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00:00 Josh
Well, US stocks sliding to start the trading week as Wall Street awaits the Fed’s final policy meeting of the year. And Yahoo Finance’s Jared Blikre joins us here with the trading day takeaways. Jared.
00:15 Jared Blikre
Thank you, Josh. You might have heard of a little Christmas ditty called The 12 Days of Christmas. Well, we have seen XLK up 11 straight days. So I’m talking about the 11 days of Techmas. And let’s just check out what has happened over this stretch. And uh I don’t have a 10 an 11-day view, but I do have a 10 day. So, here’s the S&P sectors. These are all large caps. Number one position is XLK, 8.1%, almost double that of number two, which itself is Consumer Discretionary. Then number three is Communication Services. So if you’re keeping track at home, that is the the mega cap trifecta right there. All three of those outperforming the S&P 500. And what’s not doing well over the stretch? Utilities, healthcare, real estate, staples, all those in the red. All those are defensives. So this is, you know, it’s almost like the old days of the bull rally. Maybe uh the AI trade is back. And to further that hypothesis, let’s go to my leaders. And we these are a bunch of ETFs, a basket of ETFs that I used to kind of gauge sentiment in the market. In the upper left there, the top one is Sox. That is the Philly chip index. That’s up 15 and 1/2%. Number two is Quantum. Um that’s arguably another tech trade. Arc is disruption, a lot of tech uh stocks in there. IPOs is, you know, that could be anything, but a lot of times it’s tech dominated. IWC is microcaps, so that’s an outlier. IYT is transportation. Then we have software. That’s another tech dominated industry, and then retail. So you put it all together, tech is driving this rally once again. So, I’m sure we’ll see concentration headlines in a little bit, but uh that’s what we got working for us right now.
01:28 Josh
Here’s another question. Yes. Top of mine. Fed meeting on deck, we expect a cut yields on the long end creeping higher. What do we make of that?
01:34 Jared Blikre
That is correct. Well, let’s take let’s talk a little uh uh take a look at those long rates that are creeping up like right now. Um,
01:49 Jared Blikre
and we’ll do that with the 10-year T-note yield. So, this is something that’s been happening day by day over the last few days. We can see that the 10-year is up uh three basis points today. That’s how you read this right here. that little three, that’s three basis points. 4.17. uh it was 4.14% yesterday. Here’s a five-day look and you’ll just see day after day just creeping steadily higher. It’s not a huge deal in terms of the year-to-date because we can see this is just a lot a lot of chop in here. so we’re not even at an extreme. and what usually causes problems for stocks is when the bond market moves really quickly. and you will see that reflected in the VIX of the bond market, which we look at sometimes called the Ice B of A move index. We’ll take a look at that in a second, but that’s pretty muted as well. So that was a 10-year and now let’s take a look at the 30-year. 30 year is at 4.82%. Now, this is interesting. It just cleared its 200 day moving average. Sometimes when a a market does that, you get a little bit of momentum to the upside, but still kind of similar to the 10-year, we are still well within the year’s range. So we are not in an extreme. What causes a problem sometimes, the level that causes a problem in the 30 years is above 5%. uh but we’re not close to that just yet. As promised, here’s the Vix of the bond market Ice B of A move index. I’ll take away that moving average and you can just see we are camping out by the low. so that is less fear, that is good for bonds, that is good for stocks.
03:00 Josh
I feel like you want to talk about Santa.
03:02 Jared Blikre
Oh, yes. Uh, it’s a theme.
03:06 Jared Blikre
So let’s talk about Santa’s indicator. Uh the Santa Claus rally is actually an indicator and we had the opportunity to talk to Jeff Hirsch today on Stocks and translation. episode drops Tuesday morning, so check it out. His father Yale Hirsch either created or discovered the Santa Claus rally as a seasonal pattern in the early 1970s and it’s part of a trifective of indicators that they will use, uh well, now it’s just Jeff Hirsch. His father has passed on, but he will use so that by the end of January, you have a pretty good idea of the S&P 500, where it’s going to close in December. Do you have uh gains or do you have losses? And so let’s take a listen to what he has to say about the Santa Claus rally.
04:30 Jeff Hirsch
It’s an indicator. It’s not some year end trading strategy. And what happens during that period of time is usually, you know, a lot of people are off and the pros are in there picking up bargain stocks that were sold for tax loss selling and the market tends to be up a modest 1 and a half percent. Um and when it’s not, it’s an indication that there were other forces that are at play, um that things might be a r. So, as Yale, the phrase that he invented or that he coined was, if Santa Claus should fail to call, bears may come to Broad & Wall.