New Zealand markets closed
  • NZX 50

    -11.83 (-0.10%)

    -0.0021 (-0.34%)

    +56.30 (+0.69%)
  • OIL

    +0.18 (+0.22%)
  • GOLD

    -5.40 (-0.22%)

Stocks trading in the green as debt ceiling deal heads to Senate

Investors are cheering the House passing a bill to raise the debt limit. Yahoo Finance's Jared Blikre breaks down market action.

Video transcript


- Welcome back. Let's get to Yahoo Finance's Jared Blikre for the latest market action. Hey, Jared.

- Yes, we can see stocks firmly in the green now. Even the Dow, the laggard, has caught up. In the green for about 1/3 of a %. NASDAQ over double that. Up 8/10 of a percent.

I wanted to start here really with a look at the bond market here. This is the 13- week T-bill yield. 13 weeks equals four months. And guess what? I just saw a headline come out that the Treasury is now delaying next week's bill auctions for the three and six-months tenors, and that is due to the debt ceiling.


So is this causing hiccups in the bond market just yet? No, but it is an important reminder that there is some real stuff going on, and if these headlines progressively reflect more turmoil in the bond market, guess what? That's going to weigh on equities.

However, let me just temper that by saying we're actually seeing the bond volatility, and this is expressed as the ICE BofA MOVE Index. That was down slightly yesterday. I was concerned, as I outlined. This big tick up here, which took out this high from early May-- if we do get a big pickup in bond volatility because of the debt ceiling, well, that reduces leverage overall in the system, and we tend to see equities spill a little bit.

What I also like about the bullish setup for today is the US dollar index is now backing off of this high here. Now, if it continues to move down, that's going to relieve a lot of pressure that was formerly on everything from commodities to EMs to foreign to domestic multinationals, et cetera. So that is a release valve as well.

Here is the X-sector action for today. Energy in the forefront. That's up 1.4% followed by materials, industrials, financials, communication services-- all of those outperforming. To the downside, we've got utilities and staples.

And before I go, just a quick comment on the reports we got this morning. ISM looking weak. Global manufacturing across the world just pointing towards recession. However, that could be months, if not a year away, so we look at the green today and celebrate, right?

- Indeed. Indeed. Jared Blikre there for us. Thank you for that breakdown.