Markets' 8-Week Win Streak, Apple Watch Import Ban, a Blue Chip as a 2024 Top Pick 12/26/23

SPEAKER_1 (0:00)

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Scott Wapner (0:31)

Market insight and analysis. You're listening to the opening bell of CNBC's Squawk on the Street.

Sara Eisen (0:36)

Good Tuesday morning and welcome. Excuse me to Squawk on the Street. I'm Sara Eisen with Scott Wapner today. We are live from post 9 of the New York Stock Exchange. Carl, Jim and David have the morning off. Take a look at futures this morning. Looks like the rally continues after eight straight weeks.

Going strong here up to 62 points on the Dow. NASDAQ pointing to an upstart as well. 24 points, S&P up eight in the early action. Our roadmap for the hour is going to begin with the market rally.

Major indices, indices in the midst of an eight week win streak. Also ahead, shipping giant Maersk preparing to resume operations in the Red Sea after attacks by rebels in Yemen.

Scott Wapner (1:11)

Plus a setback for Apple. The White House declining to veto a US trade tribunal's decision to ban imports of the company's watches.

Sara Eisen (1:19)

We begin, though, with the markets as we kick off a holiday shortened week. It has been amazing to see the resilience and the strength of this rally, Scott. Even, you know, the strategists all put out their S&P year-end targets for 2024 What, a month ago?

We're close to that.

Scott Wapner (1:34)

They have to throw those out and the garbage.

Because of what we've done since November 1st. It's pretty stunning.

Dow is up 13% since November 1st. S&P is up 13.5%. Now we're going to talk about all-time high watch because we're going to open above the all-time closing high for the S&P 500, which was 47.96. So keep an eye there as the futures look positive. The intraday all-time high is 48.18. But the run since November 1st has been nothing short of stunning.

Sara Eisen (2:06)

And it's really Fed fueled, right? And you've seen it in the bond market, too. The rally in the bond market, 100 basis point, move lower in the 10-year yield. We're also breaching all the targets for next year that the strategists are putting in place. They think the 10-year is going to end at 4%. Guess what? We're below that number now at 3.9%.

Which makes you wonder about how much is being frontloaded for next year. If next year is all going to be about rate cuts and normalizing policy from the Fed and the ECB and the Bank of England, well, the market's done a lot of work toward pricing in now six cuts for next year.

Scott Wapner (2:41)

Especially when you consider that so many of the lagging areas of the market are the ones that have run so much since November. So if you're thinking, well, you're going to go into a new year. There's a lot of optimism. Let's chase some of these underperforming areas. Well, they're not really underperforming anymore. I mentioned what's happened since November 1st.

Real estate's up 20.5%. The financials, which had done next to nothing for much of the year, up 15.5% just over, you know, seven, eight weeks.

Sara Eisen (3:09)

Russell's had a big comeback too.

Everyone thought, Russell Small Caps, play that because that's lagged all year.

Now, it's still, you know, up much less than, say, technology, but the chart looks like this. It's a V-chart. It'll come all the way back.

Scott Wapner (3:23)

22% since November 1st.

Sara Eisen (3:25)

There you go.

Scott Wapner (3:27)

It's been remarkable and it feels like so much of that happened so fast. Are there really going to be chasers left to get into some of those underperforming areas of the market? I think that that's going to be a big question. We'll have to find out whether earnings are going to deliver the goods.

Sara Eisen (3:42)

Absolutely. I think also if you look at sentiment and how far it's swung, given the bullishness, you can check the AAII individual sentiment readings, bears going into hibernation. I have a great chart that looks at the fact that it's the fewest amount of bears now in the market since 2018

They're leaving because everybody's jumping on board the rally. Now, does that set us up for some sort of correction in the new year? Because that's kind of a contrary indicator. There's the fewest bear chart since 2018 You might think, hmm, people are getting a little too bold up here.