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Stocks hit records after Congress certifies Biden win

Yahoo Finance’s Alexis Christoforous and Silverbear Capital Senior Partner Alan Valdes discuss the disconnect between markets reaching record highs and turmoil at the Capitol.

Video Transcript

ALEXIS CHRISTOFOROUS: Welcome back to Yahoo Finance Live. I guess the question is, can anything stop this market? Stocks hitting record highs again after Congress certified Joe Biden as the winner of the 2020 presidential election. And after that unrest yesterday at the Capitol, we have the Dow, S&P, and NASDAQ all on track for record closes. Jared Blikre joining us now for some of the movers today. And it looks like we have the new richest person in town is now Tesla's Elon Musk, taking that title away from Amazon's Jeff Bezos. What can you tell us, Jared?

JARED BLIKRE: Yeah, you said-- you asked what could stop this market. What can stop Elon Musk and Tesla right now? Now, they had switched places, this is Elon Musk and Jeff Bezos earlier in the day for that number one richest man spot, richest person spot in the world. And that was done, but then it reversed. And only within the last hour, Tesla has been making a run at it. And we've seen it climb to a market cap of $768 billion.

Now, there's another rivalry in play here, and that is between Tesla and Facebook for the number five biggest company in the S&P 500. And that was switching places earlier, but now the lead has widened out for Tesla. And that is $765 billion versus $768 billion. So Tesla, taking that spot there. And we'll have to see if it can overcome some of the likes of Amazon, maybe even Apple in the years to come. But that's quite a far distance to traverse right now, Alexis.

ALEXIS CHRISTOFOROUS: All right. Another day, I guess another record for crypto. Bitcoin now having a market cap of over a trillion dollars, Jared?

JARED BLIKRE: Well, this is-- yeah, the entire crypto market is now worth over $1 trillion. That's another milestone. Maybe throw Elon Musk and Tesla into that as well. But for the most part, Bitcoin hasn't been disappointing. Now, we have been seeing some incredible volatility here. After we hit $40,000 per coin, we retreated all the way below $37,500. And we've seen this. When it makes these big moves, these big spikes to the upside, they can be reversed pretty quickly. So here's a one-month view. And these don't look like much, but some of these are 10%, 15% corrections here. So volatility in Bitcoin remains.

And just looking at the rest of the coin complex, kind of a mixed picture. We see more red than green, but Ripple, Ripple's been making a nice comeback, too. Now, still down 44%. Had been down as much as 60%, 65%, over the trailing month, when those stories about Ripple and XRP came out. The SEC is suing them. We'll have to see how that ends, but over the last five days, Ripple making quite a comeback here. Up 50% of those lows.

ALEXIS CHRISTOFOROUS: Quite a comeback, indeed. Thanks, Jared. All right, let's stick with the markets now, and bring in Alan Valdes, senior partner at Silverbear Capital. Alan, always good to see you. So try to explain for us why there is such a disconnect between the riots we saw at the Capitol yesterday and this record day we're having on Wall Street. I'm scratching my head and thinking, I don't know, maybe it's because we've avoided gridlock now that we know the Senate has gone blue? What are your thoughts?

ALAN VALDES: Yeah, well, that's one of the main reasons is that now we have clarity. I mean, the market loves to have clarity among-- above anything. Yes, there was disgusting, it was crazy, shameful, really. But you know, that's a day behind us now. The market's always forward-looking. We have a vaccine out there now that's distributed [AUDIO OUT] among the public. The market looks strong, but this is done in a-- people say it's a "blue wave." It isn't a blue wave yet. I mean, first of all, Biden's not even in the office yet.

This is just a continuation of last year. We had a great year last year, when you look at everything. And I think there's a continuation that's going on right now. But again, there's a lot of positive to look at. Yesterday was horrible, but the country in general is a positive. We have a new president, he's in office, nothing's going to change that. So I think we're going to have a good year ahead of us.

ALEXIS CHRISTOFOROUS: And what are some of the sectors that you think can really outperform, with a Democratic Senate and with Biden in the White House?

ALAN VALDES: Well, you know, it's kind of early to really figure that out, because now, Biden has these tax plans. He wants to raise taxes, corporate tax and whatnot. If that comes through, I mean, that's going to hurt the market. So we really have to wait and see. A lot of politicians make these promises, but when they get into office, they change or they water it down. So we want to see, if the corporate tax gets raised, that'll definitely hurt the market. If you see minimum wage goes up, that's going to hurt unemployment, you're going to see those numbers get hurt.

Remember, right now, today's numbers were a little better than last month. So things are trending in the right direction there. Ever so slowly, but still trending in the right direction. So it's too early to call it a blue wave, and it's too early to say, where am I going to invest? Although I do like medical. I think medical is where you've got to be. I think tech, even though it's flying today, yesterday got clocked. Apple was yesterday, Google was down yesterday. Today, it's up. I would just stay on the sidelines. If you're in the market, stay in the market right now, but I would be hesitant to get involved in the techs. I think we are building a bubble in the tech industry.

ALEXIS CHRISTOFOROUS: You know, we keep talking about what can stop this market. Apparently, it's not a global pandemic. It is not unprecedented riots at the Capitol. I'm wondering if the Federal Reserve can stop things, Alan. What do you think? I mean, if inflation starts to heat up this year, and the Fed has to start moving interest rates higher, might that not, maybe not put the brakes on it completely, but start to temper the rally that we've been seeing?

ALAN VALDES: Sure. I mean, look at the 10-year. It's up over one right now. So maybe things are starting to edge up a little there. It could slow things down, but you know, we do a lot in Europe, and we're getting a ton of money flooding in from Europe. We're like the best house in the worst neighborhood. So I think that's going to continue for a while, now that the election is behind us.

And like I said, markets will have clarity. We know who's the president, we know what direction we're going to go in. And if anything, we have a Congress and a Senate behind this president, probably. So I think things are going to move pretty good, like your earlier guest said. Confirmations are going to move along. I think we're going to have a nice honeymoon period here, and we'll see what happens. But I think, in general, the markets are going to stay strong. And I don't see the inflation really picking up that much this year.

ALEXIS CHRISTOFOROUS: All right. Alan Valdes over at Silverbear. Always good to see you. Thanks, my friend.

ALAN VALDES: Thanks, Alexis.