Market Recap: Thursday, August 13

The markets closed mixed with the NASDAQ the only index in the green due to the technology sector renewing its run of outperformance. The Final Round panel discusses the latest.

Video Transcript

[BELL RINGING]

SEANA SMITH: Welcome back to "The Final Round" here on Yahoo Finance. I'm Seana Smith. You just watch the closing bell here, and stocks closing the day mixed. We have the Dow well off its lows of the day but off just around 3/10 of a percent. The S&P also closing in the red just around 2/10 of a percent. And the NASDAQ the only major average here eking out gains, pushing further above 11,000. It's interesting how the NASDAQ, coming off its best day in about 3 and 1/2 weeks, is still holding onto gains there.

I mentioned some of the losses that we saw in the Dow today. Cisco a huge underperformer. We brought you those breaking earnings results after the bell yesterday. That stock off just around 11% today on their disappointing earnings guidance. That's something that investors took issue with today.

Exxon and Walgreens also off just about 2%.

Taking a look at some of the sector action today, energy with the big decliner, off more than 1 and 1/2%. We also saw some weakness from real estate and financials. On the flip side, communications services, technology, and consumer discretionary bucking that downward trend.

On the data front, we have to talk about the jobless-claims number that we got out this morning, falling to less than a million for the first time since March. Not having a huge impact on the market, though, because, historically speaking, it's still a very high number.

I want to bring in my cohost for the next 30 minutes. I'm joined by Myles Udland along with Yahoo Finance Editor in Chief Andy Serwer, Akiko Fujita, and Rick Newman. And, Myles, taking a look at today's action, we didn't drift too far from the flat line, but Dow and S&P both moving to the downside. So what stands out to you in today's action?

MYLES UDLAND: Yeah, kind of a choppy day. And I do want to make Jared Blikre happy. Got to mention the bond market. That was really where we've seen the action in the last couple of sessions. I think we got into the all-time low earlier in the program. Jesus came up at some point there.

But basically, look, we have a back up here in yields from south of 50 basis points now north of 70 basis points. And a move of that magnitude in just a couple of sessions is going to upset some parts of the market-- of course, financials. We've talked so often about how bank stocks can't really get their act together.

And just thinking about-- and we were talking about this on yesterday's program. Two days ago, I think we had Jim Bianco on. He was talking about, look, the impact a 1% 10-year yield could have on the market is probably not appreciated. And obviously on a percentage basis, you know, that's almost a 50% move higher from here, but it's only 30 basis points of actual effective yield on the 10-year. The record low heading into the pandemic was 138 on the 10-year. It's not crazy we could get back to a 1 handle on the 10-year, especially if we're betting on better economic growth ahead. And that would certainly change the character of the market, and I think we've seen some of the outlines of that in the last couple of days.

SEANA SMITH: Yeah, and that's interesting there because, Andy, we've been talking about some of this rotation that we've been seeing in the market and, outside of some of the leadership there, the rotation out of tech names back into some of these other cyclically sensitive sectors. That seeming to cool a little bit today. So it's interesting here when we try to identify where investors are really finding the most opportunity at this point.

ANDY SERWER: Yeah. The other thing we've been talking about besides rotation though, Seana, is the safety trade and the fact that tech is the safety trade. Paradoxical to people like myself who have been watching the market for decades, but, in fact, that has become the case during COVID, as we know. So maybe not surprising to see those stocks doing well.

And the news today-- you know, the headline, well, the jobs number broke the 20-week streak of over a million. I don't think our long national nightmare is over with that number. Plus the stimulus gridlock is a real problem. And I think that really potentially does not bode well for equities.

And then my final thinking here top line is Cisco that you mentioned, Seana. And, you know, jeez. You would think that this company with all the trouble that Huawei has would be making hay right now, but they're not. They've had a number of quarters that have disappointed investors, and it's really been a tough time since last summer for Cisco shareholders. And I know Chuck Robbins over there, the big guy, must be feeling some heat and probably not happy right now because with the rest of tech going up, he doesn't like to be falling behind and not with that pack.

SEANA SMITH: Yeah, and that certainly is interesting here when you take a look at the fact that we saw Cisco off just around 11% today. So a massive drop, and I think a lot of the focus was on its weaker guidance that it issued there during their results.

But, Akiko, sticking with tech a little bit because Apple was one of these names that I want to talk about, but I want to get your thoughts just on this potential backlash. I know you and I have talked about this in the past, and the story in the "Journal" today from President Trump targeting-- talking about the fact that President Trump is targeting TikTok and WeChat. And they were talking about names like Apple, like I mentioned before, and Walmart, Disney among those names on a call with the White House this week saying that this order could undermine their competitiveness in China. And we talk about the backlash here and what this could mean for potential growth, or lack thereof, from these needs in China and how big of an issue that could be for these companies here, at least in the short term.

AKIKO FUJITA: Yeah, I mean, bottom line, if you're a business that's operating in China, you need to be able to have access to WeChat. It's really as simple as that.

And we had talked about that when that executive order was initially signed about just how significant this app is to do business, to communication, to really operating in any way out of China. And the "Wall Street Journal" report there saying that there are those companies like an Apple, like a Walmart, like a Disney that did reach out to the White House, had a call with White House officials on Tuesday to address their concerns.

And the reason we're seeing this kind of lobbying right now is because while that ban is not set to go into effect until September 15, if you read the executive order, there's no real clarity on the scope of the ban.

Now as far as we know, this would only apply to US jurisdiction, which essentially means for companies like Apple, they would still be able to offer and have the WeChat app in their App Store in China. But that's going to ultimately be decided by Wilbur Ross, the secretary of commerce.

So right now what we're seeing are businesses reaching out to the White House saying, look, if you move forward with this on the most stringent way in a very restrictive way, it's going to be really difficult for us to do business.

Again, we keep talking about this, but keep an eye on this weekend, August 15. We've got that meeting between Vice Premier Liu He and Trade Advisor Robert Lighthizer. That is expected to be a conversation about where things stand on phase one of the trade deal, but you can bet the Chinese side will be raising the concerns on not just the ban on WeChat but as well as TikTok with that clock ticking down to September 15.