Dow Jones, Nvidia Jump Despite Tech Selling: Eli Lilly, Avnet, BSP In Focus

0:10Ken Shreve:Good afternoon, everyone, and welcome to Stock Market Today for Wednesday, August 5th. It's Alissa Coram here and a mixed day in the market with some downside reversals, but it's been a big couple of days. We'll give you the perspective you need. Alissa Coram here along with Ken Shreve. Ken, great to see you. Great to see you too, Ali. Found three stocks to talk about as usual today. Two reported earnings. Let's start by taking a look at Eli Lilly, which managed to hold support at its 50-day moving average today. Sellers knocked the stock a little bit off highs. Still closed higher today. I also want to take a look at a really nice earnings report from AI infrastructure stock Avnet.

0:55And finally, let's end by talking about Bending Spoons, a recent IPO that's trying to break out of an IPO base, BSP.

1:04Ken Shreve:All right. We will do that. But first, let's take a closer look at the major indexes. Sorry, I'm pulling up a chart of the SPY ETF tracking the S &P 500 reversing lower on the day, down about two tenths of a percent. Meanwhile, the NASDAQ composite down eight tenths of a percent on the day. And the Russell 2000, also a down day there, down about a half a percent or so after two strong days of gains. The Dow did have another up day here, Ken. And so this is starting to, for the Dow, you know, looking pretty explosive here, up about a half a percent. So maybe we'll start with blue chips. Your thoughts.

1:48Yeah. I mean, it was really, what was this, five up days in a row for the blue chip index. And this is where all the strength was in the pre-market, too. So we had a lot of nice earnings reports in the blue chip index today. I mean, I had to put NVIDIA in the headline on our stock market today video today because NVIDIA was a 4.6 % gainer. I mean, look at that move off of lows for NVIDIA. No earnings today for NVIDIA, no specific headlines. I mean, there was more selling in the chip space today. We had a nice earnings report from AMD today, but there were sellers that hit AMD despite, you know, more strong growth in the data center business.

2:36But I guess bad news for AMD was probably good news for NVIDIA. So big gain, 4.6 % in the Dow. And then Disney and Amgen, big earnings winners in the Dow today. So those were big reasons for the Dow outperforming today as well. So look at the blue chip index, you know, closed off highs, but still, you know, four tenths of a percent gain and hitting all time highs.

3:08Ken Shreve:No doubt. All right. Let's take a look at the S &P 500. Here's the VOO ETF. What do you make of today's downside reversal? Should we be concerned or does it make sense given how much we've come off the lows in the last week? Yeah, I mean, it was, you know, that downside reversal. It was good that volume quieted down in the market today. We had we had a good good volume yesterday on that really nice percentage gain for the S &P 500. Pretty modest pullback off off highs recently for the S &P 500. Remember when SPY pulled back from that 700 level down to, what was it, 660, something like that, it was only a pullback of about, what was it, 5%, 4 % or 5 % off its high.

4:00So, you know, really explosive four-day gain for the S &P 500 culminated with that nice percentage gain yesterday. So lower volume decline today and just a modest, what was that, a two-tenths of a percent decline. So good to see it in lower volume. So we wouldn't want to see kind of a higher volume decline today. So lower volume, it looks like, both on the NASDAQ exchange and the New York Stock Exchange today. So that was good to see for both indexes today.

4:38Ken Shreve:And here's a look at the NASDAQ composite, once again, reversing lower. We are still above the marked high of 26 ,316 from that mid-July timeframe, Ken. And I know senior market strategist Mike Webster is also keeping an eye on Tuesday's low as an area. He wants to see the NASDAQ hold above. Yeah, I think this is definitely a confirmed rally for the NASDAQ too. much more of a shakeout in the NASDAQ, more so than the S &P 500. I mean, this pullback for the NASDAQ was technically an intermediate term correction because this pullback, you can see that it was a good shakeout in the NASDAQ. It started this four-session win streak after, you know, it undercut some lows.

5:28This latest pullback for the NASDAQ did exceed, slightly exceeded 10, 10 % off its recent high. So it pulled back and then started this four session win streak. And then that big percentage gain yesterday, even though the NYSE composite volume was a little bit lower than the prior session. I think Chris Gessel on IBD Live said that the that the actual, the, it's escaping me, the, not, not the, the volume. Dollar volume? Yeah, the dollar volume on the, on the composite was actually, the dollar volume was higher than, than the prior session. So we could call, call it a follow through day for the composite yesterday.

6:13And then the decline today, you can see it looks like it's going to be in, in lower, lower volume. So and again, as Webby said, that low is holding from yesterday. You know, if we were to undercut it yesterday, that could be a little more problematic and it might cast a pall on this rally that we're seeing. But overall, pretty good, pretty good action, despite that earnings sell off for a couple of big chip names today. Not only AMD, but also ALAB as well, which was one of the big, big winners in the chip space last year, along with MRVL. But ALAB, you know, came up to its 50-day moving average yesterday with a big percentage gain.

6:58And then that earnings sell off today down 11 % and pretty, pretty heavy volume, despite really, really strong growth. You can see the top line up 100%, earnings up 80%. So, you know, high PE stock here. So the strong growth was expected, but just not quite good enough. So overall, not too bad a day for the NASDAQ, despite some pretty big selling in AMD and Astera today.

7:30Ken Shreve:All right. And you know what else we saw I feel like contributed to the downside reversal, Ken, is this Google news, not Google. Yeah. Google news with what the head scientist leaving to start his own AI company, because we had seen the money flowing back into the mega caps really helping boost this rally over the last couple of days. You also had a downside reversal for Amazon as well. So two pretty big names turning lower here, contributing to that. Yeah, the news on Google was disappointing, especially since we added Google earlier this week to the leaderboard model portfolio. When you look at Google, I mean, to its credit, it did stop at its 50-day moving average.

8:18But this gentleman, Jeff Dean, apparently chief scientist, really regarded as one of the pioneers of artificial intelligence and has been at Google for some 27 years. I don't know if this was related to the recent delay that Google had with their latest iteration of Gemini that was delayed. They weren't happy with the performance, so they pulled it. But this guy is leaving Google after 27 years, and that definitely impacted the stock. You can see it paid a visit to that 50-day moving average. It stopped and then kind of rallied off lows a little bit. So it's now about 2 % below our entry. So nowhere near a sell signal.

9:07And it did kind of find support here. So we expect that Alphabet is probably going to, we're hoping it's going to hold support here and firm up. You know, we'll see how it goes. But it's a new position for us in the leaderboard model portfolio here. So kind of tough news for Alphabet today, but maybe a knee-jerk reaction. We're expecting it to firm up here. We'll see how it goes.

9:32Ken Shreve:All right. So some bonus stock analysis for everyone. As always. This is a dynamic market. There's just so much going on in recent days. There's just lots to talk about. Yeah. Yeah. This is our favorite thing to do. Here's a look at the RSP reversing lower off highs, but still a very strong uptrend here. And then to highlight another area, you mentioned the chips already. Here's a look at software. downside reversal here as well, but quite the ascent in recent sessions, Ken. Yeah, great earnings from Shopify today in the software sector. Big, big move for Shopify. A lot of stocks gave back early gains today, but still Shopify up more than 15 % on the day.

10:22Did close well off highs, but big move for Shopify. And that move for IGV, you know, really, really has been a nice picture of outperformance lately. Software stocks, Dynatrace, DT, another nice earnings report in the enterprise software group today. Also closed, you know, off highs, but still, look, that's a Dynatrace had a nice percentage gain, DT. So that one doesn't want to come up for some reason. It doesn't. It's shy. Feeling shy.

10:54Ken Shreve:There we go. There it is, Dynatrace. Yeah, Dynatrace was up more than 10%. So this software group continues to deliver really nice earnings reports. And yeah, and IGV has been a nice area of outperformance. And yeah, just a low volume decline there. You can see how many up sessions in a row for IGV above all of its moving averages. So it's going to consolidate a little bit, reverses slightly lower. But look at the volume behind the reversal today, much lower than the prior several updates in a row. So it seems pretty, pretty early today. Yeah. All right. Let's take a look at more stocks. Here's a look at Eli Lilly.

11:38Ken Shreve:You mentioned the earnings there. A little bit of a volatile day, which you do get sometimes with these earnings reports. The shares finishing up 4.9 % on the day off the highs at the start, but also off the lows here. Ken, seeing earnings growth of 33%, revenue growth of 48%, both solid, but it did mark some deceleration from the prior quarter. What's your read on the earnings and the stock action? Well, this is another leaderboard holding, another model portfolio holding, and we have a modest gain. We've held this off and on through the years, and the last time we put this back on in late May and don't have a big gain at this point.

12:30And we did decide to hold through earnings, even though it recently did undercut the 50-day moving average, which is a technical no-no. And we were very encouraged to see another strong earnings report. The diabetes drug, Monjaro, the revenue growth here was up 91 % from a year ago. almost made up half of the total revenue,$9.9 billion in revenue, the Monjaro sales. So that was up 91%. The Zepound, which is the obesity injection treatment revenue there was up 46 % year over year to close to$5 billion. They just started sales of their Fondeo, the oral weight loss pill. So, yeah, there's a lot going on at Lilly.

13:23And again, it just it came down to the 50 day moving average. Sellers knocked the stock off highs, but it held support. So we were hoping it was going to kind of close up near highs and hold on to those gains a little better, but still closed higher by close to 5%. So it's really just kind of retesting this, the top of a prior base here. So we were encouraged that it held support at the 50-day moving average. We'll see if it just can kind of hold near the top of this prior base here. We'd like to see it continue to hold support at the 50-day line and hopefully start to make some progress here and start lifting closer back to all-time highs here.

14:07So overall, I thought it was a great report. Listened to the CEO on CNBC today. And again, the pipeline is still very strong in their neuroscience area. They're doing very compelling work in Alzheimer's, mental health area, oncology. So they've got a lot going on. And they just announced a recent acquisition where they mentioned this morning on IBD Live, where they acquired a company where they're making more inroads in mental health, but they acquired a company where they're getting into the psychedelic drug area where these drugs are being used and could be used to treat people, again, with mental health issues.

15:00And these drugs could be going mainstream in the future. So Eli Lilly is getting into that area with a recent acquisition. So got their arms in a lot of different areas, obviously known for weight loss drugs. That's their big growth driver now, but have a lot of interesting things going on as well.

15:22Ken Shreve:So in terms of the stock right now, it is sitting right at the 10-week line. I feel like it would be nice to see the volatility ideally for those looking to initiate a new position, right? Different if you already own it, like leaderboard, continue to sit with it. I would say now, as long as it holds above the lows from the last couple of days, it seems like you wouldn't really want it to undercut that level. But maybe we can see the volatility quiet down a bit, see it get back above 1 ,200 or a declining tops trend line here as a potential buy down the road, Ken, for those of us watching. Yeah.

16:03Like I said, on the daily chart here, like I said, if it can just kind of sit near the 50-day moving average. But on the weekly chart, again, it gives you a different perspective, a different timeframe. I mean, this isn't a good setup right now. It's not really doing anything wrong. It's just kind of sitting right at the 10-week moving average. You can see the weekly price bar where it's trading. It's right in the middle of its weekly range here. So as long as it can kind of hold in this weekly range, it's just hugging its 10-week moving average here. So if it can even end this week where it is right now, I would look at that as a win.

16:44So as long as it's kind of respecting its 10-week line and showing support here, obviously we'd like to see it close in the upper half of its range this week. But it's really just about respecting the 10-week line here on the weekly chart. And if it can even start to move into the upper half of its range by the end of the week, that would be a sign of support. But I would say, you know, even though it wasn't a great day because it closed well off its session high, the weekly chart is still telling me it's getting good support here. And it's still showing me it's technically pretty, pretty strong.

17:26So if it were to close in the bottom half of its range by the end of the week, you know, that is what we don't want to see. It's not a total deal breaker, but it's just a matter of, you know, will it continue to show supporting action? So far, so good. All right.

17:42Ken Shreve:Next on our list for review, we want to head on over to AVT. Let's check that one out. Outside day, upside reversal here, finishing almost at day high, up 5 % and a blue dot breakout for this electronic parts stock. Yeah, it wasn't a blue dot until very late in the day. And this one kind of came on my radar late in the day. It missed my screen and my earnings screen when I was doing the news on IBD Live earlier. This was a leaderboard stock earlier in the year, actually, when it initially broke out of that cup base in April. So we had this on the leaders list in the model portfolio when it first broke out of the cup base in April.

18:31and we put it back on the leaders list later in the afternoon today when it reversed higher and it was about to break out. Disappointing to see some sellers come into the stock late in the day, but listen, it was a great breakout and crossed that 95 pivot. Avnet's a really interesting company because this electronic parts group is filled with a lot of fiber optic adjacent companies. You might remember names like Coherent, C-O-H-R, which actually had a pretty sharp pullback in this group. Did find support at its 200-day moving average, but Coherent was a big, big winner last year. Recently found support at its 200-day moving average, getting some resistance right now at the 50-day moving average.

19:26Another stock in this group, which is very similar to AVT, is APH Amphenol, which is in a very similar business. And this one is also showing relative strength, APH. And this is another kind of connector, fiber optic connector company. So back to AVT, this is actually a distributor of connectors, fiber optic connectors and components based in Arizona. And this is just they reported earnings and look at the results for the June quarter. Their earnings, big, big acceleration, 161 percent earnings growth, I think it was. And the revenues were up 48 percent. Their guidance was exceptional, well above expectations and, you know, relative strength line blue dot.

20:19So, you know, we had a good, good follow through day for the NASDAQ and, you know, the S &P 500. We're in a confirmed uptrend here and you want to see stocks breaking out of bases. So Avnet joined the party today and we were happy to, you know, put it on the leaders list. And these are the types of stocks that you want to be looking at, you know, when the market is hitting new highs, especially the ones with good fundamentals. You look at the annual earnings for Avnet this year and next, look at the growth. And this is all about AI infrastructure. So there's still a pretty compelling growth story for some of the stocks in this electronic parts group.

21:02Not all of them. A lot of them have corrected sharply, and it's going to be a long road back for a lot of them. But Avnet has really reported nice earnings this morning.

21:13Ken Shreve:It sure did. All right, and let's move on and take a look at a recent IPO, and that is Bending Spoons with a big gain today, up almost 17 % here intraday, hitting a new all-time high crossing. it's day one high Ken now. Bending Spoon has a lot of different brands under its belt including AOL, Evernote, Meetup Group, I feel like Eventbrite, some of these other digital brands. So we have an IPO breakout here after a sizable move in today's session. Yeah, and I have to admit, I did not look to see if there was an analyst note or what drove the volume in this stock today because volume was heavy compared to what it's been trading in recent weeks.

22:07But volume definitely picked up the pace today, and it was a huge move. I mean, a 15 % move. But this is a classic type of IPO-based setup. It broke out to all-time highs today. And like you said, yeah, this company basically comes in and acquires digital businesses and kind of spruces them up and fixes them up and restructures them and makes them leaner, meaner, better. And that's their business. Now, the issue with bending spoons is that normally with IPOs, it takes us a little while just to get their earnings and revenue in our fundamental area. We've got some information in the data box in the upper left.

22:57We don't have anything along the bottom here in terms of quarterly numbers yet. We usually have it by now. We have some isolated revenue information, but it's a little incomplete. So I assume we're going to be getting that in shortly. So the fundamental information here is a little incomplete. I suspect we'll be getting that in shortly. But I do believe there is a revenue growth story here that is fairly compelling. We don't have year-ago data available on the revenue side of things. But this is a company that looks pretty compelling just because it's breaking out of an IPO base here. So I think it's worth watching.

23:37After a 16%, 17 % move today, I'd be a little wary about buying it now. but it may just kind of consolidate, maybe pull back a little bit here, maybe even add a handle to this pattern, and you could get a little cup with handle base. But I think a name worth paying attention to, especially in the early stages of a new uptrend here. So a name to keep an eye on. It priced at, I think it priced at$29, and it closed at$40 on its first day of trading. So definitely strong demand for shares on the IPO day, and, you know, great day today. So we'll keep an eye on it and see if it can ultimately break out here.

24:17Ken Shreve:Yeah. And one that we've been watching on IEPD Live this week, too, as it crossed an alternative pivot. And yesterday morning, news came out that Bending Spoons was acquiring Airtable, which is basically a competitor to Monday.com, Ken. Sort of like team project management, cloud project management. And this exactly speaks to their MO, which is buying big brands on sale. So apparently Airtable was valued at$11 billion just five years ago. The purchase price,$1.3 billion. So buying these brands on sale, trying to revive them, get some value out of them. So yeah, just made that acquisition yesterday morning.

25:07Ken Shreve:So not sure exactly, like you said, what was driving today's demand. Maybe a little bit more of a spoonful of digestion of that news, but interesting stuff here. Yeah. A name that we're going to continue to watch as well because, again, after a big move like this, sometimes the stock will pause. And again, it's a cup base right now, but again, as it forms the right side like this, sometimes it'll drift lower for a few days. You see that plenty of times, and it could form a little bit of a handle here. So you could get an alternate entry here, and we've seen this pattern repeat decade after decade after decade, especially when it comes to new issues and IPO bases like this.

25:56So it's definitely going to be an interesting name to watch. And I'll look forward to when we get that additional missing fundamental information at the bottom, at least in terms of the revenue growth, because I think the revenue growth story here is pretty compelling.

26:13Ken Shreve:Yeah, it is. OK, now let's take a look at some stocks with earnings out after the close. High profile tonight, Sandisk. And the numbers were huge here, Ken. but the stock off 3%. So traders who, you know, we'll see what happens in tomorrow's regular session. It's not out of the question for it to be higher by the time you get the conference call tonight or tomorrow morning because the numbers were jaw dropping. I'm seeing something like earnings up 13 ,434 % year over year, revenue up 372 % year over year. That is quite the acceleration, Ken. I mean, we knew the numbers were going to be massive, but it is interesting to see the stock getting sold here late.

27:05Yes. And to see it down 3%, you know, probably some would call that a fairly tepid reaction so far. And you can see the estimates were for 11 ,000 bottom line growth. So, yeah, these memory storage companies are, you know, the growth is expected to be huge. So, you know, not surprised to see a big beat. And I'm sure the guidance is, you know, blowing it out of the water as well. Obviously, a big pullback for SanDisk ahead of the results. So a lot of the memory stocks have been under quite a bit of pressure here. And we'll see how the stock responds in the morning. But, you know, blowout results were expected.