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S&P up, Dow still in red on tentative debt ceiling deal

Yahoo Finance markets reporter Jared Blikre breaks down the market amid the tentative debt ceiling deal and the upcoming Fed meeting.

Video transcript

[MUSIC PLAYING]

- Welcome back, everyone. Let's get to Yahoo Finance's Jared Blikre over at the New York Stock Exchange, there on the floor of Wall Street. Jared, what's popping?

JARED BLIKRE: Well, I'll tell you what. What's not popping is the Hang Seng. Now, I want to do a little bit of an instructive look at what's happening over in China so that, maybe, there are some lessons here for the US. And of course, I'm trying to get the YFi Interactive now. But it is not cooperating. [LAUGHS]

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Nevertheless, if I were to pull up a chart of the Hang Seng over, let's say, a year to date, you would say, OK, it's down 20% now. I'm reading all these headlines this morning. So Hang Seng enters a bear market.

Well, I'm scratching my head. I thought we were already in a bear market because if you pull up a three-year chart, you can clearly see from the top, about early 2021 or whatever, it was a straight shot down to get 55% to 60% down from those highs. And so now, it's still 40% down from those highs. And yet, everybody was talking about a bull market at least this year, for a while, until yesterday, or at least until this morning.

All of this just to show that these things, these definitions that we go by, are very much just arbitrary a lot of times. You take a look at the Nikkei, what we were talking about. It's at a 33-year high. We have markets going in opposite directions all over the place here, lots of disconnects.

And I got to tell you guys, if you take a look at the bond market, and I'm looking at the 10-year T note yield in particular-- it's down about 7 to 8 basis points today-- that has been on fire recently. So a little bit of a reprieve here. And let me see. It looks like I might have the YFi interactive, tentatively speaking.

So we have a little bit of a reprieve from the surging yields. We have a little bit of a reprieve from the surging dollar. Nevertheless, guess what, guys? We have seen the market very much resilient and, despite these moves, which would be counterintuitively supporting anything like the growth trade, that is exactly what's happened.

So we have a market that is edging up, that is surging in terms of tech stocks on any good news. We also have the rest of the market trying to find its footing, a bunch of sector rotation going on, a bunch of pain trades going on. And then, we have the debt ceiling. You pile that on top of everything, plus a Fed meeting in two weeks, there is a lot that can go wrong here.

So I think it's a little bit early to get ahead of ourselves and say, OK, this is going to be like early 2021 when every buying strategy on Earth goes up. It's just not the case anymore. So we need to be a little bit more defensive, a little bit more selective, and also not ignore the prevailing trends in that one sector, in that one area of the market, which is just absolutely on fire now, which is AI. However, if you're playing this if you're playing this on a speculative basis, you better have your stops, because this is a market that turns on a dime.

- It is, indeed, across a number of assets. I was watching oil, for example, and its declines today. So a lot to choose from. Jared Blikre, thank you so much great overview of what we are seeing here.