00:00 Speaker A
S&P 500 notching its fourth day of losses. Yahoo Finance’s Jared Blikre joins us now with the trendy takeaways. Jared.
00:06 Jared Blikre
Thanks. We got to talk about those bears. They are not hibernating just yet. In a quick recap, uh, I know we’ve talked a lot about the 50-day moving average recently, and today is going to be no exception. Here is the year to date in the S&P 500. So yesterday we crossed just below, but uh we are still kind of kissing that line. Well, now we are definitively below it. And what stands out here, we’ve been above that line since the beginning of May. And so that’s why there’s so much talk about it. And critically, I said yesterday, the socks, the Philly Chip Index, uh closed above it. And so did Nvidia. Well, guess what? Both of those closed below today. So here’s the Philly Sox index finally closing below that. Uh pretty similar to chart chart to the S&P 500, but a little bit higher beta. And I just want to show you the sector action. This is today, but what I want to go to is a quarter to date. So this is since the beginning of October, also captures the entire shutdown period. XLV is healthcare, utilities is XLU, and XLE is energy. So pretty defensive setup looking here and not a lot of people were expecting this coming to coming into the fourth quarter. Biggest loser here, consumer discretionary, Amazon just had a terrible day down 4%. Communication services, another mega cap sector, and tech, well, tech’s only down 1%. So that’s actually kind of a bright spot right now. Also want to say that uh I have another clip from uh the Investipedia editor and chief Caleb Silver. We talked to him about some of this downside action that we were seeing yesterday and here’s what he had to say.
01:35 Caleb Silver
There’s a little bit of a sell off here, but don’t forget, investors have had a great run riding about the same 10 to 12 stocks for the past two to three years, really since this bull market began in late October of 2022, a little selling here, end of year, maybe rotating out into different sectors of the market, not crazy. Also, there might be some catch-up play from those global fund managers that were bearish for so long. So we might see this balance out over time.
01:54 Jared Blikre
Global fund managers. How about that?
01:56 Speaker A
Yeah, now, speaking of global fund managers, didn’t we get some new, some new data, some new insight there?
02:01 Jared Blikre
Yes. Once a month we get B of A. They they produce what’s called the global fund managers survey and we got that today. It had some really interesting data points. Not unexpected, first of all, is that the most crowded trade is the Mag 7. Now, these guys who they survey manage a half trillion dollars of assets. So these are some of the top money managers in the world. What’s interesting is that also the biggest tail risk is related to the Mag 7 because that would be the AI bubble. So they’re making a lot of money with the Mag 7, but they’re also worried that the party comes to an end at some point. Now, when does it end? And this is where it gets interesting. The cash levels of these money managers have reached the lowest percentage, 3.7% since 2011. And when they get to those low levels, a lot of times that’s a contrarian signal. So they’ve spent so much of their money, they have so little cash that, guess what, the market can correct afterwards. And so, not necessarily it doesn’t say the magnitude of the correction we’re expecting, but that is something that’s kind of like a yellow warning flag to me. One more, record number of respondents saying that companies are overinvesting and the beginning of their data is 2005, so this does not include the dotcom era, but it has never been positive. And it was wildly positive this time. So, in other words, up until this most recent survey, all the companies were saying there’s not enough investment, there’s not enough investment. And now they’re saying too much. So that might be, yeah, that is as well. So that’s pretty much the survey in a nutshell.
03:14 Speaker A
Back to the markets, where are the risks?
03:17 Jared Blikre
I was looking at the VIx today. So let’s check out the VIx, which is saying, hello to me. It has my attention. And here we have a year to date in the VIx. Here’s the most recent spike and you can see it’s about the same magnitude as that little scare that we got in the middle of October that had to do with China tariffs that never really came to fruition. But here is that big outlier. We saw that. That’s the post- liberation day spike in volatility. That’s when we had that big market sell off. So this is catching my attention. Now when you put it down to a three-month chart, you can see it’s kind of staying elevated here. So, as a quick reminder, we see an elevated VIX not only in October, but also November, then we see it decline into year end. So we could still have some market spills in the month of November. Want to show you one more thing, which is the Ice B of A move index. This is like the VIX for the bond market and here we are seeing the highest level in about two months. So the bond market has not been crazy, but if this starts going much higher, I’d have my eye on it. And just to give you some perspective, okay, we’re not nearly at the levels that we were during that post- liberation day sell off. So not too much to worry about there just yet.
04:31 Speaker A
Should we end here quickly on crypto?
04:33 Jared Blikre
Oh, I’m I’m glad you said that. Uh, Bitcoin had a positive day, I believe. I mean, things change rapidly here. Let me just get to our intraday. Here is, up only 1% over the trilling 24 hours. I think, um, we may have a temporary support level at 90,000, but I think the short sellers are still going to get interested here. Um, I would watch this all the way up to 100k because you don’t know where the short sellers are going to come in exactly, but they have been doing this a very technical sell off. I look at Fib levels and right where you think they would be coming in, they have been coming in on the way down. So anything below 100,000 just gives you the more risk of more downside here.
05:13 Speaker A
All right. Thank you, Jared. Appreciate it, buddy.