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S&P 500 and U.S. dollar trade off key technical levels, China stocks surge

Yahoo Finance Live’s Jared Blikre breaks down how markets are moving as China’s COVID-19 worries begin to ease.

Video transcript


BRAD SMITH: Let's get on over to the Wi-Fi Interactive. Yahoo Finance's Jared Blikre standing by. Hey, Jared.

JARED BLIKRE: Yes, a lot of whole lot of nothing going on so far. We don't really have much movement in the majors. I want to take a little bit of a longer term view, kind of rewind it to what I said 24 hours ago, which was we were selling off from the 200-day moving average. That line would be right about there. This is a three-month chart of the S&P 500. So this is the benchmark that a lot of people are watching. And the fact that it's selling off of a key technical level once again-- and it's done this many times or several times this year, I should say-- is something that a lot of investors are paying attention to.

At the same time, the US dollar index is bouncing off of its 200-day moving average. This is a key technical indicator that currency people are watching. And so if the US dollar strengthens from here, that's a big headwind for stocks and risk markets. And of course, traders are looking forward to potentially some tailwinds from the season that we have upcoming here in December. The Santa Claus rally potentially capping the end of the year in the first couple of days of the new year.

But I'll show you another thing. The 13-week T-bill yield, that is up another nine basis points today. That is up 4.28%. And you take a look at the 52-week range. Don't forget, at the beginning of the year, it was sitting at two basis points. That's 0.02%. For it to have come this far is an incredible deal. And the fact that we're not sinking even more, in spite of the fact today that we are seeing that huge surge in Fed-induced interest rates, is actually something to consider.

Energy in the forefront, that's after being one of the worst sectors yesterday. Crude oil falling below $74, $73 per barrel. First time that we've seen that in the year. That is in the forefront, followed by materials, industrials, real estate, financials, consumer discretionary. Communication services also outperforming just a little bit. But as I said at the beginning of the segment, not seeing a whole lot of outsized movement just yet.

It's the defensive sectors here-- utility, staples, and health care-- that are in the red, but throw tech in there as well. So let's round out the discussion by looking at the Nasdaq. And you see most of the megacaps under a bit of pressure here. Tesla up half a percent. Meta up 1 and 1/2%. And some of the green spots, some of the dark green spots, those are focused around our Chinese stocks.

And let's just take a two-day look at some of these gains here. Pretty impressive to see this going on in spite of the general market weakness. Guys.

BRIAN SOZZI: Yeah, good call out on Meta. Brad mentioned it a while ago, but you see those gains strengthening here in the early going. Jared Blikre, thanks so much.