AI Leads Market Retreat; GE Vernova, Walmart, Dutch Bros In Focus | Stock Market Today

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0:40good afternoon everyone and welcome to stock market today for wednesday december 17th my name is ken shrieve on today's show we're going to talk about more selling on the nasdaq composite today looking at a closing loss for the nasdaq down more than 400 points 1.8 percent other day of tough selling for ai stocks before we get into today's market action let me bring in our news editor ed carson who has got three stocks to watch good afternoon ed good afternoon i'd like to take a look at ge vernova walmart and dutch brothers okay well before we take a look at those stocks we are looking at a nice after hours report from Micron we'll see if that brings some good news for the Nasdaq uh tomorrow but uh before we get into all that uh let me bring in a chart of the Nasdaq composite here and take a look at what the market did today because it was uh ugly today at Nasdaq composite made a nice stand at its 50-day moving average uh Tuesday reversed to slightly higher, but we did have quite a bit of selling today.

1:531.8%. Looks like we're going to get higher volume today. So we've seen some distribution days on the NASDAQ. Let's take a look at the S &P 500. The selling wasn't as intense in the S &P 500, but still a tough day for the benchmark index that also lost its 50-day moving average down 1.2 percent the selling not not too bad in the dow jones industrial average today blue chips still down holding well above the 50-day moving average blue to blue chips only down four tenths of a percent take a look at that russell 2000 as measured through the iwm still holding above that 50-day moving average small caps today down 1.1%.

2:43So Ed, most of the selling concentrated in AI stocks today. NVIDIA, Palantir, you name it, just broad-based selling. So tough day for the NASDAQ. This is a pretty bad, bad break of the 50-day moving average today. Bad break because it came back, it almost got it on Tuesday. And in fact, it opened or right after the open was actually just above the 50-day line. And then to very quickly come down, the S &P, which held its 50-day line, it goes through pretty clearly through the 50-day line. All of a sudden, the Russell, I mean, all of the indexes, except for the NASDAQ, have been down for the last four days.

3:21The NASDAQ barely was up yesterday. Solid weekly losses so far. So while the market is still divided, where there's still some good sectors, definitely some sectors, the indexes are starting to feel weaker. Instead, it was like you could sort of squint and say, well, aside from AI, it's not so bad, but things are starting to drag down. Obviously, a lot of things today were Oracle. Oracle, apparently, a company that, one of its Blue Owl Capital, which has been financing a lot of their data centers, it's like, they're not going to do it. And Oracle confirmed that. And there's real questions, because Oracle is financing a lot of its big data center stuff with debt.

4:00I mean, That's what they're doing. And a lot of their businesses with one customer open AI. And that's a big difference from Amazon, Microsoft, Google and Meta. They generally are spending it through their cash flow. I mean, they have huge. So they're not borrowing. Oracle is really trying to beef up there. So anyway, there was just everything in that in the field. We'll look at GE or Venova, but look, everything was down, including stocks like GEV that we're holding up. So really a lot of damage here. And so even if the market recovers, I think at this point, almost all the AI infrastructure plays need a lot of work, it seems like.

4:39Maybe Micron will lead everything back to a wonderful future, but it still seems like a lot of charts need work in that space. Yeah, no doubt about it. We'd like to take a look at ARKK. That had a tough day today. Kathy Woods, ARK Innovation ETF. ETF, that's an outside day, down 3%. Chip stocks, SMH, the VanEck Semiconductor ETF, that was down 3.6%. I mentioned some of the holdings there, NVDA. That stock was down 3.8 % on the day, down in higher volume. Take a look at Broadcom, AVGO. That stock was down 4.5%. Palantir, P-L-T-R, down 5.6%. So broad-based selling in a lot of these tech names. Some bright spots in the ETF space.

5:36Take a look at XRT. This is the retail ETF still holding on to its 10-day moving average. Four down days in a row, but still holding near highs after a nice rally off of the 200-day moving average. And financial stocks still fighting a good fight here. XLF still up near highs. You've got your Dow Jones stocks like JPMorgan, JPM still holding up near highs here. Goldman Sachs as well, holding up near highs as well. Now, Ed, you mentioned GEV, AI stock here, GE Vernova. This is the first stock we're going to talk about today. This podcast is brought to you by MassMutual. For 175 years, MassMutual has been there for policy owners, financial professionals, and communities through economic shifts and societal change.

6:33In a world that changes fast, strength and stability still matter, especially when it comes to helping people secure their future and protect the ones they love. Learn more at MassMutual.com. That's MassMutual.com. really really bad break for gev today this is a stock that just last week was breaking out in very heavy volume there was no news but this was just a classic technical breakout everybody's saying boy this market looks looks good beautiful breakout and then it just fell apart yeah even this morning i was considering it hey maybe we should do this stock of the day it was holding in a buy zone and then woof.

7:16There was no news today. It's just that it seemed like they were going after it seemed like people who had AI type stocks. They were selling the winners or the ones that were most resilient. So yes, your NVIDIAs and Broadcoms were down 3%, 4%. This one was down 10%. So all the gain is gone. So it's not just that. Even that early entry, if you said, okay, they were sort of this pseudo handle that you might have thought of would have been a buy point, but no, that's down. You know, again, how that, how deserving of this That is not completely out of character with this. There's definitely been some big sweeping losses.

7:49That's another thing that people have to watch out for. In this market, stocks are seeing some big, ugly reversals and sell-offs. Just to bring up, why don't you bring up FIX, if you could, comfort systems. This is a cooling play, but this is another one that was holding up very well, not initially in a buy zone, but it was holding the 21-day line just below buy points. And then, bam, it just really came down. I mean, just decisive blow through the 50-day line. Hasn't done that. Not really gone through the 50-day line, you know, basically since April, May. And nothing is happening. And this was just one of the bigger losers out there along with GEV.

8:27That's just something that people need to know. If you have a resilient stock, especially if the market or the sector is struggling, it's holding up. That's notable. You should pay attention to it. But today's resilient stocks can sometimes be tomorrow's big loser. And boy, was that the case here with GEV and FIX. Yeah, really starting to see some of the big leaders now to violating their 50-day lines. So today is a day that's been different than some other days in the past. Not only are we seeing the indexes start to break through their 50-day lines, but some big leaders as well. So this is potentially problematic and probably a time for growth investors, if you haven't been playing defense with some of your holdings, really starting to pay attention here because when you have some of your big leaders of the year starting to break through the 50-day line in heavy volume, this is the time to start paying attention.

9:28We've been talking about some big leaders in the chip equipment group. I mean, we've been talking about names like Broadcom, NVIDIA, Palantir, but names like KLAC, the chip equipment stocks that have been doing so well. KLAC still holding above its 50-day moving average, but that stock down 4.6 % today. A name like Lamb Research that is on leaderboard, LRCX, not a break of the 50-day moving average. That stock down 5 % coming into the 50-day moving average. So some of your leaders are really, really starting to show some questionable action here. Now, in the retail space, we still have seen some pretty good action here.

10:17Let's check in on Walmart, which was a retailer that really started off a nice parade of strong earnings reports in the retail sector. That was all the way back on this day right here when they reported strong earnings. It's been on a really nice uptrend ever since, and it bucked the trend today, up two-tenths of one percent. Aren't Walmart really still acting well in this weak tape for AI stocks? And you can see how the relative strength line is improving quite a bit. And that's just versus the S &P 500, which isn't that far off highs compared to those growth names. I mean, if you were comparing this to if you did a relative strength line versus ARK or FFTY or something, this would be just absolutely vertical.

11:01So, yeah, and on a weekly chart, this is actually on track for a three weeks tight. So it's not it's not the end of the week yet. So we'll see. But it's been trading very tightly, holding right at those highs, doing everything right. You can see the RS line coming up. I mean, it's a defensive market. There's a few defensive, a few retailers, a few discounters that are doing well. Definitely not all. But yeah, this is doing well. I think it's ironic, as others have pointed out, this was actually more richly valued on a forward PE basis than most of the MAG-7, which tend to have higher growth rates.

11:32But people are liking this. They're going into this defensive name. I think when AI is panicking and everything's that, you're just like fund managers aren't going to get in trouble by going into Walmart, which does seem to be doing pretty well right now. But it is pretty amazing, though, to see Walmart selling at 45 times trailing earnings and 39 times forward earnings, you know, growing at five times this year's earnings and 12 times next year's earnings. So definitely a high multiple stock in retail. But my goodness, it is trading very well in this tape. So definitely seeing some strength outside of AI, no doubt about it.

12:16And speaking of retail, I was in a part of California. We don't have many Dutch brothers in L.A. County, but I was up in Northern California this weekend where they have a fair amount of Dutch Bros locations. And we were talking about Dutch Bros this morning on IBD Live. This is a stock that made a nice move above the 200-day moving average today. Got pulled down with the broad market, but still ended with a 1.6 % gain. Dutch Bros moved nicely off that 50 level. Like I said, gave back some gains today, but still a pretty good fundamental story here, Ed. Pretty good fundamental story. And with retail, with restaurants, it's always about the expansion because I think with their latest same-store sales was something like 5%.

13:03Don't quote me on that, but it was something like that. It was fine, but it wasn't like – but they are expanding like crazy. So this is the time when it can, you know, really, really grow. It was a nice – with this double-bottom base, I don't know if I really treat it as a double-bottom. I sort of think of 77, 68 as sort of the start of a base. I don't like these gigantic double-bottoms. But in any case, it was moving above the Tunity line. You know, I think definitely some people could be playing this one. But also at the same time, it's hard, even with something like this, even when it's completely separated from AI, it's got a growth story, et cetera, et cetera.

13:40It couldn't hold the game that well. So if you got, you know, if you bought into this when we was near the highs, you know, you could easily be down, you know, 2%, 3%. You just don't. It's just a difficult environment. So I think investors should be cautious about new buys on anything right now, just because if the market does get dragged down, when you have that, again, like the villain two-faced, it's like sometimes it'll act nice, but you just never know when it's going to turn into a villain. And the whole thing turns negative. And I just feel like I don't like divided markets because things like this, you know, can you really withstand all the selling pressure?

14:19You know, can't do that. But this is one to watch for sure, though. And the relative strength is picking up. As you say, the fundamental story is very strong. Yeah, no doubt about it. Well, we talked about very, very quiet in earnings this time of year and as we head into the Christmas holiday. But let's take a look at Micron, which is in the red hot data storage group. Boy, we've seen some selling in this group. But Micron is still holding up well at testing its 50-day moving average, down for five sessions in a row, headed into earnings after the close today, but making a nice after-hours move, holding a 6 % after -hours gain up close to 14 points, looking pretty good.

15:07Have you had a chance to look at the numbers yet? I assume a good earnings beat and pretty good outlook. Comfortable beat. I think easily beat on EPS, beat comfortably on revenue. I think it was clearly raising guidance as well. I'm not sure how much. So nice move there. And this is important. So we'll see how that it's also important that I think the estimate, I've seen something like that the next quarter estimate, they might be guiding up by more than$4 billion. I mean, it's an enormous guide up. So we'll see. But obviously, you could imagine if this were a better market, if you say, hey, this is an opportunity.

15:43I mean, it's not the first test of the 50-day, 10-week line, but you could say that. But man, can it hold it? Because one of the questions is the fortunes of Micron, even more than other chip makers, can rise and fall because memory prices go up, up, up, and then they go down, down, down. And just right now, you can see, I would think that in a better market, this would have probably gone up more. Maybe it will tomorrow. This is lifting some other things, like it lifted those chip equipment makers you named. It lifted some other memory plays. So this could give a lift, like SanDisk was up, Seagate was up, Western Digital was up.

16:17Those are some of the best performers of the year, you know, as they've had a tough, they've had some tough times. They're sort of bouncing a little bit, but we'll see. We'll see. This is probably the last real tech report that I can think of, really, you know, I mean, you know, aside from guidance and warnings, but maybe almost a month before we get other results out there. So nice report, but boy, the AI sector needs a lot more, I think. Yeah, yeah, no doubt about it. So you can see Micron's results lifting some stocks in the group, definitely having an effect on SanDisk. You see SanDisk is up, you know, two and a half percent, but you can see a name like Celestica, big, big leader.

17:01This is actually a contract manufacturer, but Western Digital, WDC, is also rallying on this news as well. Tomorrow morning, not much in terms of earnings, but DRI is reporting in the restaurant group. That stock rallied a little bit ahead of its earnings. I just wanted to talk about just a little bit of outperformance in the market today in the energy sector. Some outperformers in the S &P 500. Devon Energy making a nice move today up 5 % after four straight declines, moving back above its 21-day moving average. Also, ConocoPhillips in the S &P 500 making a nice move right along with Devon. So a lot of oil and gas stocks, energy stocks, Occidental Petroleum, another gainer in the S &P 500 as well.

18:06So lots of outperformance among oil and gas stocks. I think I saw oil up more than 2 % today. So lots of - It closed off a little bit off the highs. It only up 1.2, but that was off a multi-year lows. Natural gas rose, I think like 3.5 % or something. So natural gas had really been, I think, down almost 20 percent in December. So nice balance for that. I will say that President Trump is going to have a primetime address tonight. It's possible he'll just talk about what he's accomplished so far this year. But it's also people, some people speculate what he will say something about Venezuela. And that was one reason why oil was up.

18:44So it's just something that could be out there, a news event that could come in before tomorrow's open. Gotcha. Gotcha. and some of your hotel operators also outperforming today. Hilton HLT. CCL will be out later this week. And so that will be, that's not necessarily the leader, but that will be something that will be an interesting report. That's the cruise line operator, CCL, right? Yeah. The CCL cruise line operator, right? Yeah, there we go. Yeah. CCL Carnival Reporting. Very good. All right. Well, that is going to do it. I'm going to go ahead and close that out. And Ed, thank you. Thank you very much for your insight.

19:28As always, we appreciate it. All right. That'll do it for this edition of Stock Market Today. And tomorrow is Thursday. And I will be in the chair for the second day in a row. I will be hosting IBD Live. So please join us. I'm not sure who is going to be all the panelists. I know my colleague Hatman will be joining me on the panel. So be sure to join us. Just go to investors.com forward slash IBD live. And we'll be happy to have you along. So we'll look forward to seeing you then for tomorrow's SMT Stock Market Today video. Ed will be here with Alexis Garcia. So hope you have a great rest of the day and we will see you back here tomorrow.

20:24That's it for today and take care, everybody.

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