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Berkshire Hathaway, bank, insurance stocks hit record highs while homebuilder stocks and bitcoin sag

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Yahoo Finance's Jared Blikre discusses stocks related to insurance, banks, and Berkshire hitting record highs today while homebuilder stocks fall and bitcoin extends its losses.

Video Transcript

KARINA MITCHELL: We will now talk about what else is moving markets, and we'll bring in our Jared Blikre with more on that, starting with insurance stocks and bank stocks and Berkshire Hathaway hitting some records today, Jared.

JARED BLIKRE: That's right. XLF, the S&P 500 sector ETF, just hit a fresh record high. Haven't seen one of those in months. And the financials have really been on fire. This is what's happened today. As you said, all these stocks that you see on your screen, many of them insurance stocks, others banks, some of them bank trust companies, plus Berkshire Hathaway, which is, of course, a financial company mainly because of Geico, but also a conglomerate, all at record highs now.

Here's a five-day view. And we can really see the outperformance here. And of course, you mentioned the bond market, Karina. This is all concurrent with a very big steepening of the yield curve in anticipation of the Fed basically [AUDIO OUT] a little bit slower than previously hinted, but [AUDIO OUT] that hawkish turn with the Fed on Wednesday afternoon changed the dynamics a bit. But nevertheless, financials still outperforming the yield curve, still expanding for the most part. And off of the jobs numbers that we saw this morning, really more of the same.

So all in all, put it up to this is probably one of the biggest rotations that we've seen in the new year. Second place, I guess, tier I would hit with that is energy. Energy has really been the biggest winner. But so far, stocks like energy and banks have really been the story of the year, at least for the bull case, Karina.

KARINA MITCHELL: OK, and then Jared, homebuilder stocks on pace for their biggest weekly drop since 2020.

JARED BLIKRE: Yeah, and let's take a look at the YFi Interactive again. So it's kind of the opposite story for home builders. And this is another feature of the market that we've been talking about in 2022 so far, the haves and the have-nots. So the have-nots right now are the home builders, even Home Depot down about 5%. So this particular cyclical trade really not flying right now. Let's take a look at the biggest loser. This is Century Communities building retirement villages. And you can see a whole lot of sideways action.

A lot of these stocks were hitting record highs as recently as December. And that's XLRE. That's the real estate sector for the S&P 500 was hitting record highs as well. We also have low interest rates. But of course, those are marching higher. And that could be the reason why we're seeing these big declines here because higher mortgage rate means people aren't going to buy as many homes.

They're not going to refinance their home maybe as much to kind of make their home in ATM and use that money for home improvement. Here's another one. This is Lennar going sideways for the most part over the last year, despite these record highs that we had recently. All in all, just another part of the rotation that we've been talking about.

KARINA MITCHELL: And then, Jared, crypto really taking a bath ever since we got those Fed minutes, talking about perhaps accelerating the rate hikes as they come down and quantitative tightening. And then we see stocks like Bitcoin extending their losses.

JARED BLIKRE: That's right, and I have Bitcoin on the YFi Interactive right here. You can see, over the trailing year, up a whopping 6%. It ended up at the-- it ended 2021 with gains of 60%, but those gains from one year ago are now rolling off. There's a big spike from January into February. Actually, it started earlier than that, November of last year. But here's Bitcoin. I want to get to some of the price action on a candlestick basis. Here's a two-month chart.

And indeed, the other day on that FOMC announcement, we did get that break of support at 45,000. And we've been heading lower. 41,000 not really a significant number. I'm going to put a six-month chart so we can see where the real potential support is. Probably looking more like 40,000. Also hearing people say 38,000. So somewhere in here is going to be the real test. And of course, we do have those lows from the past year of about 29,000, 30,000. That's really the big number to watch here.