Stocks trade lower at the open, bank contagion fears continue

Yahoo Finance Live’s Jared Blikre breaks down how stocks are trading following the opening bell on Friday.

Video transcript

- As we're taking a look at the opening bell on Wall Street, there you've got a live shot of the New York Stock Exchange and the opening bell on this Friday. As we're taking a look at Model N ringing the opening bell at the NYSE, this Market Check is brought to you and sponsored by Tasty Trade. Taking a look at the major averages here. Out of the gate this morning we've got the NASDAQ, the Dow, and the S&P 500 that we've been keeping close tabs on in the futures market just to see exactly where things open up. And taking a look at them now as we get trading underway on the day, we are down across the board. The Dow is lower by about half a percent. S&P 500, that's down by about 4/10 of a percent, and the NASDAQ is lower by 3/10 of a percent right now. For more on today's tape and at least the early activity that we're seeing thus far, Jared, what are you seeing on the interactive?

JARED BLIKRE: As you can see, it's a sea of red, but not any outsized losses. Dow down about 4/10 of a percent, 124 points. Still looking positive on the week, but only by about a 1/3 of a percent. You can see we peaked about mid week around hump day appropriately named. That looks like what it is on the chart there. NASDAQ probably looking at some better gains here, about 1%. A little bit more volatility, especially with Fed day. We saw that big decline after Jerome Powell spoke. And then we saw that uplift the next day. So it's been a seesaw week here for equities.

And let's take a look at what's going on inside the market. And here we have the S&P 500 sectors. Staples is the leading sector. Communication services barely in the green, so is utilities. Energy taking it to the downside. So are financials. We're going to talk about the banking sector in just a minute. But crude oil, by the way, not having the best week. We're also going to take a look at that within sra later on in the show.

And here are some of our leading indicators here. Just mostly red. Looks like Korean stocks down 2%, regional banks down 2, Bitcoin also down 2. MJ, that's a cannabis ETF, that's in the green. IPOs not getting too excited about that. And if we take a look at the NASDAQ 100, lots of red today. But let's take a look at the 5 day results. I was just showing you some outsized results for the mega caps over the last nine days. That goes back to last week. But here for this week we're seeing some decent gains. And Brad, I know you wanted to talk about Microsoft here. So that is down 8/10 of a percent this week, 17 basis points this week.

- Yeah, just lingering on Microsoft for a hot second. Of course, there is a few pieces of news around them. I saw trending on Twitter earlier today ChatGPT and Open AI, and they had published some updates of their ChatGPT plug-ins there. So that one element, of course, Microsoft an investor, a major investor in ChatGPT and Open AI for that initiative to really include some of that generative AI product within their own cloud services.

But then on the other side of this too, you've got the Microsoft and Activision Blizzard tie up that we're still waiting for even more news around. We got some more news on that this morning. UK's competition regulator saying that they've narrowed the scope of the investigation into this takeover of Activision and perhaps that competition won't be as hindered as once feared here. So taking a look at Activision Blizzard shares here, you've got that up on the screen too.

JARED BLIKRE: That's right. And you can see the premium, the takeover premium, has adjusted over time and it is right back to the upper range. I don't happen to know the takeover price, the original one that was floated, but it looks like it's right up against it and at least accelerating toward the upper end of the range here. So if the UK is easing up on its objections over the Microsoft deal to combine with ATVI, maybe the US regulators will approach the same way. And that's all about their use, their infiltration of the video console game market. So that's down to Holly's beat right there, so I'm not going to get too far into--

- Sometimes of beef, too. Sometimes a $39 billion beef deal.

- Sometimes a $60 billion deal, beef.

- Absolutely. Let's also take a look at the banks here as fears over the health of the banking system, they revive amid rising concerns of Deutsche Bank defaulting on its debt. We've got to look at some of the regionals as well as Deutsche Bank here. Let's start there, perhaps, Jared.

JARED BLIKRE: Yes. So this is just a three-month chart of Deutsche Bank. And what really stuck out to me yesterday was this big red candle. Because that indicates that happened during US hours. Now Deutsche Bank is a European bank. Most of the trading occurs between I would say the hours of 2:30 and before the equity market in the US opens. Now, Europe closes at about 11:30 for most of their exchanges, so there is two hours of overlap here. But when you see the majority of movement of a European stock taking place in American time, that tells you something is strange and that's what's going on here.

Now historically, that doesn't happen a lot. You'll see those one offs, but if you go back to the global financial crisis, and I guess we're going to go there or at least I'm going to go there right now, we had a string, we had all kinds of signals there where Deutsche Bank was just moving on the US market by huge amounts. And so that kind of for me is at least an indicator that things are potentially boiling up here. One instance doesn't make a trend, but I'm going to be on the lookout for more instances of that, Brad