Market check: Stocks rise ahead of Fed decision, chip stocks jump
Yahoo Finance's Jared Blikre breaks down the sector action in early trading ahead of the Fed policy decision.
Video Transcript
- And here we're coming up against that opening bell here on Wall Street on Fed decision day. Ring, ring, ring. And here at the NASDAQ, we have Sonder, the travel destination company. We'll be talking to Sonder's CEO very, very shortly. Looking forward to catching up with them. A few months removed from their IPO down at the NASDAQ earlier on. Jared, we're also watching Micron, semiconductors catching a bid here the past two sessions. Nvidia, AMD catching that bid here. And Micron getting a nice upgrade, with one analyst looking for some pretty big upside.
- Yeah. And let's check out the YFi Interactive, where we're seeing a nice green board here for the semiconductors. Also a little bit of dark green there for Micron, which we're just talking about. Concerns over the stock-- excuse me. Concerns over chip makers. And let's get a year to date. Most of these names have been underwater. You can see down about 17%. DRAM. So memory exists and functions in cycles. And DRAM is very cyclical.
But also, we have the after effects of the pandemic to deal with. The bottom line is it looks like the industry is about to turn up. At least that's what the projections are. So if that's the case, should be kind of smooth sailing for here. Let me see if I can find the stocks itself. There we go. The index, the Philly chip index, is up 2%. But I just want to show you what's happened over the last three years. This is a very, very strong uptrend. And the NASDAQ looks very similar. And when it breaks, you got some downside action. It takes some time to repair.
No idea-- well, we can't say for sure if the bottom is in place right now. But if stocks were to turn up from here, we get some favorable comments by Jerome Powell later today that don't spook the market, as he has done in the past from time to time, it could be making another run at some of those highs there. So first major correction we've seen since the pandemic. And I would say it's not even a correction. It's a bear market. Having to see if we're going to find a bottom any time soon, Sozzi.
- And real quickly here, I'm looking at this note on Micron from Bernstein analyst Mark Lee saying, quote, "macroeconomic conditions were to blame for the recent sell off. And DRAM prices are likely to bottom out by as soon as the second quarter." Also coming out pretty bullish here, Jared, on SK Hynix and Samsung in addition to Micron. But of course, off a call like this, you have to wonder if other analysts on the street are looking to upgrade their estimates and ratings on other semiconductors that have been hammered during the sell off. But of course, we're still watching. All eyes are on the Fed on its decision later on today. And Jared, what are you seeing in the markets here in the early going?
- Well, let's go back to the YFi Interactive. And we have a broad-based rally underway here. We talk about sometimes the FOMC drift. What that means is the markets tend to, historically, they just tend to glide higher into the big announcement. We don't usually see surges like that. So let me break down the sector action for today. Materials in the forefront. That's up 1 and 1/2%. Financials close behind.
We've seen the yield curve expanding. We were talking about that with Liz Young. It's expanding a little bit, but still really depressed from historical levels. Also, consumer discretionary and communication services and tech, those are all up more than 1%. Those house the mega caps. And so nice to see those guys participating. To the downside, we have utilities. That's in the red for about 1/3 of a percent.
But I also like to look at some of my leaders here. We've got Kay Webb. We've been talking about the Chinese stocks, how beaten down they have been. Looking like a dead cat bounce here. But I'll also say that every major rally kind of begins with a short covering bounce. And we don't know if we have it just yet. But we'll probably get a resolution on that with the big catalyst this afternoon. Let's check out our travel board. I also like to look at that as an important sentiment indicator.
And we're seeing some-- well, check out this. Trip.com, which is a Chinese stock, a Chinese travel company, that is up 27%. You can still see it's down 44% over the last few years. But check out this two-day chart. That's a little hockey stick for you right there. Also want to check in on some of our other sectors here, particularly EV. We like to see what Tesla has been up to. It's only up about half a percent today. But not surprisingly, the Chinese stocks are in the forefront. We've got Li Auto up 25%, Xpeng up 20%, and NIO up 18%. Brian.
- Jared, you know what I'm thinking watching that board? Those are some electric moves. Electric moves in EVs, Jared.
- I like it.
