So David, first and foremost, are you a believer in the Santa Claus rally. And I want to go back to the action we saw yesterday. Uh major indices lower.A lot of people thought it was profit taking specifically when it comes to tech. All right, that was yesterday. If you look throughout the month, you're seeing the eco weight outperforming the market cap weighted.That's kind of a sign of broadening. Can we get a Santa Claus rally. Can we get a strong start to the year if people are broadening out.>> Well, we ...

Market Overview - The recent market pullback saw the S&P down 1.5%, Nasdaq down over 2%, and Dow dropping 800 points, raising concerns among investors about the market's direction [2][3] - The current pullback is viewed as a positioning flush of higher beta names rather than a macroeconomic issue, indicating potential for continued market growth [4][5] Investment Sentiment - Investors are expected to buy the dip, as pullbacks in high beta stocks often lead to a more rational market that rewards companies with strong fundamentals [5][6] - The overall market sentiment remains optimistic, with significant liquidity and ongoing support from monetary and fiscal policies [6][7] Company Focus: Nvidia - Nvidia's stock has risen 50% year-to-date, with a favorable valuation at 32 times earnings and strong cash reserves [8] - Expectations for Nvidia's data center revenues are higher than Wall Street's projections, with estimates potentially reaching $300 billion compared to the $258 billion forecast [9] Company Focus: MAG 7 - The MAG 7 companies exhibit strong operating leverage, allowing them to grow margins effectively, making them attractive investments [10] - There is a general bullish sentiment towards the MAG 7, with expectations of continued performance [10] Company Focus: Progressive - Progressive has shown the best earnings per share revisions since the beginning of 2024, despite underperforming the S&P 500 [11][12] - The company is trading at 13 times forward earnings, presenting a significant discount compared to the market, while maintaining strong growth and margins [13] Market Dispersion - The current market shows record high dispersion, with high-quality names underperforming relative to low-quality names [15] - There is an expectation that as the market rationalizes, high-quality names will be rewarded for their resilience [15] Cryptocurrency and Gold - The total addressable market for Bitcoin is expanding, with a shift in perception towards it being a store of value rather than a tech proxy [16][19] - Gold is increasingly viewed as a store of value rather than a hedge against market volatility, reflecting a significant change in investment strategy over the past decades [19][20]

Geopolitical Impact on Markets - The market initially reacted positively because the situation between Israel and Iran didn't worsen significantly over the weekend [2] - Markets generally don't react strongly to geopolitics, except for oil prices, which are closely monitored [2][3] - The market believes that as long as the US remains on the sidelines and oil prices stay relatively stable, the conflict's impact on stocks will be manageable [4] - US involvement would change the market's assessment [2][5] Market Drivers and Sentiment - The primary driver of the market is currently momentum, with a return to the momentum trade [6] - Equity markets assess geopolitical events based on their potential impact on companies' bottom lines [7] - The AI trade and mega-cap tech are currently not significantly affected by the geopolitical situation in the short term [8] Economic Concerns and Fed Policy - The economy is showing signs of a slowdown, which is a concern [11][12] - The Fed is unlikely to cut rates due to concerns about tariffs and potential higher oil prices [9][12][13] - The major risk is that the economy slows down while the Fed remains on the sidelines, potentially disrupting the momentum trade in the long run [13]