AI Hardware, Investment Banks Lead; Goldman Sachs, Dell Technologies, ASML In Focus

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1:02Ed Carson:Good afternoon, everyone, and welcome to Stock Market Today. It's Lilith LaCourham and Ed Carson here. Tuesday, July 14th. Great to see you, Ed. How's it going? Going fine. How are you doing? Pretty good. What are we going to be talking about today? Yeah, I want to take a look at Goldman Sachs, Dell Technologies, and ASML. Okay, we'll highlight those three stocks. But first, as always, a closer look at the major indexes higher across the board today. Here's a look at the Nasdaq Composite, up nine-tenths of a percent on the day. We did see a little bit more strength in the Nasdaq 100, though closing off highs up 1.1 % on the day.

1:42Ed Carson:Meanwhile, the S &P 500, we've been looking at the VOO ETF lately for that, up about four-tenths of a percent. And the Dow today managed to finish in positive territory despite that absolute wreck that we saw for IBM Ed. Yeah, that was pretty disastrous. And the Dow was resilient and software was resilient too. So it was an interesting day. But yeah, IBM said people are buying a bunch of AI hardware and not buying software as a result. Yeah. So it'll be interesting to see come earnings season, right, Ed, what we get a sense of if they're saying their clients are pivoting to these other areas, what those clients themselves are saying and what the memory and the AI infrastructure companies say as well during earnings season.

2:38Ed Carson:If they can, you know, add more color to this news that we got from IBM today. Yeah. I mean, that's going to be really important. I mean, what the hyperscalers say in a couple of next week or two, how much they're spending, what they're spending on. It really is a big deal. It seems like we fluctuate. Today we had chips and software, but sometimes it seems like one day chips go up, one day software goes up. So the indexes have been volatile, but, man, it feels like the sector is even more so. And in the case of AI stocks, chip stocks, the NASDAQ, and even to some extent the S &P, they're all right around key levels.

3:18I mean, the NASDAQ and the S &P are above their 50-day and 21-day lines. NASDAQ just barely doing that, but they're not quite above short-term levels. So, you know, and it's just like we're going back and forth. You can't really say, aha, we've done something. I mean, it's obviously nicer that we bounced, but it wasn't like tremendous. And chip stocks, there's a lot of chip stocks, including ASML, including a lot of hardware that's not in chips. Stocks that are moving above their 50-day line or bouncing from their 50-day line but hitting resistance at their 21-day line. I mean, there's just clear levels.

3:53Sometimes resistance, you're sort of looking around, what are the resistance levels? It's not that hard in many of these cases. There's some pretty clear levels. And you can't – I mean, in hindsight, we'll all say, aha, look at this. But that's in hindsight. In hindsight, we'll see, you know, that the market tanked or the market surged from, you know, now or in the next few days, say, but it just hasn't happened yet. It just makes it tricky to make buys like, OK, do this. Well, should you? Where should you? Probably you want to wait with a lot of these names to get them above key levels, get some resistance.

4:24But it's just really tricky.

4:28Ed Carson:Hi, this is Alex Osula, host of the WSJ's What's News podcast. We bring you the biggest news of the day, from business and finance to global and political developments that move markets. If you're looking for more insights and tools to understand the latest headlines, consider becoming a subscriber to The Wall Street Journal. Visit subscribe.wsj.com slash what's news to subscribe now. It is really tricky. And, you know, Ed, I think that we're not out of the woods yet. And we're sort of at this crossroads. Maybe earnings season will give us either that catalyst that we need or we'll see more evidence that, hey, this theme needs a little bit more time, needs to take a break.

5:17Ed Carson:So when it comes to what we're seeing on the NASDAQ, you talked about those levels that we're watching. I mean, the recent highs there, including last Friday, seems like a critical area above us, below us. Last week's low, that reversal. And we really don't want to go below the lows of this consolidation, right, around that 25 ,000 level. That would be pretty concerning at that point, I think. Yeah, I think that would be really concerning. Last week's lows would be bad enough. But even for longer-term holders, you're giving up a big chunk of the gains at that point. I mean, from April. I mean, we've seen some stocks that have been big winners.

5:58And obviously, they still have big gains. But they're down 30%. They're down in a couple of weeks even. And so you have to take notice. So it is tricky. On the other side, we could rally. We could punch higher. There's a lot of interesting names that all of a sudden would look attractive if we could just get above. of something David Ryan was saying on Ivy Live. There's got to look for stocks that are holding up very well, and we'll look at one that has been holding up very well, and others that were big winners and are falling off. And honestly, a lot of stocks like the NASDAQ, they're sort of go either way.

6:32I mean, they're not, I mean, they're the kind of stocks that you understandably could hold on to and probably did if you rode them up. But at the same time, they've been really tricky for new buys, and you have to be at least thinking about your strategies. You know, you could be thinking even about adding if things go up, but you also have to be thinking about exiting. So, yeah.

6:52Ed Carson:I totally agree. I mean, it's been a chop fest in a lot of areas, but some new leadership bubbling to the surface that we are definitely keeping a close eye on. Again, you mentioned the S &P. I mean, you're seeing this shift in the tech landscape. But if you take a look at something like the S &P, this looks pretty healthy here, Ed. Yeah. I mean, there's definitely some other sectors, not medical so much today, but, you know, some financials. There's definitely been areas out there. And this looks a little better. It's not, you'd still like it to get above Friday's high. I mean, but it has a little bit of distance from the 21-day and the 50-day line.

7:34So it definitely looks, you know, it needs to show more strength, but it doesn't look on the verge of breaking down either, whereas sort of the NASDAQ is sort of can't decide if it could go either way at any moment.

7:45Ed Carson:Exactly. And I do think it is favorable as of now to see that volatility calm down. So we do have that going for us. The volatility is calming down. We're above rising moving averages. And you're also seeing, you know, to your point about the participation, RSP down two days in a row here. But still, if you take that step back in an uptrend. So that's a good sign as well. Let's move on, Ed. And next, I want to have you give us your perspective on blue chips. I mean, we did briefly talk about IBM, but let's take a look at the chart of the DAO. What are the technicals telling us? I mean, technicals are looking pretty good.

8:29The RS line has been moving up. It's been leading. It's less and less of a divergence, not old blue chips, because there's five magnificent seven tech companies in there. But yeah, I think this is looking pretty good. I mean, it found support at the 21-day line. You have a stock falling more than 20%. That was, you know, really impressive that it held up. And it could have dragged down other names in there. But there's definitely some other names in the Dow that were showing strength. There's a lot of quality in medicals, financials. Yeah, there's a lot of things out there that the Dow is part of that showing strength.

9:09I think XLV had a terrible day, but clearly there's been names that have been, that's been an area that's been doing well. And biotechs as well didn't, you know, found some support. Not a great couple of days, but still, for those who have owned this over the last several weeks compared to a lot of tech stocks, a lot of AI stocks, I think people would be pretty happy with some of the biotechs or health insurers or whatnot that they had.

9:31Ed Carson:Exactly. Totally agree. Okay. And let's take a look at small caps here. We did have more headlines today on the Mideast conflict. How did that shake out in terms of, you know, what we saw flow through from the oil market and small caps and some of these other areas? I mean, IWM hit resistance at the 21-day line. Crude oil, I mean, it rose. It kept rising, but it did come off. It was, you know, crude oil prices didn't got up to about$80. It backed off a little bit. Obviously, there's been a big run. There was some news out there about this and that, but it's just an ongoing. Right now, markets are starting to lose a little bit of their confidence that everything's going to be okay.

10:16And markets were thinking everything's going to be okay months before there was an interim deal. So, you know, oil could get a lot worse if things broke down. That's a concern. On the upside, there was a very positive CPI report, much cooler than expected. But that's predicated on the big drop in oil prices. If oil prices rebound, that good news, a lot of that good news will probably go away as well in future months.

10:43Ed Carson:Yeah. And you mentioned financials. I know we're about to take a look at one, but here's another look at the sector. We do have bank earnings kicking off earnings season. Yeah. Bank earnings turned out to be somewhat of a mixed bag today, but financials still generally positive. And they've had a good run. I mean, it was really heavy on the investment banking side today, what was really working. But yeah, I mean, there's been a lot of banks that have been doing well. They often don't go on enormous, long, long runs, but some of them have had pretty good performance for quite a while. Well, speaking of, let's go to Goldman Sachs.

11:19Ed Carson:This is one of the big money center names that we've been following that's been showing that relative strength for months here, Ed. setting up heading into this report with a pretty orderly looking pullback, maybe some down days with above average volume, but holding above that key 50-day line, that support level that we love looking at for a lot of stocks. And look at this pop on earnings up 9%. That's nothing to sneeze at. I mean, just by a brief visual scan here, it looks like the biggest pop that we've seen for Goldman earnings in a number of quarters, at least. Yeah, really powerful earnings.

11:59And we knew that it was going to be a good quarter. I mean, that wasn't like, what? You know, it's like we knew there was a lot of activity trading. Equity trading was huge. We knew bond trading. A lot of the volatility was positive for banks. Hey, they were a lead underwriter on SpaceX. They were a big underwriter of the big Google offering, which actually, you know, that was like$85 billion. And, you know, so everybody knew it. It was still blew out estimates. RS line at a new high. It's sort of getting extended from the 50-day line. I think if you could have bought it early on, easier said than done, because you never know when these are going to reverse.

12:33I have five minutes. So, you know, it would have been hard to buy it ahead of time unless you used an option. So I think where is it? Like 9 % above?

12:44Ed Carson:9.6%. So within 10 % of the 10-week. Yeah. But getting a little stretched for this type of stock. Yeah. I mean, maybe early, maybe an hour into trading, you could have bought it. It's a little less. But, you know, that's easier said than done at this point. Just really doing well. Investment banking, very strong. Regular banking is fine. I guess that would be the thing is regular banking. I will note that, you know, J.P. Morgan did well. But another name, Citigroup, did not do. Citigroup had a downside reversal. I was like, oh, Citigroup in some ways looked like the most actionable. because it had been doing a lot like Goldman had been doing reasonably well.

13:19And then I don't know what happened, but that was an ugly reversal. That's when I say, oh, easier said than done buying on the open.

13:25Ed Carson:Yeah. This is what can happen. This actually didn't happen right away. And it was up for a while. It must have been a conference call or something because it was, you know, it held up for a while and then something bad happened. So, you know, that's why XLF and some of the banking things, the ETFs weren't that strong. When you look at Goldman, you go, wow, it must have been a great day for banks. It was like, eh, you know, it was fine. But Goldman is standing out and has stood out for quite a while. Yeah. The gold standard for banks right now, perhaps. I think so. Look at that RS line for quite a while now.

14:00Ed Carson:And the earnings line. And the earnings line. And, you know, this was basically sort of an AI play, at least for a couple of quarters, even though it has nothing to do specifically with AI. Yeah, exactly. And we do have that acceleration in the growth, both top and bottom line. So Goldman, a growth stock? What is what's happening here? Very interesting. Yeah, I don't know if that can sustain it, but it's like that's the thing, but it's a really strong run here. Yeah, it sure is. Okay, thanks for breaking that down. Going over to tech, you mentioned David Ryan on IBD Live talking about what are some of the tech names that are holding up?

14:42Ed Carson:while others are weakening. Dell definitely in the camp of a name that is holding strong. Great outperformance and a setup here, Ed, but the outperformance going back to even before that early April follow-through day, a very impressive quarterly report, triple-digit bottom line growth in the most recent quarter. So holding up, holding that 21-day that we like looking at for some of these more high octane, faster names that don't even come down to the 50-day? Yeah. And, you know, when it first came down, you know, you might have thought, oh boy, here we go. But, you know, because there was, not that it was terrible, but this is what a lot of these names looked like.

15:27But the thing is, it did bounce back. I mean, so other names that had big, big runs, some of them have really broken through their 50-day lines. And again, a lot of them, again, Again, they may be up quite a lot for the year, but one way to preserve your big gains is you have to be careful which ones you're doing. And this one held up. This one, you didn't know it was going to hold up. I mean, if you told me this one was down 40 % from its highs, it was like, okay, after that big run, okay. You know, a lot of it. So, but this one did. And this is why you just sort of, this one held the 21-day line.

16:00It's coming up. You could have argued that 444 was an entry. It backed off. You could still have used that or you could use the highs of the last few days. I'm not sure if it has a base on a weekly or maybe just needs one more week for a true base. Yeah, there's so many charts out there and some of them are close. Yeah, it does have a base. And so, you know, there is that. But I think that looking for an early entry, because it is getting stretched from the 10-week line, just because it's been holding up doesn't mean you want to buy expended. You still want to be looking for really precise things.

16:33that this one does have pretty big down days, even within there. There's some down days. This one could easily fall 6 % tomorrow if the market is down. It's just that it's been battling back where it's been slowly grinding higher over the last few weeks where other stocks have grown. A lot of them have been going sideways or lower or sharply lower.

16:53Ed Carson:Exactly. And I think this strength is also notable given the acceleration in the move. I feel like a lot of the other ones that we saw that really, I mean, Ed, the stock doubled in how many sessions? You know, a small handful. And to see it holding up this well and still be in that AI theme, I do think is pretty impressive. And, you know, you don't have that earnings risk with this one. Of course, you have that indirect thematic earnings risk, but we won't get a report from Dell until early September, it looks like. Yeah. So that's right. There's always earnings for these folks, but this one has really weathered it well.

17:37Ed Carson:Okay. Let's mosey on over to ASML in the chip equipment group. You talked about resistance at the 21-day line. So a stock that's been in an uptrend, broke out in that late April, early May timeframe, hasn't gotten hit as hard as some of the other broader chip sector names. But what do you think about this heading into the earnings report? Yeah, and that's really why I brought it up. There's a lot of examples. But it's, oh, well, this one has earnings tomorrow. Look, if it makes a clear move over the 21-day line, there would be a sharp downtrend. But it would also be bouncing off the 10-week line more decisively.

18:19I think you could, you know, with earnings, depending on how far it is, that would be sort of like the first real test of the 10-week line since it cleared its base, you know, for real. So that would be something actionable. And there's a lot of other names that could move that are chip equipment names. This is sort of like the first chip report. We will get Taiwan Semi the next day. But what ASML has to say about their guidance, what they're saying about, you know, just in general about things, because people have to spend on these are extremely expensive machines. So if they say anything about backlog lagging or if there's something or if they say, oh, no, you know, just anything.

18:54You could see this. It's falling apart. You know, like this is the time, you know, those early reports, we have no idea what we're really getting a sense of. And so you can see pretty exaggerated moves. Just a really important report. Again, on the downside, if it breaks below the 10-week line, I think that people who bought more recently, you know, might be wanting to look to pair their holdings because they've given up a fair amount. At that point, you're probably giving up at least half of the gain that they got from, you know, from the breakout recently, at least. and if it goes decisively through the 10-week line by the end of the week, that could be, for longer-term holders, a reason to release pair holding.

19:32So a really important week, and it'll be important. There's a lot of chip gear makers, a lot of chip stocks. I keep on saying it, but there's just a lot of stocks that are right in these areas where they could be splashing buy signals or sell signals either way without that big of a move, either way. Right.

19:51Ed Carson:Yeah, I totally agree. I think investors need to be ready for this earnings season. You have, I feel like, almost a perfect storm of you have the AI hype coupled with a weakening of the AI theme. So there could be a situation where investors have more of those knee-jerk type reactions, either which way, right? And I think, like you said, any sort of inkling of, you know, pulling back there, I think it'll be really interesting to see. So for investors who still have, like me, tech and AI exposure in their portfolios, just be on the ready, you know. And we always love the why, right, Ed? But sometimes you just you have to manage risk.

20:38Ed Carson:So I think earnings season is an especially good reminder of that. My hope is that we get more buying opportunities. I would love for earnings season to present buying opportunities versus triggering a bunch of sell signals. But we'll see. We'll see what kind of hand we're dealt this time around. Yeah. And I just want to ask that last thing about the NASDAQ and the S &P and, you know, they've been basing for a while. It's been getting a little tighter, at least on the index level. So, yes, I mean, for the first time since the rally really started, we're getting real bases, real things that could be a great opportunity.

21:14You know, it's just and we just have to see. I wouldn't cheat ahead of those things, but just be ready. Work on your watch list. Look at those setups. be ready in case things do really turn out for us.

21:28Ed Carson:Exactly. And whatever news we get, it's always fun to cover, right? And to talk about it on this show, on IBD Live, and to read about it in your Futures column and our other team coverage. Yeah, it's always a lot of fun. It is. All right. Well, the fun continues on our YouTube live stream with, and thanks said, with our Swing Trader status update. That monthly show from our Swing Trader team, Justin Nielsen and Mike Webster is happening today live at 5 p.m. Eastern on YouTube. So to get their perspective on what's happening in the market, that Swing Trader POV, make sure you check that out. Looking forward to their perspective.

22:17Ed Carson:All right, everyone, that's it from us for today. and we will see you in the morning on IABD Live starting 10 minutes before the opening bell. Investors.com slash IABD Live for all those details. We'll see you there and then we'll also see you right back here tomorrow after the close.