Blue Chips Soar, Nasdaq Snaps Back: Veeco, Citigroup, Indivior In Focus

0:00Look, when people start to gamify investing, right? So when you think about people being rewarded with balloons and fireworks for trading, which we know is the more you trade, the worse offer you're going to be in the long run. I'm Joe Davis.

0:12Ken Shreve:And I'm Christine Kashkari. And this is Season 2 of Better Vantage by Vanguard, an eight-part video podcast series hosted by custom content from WSJ and Vanguard.

0:32Ken Shreve:Good afternoon, everyone, and welcome to Stock Market Today for Thursday, June 4th. It's Alyssa Coram here. And small caps and blue chips soaring on the day. Some nice outperformance there. Joining me now to discuss the action in today's session is my colleague, Ken Shreve. Ken, it's always great to see you. What do you have for us? Oh, I'll tell you, quite a bit of action today in the market, Ali. Almost a 900-point gain for the Dow Jones. Like you said, small caps, a big day for them, too. Quite a bit of action in the NASDAQ as well. So got three different stocks to talk about today. We'll talk about a chip equipment stock, VECO, V-E-C-O.

1:15Lots of outperformance from financial stocks today. Could have spent the whole show talking about financial stocks. But we'll talk about Citigroup, ticker C. And then we spent yesterday's show talking about a whole bunch of health care stocks. So let's stay in health care and talk about Indivior, I-N-D-V.

1:35Ken Shreve:All right, a lot to get to. So first, let's take a look at the major indexes. The Nasdaq composite on the day down by about one-tenth of a percent, but closed nicely off the lows here, Ken. So that was impressive. Meanwhile, the S &P 500 up four-tenths of a percent on the day, a nice upside reversal at a key short-term line. The Dow on the day, like you said, up almost 900 points, up 1.7%. The Russell 2000 small cap index also had a nice day with the IWM ETF up some 1.6%. So a nice upside reversal there, too. So seeing some strength out there, Ken, what are your thoughts on the action? Well, I mean, pretty, pretty incredible.

2:25We've been talking about a bull market that has just not really shown any quit. We've kind of seen, you know, blue chips and small caps kind of running in tandem and they did it again. You know, today we saw a lot of really strong outperformance from blue chips today. It was, you know, kind of UnitedHealth, UNH in the Dow that did a lot of heavy lifting today in the blue chip index. And we had a lot of financials outperforming in the Dow. Look at all these technical setups in the Dow. Goldman Sachs, really nice day for Goldman. JP Morgan made a nice move today. American Express. So just all sorts of, you know, broad-based strength in the blue chip index.

3:17So definitely saw a rotation. Really interesting, Ali. You know, we had three really high-profile earnings reports at the open and three stocks that were down sharply. And I'll tell you, we were watching Broadcom's earnings after the close last night. And, you know, they had their conference call and said some things about AI that I don't know. I mean, they were talking about their AI chip revenue for their fiscal third quarter, said it was going to be up 200 percent. AI chip revenue, you know, up 200 percent,$16 billion. That was a little below estimates. And, you know, the stock sold off. But Broadcom ended up, you know, closing off lows.

3:57It wasn't great to see a 12 percent decline for the stock. But between Broadcom, Sienna and CrowdStrike, it really had all the makings for a tough day for tech stocks. And, you know, to see the NASDAQ down 1.1%, I think it was down on an intraday basis. And to see it, you know, come all the way back and just make a really nice stand at the 10-day moving average, We just got reminded again that there are still buyers around and there is money on the sidelines coming in and offering support here. So, you know, I know we talked yesterday about let's see if the NASDAQ can find support at the 10-day line here.

4:43And that's what it did today. So it's another strong performance for the market. And, you know, I think the state of AI stocks may be, you know, still in question here. But, you know, when you look at Sienna, which fell below the 50-day, no question about it. But look at what it did today. You know, I mean, this was a, at one point today, this was a decisive break of the 50-day moving average. No question about it. It was below the 50-day. It was down near lows in heavy volume. and then buyers came in, lifted it back above the 50-day line. So this was a good case of support. And what looked like a real bad distribution day for the stock, there were actually buyers that came in and lifted the stock off lows.

5:34So it actually ended up looking like a support day, even though it was down double-digit percentage decline. There were some buyers in there lifting the stock off lows.

5:44Ken Shreve:Yeah, so some nice support there. And for the broader AI theme, even with some of the tech earnings weakness. And I think what will be interesting to see from here is this mini upside reversal that even though we didn't close positive on the NASDAQ today, we did for the S &P and the other indexes. But could this short-term bounce be something that we see continued into tomorrow's session? Or if we do get a continuation of the pullback, perhaps to the 21-day line, I think it's good to see this type of action in a pullback where you are closing off the lows, right? So it's this orderly, gentle pullback.

6:29Ken Shreve:You're still seeing buyers come in. I think that that strengthens the case for potential support and a strong bounce at the 21-day line, which I would really like to see actually in this power trend. So I don't think that would be a bad thing to see that as we do see a continuation of the pullback. Yeah, and I think our senior market strategist, Mike Webster, wouldn't mind seeing that as well, as a lot of other market technicians wouldn't mind to see a test of the 21-day line here and just to see a little more digestion of the gains. And that's entirely possible. You know, just we had a nice recovery by the market today.

7:14But, you know, we'll see. We're at the end of the week. So we'll see if we get some more follow-on buying tomorrow or we'll just see. But it's still possible that we could come down and test that 21-day line. But at least what the market gave us today, the bulls certainly have to be quite pleased. We can leave. Just look at some other quick stocks. I mean, we've been following NVIDIA, which had been under some selling pressure. We were very encouraged by NVIDIA's action today that came down and reversed higher. That was under some pressure. That looked like it was going to be down sharply for the third straight session and kind of following Broadcom lower early in the session.

8:02But it found some buyers and reversed higher above some short-term moving averages. And even Google, which had been, you know, threatening a break and was kind of coming down close to its 50-day moving average. Even that one kind of reversed higher and had a decent close as well. So we saw some pretty good action in a lot of individual stocks. And again, when you kind of go in and look at Broadcom's earnings report, and again, we do have this stock in the leaderboard model portfolio. And we had a really nice gain in Broadcom. And it was disappointing to see that big gain, you know, a lot of it disappear.

8:45We're still profitable in the position, not as much as we were. And it was disappointing to see a lot of it, you know, disappear today. But, you know, we're still holding it. And we'll see how it reacts after today's, you know, modest recovery. But the earnings report, there still seemed to be a lot of good news in there to me. And again, this whole thing about, you know, disappointment about AI guidance, the guidance still seemed pretty strong to me. And what they said three months ago about, you know, the business with Anthropic and OpenAI, there's still a lot of good going on at Broadcom. So we'll see.

9:33We're still happy to be long the stock. It was disappointing to see the gap down. It had rallied quite a bit, obviously, headed into our earnings. So it was good to see it recover off lows. You look at it showing the accelerating growth, just like NVIDIA is. I mean, even the results this time around was nice acceleration from the prior quarter. And even growth three months forward is supposed to accelerate going forward as well. So numbers seemed pretty good and, you know, disappointing reaction, but at least it did close off lows and there were some buyers around today.

10:11Ken Shreve:All right. Well, we'll have to see what happens with the stock in Friday's session elsewhere. Let's go to Q &T. Yeah, I just wanted to give people a heads up. This was kind of a high-profile IPO that took a while to open. This was a Honeywell spin-off, and yeah, the ticker QNT, quantum computing stock. And yeah, they priced above expectations at 60 today, and it closed right around, it looks like it traded all the way up to a little over 71. I think it hit a high of 71.35. It priced at, like I said, it priced at 60. was supposed to go off, I think, between 53 and 55, something like that. And, you know, kind of went up to 71, 35 and closed right around where it priced last night.

11:08So kind of an interesting IPO to keep an eye on in the coming days, but just an IPO that opened quite a bit later in the market today, but just wanted to keep an eye out on. And I just wanted to give a heads up on a Honeywell spinoff that went public today.

11:28Ken Shreve:Absolutely. Continuum. Continuum. Thank you. I wasn't really sure how to go about pronouncing it. This is my best guess. But let's see if it forms an IPO base over the next couple of days to weeks. another great reminder we've we've had a couple of good reminders lately ken with the ipos of why we typically don't like buying on day one we want to see some sort of level to trade off of and that's hard to get on day one and i think it also is especially a good reminder ahead of this the spacex ipo that one's going to be uber high profile and i know the fomo is going to be there and you never know sometimes that could pay off i would say if you are going to be really aggressive manage risk but in uh in general you do see this a lot on day one of ipos even the super high profile ones right meta when it went public as facebook that stock didn't get above the day one high for over a year i think right exactly exactly yeah i want to let them just develop a little bit of a trading personality.

12:42So that's what we'll do with Quantinuum. You know, just let it trade for a week or two and let it just develop a little trading personality. But anytime a stock, you know, prices well above the proposed range. And this isn't a good industry group in quantum computing. There's a lot of strong price performers in the quantum space. And yeah, so we'll see how this one does. But it was a fairly high profile IPO with some good underwriters. And so we'll see how it does here. Yeah.

13:18Ken Shreve:Okay. Let's also check out KBWB briefly. You mentioned the strength in bank stocks. So look at this breakout today at 3.7%. So a lot of strength in the banks. There was a lot of movement among the financials today. We talked about the money also moving into health care as well. We talked about three health care stocks yesterday and saw some health care outperformance again today. So, yeah, and you see this is another ETF we'll talk about. But KBWB was a nice breakout today and saw several breakouts in the financial sector today. So this theme of the market broadening out here still plays. And this was a great breakout today.

14:04Definitely buyable, just a classic cup with handle breakout here over the 90 level. Still in a buy zone if you don't want to own individual stocks in the financial sector. This is an ETF that looks actionable here. And it owns all the big money centers. I looked at all the top holdings. It's Morgan Stanley, Goldman Sachs, Bank of America, J.P. Morgan. They're all in the top five holdings. So excellent ETF here to consider. Nice breakout, clean breakout, still in a buy zone. All right.

14:45Ken Shreve:Let's see if it holds. And let's go to XLV. This is the broader health care sector ETF up 3.1 percent on the day. So like you said, if we're continuing to see money come in from the sidelines, more areas participating in the market, that's going to help continue to fuel this broad market rally, one would think. Yeah, definitely. And this is kind of broke out from, you know, kind of deep inside a consolidation here. So, you know, maybe not as crystal clear a buy as KBWB because XLV is kind of breaking out from kind of a deeper inside a consolidation here. But still, I think actionable if you just want a little piece of the health care rally here and you don't want to own an individual stock here.

15:34I think XLV was actionable today. And again, just another way to partake in the health care rally. There's a lot of ways to do it. I mean, we're seeing great action in biotech stocks, the managed care group, the health insurers today, whether it was UNH and the Dow, a lot of health insurers were outperforming today. And like I said, the biotechs were doing great, too.

16:00Ken Shreve:Yeah. 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. All right. Well, let's turn our attention now to VECO. VECO in the Semiconductor Equipment Group upside reversal today. Shares gaining more than 5%, a little bit of a flag that one could argue it's clearing here, Ken, after a fantastic run going from 35 to 65.

16:51Yeah, I just like the setup here. And again, you know, the chip stocks are still, you know, they're still doing well here. The relative strength line is still really strong for Vico in the chip equipment group. It's still a very strong industry group in the market. Now, when you look at the recent results here, you look at the third quarter growth and the fourth quarter growth, first quarter, there's a lot of declining growth here. But this is a classic turnaround story because you look at the annual earnings and the earnings are really expected to ramp up here. And then going forward, you look at, you know, second quarter, third quarter, fourth quarter, growth is really expected to ramp up here.

17:37So this is, again, in the chip equipment group. Again, a really, really strong breakout from a base several weeks ago and just holding nice and tight up near highs here. You mentioned sort of this pennant, you know, kind of flag type of, you know, formation. So the fact that it's just holding tight near highs here, almost trying to break out of a downtrend right now up near highs. I think this is, again, in a really strong industry group. It's a strong stock. It really has the look of a turnaround story here. So as chip stocks continue to outperform here, this is clearly a group leader that is right in the sweet spot of growth here.

18:19And when you've got that future growth runway looking as good as it does here, I think this is one definitely to keep an eye on. And a very powerful breakout, too. You can see how strong that breakout was when it started to run over 35. The breakout was over 35 and really ran powerfully up to that 60 level. And the pullback was basically down to the 21-day moving average. So it's kind of an orderly pullback and really holding well near highs.

18:51Ken Shreve:Yeah, some nice support there. Moving on. Well, if we're talking about strength in banks, let's cover one, right? Here's a look at Citigroup up 4 % to break out on the day. Yeah, this is really nice. We looked at Goldman in the Dow, which has really started to move. That's probably a little bit extended. But Citigroup, this is really kind of a classic example of what looks like a base kind of on top of a base, a base on base structure. So it initially broke out, rallied a little bit and then formed kind of a second base on top of a cup base here. So Citigroup is still in the early stages of breaking out of this second cup base, kind of sitting near that 135 level.

19:38So if you want some, you know, financial exposure in an individual stock and you don't want to own KBWB or XLF or one of these other financial ETFs, I think Citigroup is right here. You know, it's just kind of sitting right at a buy point. It's been consolidating. So, you know, you're going to have a relative strength line that's off highs. But, you know, people look at Citigroup as such a, you know, venerable, you know, just a great, you know, large mega cap institutional quality name, very well run company. So I think it looks great here, you know, right at the top of a base in a buy zone and looks pretty solid.

20:24It's going to be interesting to see. I mean, there was a clear rotation into the financials today. Obviously, people are still feeling optimistic about this economy. People are still worried about inflation, but there's a feeling that the Fed might have to raise rates by a quarter point by the end of the year. And they're doing that because the economy is still chugging along here and looking pretty good. And maybe that's why the financials are holding up pretty well here. So a lot of money flow into the financials today. So Citigroup may be worth a shot here.

21:01Ken Shreve:All right. Yeah, some nice outperformance in that relative strength line over the last year and a half or so. Okay, let's move on and take a look at INDV next. Ken, this is in the medical group. Look at that upside reversal taking shape this week. shares up 4%. So a compelling reversal and compelling fundamentals here. You've got that accelerating top line growth now in the double digits. You also have triple digit bottom line growth for a couple of quarters now. Yeah. And yeah, we always like that, that just that good blend of technicals and fundamentals. And with, in Divier, this is on the daily chart, you know, this is just a nice technical move, a nice little breakout over a trend line on the daily charts.

21:58I think the stock was, you know, actionable today. On the weekly chart, you know, it's just a great kind of upside reversal. Nice weekly bar on the weekly chart, climbing back above that 10-week moving average. Very profitable, you can see here. It's had a few little earnings blips recently, but you can see the company in recent quarters has really turned into growth. It's a pharmaceutical, not technically a biotech, but they're a drug maker. They're very interesting what they do. This company treats opioid dependence. So people that are having problems with opioids, this company deals with drugs drugs that help people get off of opioid dependence, which we know is still a major, major problem in the U.S.

22:56and around the world. So they make drugs that help people, wean people off of opioid dependence. So it's kind of a niche market that this company is doing very, very well in and making a lot of money and helping a lot of people get off of that terrible addiction. So it's in a nice setup here, kind of back above its 10-week moving average and really trying to get up and out of there from this consolidation. So you've got the fundamentals, you've got everything kind of in line here. So we'll see if it, you know, you've got a market uptrend, you know, good fundamentals, decent technical setup, a stock that's in the early stages of breaking out of a downtrend.

23:40We'll see if it can, in a good industry group, you know, right sector. So we'll see if it can get moving here.

23:48Ken Shreve:All right. Well, we have a few earnings reports to look at after the close, right? Okay. So in the space industry, we've got Planet Labs, ticker PL, shares down about 2%, I'm seeing, after hours. It's been a strong uptrend. So thoughts here, Ken? Yeah, it's been a big, big winter. They do satellite imagery and it's been a kind of a mainstay in the IBD 50 and, you know, fast, fast grower in a strong uptrend and not moving, not moving a whole lot down, down 2%. But we've been following this one for a while. And yeah, just kind of just down a little bit. So we'll see what the numbers look like. But, well, they have really been delivering strong growth in recent quarters.

24:47So sort of a muted reaction so far, but interested to see what the quarter looks like.

24:55Ken Shreve:Okay. Next on the list to check in on AGX. This is in that heavy construction group that we've seen a lot of big winners from. I'm seeing shares up over 4%, Ken, another stock that has had a phenomenal move over the last year plus. Yes, this has been a big-time winning industry group. I've seen a lot of, boy, so many good earnings reports in this group. A little surprised with how DICOM gave back a lot of gains. because DICOM was really one of the big earnings reports in this group. And this stock came all the way back down, but tested that 10-day moving average, is finding some support. But DICOM had a nice earnings report in this group and then kind of gave a lot of it back, but is finding support.

25:44AGX, this has been a longtime winner in the group and looks like a positive reaction so far. Came down close to its 50-day moving average. Didn't quite touch the line, but we'll see if it can hold these gains in the aftermarket here. Weekly chart, yeah, this is another test of the 10-week moving average. You can see that base breakout. I'd call this the second test of the 10-week line. The tricky thing here is that it looks like it's probably going to gap up tomorrow. So this will be a tricky buy because if the aftermarket gains hold, and it does indeed gap up, it's probably going to get quickly extended.

26:28But, you know, just a strong stock and a strong industry group. So we'll see. Might be a tricky one to handle tomorrow. We'll see where it opens. But just another leader that we're paying attention to.