Market check: Stocks down at open, software sells off, energy rises

Yahoo Finance's Jared Bilkre reports on how stocks are performing at market open.

Video Transcript

JULIE HYMAN: And there's a lot to watch, Jared. We have bond yields rising to their highest in quite a while. We have oil prices at their highest, what, since 2014, all of this seeming to put some pressure on the overall market.

JARED BLIKRE: Yeah, it's another day and we're telling the same kind of story here. I do want to focus on this Microsoft deal, just a couple of quick notes here. And I have some quotes on the YFi Interactive.

So I'm going to sort by performance. We can see in the upper left Activision up 32% in the premarket. And you were mentioning some of the other gaming firms. Electronic Arts, that's number two, that's up 6%. Then we have Playtika, that's up 4%. By the way, they got some love from that Zynga-- excuse me that Zynga news the other day. Also, Take-Two is up about 3% there.

And you take a look at what's happened over-- I'm going to take these quotes off and you take a look at what's happened to software over the trailing two months, these companies are on sale. So I think there could be more merger announcements out there because anytime you see software dip about 20%, that's kind of a mean reversion signal. So, all in all, going to be interesting to see what comes of this, if there's any more consolidation in this space, which has really gotten hammered over the last few months here.

Also want to check out the electronic vehicle space because we did get some news. GM is launching an auto parts marketplace for it looks like 45,000 different parts. Consumers can pick them up at any of 800 dealer locations. And General Motors is-- well, General Motors is a stock that has been up 18% over the last year. Blink also partnering with them to deliver charging stations, so interesting to see this space too.

JULIE HYMAN: Indeed. And we're just going to pause for a second and take the opening bell on this Tuesday morning.


So there we have the opening bell on this Tuesday. Again, it's a holiday shortened week, of course. Markets closed yesterday for-- to mark Martin Luther King Day. And as we resume trading here on this Tuesday, it does look like we are going to see some drops here at the open, the NASDAQ usually the last to open up because it's the largest of the three averages in terms of its number of members. The Dow and the S&P both trading off by more than 1%. And looks like we're going to have the same-- and indeed we do-- 1 and 1/2% down for the NASDAQ.

And Jared, again here you were just looking at those electric car-related and just generally auto-related stocks-- big tech has been feeling the brunt. I mean, you saw software and then you showed very well that sell-off that we've seen in software stocks. Big tech broadly-- every time we see those bond yields creep up, big tech seems to get smacked.

JARED BLIKRE: Yeah, that's definitely a great observation and, kind of, one of the themes here of 2002. Let's take a look at the YFi interactive, got the NASDAQ 100 heatmap. We're seeing Alphabet, Microsoft, down 2%. Tesla and Amazon, each down about 2% as well. Facebook a little bit more and Nvidia off 3%.

But I think the story-- I was just-- I got to this briefly before the break. Software tends to mean-- revert when it sells off 20% unless there's a bigger crisis. So the tech bubble would be one, global financial crisis, COVID. But if this is a normal correction in software, this is a time to buy.

Now looking at some of the names that are weak on this list, it looks like Chinese names getting hammered once again. We see Alibaba down there about 4%, JD down 3%, so is Pinduoduo. But just thinking about the tech space here, I was reading the B of A Global Fund Manager Survey. I love it when it comes out each month because it polls some of the largest asset managers around the world. They are overweight value and tech-- excuse me, they are overweight value and underweight tech to the largest and lowest levels, respectively, in years.

So we're seeing a little bit of weakness in banks today. That's kind of an earnings story with Goldman Sachs off 6%. But normally we would expect the value trade like energy to outperform and indeed that's what's happening today. So the pain trade, that tells me, guess what, if we see a rally in tech and we were to see value sell-off that would be a big pain trade for Wall Street.

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