Jared Blikre of Yahoo Finance joins Asking for a Trend to share key takeaways from Wednesday's trading. We start off by talking about the divergence between the Dow Jones Industrial Average (^DJI) and the Nasdaq Stock Average (^IXIC) over the past five days. Blikre says the Dow Jones Industrial Average has been down while the Nasdaq has had a net gain. He attributes this change to the difference in Treasury yields and a shift in investors' desire for safety.
Bricle added that VIX (^VIX) volatility is on the rise, calling it an “official yellow light,” and that the bond market is also trending higher. He also discussed how the BlackRock Spot Bitcoin ETF (IBIT) has overtaken Grayscale (GBTC) in terms of total assets.
For more expert insights and the latest market trends, click here to watch the full episode of “Ask the Trends.”
This article was written by Gabriel Roy
Video Transcript
The market closed lower as a spike in government bond yields spooked investors.
Investor concerns outweigh NVIDIA's AI rally, with more from Yahoo on what to watch during the trading day.
The financial situation is very good.
Jared Brick, Jared.
Let's take a look.
Where do you start today?
Now, over the last five to 10 days, we've seen a divergence between the Dow and the Nasdaq.
So the Dow is under a lot of pressure.
The Nasdaq was under a little bit of pressure today, but net income was up, and I'll show you a heat map of the Dow over the last seven days.
This really shows you all the red numbers, and if you sort by performance, you'll see some of the big names here like Microsoft, Amazon, Walmart, and others.
And, in fact, we can see that McDonald's stock is down 8% over the past seven days.
United Health agrees.
Three M Boeing.
The list goes on.
Umm, why is this?
That's because we are seeing differences in government bond yields, and I think it speaks to the overall nature of how investors are approaching the market.
So last Tuesday was a defining moment of sorts.
Or, excuse me, the big moment was when NVIDIA's earnings were being priced into the stock price last Thursday.
We saw the entire market start higher and then sell off throughout the day.
NVIDIA alone couldn't save the day.
Now let's have a look at the price movement over the last 7 days.
Guess what tech xlk is.
number one.
Then there are communications services, which are essentially flat.
Everything else is in the red.
Why is the technology sector the only one to benefit?
Although yields are rising, I think that has more to do with the safe trade.
Investors are looking for safety right now for one reason or another.
Well, I think you know why semiconductors are the reason, because they're basically the only stock that's outperformed in the last seven days.
Now, here are some other markets that I'm watching. You can see solar stocks.
That's a whole other story, but the stock price is right at the top of its game and is really just soaring.
So when you see what you call unusual or unusual behavior, do you find that suggests something about the market in a broader sense and the direction we may be heading in the near future?
Yeah.
Whenever something seems out of harmony, we can call it a discrepancy.
Well, we're looking at the yield on the 10-year Treasury note here.
We talked for about seven days.
Well, guess what?
Over the past seven days, these yields have risen in the opposite direction to Wi Fi Interactive, found here.
Well, this paints a picture to me of investors wanting safety but building for some reason.
When I see these long-dated tech stocks being bid up, I scratch my head and think, “Well, maybe there's something going on.”
Perhaps the market is ready to pause here.
And I think that's exactly what we're seeing unfolding right now.
Okay.
What is Buri?
Point 2.
Now, let's talk about volatility, and this is the volatility of the VIX and the moving index.
So let me show you what happened with VICS as it pertains to stocks.
And that's what we're used to seeing.
If you look at this year-to-date chart, you can see that we've been paying attention there recently.
So for me that's a yellow flag.
This is Jared Bricker's official yellow flag, this is Jared Bicker's official yellow flag.
I think we have to do that.
I need to start working on the flag.
Is it a hat?
Yes, that's a good thing.
Enough about hats, because I love hats.
And one more.
You get volatility in the stock as well as the bond market.
This is the mobility index, which has also risen slightly recently.
This is consistent with the rise in yields that I was talking about.
This is a typical period, when you see increased volatility not just in stocks but also in bonds, it usually means that stocks are going to take a hit or at least get a breather.
And that is exactly what we are seeing.
Here's a look at the Dow Jones Industrial Average, the weakest of the major indexes.
This is down quite a bit from the highs seen just a few weeks ago.
Jerry, let’s take a stroll through the world of cryptocurrency.
Well, of course, because I'm going to tell you something really interesting is going on here.
BlackRock, IBIT.
That's their place.
The Bitcoin ETF has finally overtaken GrayscaleGBTC in terms of total assets.
Now, just to be sure.
Well, Grayscale has been around for almost 10 years now.
Well, but it was classified as a different kind of fund.
They converted to a spot Bitcoin ETF.
And that's what led to this photo.
here.
Here's a comparison of Grey Scale A assets vs. iShares assets year-to-date.
Basically, you can see that the spot Bitcoin ETF, which was offered by BlackRock through iShares pretty much from the beginning of the year, went from basically zero to rising and finally surpassing Grayscale.
Well, it's worth pointing out that Grayscale has high fees, so that plays a factor as well.
But the speed with which this happened is that it was only after just four months that we saw iShares rise to these levels.
That's faster than anything ever seen in history.
So I think the adoption of Bitcoin through this ETF is a key takeaway here.
While 401k adoption is still not as widespread as people had hoped, the amount of money being put into them is vaster than ever before.
And that's what I was going to ask.
Does this tell me anything?
Any advice on Bitcoin Ether?
It's just a long-term perspective.
Bitcoin is here to stay.
Okay, Jared, I liked the takeaway.
Thank you, my friend.
appreciate.
