Stocks edge higher, energy leads amid OPEC production cuts

Yahoo Finance’s Jared Blikre breaks down how markets opened on Monday.

Video Transcript

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JULIE HYMAN: You're watching "Yahoo Finance Live." Markets are in the green. Let's get to Jared Blikre as September trading begins in earnest here.

JARED BLIKRE: Yes, in earnest. Well, we had two days before this, but did they really count? Well, traders are coming back to their trading desk. So let's take a look. We got everything in the green here. The Dow is leading up about 143 points. Just let's take a look at three days into September. And you can see, we are up a whopping 1/2 a percent. So lots to get through here today.

And let's take a quick look at the sector action. We've seen energy leading or lagging. We can see it's leading today. We're gonna get to some comments on OPEC+ in a minute. But that is also followed by materials, and then utilities, financials, real estate, consumer discretionary, and industrials all of those are outperforming. So not a huge rally to begin the month, but I think traders will take it.

And here we can see in terms of our leaders in sentiment. BETZ, that is a gambling ETF, as well as solar energy, regional banks, Momentum, those are outperforming. Whereas to the downside, Chinese stocks, which have been either leading or lagging most days, those happen to be to the downside-- leading to the downside today, as well as ARKK components.

Let me take us back to a bigger picture view of the S&P 500. So here, we are just coming off of these mid-August highs there. Now, we have sunk to what are now oversold levels. You can use this, an indicator like RSI or some other ones. But we have gone from overbought to oversold in a very short period of time. And this could be a time when markets want to reverse. We don't know if that's the case but there is a potential for that.

Now, to the downside, I was just looking at some commentary by Mike Wilson over at Morgan Stanley. And he's saying 3,400 is in the cards. 3,000 in an extreme bear case. You can see that's 1,000 points in the S&P 500, another 25% off from where we are. So lots of opinions on the Street here.

Just want to get to a few more indicators. We got the VIX, that is slightly elevated from Friday's level. Still above 20-- above 25, for that matter. But not poking through these highs we saw here when equities took that tumble a couple of weeks ago.

And then just thinking about seasonality here, we do tend to have September as a relatively flat month in terms of the midterm election year. But then kind of taking off later in the month. Why is this? It could be the fact that we are in an earnings vacuum right now, as traders get back to the desk. And you have to ask yourselves, what catalyzing moment is there today for a trader to unwind their existing portfolio and establish new positions? I'm not seeing it, guys. So I think we're all just waiting for that next catalyst. Probably going to be those CPI prints that we're waiting for and then the Fed.

So here's a bond market, 10-year T-note yield. That is up 7 basis points. More volatility in the bond sector. Let's take a look at the Bank of America MOVE index. Now, this is as of Friday. Well, we can see that it has been more or less on an upward tilt over the last few weeks.

BRIAN SOZZI: Jared, you're also watching the selloff in commodities.

JARED BLIKRE: Yeah, and I'd be remiss if I didn't tackle the US dollar first. So here is the US dollar index. It's up a 1/3 of a percent today. Notably, this is another 20-year high. Take a look at this max chart right here, pushing up against levels we haven't seen since the dot-com bubble burst.

Now, you asked about WTI? Well, we got some news from OPEC+ over the weekend. And guess what? They are not standing pat. They are actually cutting production by 100,000 barrels per day. This was, as you mentioned earlier in the show, Julie, it was alluded to but not fait accompli. For their part, Russia was-- and I'm trying to find the crude oil ticker. I think from Brent there, I'll take that.

You can see still depressed from Friday's levels. This is actually Sunday's levels, opening levels. But nevertheless, in the green for about 84 basis points. As I was saying, so Russia was against this cut. They were saying they wanted pricing power. Nevertheless, the Saudis cut their price to Asia overnight in a move that was largely telegraphed. Needless to say, lots of wrangling over oil and gas prices here as we head in to those midterm elections, guys.

BRIAN SOZZI: Jared Blikre, thanks so much.