Indexes Await Nvidia Earnings; Boeing, Elbit Systems In Focus

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0:26Good afternoon, everyone, and welcome to Stock Market Today. My name is Ken Shreve. On today's show, as usual, we'll talk about what happened in the stock market today. We had that big rally on Friday after the Jackson Hole Fed talk and two days of very quiet gains as the market awaits NVIDIA's earnings report Wednesday and a big reading on inflation later in the week on Friday. So joining me today to discuss today's market along with three stocks to watch. Let's welcome in our news editor, Ed Carson. Ed, what do you have for us today? Yeah, I want to take a look at NVIDIA, sort of preview the earnings and how the setup is there.

1:09But also take a look at Boeing and Elbit Systems. A lot of aerospace defense firms looking good right now. Yeah, also strong earnings from Heiko today. So lots of good movement in that group. All right, well, let's start by taking a look at the major stock indexes. And I'm going to share my screen here. And let's see here. We'll start by taking a look at the NASDAQ composite. You can see that big move Friday. Let me just enable my pen here. We had that big move Friday and then two days of pretty tight action. But just checking in on the market here at the close, we had mild gains. Actually, a close near session highs.

1:53NASDAQ up about four-tenths of a percent. Same with the S &P 500, also up about four-tenths of a percent. Small caps really in the driver's seat here. Take a look at IWM. That closed with a gain of about eight-tenths of a percent. And then finally, the Dow Jones Industrial Average here, 0DJIA. That ended with just a gain of about three-tenths of a percent. But, Ed, we did get a close near session highs. It was kind of a quiet day, just like yesterday, but pretty decent close. Yeah, yesterday there was a little bit of a weaker close on some stocks. But today, for much of the day, it was like it was barely any movement at all.

2:39And so there was in the last hour or so, nothing too much. I mean, obviously, we'll see what NVIDIA does, and that could swamp everything in a couple of days. But nice to see this. And the NASDAQ and the S &P, they're both sort of pausing over the past couple of weeks. And you could even argue the Dow, you know, in some ways and some of the other indexes out there sort of pausing. And so there's some churning underneath. It's not clear what's going to lead. And NVIDIA will, again, be a big part of what that is. And even the Dow is just sort of right on top of all that. So it's still not really decisively beyond that.

3:10So a lot of stocks are setting up. A lot of stocks are sort of pushing into buy areas. A little longer pause wouldn't be the worst because you'd have some more handles, some more basis form after some decent run. But things are going pretty well right now. There was some concerns like the market was down a little bit in the pre-market on President Trump firing a Fed governor. Market took that in stride. Now, I mean, that that isn't over. She's not she's going to fight it and everything. But, you know, the market has taken just whenever you think of headlines that think potentially might be negative.

3:41It really just hasn't been that way, at least not for long. Yeah. Well, it was interesting to see the Dow Jones hit an all-time high on Friday and, again, doing a good job holding on to that big gain Friday. It was interesting, Ed. It wasn't that long ago when we were talking about how the Dow Jones and the Russell 2000 small cap were really lagging the NASDAQ and the S &P 500. Like the strength in the market seemed to be in the NASDAQ and the S &P and the Dow and IWM just couldn't participate. But that whole narrative has changed. Both the Dow and the small cap index look quite strong here. That's really impressive with small caps.

4:23Because when you think about the Dow, part of it's because NVIDIA wasn't going anywhere for a while. And now NVIDIA has. I mean, and we'll look at it. But Microsoft picked up again after a long slump. And then you combine some other things with some breadth, financials, industrials, some medicals that are doing better now. But the Russell, that doesn't have NVIDIA. So it's nice to see this one. Can it really maintain it? It is nice to see that RS line, you know, pick up a little bit. I mean, it's just been so long since there's been any significant period of outperformance. So can it really do that?

4:57I don't know. But it is really nice to see that. I just feel like there's some more breadth out there in the market. Well, yeah, and obviously small caps betting on a lower interest rate environment here. The market is still deciding whether or not they're going to be two quarter point cuts or maybe three quarter point cuts between now and the end of the year. But it does seem like the Fed is getting ready to start cutting rates. and we'll see how all that goes. Let's talk some, we have some ETFs that we wanted to talk about too. The equal weighted RSP that we like to check in on. RSP is the equal weighted version of the S &P 500 ETF.

5:48Ed, this is telling an equally bullish story here. Yeah, it looks like the Dow. And QQEW is probably one of the weaker indexes out there. in general. So that one is still, I think, a little bit below the 50-day line. So that's a bit of a concern. When you get beyond some of the mega caps and some of those super large caps, like a Palantir or something else, you know, and obviously Palantir is off highs. But, you know, aside from that, you know, kind of thing, it's, there is some weakness in some of these larger techs. I'm not exactly sure where it all is, but that's the only thing, but otherwise pretty good.

6:20Yeah. Well, we've seen Palantir come under a little bit of pressure, but it is, holding firm at the 50-day moving average. Robinhood, another name coming under pressure, but still holding above key support levels here. All right, why don't we also take a look at IBIT, which has come under a lot of pressure. We had this on leaderboard. We had to exit the position. What are you seeing in Bitcoin here, Ed? Yeah, it'd be interesting to see if we can get back above the 50-day line, and that's tended to be a place where if you wanted to get into it, it seems to be a good place because it just goes on runs from there.

7:02But when it gets to new highs, it's often where it soon pauses. Yeah, it's sort of interesting to see this one weakening quite a bit because it does, you know, that Friday's gain could not be held at all. I know that there are maybe some big sales out there that might be driving it, but I think it needs to get above there before you get above the 50-day line at least. Yeah, very impressive stand for IBIT Friday at the 50-day moving average after we got the Fed news. Came in higher volume, and then the very next day just gave up the 50-day line. Let's also take a look at FFTY. This is sort of our proxy for the health of leading growth stocks in the market.

7:45Obviously, this was volatile right along with the market recently, but nice move back above the 50-day moving average. And it looks like it's trying for another breakout here. Yeah, it really is. And again, I think people forget, it's so easy to forget that just a week ago, things were not looking so good. You know, a week ago, we were tumbling to the 50-day line. And the next day, we tumbled underneath it to start, you know, before things turned around. So it's always a challenge to know like how quickly, I mean, I got shaken out of some things. A lot of those things went back up. I mean, it just, it was the way, but if things had gotten worse, like the Fed or other things, things, you know, I could have kept on selling, but yeah, but really impressive to see this bounce back.

8:28Yeah. And you mentioned the continued strength in the aerospace and defense group. This is an ETF that is, well, related to aerospace and defense. ITA, nice move, closes just below that 200 level today. Yeah, it bounced off the 10-week line, you know, probably trading pretty tightly. There was probably a downtrend. I think it certainly was actionable today. This is an area where I think people could have played with a little more confidence, say, buying an AI stock today, because you just don't know how those things are going to go with NVIDIA. But obviously, if the stock market falls 5 % on Thursday, these aerospace stocks are probably going to struggle as well.

9:08But it's just a little bit. And this has been a leading area, which we'll get into with some names beginning. So definitely a strong performing group out there. So, you know, investors want to make you think about having some of this to diversify their leadership. Yeah, yeah. There's a lot of a lot of technical setups that look like this. You saw that breakout for ITA over the 160 level. It is just now coming down to the 10 week moving average for the first time, seeing a lot of individual stocks doing that. So I think for people that still have a bullish slant on this market, and I think there are reasons to have a bullish slant, it is encouraging to see so many stocks firming up at the 10-week line.

9:53Again, not only ITA, but lots of other leading stocks out there. 100 % agree. All right. This podcast is brought to you by Federated Hermes. We put our investments through a ruthless vetting process because we don't like surprises and neither do our clients. Learn more at federatedhermes.com slash US. Investments are subject to risk and may lose value. Let's stay in the defense group and take a look at Boeing. We've been watching Boeing for a little while here show great action at the 10-week moving average. Stock recovered well after a pretty big reversal off highs several weeks ago in higher volume, but it's still fighting a good fight here.

10:37Yeah, I found support of the 10-week line. And I think today, this is one you really need to look at on a daily, I think. There is an emerging base that's coming in, but it broke a downtrend today. Like if it takes from the top of that base and just brought a downtrend, it probably just peaked above it. And I know that this was added to leaderboard today, I'm guessing for similar reasons that I was seeing here. Exactly, yeah. Yeah, so nice action. Yeah, go ahead. Go ahead. Well, we put it on leaderboard. We've been increasing exposure. We were very light last week headed into the Fed, maybe 60 % invested.

11:22And then after Friday, we've been kind of ramping up exposure. And we ramped up exposure a little bit more today by adding Boeing to the model portfolio. We've been watching it a while. I think, Ed, you know, for a turnaround story, this one checks a lot of boxes. Yeah. I mean, today there was some news they got a Korean Air jet order. But if you go on a weekly chart and you scroll down to the earnings, we're finally, finally, finally, finally, and I mean finally, after years and years and years of quarterly losses, it's supposed to be turning profitable. We'll see. But yes, I mean, it has been going back all the way to those Dreamliner crashes.

12:01It's just been endless losses for Boeing. So we'll see here. It is definitely finally that turnaround. We're seeing the revenue come up, but the loss is still there. But so that's going to be a real change for them to see if they can turn that around. Yeah. And I think you mentioned by the end of this week, this is going to be a five-week base here. And as far as I can tell, it's going to be a flat base. So we'll see how Boeing goes. But we're encouraged by the turnaround story. It seems to have a lot of the bad news that's been resolved and behind them. So we certainly felt it was worth a shot on leaderboard.

12:51Let's stay in the defense group and take a look at ESLT. This is a stock that we had on leaderboard not that long ago, but we got shaken out right in this area here when the stock started to really fall apart and deteriorate below its 50-day moving average. But a nice up session today. Yeah, and performed well since its earnings. And today, really strong move. You could say it broke the downtrend in the latest portion of this ascending base or getting above the bulk of it. I mean, it's essentially almost there. So you could have used today's gap up as a place to enter, or you could wait now at this point.

13:32You know, it's so close to the buy point, you might just wait for that to happen. Yeah, there's a bit of a stair stepper, and that's sort of how ascending bases can sort of look. Like, this isn't the most rapid ascension that I've seen in ascending bases, but nice performance here, strong earnings, you know, there's strong earnings growth, strong revenue growth. This one was looking really strong. And again, that group, just like with Boeing, but just that group is rife with a lot of stocks. Some of them are extended. Some of them are setting up. And some are clearing buy points, but it's definitely an area of strength.

14:10Yeah, just a quick note on the ascending base. You typically have three pullbacks after a stock breaks out. And in Elbit's case, you had the first low right here. The second low was a higher low than the first low. And the third low was a higher low than the prior low. So just three quick little pullbacks. That brings a 494.32 entry into play. Ascending bases are a little tricky because it sometimes feels like you're buying an extended stock just because it keeps on hitting new highs. But Elbit certainly is in a very strong industry group, as we've established. And let's just throw in Heiko here as well, which reported earnings.

14:58Another aerospace and defense leader and a nice gap above its 50-day moving average here. Weekly chart for Heiko. It's been a longtime leader in the group. All right. Let's – Yeah. And it just feels like that maybe needs more time to set up. It's sort of awkward-looking base. So I suppose if you put your thumb over that original high because there was negative news on arrival that obviously HICO did not – its earnings turned out fine. So I suppose if you put that thumb over it. But again, yeah, a lot of strength in this group. Yeah. Bad reversal a few weeks ago on that Transdime earnings report.

15:36But Heiko, back in business here. All right. Well, let's conclude by taking a look at NVIDIA because this is the stock that everybody's going to be watching tomorrow because they report earnings after the close. And, Ed, NVIDIA has a lot of tentacles. It really, there's a lot of different parts of the market that could move based on what NVIDIA has to say. You would agree with that, I assume? 100%. It's like it's not just AMD and Alab and Taiwan Semiconductor and those chip names, but you have so many networking names. And then it's the heating and cooling companies. It's all the energy producers.

16:19So NVIDIA, a good report or a negative report could have just a huge impact on that enormous sector. Just NVIDIA's alone is$4 trillion, just that alone. But you got to figure that there's like$8,$10 trillion easily in market cap that could swing significantly. And then probably another$10 trillion, because I'm not even including the hyperscalers like your Microsofts and your Metas and Googles. So it's not just earnings and guidance, but it's also like, what do they have to say about China? There's all these reports that their H20 chip that they were going to sell through a very weird arrangement, you know, and for export licenses, that China's not going to buy them.

16:55So that would be an issue. You know, there's this, but maybe everything will be okay. There's just a lot. And when will the Blackwell ramp up? There has been rumors that the next chip is delayed. Well, is that the case or not? So there's a lot of things that they could allay a lot of concerns and take it off. The stock looks great. Go ahead. Oh, yeah. The stock looks great. If it weren't for upcoming earnings, I think that move off the 50-day, 10-week line would have been very actionable right there. But it just raises, you know, there's not a whole lot of cushion from there. It's acted well, you know, and, you know, everything might work out.

17:29But it just that would be the concern. Unless you're doing an earnings option play, it would seem pretty risky going into it. Yeah, well, I mean, it would qualify because it's showing such technical strength and is really not too far stretched from its 10-week moving average. I was just before we went on air, I was looking at the 182.50 call. that expires actually this uh this friday and it was surprisingly cheap only a little over three uh three percent uh risk um typically nvidia you know sells uh sells at pricey uh options uh but lately um you know so it's not not not too bad a trade 182 50 uh strike expiring uh friday again it was about a three percent uh i think the the the premium was around uh five dollars and 75 cents something like that.

18:18So for an option trade, not overly expensive. I'm sure people will be trying out some calls or have already bought their contracts. So we'll see what NVIDIA has to say tomorrow after the close. I don't think there was anything noteworthy in terms of earnings reports after the close. Anything that you see, Ed, that was moving? A couple of names that are answered, like Okta and MongoDB. Okta, both of them, just look at them briefly. Okta's up modestly. There's some other cybersecurity names that have been doing better. So it might be nice to see how this one goes, but it needs work. It needs to get above things.

18:56The big move is MongoDB, MDB. And this one has really struggled, this database software name, but it's really moving. Software sector has really struggled. So to see these names is a positive for a lot of the names that aren't Palantir or AppLevin or Oracle. So this one might surge above, You know,$250 and other things. So all of a sudden, that's going to look quite a bit different, you know, in that regard. So even if you say, I want nothing to do with these stocks, I totally get that. It's encouraging for some software names. We'll get other things. In addition to NVIDIA, we'll get Snowflake.

19:28We'll get CrowdStrike. We're going to get some more names out there this week in the software space. Good stuff. Yeah, well, MongoDB has been a laggard in the database software group. but you can see the stock is up 23%, almost 23 % in after hours trading here. So that is going to do it for today. And I want to thank Ed very much for joining us. Ed, appreciate it as always. Thank you, Ken. Hope to see you back here tomorrow. It's going to be Ed and I on Wednesday for the Stock Market Today video. So we'll try to stretch it out so we can see what NVIDIA has to say after the close. And if you haven't had a chance to check out IBD Live yet, you can go to investors.com forward slash IBD Live.

20:18We'll be on the air again tomorrow morning starting at 6.20 a.m. Pacific time. And we go up to about 8 o 'clock or so on the West Coast. So lots of market talk. You can get more information at investors.com slash IBD Live. The audience has been growing lately. We appreciate it. So check it out. Otherwise, Ed and I will be back here tomorrow for another Stock Market Today video. Thanks a lot for joining us, everybody.

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