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Market check: Stocks mixed as tech remains under pressure, crude oil dips

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Yahoo Finance’s Jared Blikre reports on how stocks are trading Tuesday morning as a slump in Big Tech stocks continues following President Biden's Fed chair pick, plus the moves in the U.S. dollar relative to the Turkish lira.

Video transcript

[MUSIC PLAYING]

- Welcome back to "Yahoo Finance Live." Let's head down to the New York Stock Exchange and check in with our very own Jared Blikre. Jared.

JARED BLIKRE: Well, I'll tell you what, Brian, I'm looking at some of the moves in the market, and it's a tale of have and have-nots, as we've seen. Just look at the retail sector that you've been talking about today. But specifically, I'm talking about breadth inside of different markets, inside of different indices. In the S&P 500, we have a large degree of those stocks still trading at or near record highs. If you take a look at the equal-weighted S&P 500, that's been making record highs recently.

Opposite story for the NASDAQ, where you do not have a lot of participation. And if you don't have the mega-caps going for you-- and let's just pull up the NASDAQ 100 heatmap on the Wi-Fi Interactive-- if the mega-caps aren't performing, that means the NASDAQ is vastly underperforming. Really not enough weight behind a lot of these other names to keep it up.

So that presents a little bit of a problem going forward, but we are also in one of the most seasonally bullish times of year. So I think the dips are going to be bought. We could have some nasty ones, any day, one-day or two-day event. But I think those are going to be bought. And we'll have to see if anything comes of the market this Friday. Usually a very, very sleepy, quiet day, thank goodness.

Looking at the sector action, we have the value trade in full force today once again, just like yesterday. And that is on the back of higher yields, the entire yield curve shifting higher once again. Energy in the forefront. That's up over 2%. We can talk about crude oil in a second. But financials up half a percent. And as we see higher yields, we're also seeing a contraction-- not a contraction, a flattening of most places in the yield curve.

Taking a look at the travel sector, kind of a bounceback from yesterday. Really nice to see, as we have increasing fears of lockdowns in Europe. But not being displayed here on our travel heat map. You can see Delta Airlines and Carnival, Royal Caribbean each up more than 1%.

And finally, we'll take a look at the banking sector. That's been on fire recently. The Fed is helping that situation out. In fact, I'd say the narrative right now is the Fed. And it kind of gets back to the US dollar and crude oil and all that other good stuff.

- Well, let's talk about all that other good stuff, because as we see this movement in the dollar, there are some other things going on that we should flag. First of all, we also had the confirmation that the US is going to release some oil from the Strategic Petroleum Reserve, along with other nations, and yet oil is going up, which is not necessarily what you would expect. And then the Turkish lira is getting attention once again. And I guess all of this is sort of intertwined with the dollar action.

JARED BLIKRE: I think so. And just because we have a stronger US dollar, it doesn't mean that things are bad. It just means that certain assets are going to perform better than others. And we get-- when we get a really big movement like we have in the US dollar-- and let me just pull up that chart on the Wi-Fi Interactive-- here's a year-to-date look. And we can see a really big break to the upside only recently. And I think there is a lot more to go. And if that's the case, we're going to see more disruptions.

A higher dollar is a hedge-- it's not a hedge, it's a check against inflation. And so good for the US, in that regard. And it's probably going to be on the top front of people's minds because we're going to see a rising US dollar is not necessarily a friend of the administration. The administration likes a lot of things, but not necessarily a stronger US dollar, but maybe not inflation even more.

So let me just go to a chart of crude oil. I think I can explain the price action simply based on technicals here. Doesn't want to-- there we go. We've basically been in a trading range between $75 and $85 for about the last, I don't know, two months here. You can see this was an important inflection point. That's when we hit 75 and lifted off. And so not surprising to see this. I was talking to Bob Iaccino last week about the technicals, and he said we're probably going to come down and see 75 before we go back up and see 85. And I think we're just trying to establish a trading range right here.

But the US being able to get a bunch of other countries involved in the Strategic Petroleum Reserve release-- and that would include India and maybe China-- that's a fairly big deal in the short term, but there have been a lot of rumblings over this over the last few weeks, so it could be priced in. We're talking about flows of maybe a million extra barrels per day. And that's not nothing to-- that's not nothing, but the time period is probably only a month or two. So this is kind of a stopgap effect, and we'll have to see how it plays out.

Finally, on the currency side, the stronger US dollar because of the Fed, because of the Fed raising rates, making the US dollar more attractive for those higher rates, guess what? It is not having the greatest effect on the Turkish lira, along with other emerging market currencies. And we can see a 9%-- 8%, 9% move in one day in a currency is absolutely huge. And you take a look at what's happened over the last month here, 30%-- let me change this chart, there we go-- 30% loss in the purchasing power versus the US dollar.

And this is a country, Turkey, that saves-- or excuse me, that has a big part of their national debt in US dollars. They have to pay this back. And so this is creating huge pressure. I'm not saying that it's hyperinflation yet because I think that word is overused, but approaching that point, hyperinflation simply being when there is a crisis of confidence in the currency. And that's when you see it really go into overgrowth-- overdrive mode.

- Jared, your vast market knowledge never surprises me. Appreciate your hot take on the Turkish lira. Jared Blikre, thanks so much.

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