Bulls Dominate As Win Streak Continues; Powell Industries, Hilton, Vicor In Focus

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0:25Good afternoon, everyone, and welcome to Stock Market Today for Wednesday, December 10th. My name is Ken Shreve, and on today's show, we'll talk about the action in today's stock market. We had the Fed decision. They did cut interest rates as expected for the third straight meeting, and we had a pretty good response by the stock market. Nice day of outperformance for small caps. Before we get into all that, let me bring in our news editor, Ed Carson, who has got three stocks to watch for today. Good afternoon, Ed. Good afternoon. Yeah, it was a nice day. Here's three AI stocks, but leadership was broad.

1:05GE Vernova, Palantir, and Taiwan Semiconductor. Okay. Well, before we check out those stocks, let's go to the charts as we usually do. And I'll pull up a chart here of the NASDAQ composite. Tech stocks did lag today. We'll take a look at the NASDAQ here, which ended with a gain of three-tenths of a percent. You can see here, still holding up near all-time highs. And I don't know if we have seen a chart of the NASDAQ. There it is. You should see a chart of the NASDAQ here. And then the check-in on the S &P 500, which also rallied today a little better than the NASDAQ composite. That was up 7 tenths of a percent.

1:55Dow Jones Industrial Average also had a good day. Blue Chip Index ended with a gain of 1.2%, but the big gain was in small caps today. IWM soared to an all-time high here, closed a little bit off highs. As you can see, the Russell 2000 up 1.4 % on the day. So, Ed, we did see, again, tech stocks did lag today, but overall a positive response by the stock market, the Fed. It wasn't a big surprise that they cut interest rates. They did say that they were going to start a little bit of quantitative easing. They're going to start buying$40 billion worth of treasuries starting this Friday. They did hint at that at the last meeting.

2:52So maybe not a big, big surprise there, but overall a positive response by the market. Yeah, very positive response. I mean, the market really seemed to pick up the pace with Fed Chief Fallon. He seemed to have just the right balance. Honestly, just seemed fairly positive. I mean, you know, like, yeah, the labor market's got some issues, but he thought that would stabilize. He's not worried about inflation. He didn't really surprise. And obviously, I think the markets were probably just looking for no surprises here because it wasn't like, you know, because the Fed does seem likely to pause, or at least they're signaling to pause, giving themselves room to pause over the next few months.

3:25Ten-year Treasury yield fell, and it probably fell a little bit more than this. I mean, I saw it after the 3 o 'clock Eastern official close, that it was drifting a little bit more as Powell spoke. But again, the yield had been coming up to three-month highs, and it's now backed off. I mean, so the downtrend is still sort of intact. The uptrend is still sort of intact. So we'll have to see how that goes. uh yes the nasdaq was a little light but some of that was microsoft was weak meta was weak nvidia was weak but uh you know if you look at qqew uh that one was stronger that one showed a little bit more breadth you know in there because that's where you know there were a number of tech or techie type stocks that were showing strong action but there was a lot of strong action financials homebillers airlines there's all sorts of things were doing well today uh we saw a major not QQEW, but saw the major indexes all get above their short-term highs, at least intraday.

4:17So there was like that high from last week. They were all getting above that. The Russell, obviously, at new highs. Look, the market's at highs, basically. Stocks, leadership is broad. Stocks are flashing buy signals. This is a time to be pretty heavily invested. I mean, this is why the last couple of weeks have been a time to build up to that. You can keep building up to that. But it's sort of like, if you're not going to do it now, when would you get pretty heavily exposed? Again, if you are modestly exposed, don't jump in overnight and go from 20 % to 90%. But this is a time to be exposed, assuming conditions stay positive.

4:54Yeah, well, we were looking to add some exposure with the leaderboard model portfolio today, and we figured what better way to do it just by adding some small cap exposure. This was just a picture perfect technical breakout for IWM. This is the small cap ETF. And this is what just a classic technical breakout looks like here for IWM, breaking out to all-time highs here, crossing this 252.77 buy point here. And even, like you mentioned, DIA, obviously making a strong technical move today just breaking out over some recent highs not going into all-time high ground but definitely a strong technical action for really all of the major stock indexes today so this this really the rate cut today by the Fed it really is almost a one-and-done type situation because when you look at the the Fed's dot plot they're really only forecasting at this point things can change, but we're only looking at one rate cut for all of next year at this point.

6:04Yes, but it is definitely divided because the funny thing is that I think that there are something like six or seven. It's basically there's six or seven or so that want no cuts from here. There's a whole bunch that want two cuts or more. And then there's only four that want one cut. So, I mean, that's the median voter and that's maybe what we would get. But it's definitely it's tilted towards the it's not a bell curve where everything was in the middle. It's so it's going to be divided heading into next year. And again, the Fed's going to change. I mean, some of the policymakers, the regional Fed presidents rotate and some of those will rotate in on January.

6:40Some may be more hawkish or dovish, but the, you know, Powell will be leaving in the spring. So what the Fed has to say about 2026, keep in mind, the Fed will look much different in a few months from now. Yeah. Yeah. Well, you mentioned some of these equal weighted ETFs, RSP, really acting strong here up near all time highs. RSP, little mini breakout of its own here. That made a nice move. Definitely outperformed the S &P 500 today with a 1.4 percent gain. And then QQEW, the equal weighted NASDAQ 100 ETF, also a nice move today, up nine-tenths of a percent here today. I'm Steve Booth, CEO of Baird, an independent wealth, asset management, and global capital markets firm.

7:33At Baird, our 5 ,000-plus employees are united by an unwavering commitment to excellence and a genuine passion for helping our clients and each other succeed. As a privately held, truly employee-owned company, we treasure our independence since we can focus on delivering results to clients and taking care of our people throughout the cycles in our serve markets. Learn more at rwbear.com slash wsj. I saw a very nice move today in GE Vernova. GEV had an analyst day yesterday and spoke about some very bullish guidance. Their turbines seeing very strong demand, powering data centers. GEV had a nice gap up out of a long consolidation here.

8:20Had been showing very good price action before the gap up with a nice move above the 50-day moving average. But they did have some pretty good things to say. It wasn't an earnings report. Just had some very bullish things to say about business going forward late yesterday, Ed. Yeah, I was talking about 2028 guidance and that matters because they're basically sold out for the next few years. So there's only so much they can raise guidance in the short run. But it's just like there's just this unlimited demand right now for its natural gas turbines. It raised its buyback to 10 billion from 6 billion, double its dividend, just sounded very bullish here.

8:55it was interesting that ge vernova did not have much in the way of coattails like if you look at something like bloom energy and some of the other ai energy plays like bloom energy or constellation energy uh some of them came off lows well actually bloom didn't it came off lows then fell back again and so even with the fed cutting rates even with everybody rah rah it was interesting that there was just no coattails and i think ceg the last time i had looked that was also down uh so that's a big nuclear play. So again, that's just a little odd. But yeah, GE for Nova. Oh, that did come to Iraq. But that's after the Fed.

9:32It wasn't because of GE for Nova. But GE for Nova, I think at this point, there were opportunities you could have bought it in the buy zone. I think now you might want to wait to see if it can hold here or drift back into the buy zone, because that's a pretty big move. And you don't want to be chasing something because falling 10 % from here wouldn't be that shocking in the next few days. So you just have to make sure you're buying right on these things. Yeah. Always want to pay attention to these stocks that gap up very, very strong buying demand here. You can see volume exploded to well above average.

10:06Obviously, some big institutions at least doing some of the buying today. So if this stock can hold on to these gains, you often here. Stocks will often come back and fill the gap. That is sometimes the case and sometimes not the case. But if GE Vernova can kind of hold tight here and trade sideways, that would be a sign of strength and support. And sometimes you can get alternate entries when stocks gap up powerfully like this. So a very bullish move for GE Vernova today. Let's go ahead and take a look at another strong mover today that really just didn't go down or give back any gains. Palantir, there was news moving this stock before the open.

10:55They had a nice contract with the U.S. Navy. This one has been working its way higher for the past couple of weeks, showing improving technical action by the day. Palantir Technologies, what do you see here, Ed? Yeah, that Navy contract certainly helped. It had gotten above the 50-day line, but hadn't really clearly done it. So I think today it's now clearly above the 50-day line, but not too extended. I think it's probably like 4 % above the 50-day line, something like that. So today was certainly a day, especially after the Fed cut, that you could say, I'm going to add exposure. This was the first day in a while that there's been higher volume.

11:32That was one thing about the rebound, is that there really wasn't any volume to that balance, which made it a little suspect. But today we saw the best volume in a while. So that was positive here. You know, it's getting above some of the levels. It didn't quite get above this old buy point of 188.20, but it's sort of some of the old holders from recent weeks all in that area, you know, are happy again early, you know, so that's positive. So it was a buying opportunity here. The fundamentals are great. It just has had quarter after quarter of accelerating revenue growth, generally trending up earnings growth.

12:06So a lot to like here. Yeah, people always talk about Palantir's stratospheric PE multiple, and it is a pricey stock, 284 times trailing earnings, 193 forward earnings. You can see that the growth that this company is showing, huge annual earnings. But when you just look at the recent quarterly results here, sometimes stocks sell at a premium valuation for good reason. And you can see that the growth is accelerating and the strong growth is expected to continue. And Ed mentioned this contract, a$450 million contract with the U.S. Navy. The company's foundry analytics platform is going to be integrated into parts of the U.S.

12:56Navy. So Palantir just still coming out with a lot of different contracts and companies still in the early stages of growth. So still a compelling growth story for Palantir. And then the final stock today is going to be another nice mover, Taiwan Semiconductor, the world's largest chip foundry, TSM. Take a look at Taiwan Semiconductor. We'll pull that up here.

13:30And we'll take a look at the daily chart for Taiwan Semiconductor.

13:37Come on now. Yeah, really nice move today. They reported like something like 25 % revenue growth. Yeah. Yeah, in November versus a year earlier. I mean, the growth is slowing a little bit, but still strong growth. You know, it did just close above this double bottom buy point. It's been actionable for the last couple of days above the 50-day line. So it was actionable. But, I mean, the upcoming sales were an issue. Here it's moving up. It is, you know, this is much like SMH. These are sort of like, this is one of the better ways, safer ways, I would say, to play the AI thing. Because whether it's custom chips or it's AMD or it's NVIDIA, Taiwan Semi makes them all.

14:18So even if it doesn't end up being the biggest winner, it seems like it will likely be a winner as long as AI chips are winners, you know, in general. So this is definitely one to play. I mean, I will note that Broadcom does have earnings tomorrow, but, you know, it does seem like Taiwan Semi has its order book full and should be doing well here. Nice action. Yeah, just it provided opportunities ahead of time. Nice move here that people could have taken advantage of. Absolutely. And still in the 5 % buy zone here, still in the early stages of breaking out. And look at the fundamentals here, too.

14:58You look over the past four quarters of reported earnings and revenue. I mean, you're talking about rip-roaring growth here. So you see a lot of these tech stocks just going to the moon, but in many cases, there's just really, really strong fundamentals that are fueling the growth here. So Taiwan Semiconductor, just like Palantir, really a compelling growth story. So another stock that is in a buy zone here just now starting to break out of this pattern here. So you have a buy point here of 310, maybe 311.37, but the stock at 310, still in the buy zone here. You mentioned Broadcom reporting earnings tomorrow.

15:43We've been talking about the outperformance of all different kinds of chip stocks, and you can see Broadcom is up near all-time highs. That hit another all-time high today. We do have a couple of earnings reports after the close. At least I know we're going to take a look at Oracle, right, Ed? I don't know if they have come out yet. Oracle's reported, yeah, they had mixed results. Earnings beat, but revenue fell short, including cloud revenue. And so, I mean, people, I think, really want to see positive news. And you can see it gapped up after the last earnings report. But then people just thought it's sort of like it's almost like they went into a buffet and said, I want everything.

16:24and they put on their plate and people said, are you really going to be able to eat all that? Are you going to feel good about that? And so there's still, I mean, maybe it will all work out. I think the conference call will be very important. I wouldn't be shocked to see this move around a lot. But that's an important report because a lot of other companies may take their cue because that was the catalyst for a lot of things. And then it fell back. So that one's negative so far, may fall back below the tuning line. Synopsys seems to be out. SNPS. They're a chip design firm. They have not chip design software firm.

16:56So they haven't been doing very well lately. They did rebound recently because NVIDIA took a stake. So maybe this can get above the Tunity line. But the opposite from Oracle, where this one gapped down after the last report, now it's trying to get back the other way. So there's that. And one more is Planet Labs, PL. That one seems to be doing pretty well after hours. I haven't looked at the report there, but I think it broke even when it was supposed to make another loss. So that's capping up, you know, nicely after, you know, sort of pausing right before the 50 day line. So those are some. Yep.

17:34Yep. And a big one tomorrow morning to add this fiber optic group, which is the number one ranked group in the market right now. This is a big one because this is the first report that we're going to see in the fiber optic group from Ciena, C-I-E-N. I believe they report tomorrow before the open. This is a stock that has been a huge, huge winner and the fiber optic group number one in our database currently. So what they have to say about demand is going to be very important. The stock hit an all-time high ahead of the results tomorrow. And then after the close Tomorrow, we've got Broadcom, which is going to be an important report as well, customized AI chips.

18:20So that is going to do it for today's show. Ed, as always, we appreciate your market insight. Thank you very much. Thank you, Ken. All right. And I'm here, but really it shouldn't be me. Okay, that is better. Thank you very much, Claire. That will do it for today. Thanks to Ed again. And for tomorrow, I believe it's going to be Ed and Lexi for the stock market today video. So you will have them tomorrow. Ed is going to be hosting IBD Live tomorrow on Thursday. So be sure to check out investors.com forward slash IBD Live. Until then, I hope you have a great afternoon, everyone. We will see you back here tomorrow and take care.