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Stocks rally following post-Fed losses, inflation-fighting remarks

Yahoo Finance Live’s Jared Blikre breaks down how stocks are moving in pre-trading hours on Friday.

Video transcript


BRAD SMITH: Well, getting to today's Morning Brief. Stocks rallied back yesterday following some Fed induced losses on Wednesday. As investors are weighing Powell's hawkish inflation fighting comments, while also keeping in mind that the Fed is entering a wait-and-see mode, believing that its work is nearly done.

You can read all about this in today's Morning Brief, up on the Yahoo Finance home page. But for more, let's get on over to Jared Blikre standing by at the YFi Interactive. Jared.


JARED BLIKRE: Here we are. Remember data dependency? That's a phrase that we haven't heard in a while, but it looks like the Fed is moving back to that. And we've seen this breakneck pace of rate hikes over the last year, increasing them by about 475, 500 basis points, a huge amount for one year.

And I just want to point everybody to the YFi Interactive here. Over the last nine days, we have seen some incredible runs in the tech sector. The NASDAQ 100, if you take a look at these left-facing stocks here, we see a lot of the mega caps with some outside game. Alphabet up 16 and 1/2%. Meta up 13. Nvidia up 18 and 1/2%.

The bellwether Apple stock only up 7%. And it looked like tech stocks may have continued-- may have room to run here based on the fact that the Fed is kind of in a pause mode, but not really, waiting to see what happens next. Interest rates, meanwhile, have come down, and this has fueled the growth trade.

But what I want to point out there is that a lot of these trades have reached interim highs here that are a little bit overextended. Apple I think is a great example. You take a look at a one-year chart of Apple here. Actually, let me put this to two years so I can draw some longer term trend lines. But here we have right towards the top of this line here.

And we also have a trend channel. Suffice to say that Apple has reached an overbought status with respect to its RSI, not shown here, and into these potential resistance levels. So Apple potentially at an inflection point. And also I want to point out that the market's overall, you take a look at the NASDAQ, the S&P 500, we'll do the NASDAQ right here.

NASDAQ has been in a trading range over the last year. And here are some candlesticks so we can see the price action a little bit better. I'll put the lines back, and you can see, here is a range in the NASDAQ, basically 10,500 to 13,000 there. Until we break this range, nothing has really changed. And you take a look at what the Fed is typically done, what the markets have done.

At this phase in the business cycle, if we are expecting a recession, just keep in mind, we don't usually get the low, the big low until we're actually already in the recession. And we don't think that's happened yet. So a little bit of ways to work here until we get back to those highs, Brad.