Stocks extend losses, WTI crude oil dips below $80 a barrel, British pound dives

Yahoo Finance's Jared Blikre breaks down how markets opened on Friday.

Video transcript


BRAD SMITH: Welcome back to "Yahoo Finance Live," everyone. Major averages lower across the board here on this Friday to really wrap up. Boy, it's been a downward-facing week. Dow down by about 1%. S&P 500 by about 1.4%. And the NASDAQ in the red by about 1.3%.

And this is kind of global. So let's get on over to Yahoo Finance's own Jared Blikre who's live at the YFi Interactive. A lot of red on that screen, Jared.

JARED BLIKRE: A lot of red. A lot to get to today.

I'll tell you what, it's been a very eventful week. Another 1% down day for the markets. Let's check out the five-day price action. At the bottom end of the range, down 4 and 1/2%. And we've seen these days quite a few times in the past.

Now, here's the sector action. It should be the sector. There we go. Everything in the red here, energy. Got to focus on that for a second, down 5%. We got WTI crude oil down below $80 per barrel for the first time since January.

I just want to show you a quick trip that we've had in the XLE. And you can see right down to the bottom end of this period in early July. Also want to track what's going on in the travel sector. This has been flagging lately. You can see United Airlines, Carnival Cruise Lines, American, each down more than 3%.

And you take a look at what's happening inside the NASDAQ, fairly-- not ugly but not great either. Not too much dark red. But you can see Tesla just flashing, coming down to minus-3%. That is enough to take it into the dark red.

I want to spend a little bit of time taking a look at the bond market as well that has been really driving equities. Five year T-note yield, gapped up to a new high. Barely positive right now. But these have been the moves that have been driving risk markets and to the downside.

And front and center in all of that is the US dollar. You got to take a look at this. This is a 20-year high for the dixie. I'm gonna go back to our heat map so I can show you what's been happening in currency land.

We have a major political upheaval in the UK. And we can see that being reflected in the pound. Up there in the upper left, that is the US-- US dollar versus a British pound. And you take a look at what's happened.

Let's go back five years, you can see this incredible strengthening of the dollar, weakening of the pound to the upside. Most of this 23% has happened this year. So we've seen this across the board. US dollar really putting pressure.

And I'll tell you what, guys, we are probably one step removed from a full out currency debasement. It's not a beggar-thy-neighbor policy. It's not a "race to the bottom." It's simply what is happening right now. We're gonna see a lot more of these big moves in effects land. And it's gonna ripple across the asset classes here, guys.

JULIE HYMAN: Yes, it is. And also to corporate profits for that matter, as well--


JULIE HYMAN: --as it has been. So a lot of big implications.

JARED BLIKRE: Rosenberg warning about that today as well, corporate profits going to take a hit.

JULIE HYMAN: He likes to do warning. He's a warning kind of guy.

JARED BLIKRE: I know I started following him during the GFC. He's still doing it.

JULIE HYMAN: Yes, yes. Dave Rosenberg is who we're talking about, ladies and gentlemen. Thanks so much, Jared. Appreciate it.