road. i think investors are starting to think about that and also looking back at this year. if you parked a lot of your net worth in cash, you probably regret that now what will you do? you will see where the markets have underperformed go into the areas of weakness we saw in 2023 using that money market cash. >> people would agree with you but not everyone agrees where the money will go. jeffrey gundlach was on right after powell and he's not on board. >> i think the logic people have that money market bloat will go into the stock market is wrong. i think it's unlikely for investors to go from risk-

large-cap over the rest of the world. i would think about big picture themes when i think about position for the year ahead. >> we have more than a pulse at this point. is like a rapid heart rate. given what has happened in a really short period of time. you believe in the broadening? >> i think broadening for the next two or three weeks, yes. beyond that, no. i think as we look out the next 3 to 6 months, the mega cap same of outperforming the rest of the other 493 and small caps is going to continue. the reason why is that the headwinds -- returns at this year, it right for mega cap relative to -- if you look at two-year returns, not that it's an basis for any think two-year returns are unchanged relative to rest of the market. i think the secular trends between where mega cap is and headwinds for the rest, which is higher rates, access to credit et cetera is going to be a headwind until we see economic weakness. >> elect the phrase high conviction bearish equities. what gets you to come here and tell me your high convi

you have a cap x opportunity. you have a home recovery opportunity, and, you have interest rates falling it's hard to say stocks should fall next year what do you think? if he too optimistic >> i think if we're lookin into 2025, which is what tha to 70 number is, that' actually where consensus is as well so, what we can see is that' not pricing in any kind of recession. we're not in the camp yet wher we think we're going to have a imminent recession in the firs half of 2024 but that's a long way away i 2025 so, that's terrific will continuously have to look. once you get to 19, 20 times that 25 number, that's whe you're starting to be very aggressive on your estimates for the valuation at the sam time that earnings would not b pricing in any potential downside >> it's argument, to, is the feds are going to have to cut, and they're going to have to cut because inflations com down enough not because th economy is falling off a cliff obviously, if i said he thinks he could get to $280 on hi high upside prediction for

>> are you a believer in small caps going into 2024? are you a believer the rally will broaden into next year? >> frank, i think that's right, the rates part. the big headline for small caps was the borrowing regime. will it be harder for companies not as well capitalized as the s&p 500 to roll debt or to access lines of credit or whatever. and in that i think explains a lot of the multiple disparity and so long as that headwind is fading and going in the right direction these stocks can work. a lot of what passes for size differences, a lot of that can beboiled down to industry mix. there's a different makeup and they didn't participate in things like ai this year. there was no benefit of it there. where there's a lot more economic uncertainty there should be a premium paid. jpmorgan is a stock that i own. they are on pace to finish 2023 when we get their q4 earnings with the largest single year profit for any bank in american history. it only got bigger. i think there were reasons for that. they didn't have to worry about that. there

mega cap tech will do well. biggest thing is what i just said, everybody believes there's no bear case. >> nardelli said, quote, perhaps we have nothing to fear but nothing to fear. the point he makes is quite obvious. goldman sachs today, the simplest fact there are no caution signs out there. you're starting to get those kind of notes come out. everybody is on the same side of the boat, so watch out. >> i would label that a short-term concern, scott. meaning, as you led the show off, we've had eight weeks in a row of gains. i think you're supposed to stay on offense for the short term. things have to pause. i'm not very worried about what happens in the short term. you mentioned 5% earnings growth in the fourth quarter for the full year it's projected at 12%. if that comes through, it's supportive to future gains in the market. that's the big if we need to see and what the upcoming earnings season is for, confirmation or not of whether the full year will be as good as the market not only expects but needs in o

over large caps. talk me through the thesis, but also from years of experience in looking at this, that part of the market tends to be quite cyclical, and if we are staring down the barrel of a potential recession, a mild one, a slowdown in european growth in the coming months, how can small caps outperform? >> skblenltexcellent question. they have been dominating markets for over a year. this is the best telegraph recession we can cross in recent history. compare it to a stock where investors expect negative earnings for the next quarter. they report exactly those negative earnings on the day zero. we think something similar could actually happen if a recession after so much waiting and so many expectations materializes. actually the market reaction could be pretty benign. even if we have this market recession, we're pencilling in for the first half of next year, we think market reaction would probably be not too negative. i agree. you have to be positive on markets, otherwise, the trade's not going

the cap has four ways out. even if one of us says that a branch has fallen and caught it, one of us should say that a bird has come and left a nest. this is it. it doesn't happen at the same time, there are two other paths for the exhausts, so in fact , the edge cap guarantees the proper functioning of the chimney. according to forensic statistics, last year, 91 people lost their lives due to carbon monoxide poisoning . nafisa sohravian, sedav cima news reporter. sit down now in the name of god. god bless you in 64, the first nuclear master's or master's degree program started in universities, including sharif university of technology, the universities that i would say all universities that could not have professors, but sharif university of technology started from the same one. in the first moments, i realized how talented our beloved is, both scientifically and morally, he really had a special place and it can be said that he is an example of a truly idealistic person who is armed with two wings and religion

large-cap and small and mid-cap and developed international.d developed international over emerging-market and small and mid-cap as we enter 2024. >> on the bond side of the portfolio, really rough year as interest rates shot up in 2022 has been okay for bonds, where are you do you stay short that the long end and rates might come down. >> i do think rates will come down i don't know when they will come down but i think a year from now rates will be lower than they are today we are starting to extend duration on our portfolios. in the bond portfolio you can get a taxable yield of 6%, when you compare that to the long-term return of the market as 7 - 8% that is a nice place to sit tight, capture the returns and wait for the uncertainty and the volatility that we will for sure experience in 2024, it is not just inflation and unemployment it is geopolitical risks and also entering an election year and election year as you know is a volatile year and the best of circumstances. some people might argue these are not the best of circumstances as we en

mega caps were down. yesterday, mega caps got cheaper. those names got more expensive, but at the net, they are tied. as money goes into the smaller names, it's got to come out of the larger stage, but it doesn't change the ultimate fact that the group, as an aggregate, right? is not growing and has the multiples. >> i will point that you look at performance in the market and you think, this is getting away from me now, and then you are forced to change your view. like, bears are a bit on the defensive where they had all the chip toward them early on. now, the table has turned, and the bulls are the ones flexing their muscles, suggesting a change in our direction. what pushes you toward their direction further? >> i think stocks can overshoot and undershoot. one five weeks ago, the marker was 4100. the narrative is very different now with an f i-45 50. and i said i thought based on the current sediment conditioning, it was to arrive in a couple of weeks, but i think if you take a step back and put price a

those were the best returns for small caps. >> small caps long term tend to outperform big caps.hat be something in that happened. >> yes. many are skeptical small caps could work. most think it's a tourist trade. like they want to own it a couple months. so the more or less likely outcome they do well the entire year. >> and i know you expect a little turbulence in february, march? >> yes. i would say if history was sort of your guide, january, february, s&p gets to, you know, 5,000. i mean, i think new highs is just a matter of days. but then the march late february, march, april, 5% draw down. >> and then up from there? >> yeah. up interest there. that's growth scare, so everyone will panic and that's probably the time to be buying again. >> no doubt we will be speaking to you many more times before then. >> thank you very much. >> happy new year, tom. >>> as we head to break here's our road map for the rest of the hour. it was a rough year if you invested in china this year, but is it right for a rebound in 2024. >> 2024 set to kick off a major battle between apple and meta,

. >> the story is it's broader, and gone into all caps and energy stocks are dog well. we will get earnings later this week like fedex and nike. with that, thank you, david. >>> we will send it over to scott and the "halftime report." >> i am scott wapner, front and center. joining me for the hour, everybody here at post nine, joe terranova, liz young, jason snipe and steve weiss. let's take a look at the major averages. we are green across the board. 2% or so away from its new all-time high. yields, 10 years at 3.95. liz, we came into this week asking the same questions that we did last week. we are going to get cash come in to extend the rally, and so where will that come from? what is your sense? >> i think rates probably have to come down a little bit more before cash is going to come out of money markets. you you are still getting above 5% in a lot of those and that's attractive given where things are. we need to see that fall a little further. right now the rotation play is still intact in the sense of the big winners of 2023 rotating into the laggers, and small c

why wouldn't they want small caps? >> we still wants some small allocation to small caps, historically large versus -- but if it's about overweight the marginal dollar will still prefer quality large caps. that's because a soft landing still does not mean things are great. i think the discussion for next year's gonna be a lot more where are we in the cycle, where do you see platters of the late cycle, and that tends to be small caps. small caps have floating rate debt, they are already feeling the pinch of higher rates. the fed is unlikely to cut it fast enough to ease that pain in the immediate future. >> it's fair to say you're a believer in the broadening? you think that can continue in the new year? you need to just be somewhat selecting to where the broadening will come from? >> exactly, where do you see positive fundamentals, and unjustifiably low valuations. for us it's a cross actor, examples for us would be taking advantage for the lagging performance of things like utility, industrials, health care, internati

the problem, or the one push-back you have is the kre, the etf for mid-cap and small cap banks, is upce the low. that's tough to just kind of jump on right now, so, you might want to wait, and that's what we're thinking about. again, we're looking for that opportunity where maybe fourth quarter numbers aren't that great. we get a little bit of hiccup, we get a push-back from all the positive, from that, everyone thinking the fed's going to be really aggressive, and that becomes your opportunity. but overall, things are setting up very nicely for the banks and the financials. >> courtney, do financials interest you? and if so, which part? >> they are interesting. if we are right that a soft landing might happen, more people are borrowing, so that's where the banks are going to benefit. some of your big names like your jpmorgan, is that the whole banking industry? i do think that is something that you want to own right now, it is one of the safer plays. >> courtney, thank you. >>> and coming up, china's ev gold rush keeps getting bigger and bigger. we will kick the tires on the latest h

i know that the astros make up 20% of the mid cap space. there might be more stickiness there regardless of knowing perfectly where we are in the cycle. which isn't a textbook definition of when you deploy money into smaller mid cap. i think there is a lot of opportunity for investors and, while rick spoke specifically to pensions endowments and sovereign wealth funds i think, from our side of the business, working with individuals and family wealth, there is never been a better time to actually create portfolio construction based on whatever the timeline is for next year. to quote wreck again, you can put a lot of income in a lot of different pockets across the market spectrum. >> on that note then, dan, working for solace alternative wealth management, what does 60 30 ten look like to you if it is 60 equity, 30 high quality yielding assets and then ten private credit and things like that? >> yeah, we talked about this in the past. you are entering the year with high yield yielding, call it eight a half percent. ige, somewhere in the five

that volatility has been absent from the large-cap market. the cboe index is languishing at 13 at this point or below that. what is the outlook for volatility given the fast run-up we have seen in options activity tied to some of the parts of the market? >> it is fascinating. when you look at the saep&p ind it is not seeing a lot of volatility. no one wants to hedge the s&p. they want meta and nvidia to carry us through. that is not the case in the russell. that is at the center of the volatility and people are expecting more fireworks there. there has been divergence compared to the broader market. russell up 3% yesterday and trading lower. that is at the enter center of market action. that's where people are placing their bets. >> all about the fed. gunjan, thank you very much. >> thanks, dom. >>> coming up on the show, we have more on "worldwide exchange," including the one word that investors have to know today, but first the commercial real estate debate rolls on after a market-moving call from carson block. we'll speak with one ceo who

>> if you're going to be in small caps, you've got to do -- most people should not be in small caps,osoft. utilize ada -- advantis, i've used the product, it's excellent. charles: the ideal dream is you live next door to someone with a small cap company, you go over for dipper and learn about the company, if you get lucky -- >> if you have the wherewithal and do that homework, then by all means. charles:s opera, we'll keep an eye on it. have a great weekend. >> you too. charles harls listen, there's so many ideas, so many trends, or so many great things that i'd like the discuss, right? never enough time on this show, so i invite you to read my daily market commentary. go to wstreet.com. i love it. i put so much work in this thing day and night and, let me tell you, i think you'll love it too. >>> all right, coming up, tens of thousands of children as young as 5 years old are mining cobalt in the congo so that you can drive your ev. study hard -- sidhar witnessed this firsthand and he's here to tell us about it right after a this. ♪ ♪ rude. who are you? i'm an investor in a fund that

you have mid cap selling at 12, 13, small cap selling even lower e. you have europe selling at 12. i mean i'm not going to go around the world. but really, yeah, when you add in the magnificent 7, valuations are on the high end of history. when you take out those seven, which is everything else in the market, i think given the outlook, they're at the low end of history. >> do i want to bet, cameron, on the seven or the everything else? because the everything else is outpaced a seven at least since the rally got turbo charged in the end of october until now. so what does it mean for where we go next? >> i think you have such a lower bar in the everything else, both on valuation and on earnings. because we do know the magnificent 7 really earned its outperformance this year because earnings were so strong. they do decelerate a lot next year. i do wonder if we're making an everything else argument. are we implicitly making a growth verses value rotation trade argument as well because growth has absolutely trumped value this year. a lot of it is because 50% of the growth index is the m

the one area still overprice maybe even bubble priced, would be the large-cap tech.are worried about the magnificent seven, who have underperformed the last month. that doesn't make a trend, but those stocks are seriously overpriced and they have a huge impact on the s&p 500. so i would personally be modestly bearish on the s&p 50 and call me fairly priced for small cap and mid cap value. >> which goes back to the question about the russell 2,000 versus the s and a few things like that. i knowou're not a big fap of investing more in the indexes broadly, but you think head winds for the magnificent seven will keep the s&p from shining more brightly here on out? >> that's right. if you thought a recession was coming, you avoided cyclical stocks and sectors, you avoided banks, you avoided oil, consumer discretionary. and you bought things that you thought would do fine no matter the economic outlook amazon, microsoft, apple, those names tend to do fine in any economic economy and so people have been hiding in the magnificent seven i think that trade is going to unwind a

this is better than the mid-cap area. small caps have coming on strong. not just small caps.hen money comes out of the mag seven it goes into other names. nasdaq 100 is a breakout. it has double tops. double tops is one of the easiest chart formations to identify. it has a amazing hold rate. if they don't come down some may quibble you have so many more names at 52-week highs, that there are fewer, and fewer opportunities out there. it happens quick. you have to be positioned. that is another issue, despite the good vibes and good news, maybe we come too far too fast. 47% of the s&p 500 above 70 on relative strength index. 70 is sort of a sell indicators, an overbought indicator. this is the highest level since 1991. i want to bring in kaltbaum capital management headgearry call guam. are we overbought here? should investors stop buying. >> this is the most overbought in a while. i have news for you it has to be a positive. in order to get this overbought you have to have serious buying and serious movement in. the market. i think we're in good stead right now. i think we'll

2000's market cap.if you do see even a little bit of a rotation from one to the other, you can get a you know, a lot more bang for your buck so to speak in the small caps. just goes to show that you know, everyone seems to say it has got to this or that, megacaps or small caps. charles: right. >> i think you will not see the strength in the megacaps we saw this year next year but that doesn't mean they have to go down. they could consolidate for a little lit here. charles: i'm glad you brought that up. i think it will be a huge mistake people sell the companies they claim to be a long-term investors. it is okay to have a dull year in those names. meantime talk about bonds more a minute to go. tlt, it is making a pretty good move here and it has not broken through key resistance points and it has a long way to go to get back to some of the high levels. you like bonds here, don't you? >> i see a strong rally in bonds here. we're more on the equity side. charles: right. >> they have been left for dead but

if you're in small caps, if you're outside of the mega cap tech that's done so fabulously well this year, it's a pretty good day and has been a good week and a pretty good month. i think what's happening here is that long-awaited rotation. i will be the first and quick to say rotation calls in the past have turned out to be folly, and i've made plenty of them. maybe it's for that reason nobody is really strongly banging the drum here that new leadership is taking hold. to do so might be folly. it feels that way to me. confirmation of that, scott, and viewers, has to come from the data. coming in softer and the fed, the dot plot, you need all these to come in and confirm that rotation. >> is it too early to say we have new leadership? you have new near term leadership. up near 8% so it's been the outperformer relative to the other major indices. however, it's probably too soon to suggest a lasting thing. >> the russell is up a lot. i'm looking at the goldman sachs tech basket up 9.3% for the month so far. big tech, which was providing a hiding spot, money market and private credit, but th

if you buy the large cap or the small cap. >>> coming up, how about dem apples? highs today, now more than 15% since october. can apple defy the recent mag seven malaise? refa meyinwothe charts. mo "ston" t. when it comes to ai, there's something big happening. the smallest things are creating giant revolutions... at world wide technology, we're at the forefront of ai. with our one of a kind ai proving ground, cyber range, and full stack approach, you can build, test, protect and implement ai solutions that deliver for you and your customers... in a big way. world wide technology. together, let's make a new world happen. >>> welcome back to "fast money." apple hitting a fresh all-time high in today's session, but pared back much of the close. the magnificent seven overall is just up 1% in december, underperforming the broader market. so, what is next for this group? let's go to chris on this one. i want to address this right off the bat, because a lot of people take a call they hear on the show, think it's a snapshot in time, but it's -- they think it's written i