U.S. Markets closed
  • S&P 500

    3,768.25
    -27.29 (-0.72%)
     
  • Dow 30

    30,814.26
    -177.24 (-0.57%)
     
  • Nasdaq

    12,998.50
    -114.10 (-0.87%)
     
  • Russell 2000

    2,123.20
    -32.15 (-1.49%)
     
  • Crude Oil

    52.04
    -1.53 (-2.86%)
     
  • Gold

    1,827.70
    -23.70 (-1.28%)
     
  • Silver

    24.83
    -0.97 (-3.77%)
     
  • EUR/USD

    1.2085
    -0.0079 (-0.6526%)
     
  • 10-Yr Bond

    1.0970
    -0.0320 (-2.83%)
     
  • Vix

    24.34
    +1.09 (+4.69%)
     
  • GBP/USD

    1.3583
    -0.0057 (-0.4143%)
     
  • USD/JPY

    103.8710
    +0.0290 (+0.0279%)
     
  • BTC-USD

    37,308.31
    +290.03 (+0.78%)
     
  • CMC Crypto 200

    701.93
    -33.21 (-4.52%)
     
  • FTSE 100

    6,735.71
    -66.25 (-0.97%)
     
  • Nikkei 225

    28,519.18
    -179.12 (-0.62%)
     

Market Recap: Wednesday December 2nd

The S&P 500 turned slightly positive intraday on Wednesday after opening lower, as traders paused after Tuesday’s rally. Energy shares led gains as crude oil rebounded from a day earlier. Sam Hendel, Pres. of Levin Easterly Partners and Bill Baruch, Blue Line Futures President, joined Yahoo Finance's Jared Blikre, Seana Smith, and Adam Shapiro to break down today's market action on Yahoo Finance Live.

Video Transcript

SEANA SMITH: We want to bring in Sam Hendel. He's the president of Levin Easterly Partners. We're also joined by Bill Baruch, president of Blue Line Futures. Bill, let me go to you first, just in terms of, you can see, obviously, how important stimulus talks are to the market today. We can see that flipping the Dow from negative territory back into positive territory. What's your reading on that, and how optimistic are you that we're going to get a deal done?

BILL BARUCH: Thanks for having me on. I do think that we will have a deal. And but the problem is, the market is already anticipating it. Now I am bullish, and I think the path of least resistance is higher for stocks. But one thing, again, what are the market's expectations? And that $2 trillion headline that everybody had for months is now dissipating. And the market's going to have to settle for a bit less. And then when they do get it, is it going to be a buy the rumor or sell the news event? So those are things that are going through my mind when I'm trying to manage risk.

ADAM SHAPIRO: Sam, I'm going to come to you in just a second, but we've got to get to Jared because we're literally about 50 seconds to the closing bell. And Jared, you've got your eye on what, because the markets were negative at first, but they went green about two hours ago.

JARED BLIKRE: Yeah, broadly constructive action here. About average volume, not that much range for the day. Just kind of setting up for what most traders and market participants have been projecting to be the Santa Claus rally, broadly extended through the month of December, early January, if history holds here.

But we are seeing some weakness in the EV space. Tesla underwater for about 3%. Some of the other stocks in that space have come back. Li Auto down only 32 basis points right now. It had been deeper in the red. Nio up over 5%, XPeng up over 6%.

Also taking a look at the semiconductor space, that's been really hot over the last two days. Let's just check out that two-day price action. Micron up 8%, Lam Research up nearly 6%. So heading in with some strong names in the tech sphere today. And here's the closing bell, guys.

[BELL]

ADAM SHAPIRO: All right, we are waiting for the markets to settle, with the Dow up over 50 points. S&P 500 should settle around up six points. NASDAQ maybe not, off about 5 points. Russell 2000, by the way, is going to settle off about six points. And the sectors that were in the green today, we were talking about energy not too long ago, but financials, healthcare, as well as communication services.

So let's bring Sam into this, because one of the things that is on everybody's mind is the vaccine and healthcare. But if you're going to make a play with healthcare, would you be better now to go direct to, say, a pharmaceutical stock, or would you might want to look at the airlines and the shipping companies and the cold storage companies that are going to have to transport and get this vaccine to us?

SAM HENDEL: Well, it's a great question because the healthcare companies, in particular, the pharmas, are going to be the ones who are really going to start getting the economy moving again. But it's a situation where they're the ones who are doing it, but the other companies are going to benefit more. They are these cyclical companies. They are the airlines. There is other companies that really have a lot of the juice coming from the world getting back to normal.

And I do think that long term, there's going to be a tremendous amount of money that remains within the healthcare sector. And this is sort of the-- you know, COVID-19 is really what September 11 was for defense and security. The amount of money that's going to go toward vaccines, towards diagnostics, is going to be huge over a long period of time. But in the near-term, it's really those cyclicals that we think are going to outperform.

SEANA SMITH: Bill, when it comes to the market, I think there's lots of questions as we see this rise in COVID cases. The jobs report that we're going to get later this week, some saying that we could even see-- potentially see a negative number. How big of a risk do you see this being to the market?

BILL BARUCH: I think in the near term, it's going to help gyrate the market. But overall, I do anticipate a steady recovery in jobs. And that's been a tailwind overall. And what we've, in fact, seen is better data has actually taken some steam out or not much steam at all, the dollar. But it's taken the dollar lower. It's been actually a risk on for the market.

And that's really what I'll be watching, is, how does the dollar react to the jobs report, because the dollar's really breaking down through some pretty crucial levels, and that's been a tailwind for stocks all year long. It's been the sacrificial lamb, if you will. So I think that's where we want to keep a pulse on. And but steady job growth-- or steady job recovery is really what's going to be important to kind of keep the market satisfied.

SEANA SMITH: Sam, what do you think? Do you agree?

SAM HENDEL: I do think that, you know, in the near term, it's going to be a very choppy period for the economy, where we have, you know-- as stock pickers, we're really looking toward, you know, what's going to happen with the distribution of the vaccine. And, you know, it's really the long term is what really counts for, in particular, for your mid-cap and large cap stocks that certainly do see, you know, the light at the end of the tunnel here. And I think that's going to be-- our focus is more on, really, 2021 numbers, 2022, and how quickly we can get the vaccine moving.

SEANA SMITH: Adam, it seems--

ADAM SHAPIRO: Sorry about that.

SEANA SMITH: --like you are muted, Adam.

ADAM SHAPIRO: Yeah. Sam, what do you think about clean energy?

SEANA SMITH: Got it now? OK.

ADAM SHAPIRO: As we get out of the pandemic, we're going to have a new administration that's going to be pushing heavy into clean energy. And it seems to me is that, for some-- I mean, forget Tesla and EV, because that's expensive right now, but there are other plays there that are affordable and that you can get in on.

SAM HENDEL: Yeah, I mean, one stock that we really love is General Motors here that is participating in all the electrification of auto and doesn't have the same multiple that Tesla has. I think I talked about it the last time I was on the show, guys. But in general, I think the Biden administration is going to focus on clean energy. It's going to be on renewables.

Now, a lot of this was already happening. And you've really seen that in utility land, where the utilities that have the highest multiple are the ones that are the most focused on green, on solar, wind power, battery storage. And I think there's going to be a lot more money that's going to focus on these areas under Biden. The corporates have already been moving in this direction. And now you have the potential for the government to be doing the same thing.

And that really does bode well for, you know, a real focus on climate change, on clean energy. And there are a lot of stocks that are high flying. But I think there are other companies that don't have the same multiple that also have a value bent. And we're focused on finding those and having that optionality on clean energy.

SEANA SMITH: Bill, we've seen some rotation back into these growth names that have fallen behind over the last couple of weeks. I mean, we see the NASDAQ 100 closing at another record high, S&P back at a record high. Apple is one of the leaders earlier this week, as well as Amazon and Google, at a new record today. Are you-- do you think some of the rotation here that we thought was maybe going to stick into those value names was a little bit too soon to call?

BILL BARUCH: You know what? I like the value names, and I don't think you need to leave tech on the sidelines. I, you know, have really increased my exposure in industrials through October and November, looking for some really good value out of some good balance sheets as the vaccine narrative or, really, the new year starts to bring a tailwind to a lot of those stocks.

And another thing, though, is, tech is really breaking out a lot of these-- as well. There is going to be higher prices, and there's some really good chart setups. Maybe not the Salesforce breaking down, but Apple, which I like Salesforce a lot still, but Apple has a really good chart setup. So there's some names you can pick and add exposure or even trade them with some-- I bought some call spread options with Apple earlier this week.

And I think that's-- stuff like that, you can look at riding tailwinds, riding some strength, where this market is. Because I think we are trending higher, but you're also using options to define some of your risk when you're adding that exposure.

SEANA SMITH: All right, Bill Baruch, great to have you back on the show, president of Blue Line Futures. Sam Hendel, president of Levin Easterly Partners. Thank you both so much for joining the show today.