Tech sell-off, crypto signals, bond bounce: Market takeaways

Tech stocks slid while real estate (XLRE) and staples (XLP) caught a bid as traders rotated into rate-sensitive sectors.

Yahoo Finance Markets and Data Editor Jared Blikre shares his takeaways from the trading day.

To watch more expert insights and analysis on the latest market action, check out more Asking for a Trend.

Video Transcript

00:00 Speaker A

Tech taking a tumble. That is to the downside. Having seen a worse day for the Nasdaq in a few weeks. You'd have to go back to the first trading day of the month, which was August 1st. So let's take a look at some of the market action today, and then maybe we can get an idea of where we're going with this. So here was the intraday price action. Just want to show you though, in the big picture, we're still up 10% year to date and just a blip off of those highs right there. I thought it was really interesting to see the sector breakdown. Tech was the only underperformer. That means it was doing worse than the S&P 500, which is the GSPCTicker right there. But you don't see a lot of red. In fact, you see a lot of green right here. Real estate did well, and we're going to get into some of the winners in a minute. But now I want to show you my leaders board. This kind of shows me, I set this up to show me where the hot money might be flowing, and the hot money was flowing out of a lot of sectors today, out of a lot of industries. Cannabis, which has been doing well recently, took a dive, Ark Innovation Fund, IPO, Bitcoin, we'll get to that in a second, software, Korean stocks, solar, which has also been doing well recently, Mag 7, chip stocks, the list goes on. And so, uh, this just tells me that it's kind of a normal rotation in the market. I'm not seeing any red warning flags, not any orange ones, maybe a couple yellow ones, but that's the extent of it. So tech was getting attention. What about outside tech?

02:37 Speaker B

Yeah, let's take a look because I'm going to talk about some Dow theory here. Transports were taking off today. So the Dow actually closed just barely in the green. When we say the Dow, that's the Dow Industrials. And we can see that. This is the Dow leaderboard here. The mega caps did bad, but we had a lot more green over here. Now, I'm going to show you the transports, and a lot of green here. A lot of these are value stocks. And what we saw today was value was doing well. And it wasn't just that, if we go back to our sector, what did well? Real estate, 1.78% to the upside. That was the best day in a while. Real estate is sensitive to interest rates, longer term ones. We saw those drop. So I think traders see the action, all right. Everybody's piling out of tech today. What can we buy? Rates are down. Let's buy some real estate staples, good old staples, up 1% today, utilities, healthcare's been perking up recently. So we are seeing a little bit of a safety trade, but, uh, not the dire circumstance that I've seen, uh, let's just say, I'll cross X today, the former Twitter.

04:45 Speaker B

Yeah. How about cryptos?

04:46 Speaker A

We do a Bitcoin check.

04:48 Speaker B

Yeah, let's do that as well. And let me get to my header here because I was talking yesterday about Bitcoin as kind of a leader, and even micro strategy leading, uh, Bitcoin itself. So let's take a look at that trade right now. And, um, first, I'm going to go to our comparisons here. The first chart I led with yesterday was Bitcoin versus a Nasdaq 100. This is a year-to-date, and in, uh, purple here, this is we were sitting on some higher gains with Bitcoin. And that was down yesterday. And what I was saying was the Nasdaq really hasn't caught down to that, but we saw some more downside action today. So that kind of that got fulfilled. And then the other thing I was looking at was Bitcoin versus microstrategy. And this is a little bit more concerning because microstrategy we're seeing a big divergence. We saw, for instance, this is at year-to-date time frame here. We saw higher high in microstrategy, higher higher in Bitcoin, but just kind of melting off there. And now that we saw microstrategy with year-to-date returns below Bitcoin, for me, that's an ominous warning sign. It's not a red one, but it's yellow, maybe migrating into orange. I'm going to finish here just by showing the crypto board so we can see our heat map and kind of get a picture of everything that's going on in crypto. Ethereum down 4%, but look at the price, still above 4,000 there. And that's kind of a big key level. Put the year-to-date on, and so you can see still a solid uptrend for Ethereum. So right now, we're still relatively close to these record highs or recent near record highs that we've had in a lot of these coins.

06:55 Speaker A

No, you have mentioned a few days. She's unlike you. Oh. The dollar.

07:07 Speaker B

Oh. How could I forget? Well, I'm glad you mentioned that. It's interesting because the dollar was up today, so we saw money moving into the US dollar. Let me get a chart of that. And here we go. US dollar index was up. This is a year today, and you can see, uh, it doesn't look like it was up today, but I I swear it was because of the down movement. There is so big by comparison. But what was going down today is the 10-year T-note yield down four basis points. That's why I was saying real estate was doing well, and the 30-year yield was down as well. So you put that together, and you have yields going down, that means bonds are going up. So people were buying dollars to buy bonds. Maybe there's a little bit of a safety trade there too. So we saw a little bit of safety trade in action here. We also saw some healthy rotation, all in all, not a concerning picture, but we do want to keep in mind that we're heading into that high volatility season in September, October. Related Videos

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