AI Plays Leads Indexes Lower Again; GE Vernova, Boeing, TechnipFMC In Focus

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0:24Good afternoon, everyone, and welcome to Stock Market Today for Tuesday, September 2nd, first trading day of September on today's show. We'll take a look at what happened in the stock market today. To help me do that, I want to bring in my colleague, news editor, Ed Carson, who has got three stocks, as usual, to watch. How are you doing, Ed? Hey, good afternoon. I want to take a look at GE Vernova, Boeing, and Technip FMC. Okay, good group of stocks there. Let me go ahead and pull up a chart of the – I think we're going to start with the S &P 500 today. It's actually not such a bad day for the market here.

1:08Taking a look at S &P, looks like a closing loss of about 7 tenths of a percent. Let's take a look at the NASDAQ composite. Also closed off lows. Let me switch to the daily chart here. See the NASDAQ was down quite sharply, only ended with a loss of about 8 tenths of a percent. Taking a look at the Dow Jones industrial average, really a nice close here. only down about six-tenths of a percent. And then the Russell 2000, let's take a look at that IWM ETF. See small caps down about six-tenths of a percent. So Ed, just going back to the NASDAQ here, market was sort of sorting through this news, sort of strange timing late Friday afternoon.

2:00We got news that the federal appeals court said that these Trump tariffs are illegal, and stocks responded negatively when we opened after the long holiday weekend. But it looks like a pretty compelling performance here for the NASDAQ. Yeah, I think the other big thing is that there's still continuing concerns about NVIDIA and AI chips. saw some, some of them, especially some of the AI hardware and related plays selling off. And you just have to look back, just back to February to April. Marcus didn't like a combination of Trump tariff and AI headlines. You know, it's not like it was so super negative.

2:41It was more the uncertainty, I think, today. But as you say, look, the NASDAQ and the S &P to a lesser extent sort of came down through the 21-day line and were approaching their 50-day lines. But they rallied off the lows and came up. The S &P almost regained its 21-day line. And so not so bad. Again, the question is, is this where we stop? Do we hold here? Some leading stocks rebounded nicely. Some leading tech stocks rebounded nicely. Some did not. Some other sectors did fine. So still unclear. Is this just a modest pullback test? Is this a rotation from tech? Is this something that started something more serious?

3:23I still don't know, but it was definitely a nice close. What was a disturbing little open, I think? Yeah, well, it was definitely a good close, no doubt about it. We see the S &P 500 nicely off its lows as well. Do we have any idea how long these tariffs could stay in the courts? I think I saw something out of the White House today that President Trump said he's going to the Supreme Court tomorrow. Is that confirmed or is that – do we know anything about that? Well, they won't go to the Supreme Court tomorrow or they'll go only to say we'd like to appeal to the Supreme Court, which everybody knew was going to happen.

4:00I don't know how long it'll take. I'm sure they'll try to expedite it. But what the Supreme Court thinks about expediting and what Wall Street thinks is expediting are probably two different things. So it could be several weeks. It's always possible to send something and they could even send it back to the lower court saying, no, no, would you address this first? And I think to keep in mind is that let's say Trump has a total defeat and Supreme Court says, yes, this is illegal. He can still turn around and probably recreate most of these tariffs using other authority. It's just that some of the authority that he used for some of these big global tariffs was a little bit shakier ground, but he could probably recreate it.

4:38So it's not clear that at the end of the day that things will be that much different. And, you know, so it's hard to know how the markets will end up reacting to that. Well, that's excellent, excellent color, though. It helps helps me and and viewers as well. But the bottom line is just like another layer of uncertainty. The market's been dealing with uncertainty pretty darn well for for a while now, whether it's the Fed, interest rates, the economy. Now there's some some tariff uncertainty. But, you know, once again, the market showed that there are buyers out there. We had gold stocks and biotech stocks outperformed today.

5:18In terms of economic data this week, I know, Ed, we had an ISM manufacturing index that was mostly in line with expectations. What are the big reports that we're looking at this week? Well, there's a bunch of labor reports mainly leading up to Friday's jobs report. I'd say the jobs report and the next week's CPI report is sort of like the last tests, you know, that we need to get to to see if the Fed will cut rates on September 17th. And it would really – the Fed would really have to – something would really have to happen to distract from that. But it would also – it's not just that rate cut.

5:49Will they talk about future cuts? But, yeah, the jobs report is the big thing on Friday. Got it. Take a look at QQEW. This is the equal-weighted version of the NASDAQ 100. QQEW ETF. This was, you know, it's been kind of straddling its 50-day moving average. This was a gap down, you know, below it. It did close up near its highs. The equal-weighted RSP, looking a little better than the Q's at this point, still holding at its 21-day line. And then we had bond yields really rose sharply. Did you understand all the selling in the bond market today, Ed? I don't understand. Well, just a couple of reasons that there were some concerns in Europe about the budget situation.

6:40There was a higher than expected inflation report in Europe. And then there's the concern. One thing that could happen about the Trump tariffs, if they are struck down ultimately, ultimately you would have to – the administration would have to repay all the tariffs that came before. Now, they could recreate them, but the ones that were paid now in the last few months, they would have to be refunded. So that would add to things. I mean, ultimately, it's still not really breaking the downtrend. I mean, it was up, but it's not fundamentally changing anything. Very good. And then take a look at some ETFs that have been market moving lately.

7:15You mentioned NVIDIA has been under some pressure. that look at the VanEck Semiconductor ETF, NVIDIA and TSM are the top holdings here. And this closed off lows too, but first time below the 50-day moving average for quite some time. It's a little bit like, okay, we only, it's like missing something on a test. Well, if you already had a 98 % going at the test, eh, you lose a couple of points, you're still getting an A. It's when you start getting to be like, I had an 80 coming into this and I didn't do well on that last test. You know, when you step down, this was already closed to the 50-day line, so the drop wasn't enormous, but, you know, it's more technical damage than for some other things.

7:55Yeah, and NVIDIA closed below the 50-day line for the first time in a while. It almost came back, but still closed below the 50-day line like SMH for the first time in several months. And it's just maybe this is just a great little shakeout that we'll have. Maybe this is starting with something more. It's just it's going to be interesting. You know, we're sort of at one of those key junctures once again. Absolutely true. And then the software ETF, IGV, this is kind of a similar look to the SMH here, also below its 50-day moving average. We've seen growth stocks come under some selling pressure, but FFTY, this is our proxy for the health of leading growth stocks.

8:38This still looks pretty strong, Ed. Yeah, I mean, sometimes you get the luck of the draw on the upside or the downside. It's like you have a couple of names in there, and there were some names that were really strong today. So there are definitely some pockets that didn't fall or had solid days or even great days. So I think this may overstate growth stock strength today, but still really nice to see the resilience here. And a nice day for biotech stocks. We check out the XBI, the SPDR S &P biotech. This actually cleared a buy point today. It broke out over last week's high or a recent high here, still in the 5 % buy zone.

9:21There was one big mover in this ETF, and that was United Therapeutics, UTHR. I think that was the big, big mover in this ETF. They're looking for a label expansion for one of their drugs to treat lung disease. And then another big story today, GLD, which we added, we increased our gold exposure in the leaderboard model portfolio. We added some GLD. It's ironic, Ed. You've seen, you know, we've seen gold producers working for a while now, at least a few weeks. And just now, GLD is starting to get up and out of there. Yeah, it is interesting to see that dichotomy. I mean, but really a lot of strength in gold, gold pure.

10:07and also just on the XBI. I mean, I don't know if they're actually in there, but there were a lot of big winners in biotech today. So I think that, and that lifted some other names as well. So, you know, sometimes it's hard to find. It would have been hard to buy those things. I mean, some of those gap ups would have worked, obviously, but there was a lot of individual names that had, you know, 20%, 30%, 40 % gains today. Yeah, yeah. Well, XBI still holding in a buy zone here. So biotechs and gold stocks among the best performers today. All right. Well, let's. This podcast is brought to you by MassMutual.

10:47For 175 years, MassMutual has been there for policy owners, financial professionals and communities through economic shifts and societal change. In 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. So switch gears and take a look at your first stock. It's going to be GE Vernova. This is a leaderboard stock that we did decide to trim today. This has been a nice winner in the leaderboard model portfolio, but talk to us about GE Vernova, Ed.

11:30Yeah, really strong performer. And I think that if, you know, if it investors could have, I think trimming makes a lot of sense here. I think you could wait to see how the end of the week or if it decisively falls from underneath today's lows, you don't necessarily have to wait till the end of the week. But if it's decisively below the 10 week line, you could choose to sell the rest of the position. And obviously, you know, people have gotten some pretty good gains. I know Leaderboard did. But yeah, this one looked like it was flashing a buy signal, maybe as it bounced off the 10-week line, then maybe even as recently as Friday, at least intraday, not Friday, but Thursday, when it sort of bounced intraday and sort of maybe breaking a trend line if you're looking to do something there.

12:10But that came off and reversed yesterday and today. There's a lot of AI stocks who are coming down. And it's not exactly clear why, but a lot of AI hardware plays are having a tough time. And it's just something to recognize. You can see how much GE Vernova sold off in February to April. Obviously, it was a bear market. Obviously, AI was in free fall. So I'm not really saying that. But it's just something to know. These hot, hot stocks can get very cold very fast. And I'm not putting that in there. And I don't know that. But I just think that investors always have to have that in mind. And, you know, when you're thinking about portfolio protection, not thinking, I want to get back to the old highs, you have to be thinking, well, at some point you need to take a profit and need to book a gain with a stock, whether that's two weeks, two months or 20 years.

12:59Absolutely. Well, we we took the opportunity to take some money off the table, trim the position by half. We were in GE as it was coming out of this base right in this area. I think May 20th is when we added it to leaderboard. And we'll still hold a half position here and see how this test of the 50-day works out. All right, let's move on to Boeing, which happens to be another model portfolio name, A recent new addition here, a stock that's been trending nicely above its 50-day moving average and nice day of outperformance today. Yeah, I mean, you know, it's been flirting around with early entries.

13:41I think if it got above Friday's high, you could do that. Nice bounce off the 21-day line. And that is a flat base, by the way, on a weekly chart. So, you know, this might have been, and I didn't check here, this might be a 52-week closing high today. So I didn't check to see if a couple of days ago was higher, but it's definitely. Looks like it could be. Yep. Yeah. So nice action there. Relative strength line is sort of at that high. It is definitely a turnaround. End of the year, we're supposed to finally get profits after really just no profits forever. So that would be a real positive there.

14:20There's a lot of jet orders going on. They got another jet order today. So definitely one that's acting well here. Here is the turnaround that analysts are expecting for Boeing here. You can see in these market surge charts, you can see the earnings and revenue really starting to kick back into gear after a period of softness. So that was the reason why we added it to the leaderboard model portfolio, just as a good turnaround. And a stock that here's that flat base that you were talking about, Ed, is really setting up nicely here. All right, let's conclude by taking a look at, well, oil and gas stocks we have not been looking at very often.

15:08I know there was some talk on IBD Live this morning, maybe seeing some names starting to turn in the oil and gas sector. It has been beaten down. What do you see in here in Technip FMC? Yeah, I mean, well, the relative strength has done pretty well, and a lot of energy stocks have not. I mean, energy stocks, a lot of them are coming up now. OK, they're starting to come up. They're maybe getting toward key resistance levels. But, you know, if you've called up XLE, I guess, you know, that would be one thing to, that's a big energy ETF. And a lot of it's dominated by Exxon and Chevron. But a lot of these ETFs will look the same.

15:45They're bouncing back. Maybe they're getting above levels. But you can look at that RS line, just weak, weak, weak. But FTI, you know, that's just a different animal there. I mean, that one has, this isn't just a, you know, that one you could argue that maybe today's action over Friday's high, maybe you could have used that as an early entry, you know, nice upside reversal. Yeah, this one has just shown a lot of strength. And, you know, if you're looking to diversify, I mean, obviously there's things like aerospace, there's medicals, a lot of things. But I think investors do want to be thinking about that.

16:19How much exposure do I have to AI? How much exposure do I have to tech? And just think about some of these other areas that are coming up. And if you're looking into energy, which seems to be moving up, well, you want to look for those leaders. And this one definitely seems to be among us. A few others that are close to highs. Refiners are close to highs. But this one has solid, solid earnings growth. The revenue growth has been decent. It's just it's been a real strong performer for a long time. It has been a solid name in the machinery and equipment group. You can see the nice uptrend that it's been on.

16:51All right. Well, thanks for those three stocks, Ed. Appreciate your insight as always. And I know we're on a slightly different SMT schedule, but it's going to be you and I again tomorrow. So thanks again, Ed. We'll see you tomorrow. Don't go too far. All right, folks, that'll do it for today. Thanks very much for joining us. Bullish day for the market. Really a soft open, but we did get some buyers come in and lift the market off low. So we will take it. If you haven't had a chance to check out IBD Live yet, I always like to do that at the end of our SMT video, investors.com forward slash IBD Live.

17:42you can see what we do every morning an hour and a half show on the market talking about actionable stocks so please join us if you haven't yet investors.com forward slash IBD live that'll do it for today and we will see you back here tomorrow have a great afternoon everybody

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