Dow falls 100+ points a day after topping 30K for first time

Yahoo Finance’s Julie Hyman, Myles Udland, and Brian Sozzi discuss the market action with Investopedia Editor-In-Chief Caleb Silver.

Video Transcript

MYLES UDLAND: Let's stay on the markets and talk a bit about some stocks maybe that we haven't discussed too often this year, and they have done quite well amid this rally. For that conversation, we're joined now by Caleb Silver. He's the Editor-In-Chief over at Investopedia. Caleb, it's great to talk with you again.

Let's just begin, I suppose, high level, broadly, and you guys have a lot of interesting data in terms of what people are looking for, what search terms are surfaced. I remember writing a story-- I think it was four or five years ago-- about smart beta was the hot thing that year. I imagine it might be a bit more straightforward this year. What sort of trends have you guys seen?

CALEB SILVER: Sure. Our investors and our readers have been all over the place on our site because it's just been such a dynamic year for the market. So lately-- and we've been tracking this. We track it every week and every day, but since the election, they are looking up things like universal basic income, Joe Biden's tax plan. They're also looking for opportunities to invest in sectors that have been crushed like REITs, like electric-car makers that are on the rise.

So it's this combination of how is my personal finance situation going to play out in '21? Am I going to experience capital gains on my taxes? is my tax rate going up? to will there be a universal basic income? will we see that kind of a program? to how do I take advantage of the fact that the momentum is back in stocks right now in a big way? And our readers are all over the sectors that were beaten down and heavily interested, obviously, cryptocurrency. Like a lot of people expect that to be a Thanksgiving-dinner conversation again like 2017.

JULIE HYMAN: Yeah, except I guess now you're just having that Thanksgiving discussion with your children or people who live in your house with you.

CALEB SILVER: Yeah. Explain Ripple to an eight-year-old.

JULIE HYMAN: Right. I just want to mention real quickly that we just got some economic data coming out in the past few moments, including personal income and spending for the month of October. Income actually fell more than estimated, down 7/10 of 1%. Personal spending rose a tenth more than expected, up 0.5%. And we also got some inflation data, the so-called PCE deflator, which is a fancy way of saying it's a way of measuring inflation, and it's one that's preferred by the Fed. It ticked up to 1.2% in October as well. And then we also got consumer sentiment, the November final number coming in at 76.9, which is pretty much in line with the original reading.

But all of that said, Caleb, you know, it has been interesting, and we continue to talk about sort of people's personal circumstances versus the circumstances of the market or economic circumstances versus what's happening in the market. And so I wonder how that is playing out among your users and what they're looking for.

CALEB SILVER: Exactly that, their personal finances. Anxiety is a lot lower as it relates to the markets and investing. $30,000-- 30,000 Dow will do that for you and a huge rally like we've had. But people are concerned about their personal finances, so we do see a lot of searches for foreclosure, for forbearance, for bankruptcy. And that is people looking into their own personal economies and wondering how are they going to be if this continues on or if they've suffered some hardship over the past few months.

That savings number you mentioned is a very big deal. People have been saving throughout the pandemic, throughout the summer. A lot of that was those stimulus checks. As you know, those have run out. We have other programs expiring at the end of December. People are reining it in a little bit in terms of spending.

And the concern, as you all know, is spending going into the retail holiday season, which is going to be a little bit higher in some places. But if we get that real pullback in consumer spending, you know what that will do to GDP and to the markets overall.

BRIAN SOZZI: Caleb, you can just feel the excitement on Wall Street even though, for us, we're still stuck in our homes and we're not even on Wall Street. But Dow 30,000, lots of excitement there. Do you see readers on your platform searching frothy-type stocks, those real momentum names that are probably getting caught up in this Dow 30,000 move?

CALEB SILVER: Absolutely, and we've seen some stocks that they've been searching which are a lot of the popular ones, the stay at homes, the Pelotons of the world and also the Shopifys and others, but we've also seen this stealth rally in some stocks that we're not even paying attention to.

Three that come to mind immediately are other Utz Brands, the potato-chip company. The stock's up some 100 odd percent this year, 140% this year. Look at Otis Elevators. We have a commercial-real-estate disaster going on here, but Otis Elevators is making all-time highs.

And then we see other stocks that are also doing similar things that nobody's really paying that much attention to. So I look at a Berkshire Hathaway beat. Berkshire Hathaway, the big conglomerate obviously, very heavily invested in the equities. The B shares hit an all-time high this week. And then we've got Dunkin' Donuts, Dunkin' Brands. That's the stock that's up 100%. Utz is up 101%.

So this mix of different sectors rallying, good sign for the overall market. But these are sleeper stocks that not a lot of folks have been paying attention to, but we see some interest on Ivestopedia.

JULIE HYMAN: Yeah, that is interesting. People have also been interested, as they usually are, about ETFs, and you've been tracking sort of the top ETF creation that we've seen as well and then top interest there. What are you seeing?

CALEB SILVER: Yeah, so we started tracking-- we track it all the time. But as of a couple of weeks ago, I wanted to see what was happening since the election and since November 16 when Pfizer dropped that good vaccine news, and the big are getting bigger here. We're seeing it in BTI, the big daddy Vanguard Total Stock Market Index, the most creation. It's also the biggest ETF-- one of the biggest ETFs out there. But also the IVV, the iShares Corp. S&P 500 ETF.

But then you've got to look internationally because emerging markets have been on absolute fire here. EMB, the iShares JPMorgan Asset Management ETF, on fire. And XLI, the industrials-- as the industrials and the cyclical sectors have rallied, we've seen a lot of creations in these ETFs that really didn't have a lot of attention for most of this year.

So we're seeing this broad-based rally, and you see ETF buying with that record amount of inflows into equities over the past two weeks. $73, $74 billion coming into stocks.

MYLES UDLAND: All right, Caleb Silver is the editor-in-chief over at Investopedia. Caleb, great to talk with you this morning. Have a great Thanksgiving, and we'll be in touch.

CALEB SILVER: Thank you. Same to you all.