Stocks were lower before CPI data, the US dollar reached a 20-year high on parity with the euro

Yahoo Finance markets reporter Jared Blikre examines market action heading towards closing today, in addition to the US dollar and euro, volatility, sector leaders, and ServiceNow in the software space.

Video Transcript

RACHELLE AKUFFO: Well, let me give you a market check because we are only an hour away from closing the bell. As we said, this is a volatile trading day. The major indices are still in negative territory. You see the Dow there almost flat, essentially, about 50 points. The S&P 500 is down nearly half a percent. And the tech-heavy NASDAQ there is about 2/3 of a percent there. We see that in terms of sectors, it is energy that is leading down. Now our very own Jared Blikre joins us to look at the markets more closely. Jared, what do you notice now?

JARED BLIKRE: That’s right. Well, I’m looking at the markets here. We were green an hour ago. We were red two hours ago. A fierce day. And you can see that expressed here on the NASDAQ composite. That’s intraday price action. The Russell 2000, by the way, was in green most of the day, but slipped into red. It also tops most of the day.

I want to look at our two -month chart of the S&P 500, just to show that over the past two to three weeks, we’ve done almost nothing. Still just kind of trade sideways here. Maybe we need the JPMorgan bounce Thursday morning. Maybe it will be CPI. We need to know which direction we are going. Just waiting for the catalyst.

Then we need to look at the VIX. That was raised recently, coming from those lows, but still within the trend channel here. Does it mean much in the long run? It’s hard to say, but we also look at the VIX as the volatility of the VIX. And that is slightly elevated as well. Well, we know that the bond market has been ahead of equities lately. And we’ll see a slight downdraft in the five-year T-note yield today. That dropped 4/10 of a percent.

Also looking at the 10-year, that dropped by about the same amount, but the US dollar is burning. Look at this. This is a 20-year high on the DX-Y. And look at what’s happening to the euro. I want to show you something. We are talking about parity. That’s when the euro equals $ 1 or a tether, I think. We reached the low of 1.0004, or 1 point triple 0 4, today, but did not exceed that level. You will likely see some downside wash out, if and when that is reached.

Let’s take a look at some of the sector’s actions because, as I said, it’s been a volatile day. But in terms of leadership, we see all communications, staples, materials, industrial, and financial services as superior. That’s kind of a weird leadership. Just want to close by looking at the software sector. ServiceNow, Bill McDermott, the CEO, was in earlier today, had some negative comments about the space. And I’ll tell you what, the software, which has been ahead for the past month, is lagging behind now.

DAVE BRIGGS: I like your notion about S&P, which seems to have done nothing in the last two or three weeks. It’s like we’re all, aren’t we? I mean–

JARED BLIKRE: Well, I mean, Seana is on vacation–


JARED BLIKRE: –but he came back. Now he’s back–

DAVE BRIGGS: He became–

JARED BLIKRE: –and markets can switch.

DAVE BRIGGS: He has become more like the NASDAQ, yes. We became more like S&P. Did you buy on Prime Day?



JARED BLIKRE: –out for tomorrow. Did you know? I woke up this morning. I never thought about Prime Day. Do you believe? That’s false faith in the news business, I admit it. But not [INAUDIBLE].

SEANA SMITH: There we are.

DAVE BRIGGS: That’s outrageous. We get attendance. So we are 0 for 1. I did. are you

SEANA SMITH: Yes of course.

DAVE BRIGGS: OK, well, 2 for 3.

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