Market check: Stocks open lower, Treasury yields fall

Yahoo Finance's Jared Blikre breaks down how markets opened on Tuesday.

Video Transcript

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BRIAN SOZZI: Let's get down to New York Stock Exchange and check in with Yahoo Finance's Jared Blikre. And Jared, Chevron ringing that opening bell down there. Any oil barrels, real life oil barrels down there, any photos?

JARED BLIKRE: Yeah, I hit an oil slick, but I recovered my balance. Nice interview with the Chevron CEO there. I'm looking at the YFi Interactive, not a whole lot going on in the indices, pretty quiet day so far. But I want to get to the bond market just real quick, because we're seeing another huge, huge drop in the yield curve.

And you can see that in the five-year, the 10-year, the 30-year, that's after dropping a huge amount yesterday. You can see the five-year down 8 basis points. Julie was noting this earlier. We were back in a territory we haven't seen in about a month, three or four weeks ago, so going to be tracking that. That is not good news for the financial stocks. And in fact, that is the only sector or one of the sectors in the red. It is down over 1%, almost 1 and 1/2%, so really taking it on the chin there but not some big-- not any big outsized losses in the other sectors.

Now, also looking at energy, crude oil, WTI holding above $100 a barrel, up another 5% or 6%, energy up 2% followed by utilities, real estate, staples. That's a defensive setup. And going back to the S&P 500, still hasn't been able to clear resistance over the last few days. So we'll have to see what comes of this. But all in all, kind of, in no man's land here for the S&P 500, especially given the range. You can see on this year to date chart just haven't been able to punch through $4,400 here, $4,500 really the big level. So we've got to see if any short sellers are attracted if we manage to punch up into that range, guys.

JULIE HYMAN: Hey, Jared, I know that you've been looking into some maybe misperceptions that are reflected in the market right now based on a note out from Goldman's Dominic Wilson. Where are those misperceptions?

JARED BLIKRE: That's right. And this is also somewhat contrary to a note from Director Marko Kolanovic over at JPMorgan, so I'll highlight. And I think it just speaks us to the fact that Wall Street really has some very strong differing opinions about the market. And that means that those opinions could be worked out in a very volatile fashion.

But let's go to the YFi Interactive. I have a couple of notes here from that Goldman Sachs' Dominic Wilson note saying, "We think the market might be underestimating the risk of tighter supply on oil pricing, we're just talking about WTI, which remains a key risk from the ongoing conflict. So we think that the risk premium, that's embedded in WTI, crude, and Brent, here should probably be larger," arguing for higher oil prices. And indeed, that's what we're seeing this morning.

Also, the second thing, "We think the market is starting to overestimate the impact that the conflict will have on Fed trajectory and so we think that the front-end rates are ultimately likely to reverse this recent rally." Now, when we talk about the rally, we're talking about the rally in bonds not the yield. The yields have been crashing. So I think they're arguing that we're probably overdone to the downside on this crash in yields over the last few days going to be revised to the upside.

I've been talking for a month now, are we at peak Fed? I've been asking that question. We might have passed that point and actually swung the pendulum to the opposite side where people are underpricing the risk of the Fed in the market right now. So really interesting to see that. Also JPMorgan, Kolanovic saying that the worst might be behind us on the sell-off. You've got to listen when Kolanovic gets bullish on the market. I would hasten to say that January 10, he also got bullish, didn't work out as well, guys.

BRIAN SOZZI: Oh, watch out for those oil slicks down there. You've got to be safe, brother. Jared Blikre, we'll check back with you later.