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Stocks trade lower as investors await Fed meeting

Yahoo Finance’s Jared Blikre joins the Live show to break down how stocks are trading ahead of the upcoming FOMC meeting.

Video Transcript


BRAD SMITH: Welcome back to "Yahoo Finance Live" this morning, everyone. Major averages are in the red across the board. Let's bring in Yahoo Finance's Jared Blikre for just a preview of what we're kind of teeing up for this week and what the markets may be most reactive to.

JARED BLIKRE: Well, like many people on this show have been saying this morning, it is our Super Bowl week. We have tons of earnings. We get Apple earnings. We had a bunch of important ones last week. Tesla out of the way, but some other big names, as well.

And then, for me, a Fed is gonna be front and center here. Is it gonna be one more 25 basis point rate hike? Is it gonna be two? I think we're gonna get some more color on that. And let's just remember that the Fed doesn't necessarily like to see stocks up.

And so if we get into that press conference at 2:30 PM on Wednesday afternoon and stocks are flying higher again, well, Powell might just decide to pour cold water over everything. Now, does that mean the rally is over? I don't think so.

There's a lot of positive signs here. And whether or not the low, the big low is in or not, I think some sectors-- for some sectors at least-- the low is in. So you look at the breakouts. Now, the Russell 2000 broke out last week. So did the NASDAQ above some potential resistance there. The 200-day moving averages have been in play. S&P 500 broke out of that. 4,100 still a level for the [INAUDIBLE] that they have to climb out of.

But the breakouts have been more than the breakdowns right now so we've got to pay attention to that. And even if we had down in February or March, I think we're gonna at least test these lows. But some stocks are just gonna be up, up, and away from here. And that's what happens at the beginning of bull markets.

People say, well, this has all been a short covering rally. Yes, it has been a short covering rally. But guess what? That's how every single bull market begins. They transition into quality names but they always begin with a little bit of hesitancy. And, well, you know, it's the market's job to kind of keep people out of the market and making the wrong decisions. So I'm just here to say that I think we've got some plays that we should be paying attention to right now.

BRIAN SOZZI: And Jared, speaking of breakouts, since mid-January Bitcoin has been on absolute fire. But looks like we might be getting a breather here.

JARED BLIKRE: Yeah and we-- I was talking to a guest on Friday afternoon about Bitcoin and how levered it is to the Federal Reserve. So I think this is going to be a huge week for Bitcoin because whether stocks are up or down on a Fed announcement, guess what? Bitcoin is usually leading the way up or down by an even larger amount.

So if you take the most sensitive risk asset to leverage, which I believe is Bitcoin right now, I think that's gonna be the market to watch this week. Because if at 2:45 or 3:00 PM, we're seeing Bitcoin head lower, guess what? Stocks are probably gonna fall or if they haven't already are gonna be following.

BRIAN SOZZI: Good point, Jared Blikre. Thanks so much. Appreciate it.