SOTS 2nd Hour: 2025 stocks to watch: from Software to Renewables to Cannabis, plus: IMAX CEO's 2025 Predictions 12/26/24

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Sara Eisen (0:59)

Good Thursday morning. Welcome to another hour of Squawk on the Street. I'm Sara Eisen with Brian Sullivan. We are live from Post 9 of the New York Stock Exchange here on this holiday week. Carl and David have the morning off. Take a look at stocks. We are giving a little back after a strong rally on Tuesday. S&P is down a quarter of 1 percent and it's broad. Every sector is lower right now. Technology is outperforming. It was higher just a few moments ago, but actually is now lower. Some of the gainers in there, Apple, again, higher. NVIDIA is kind of swinging around the flat line. Broadcom is higher again, half a percent. Stunning performance this month, up almost 50 percent. Nasdaq down about a third of 1 percent right now. Take a look at Treasuries. Big debate over whether this is a headwind or not. Higher Treasury yields. Treasuries selling off as yields push higher. 4.631 is near the highest since 2022 and highs of the year.

It happens despite the fact that the Fed has been cutting rates, but got supercharged last week when the Fed hinted fewer rate cuts to come in the new year. We're 30 minutes here into the trading session. Here are three big movers we're watching. More volatility and shares of micro strategy. They're under pressure alongside the price of Bitcoin after the company filed to sell more shares earlier in the week, presumably to buy more Bitcoin. Japan's Nippon Steel delaying the closing date for its planned takeover of US Steel due to the ongoing review of the deal in Washington. The move coming after a panel that looks into acquisitions for national security was deadlocked over whether to approve the sale, leaving the final call to President Biden. Both he and President-elect Trump are opposed to the deal. Also watching Apple, Wedbush raises the price target to 325, a share from 300, writing that the street is still underestimating demand for AI-powered iPhones. Stock within striking distance of $4 trillion market cap. We're watching for that level, 364.63, or 264.63 is the level for the $4 trillion market cap. But Brian, I wanted to start with some better than expected data, I would say, on the US consumer. So MasterCard spending pulse, which tracks a lot of the spending during the holiday season, just putting out numbers today showing 3.8% increase from last year, from November 1st through December 24th. That is good news. A consumer, they say, that is willing and able to spend, but driven by a search for value, that can be seen in concentrated e-commerce spending as well. If you break down some of the numbers a little more, online spending really strong, 6.7% growth from last year online versus 2.9% growth in store, taking out autos. Apparel, goods, which has been a weaker part of the spending picture, they rebounded a little bit this year, which was good to see. And restaurants, which is the services part, which we know people have prioritized really strong, up 6.3%, take it all together. And you've got a consumer that's still in pretty good shape, judging by this holiday shopping trend.

Brian Sullivan (3:53)

The spending continues unabated. I think a lot of that is on credit cards. We've been worried about it. I've been worried about it and massively wrong. I mean, the US economy continues to go. I think the question to your point at the top, let's combine the two macro themes.

I think, yes, listen, is this holiday short and weak and a lot of people are off? Yeah, but watch Treasury Yields. At the top of the show, Sara, or the 10 a.m., Sara talked about how we're seeing this big backup in yields. Well, it's true. We're at 4.63 or whatever on the 10 year. That means your credit card rates, your auto loans, your mortgage loans, they're going to rise in interest rate as well. And I think that if you were betting on this idea, oh, don't worry, the Fed's cutting rates, we're going to be paying less for big ticket items. If you were relying on that, the bond market is saying, hold my beer. We have something to tell you, which is that we don't think the Federal Reserve in the near term is going to be correct. And it's going to cost more money to borrow money. It hasn't impacted the consumer yet.