Market check: Stocks resume losses, Tesla stock declines

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Yahoo Finance’s Jared Blikre breaks down how markets opened on Thursday.

Video Transcript

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JULIE HYMAN: Well, stocks are trading lower once again. I was just looking at the numbers for the NASDAQ 100 in particular because we’ve seen so much of the selling concentrated in tech, the NASDAQ 100 is down 13% or so since the close last Wednesday. Our Jared Blikre is back at the New York Stock Exchange watching this selling action. What stands out to you, Jared?

JARED BLIKRE: Yes, the Dow down for the sixth day in a row, the NASDAQ composite off materially, and I’m looking at the S&P 500 here, off a cool 1,000 points from its high. You can see the high, 4.818.62, that was the record high and we are now about 1,000 points lower.

Looking at the market, remarkable here it seems like since I left it was close of business last Wednesday all we have seen is selling. Now, the last day I was present for was that Fed day and very interesting, I thought it was off– it was going to be off to the races, it looks like the markets thought that Fed Chair Powell was going to be a little bit less hawkish than he had been before. But we have seen six straight days of selling and we have to pay attention to that.

Also taking a look at the VIX, which is elevated here at 34.16 as you can see on your screen, pressing up against these highs that we’ve seen throughout the year. And then also taking a look at the sector action looking pretty defensive today. Let’s see if we got anything in the green, we got consumer, we got staples, that’s in the green that’s up about 0.33%, followed by utilities, that is just barely green.

But a lot of the action here has been concentrated in the tech trade. And we can see over the last five days we have seen consumer discretionary down 11%. That is the house of Amazon, XLK, that’s tech, that has Apple and Nvidia, many other tech companies, that’s down 8%. Real estate down 8%, communication services down 7%.

And then you take a look at the NASDAQ 100 over this same time frame which is five days, Tesla just shedding a cool 21%. And we are now testing levels in a lot of these stocks, not just picking on Tesla but a lot of these stocks have been round-tripping gains that they’ve been making for some time. So you can see Tesla giving up gains that they had basically made last year. And so we’ll have to see what comes of this but nevertheless another down day in the markets, guys.

JULIE HYMAN: Yeah, we were just talking about some other movers, Coinbase, for example, down more than 20% today alone. Jared, you’ve been at this a while, you look for all the technicals in the market, and I’m curious what you would look for to signal what market participants refer to as capitulation? In other words, the idea that the selling has been exhausted to the extent that maybe the market can turn. Doesn’t feel like we’re there yet but what would you be looking for?

JARED BLIKRE: Yeah, Julie, that’s an excellent question. There is a phrase of Brian Shannon of AlphaTrends, he’s a founder there, I love it, if they don’t scare you out, they wear you out. And so here’s the S&P 500 on the YFi Interactive, I’m going to put a year-to-date chart, so markets have been very, I would say very frustrating this year for a lot of investors. The S&P 500 doesn’t show the incredible carnage that we’ve seen. NASDAQ 100 is going to paint a better picture down 27% year to date.

And I’ve got to tell you, Julie, it looks like the market is wearing people out right now. It looked as though we might have had some capitulation in this previous market– what could have been a previous market bottom that was right before the Fed, the Fed wasn’t the catalyst that the market was looking for. But until we find some kind of market clearing event or simply enough time has elapsed because we can have corrections in time as well, we’re not going to see any improvement here.

I’m looking at some of the fringe markets, if we take a look at some of the ARK Innovation components, I think the next rally that we have is going to feature a lot of these. We’re going to see a junk off the bottom rally, that is a lot of the stocks that have been taken down the most are going to enjoy a huge rise. I don’t think they’re going to get back up to break even or even close to that but nevertheless, I’m looking for signs of life in some of these components that we’re seeing in here. And this is one day’s price action, Coinbase down 18% but you take a look at the year-to-date, it’s a lot of red here on the screen as you can see, guys.

BRAD SMITH: Yeah, a lot of red. I think one of the only green spots I saw was Costco and we were talking about that a couple of days ago as in deep. Jared, we appreciate the breakdown. Welcome back as well.