Investors are filled with the festive spirit

This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

New highs for S&P and Nasdaq
U.S. markets were mixed on Monday. The S&P 500 and Nasdaq Composite climbed to new highs, but the Dow Jones Industrial Average dipped. Asia-Pacific stocks traded higher on Tuesday. Japan’s Nikkei 225 jumped around 2.1%, buoyed by chip-related stocks such as Tokyo Electron and Lasertec, which shrugged off new rounds of U.S. export curbs.

Trump pledges to block U.S. Steel acquisition
U.S. President-elect Donald Trump vowed to block the acquisition of U.S Steel by Japan’s Nippon Steel, in a Monday post on his social platform Truth Social. The two companies reached a $14.9 billion deal in December. The U.S. Committee on Foreign Investment is reviewing the deal to ensure it doesn’t incur national security risks.

$56 billion package for Musk denied
Tesla CEO Elon Musk failed to get his $56 billion 2018 pay package reinstated. A Delaware judge upheld her prior ruling that the compensation plan was improperly granted. Tesla shareholders had voted in June to “ratify” the package. The judge, however, wrote in her opinion that “Even if a shareholder vote could have a ratifying effect, it could not do so here.”

[PRO] Goldman’s refreshed conviction list
Goldman Sachs maintains a “Conviction List,” which contains stocks it expects to perform better than the S&P. The Wall Street bank just refreshed its list of global stocks, including three it gave potential upside of more than 40%.

Investors are still buzzing with positive sentiment, pushing stocks up to new records, but some analysts are concerned the good feelings are on frail footing.

The S&P 500 added 0.24% and the Nasdaq Composite, electrified by Tesla’s 3.5% rise and Super Micro Computer’s 29% surge, climbed 0.97%. Both indexes closed at fresh highs. The Dow Jones Industrial Average slipped 0.29%, though it briefly breached the 45,000 level during the day.

“The holiday season is in full swing and spirits seem bright, at least among investors,” UBS wrote in a Monday note. Indeed, 56.4% of consumers expect stock prices to rise over the next year, according to a survey by The Conference Board. That’s the highest level on record.

Not to be a downer this holiday season, but analysts see signs that optimism might have some roots in wonderland.

Stocks might have had an incredible rally in November, but that was probably investors “pric[ing] in the upside from the new, pro-business administration,” Jay Hatfield, founder and CEO of InfraCap, told CNBC.

Now, investors “need to get details — not just tweets — but details of what the policy is,” Hatfield added, suggesting the upward momentum might take a pause for now.

Investment bank Oppenheimer also noted that stocks are still expensive. “Benchmarks [are] showing forward PE multiples that are higher than their five-year averages,” wrote chief investment strategist John Stoltzfus on Monday.

UBS thinks the exuberance among investors is “raising concern about the markets getting frothy.”

Froth implies that things will settle down, which is not necessarily a bad thing in the long run.

Oppenheimer, though, thinks the bull market is “driven by fundamentals” that will steer it higher in the next year, despite high valuations. Likewise, Savita Subramanian, head of U.S. equity and strategy at Bank of America, sees “ample reason to stick with stocks over bonds for the long-term.”

The layer of frothy milk adds to a cappuccino’s delight, after all, and doesn’t detract from the coffee below.

— CNBC’s Lisa Kailai Han, Alex Harring and Pia Singh contributed to this report.