Key Takeaways
- The S&P 500 gained 16% in 2025, NASDAQ surged 20%, and the Dow had its best year since 2021.
- Traders anticipate increased market volatility in 2026, with the 10-year Treasury yield predicted to reach 4.5%.
- Oil experienced its worst year since 2020, with a 20% price decrease, despite record U.S. output.
- The retail sector showed mixed performance in 2025, with Five Below up 80% and Lululemon down 45%.
- Warren Buffett concluded 60 years as CEO of Berkshire Hathaway, yet its stock is still considered a strong investment.
- UnitedHealth shares ended 2025 down 35%, but technical analysis suggests potential for a stock reversal.
Deep Dive
- The S&P 500 closed 2025 with a 16% gain, the Dow saw its best year since 2021, and the NASDAQ surged 20% due to AI.
- Gold and silver achieved their best performance since 1979, while oil recorded its worst year since 2020.
- Trader Guy Adami predicts increased volatility in 2026, expecting the 10-year Treasury yield to reach 4.5%.
- Rising interest rates are projected to impact the housing market, potentially leading to higher mortgage rates.
- Opportunities are seen in companies building on AI technology in 2026, with equal-weight S&P expected to outperform.
- Significant market drawdowns of 20% or more occurred in four of the last 10 years, often rapidly.
- These drawdowns, regardless of cause, typically create buying opportunities for investors.
- The speed of market swings and recoveries has accelerated, with declines and recoveries now occurring in weeks.
- High VIX (volatility index) levels, such as 55 or 60, have historically signaled buying opportunities despite fear.
- Oil experienced a 20% price decrease in 2025, marking one of its worst years despite record U.S. output.
- Key macro issues impacting oil include potential oversupply from OPEC, Brazil, and Guyana, alongside geopolitical risks.
- Market participants are monitoring Venezuela's potential to increase output if sanctions are lifted, requiring investment and stability.
- OPEC's decision to pause production increases is significant due to limited capacity to boost supply further.
- The retail sector saw varied performance in 2025, with the XRT ETF gaining 7.5% despite tariffs and elevated prices.
- Five Below (up 80%), Dollar General (up 75%), and Dollar Tree (up 64%) achieved significant stock gains.
- Specialty mall brands like American Eagle (up 59%) and Victoria's Secret (up 32%) also performed well.
- Lululemon shares fell 45% due to internal and competitive issues, while Target missed the discount rally.
- Jeffries favors Nike for 2026, while UBS lists On Holding, Ralph Lauren, and Signet on its buy list.
- Warren Buffett concluded his 60-year tenure as CEO of Berkshire Hathaway; Class A shares grew over 1.1 million percent.
- Carter Worth notes Buffett's departure coincides with a relative peak in Berkshire Hathaway's stock performance against the S&P 500.
- Berkshire Hathaway is considered a strong investment post-Buffett, supported by its over $370 billion cash position.
- The company has historically capitalized on market dislocations, acting as a 'bid of last resort' during downturns like 2008.
- UnitedHealth (UNH) ended 2025 down 35%, marking its worst performance since 2008.
- Chartmaster Carter Worth identifies uptrends and a broken downtrend line, suggesting the stock's lows are in.
- Despite recent difficulties including a CEO murder trial and withdrawn guidance, an absence of negative news could prompt a rally.
- UnitedHealth's next earnings report is scheduled for January 27th, a key date for investors.
- Karen Finerman suggests Versent, a Comcast spin-off, as a strong 2026 pick due to its diverse business portfolio.
- Investment banks and brokers like Morgan Stanley and Goldman Sachs performed strongly in 2025.
- Favored sectors for 2026 include stable big banks (BKX), consumer internet stocks (Spotify, Netflix), and the energy sector (XLE).
- The IPO market showed signs of thawing in 2025 with over 200 IPOs, but challenges remain for large-cap companies in 2026.
- Final trade recommendations for 2026 include Amazon, Rivian, and Snap, with potential for AI-driven growth.