Indexes Quiet But Leaders Diverge; Chefs’ Warehouse, AMD, Qifu In Focus

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0:25Ed Carson:Good afternoon, everyone, and welcome to Stock Market Today. It's Alyssa Coram here, and we have an interesting show for you today. The indexes were quiet, but a lot of divergences underneath the surface. We will explain and join me to do just that is my colleague, Ed Carson. Ed, what do you have for us today? Yeah, I want to take a look at Chef's Warehouse, Advanced Microdevices, and Keyfood Technology. Yeah, and a few interesting ETFs to check in on as well. So let's start with a look at the major indexes today. The Nasdaq was able to squeak out a fractional gain in the stock market today. Meanwhile, the S &P 500 was down a little less than one-tenth of a percent.

1:10Ed Carson:The Dow, the hardest hit today, and down just four-tenths of a percent on the day inside yesterday's action. And on the upside, small caps led with the Russell 2000 up some six-tenths of a percent headed into the close. So this is a day, Ed, where it looks quiet on the surface, but a lot going on underneath. Yeah, I mean, I'll just say on the indexes, they're all pretty quiet today, which is fine. I mean, we were talking yesterday about how maybe the market needed a pause, and that's sort of what we're getting this week. A pullback yesterday, a pause today, just a little breather after a big run.

1:49Yeah, while the indexes were quiet, there was a lot of interesting motion underneath. Some sectors and stocks that were leading did well, but a number of them had downside reversals or just had bad days. So it was interesting. Depending on what stocks you own, you might have said, this was a great day or this was a nothing day. And others would say, man, I got hit really hard. So it definitely depends on what you own today.

2:14Ed Carson:Okay. Let's also take a look at the S &P 500. So quiet, near highs here. Not a whole lot more to say, Ed. It's a quiet day. I mean, we're in a power trend. And we'll take a look at FFTY to show just what kind of day it was for growth stocks. This IBD50 ETF reversing lower down about 1.7%. So definitely a different look than the Nasdaq's fractional move on the day. Yeah, definitely a lot of growth. Had a tough day, though it definitely wasn't all over the place. We looked at SMH, which there's a number there. That SMH was just fine. And there were a number of chip stocks. We'll look at one that did pretty well.

3:02And in some other AI hardware plays, there were some China names like Kifu. There were names that did well. There were names that did not. It was just an interesting day to have that kind of divergence between the chips and FFTY. lie.

3:15Ed Carson:And let's also take a look at copper, some trade war tariff headlines here impacting the copper market, the CPER ETF up over 8 % on the day, Ed. Yeah. And the futures, which closed at 1.30 Eastern, so well before the stock market closed, that went up, I think, a little over 13%, the biggest day ever for the copper futures. So the ETF, it did sort of trail off a little bit after that initial burst. President Trump says he's going to impose a 50 % tariff on copper imports. That's much more. I think people were probably expecting 25 % sector tariffs. Probably some people were hoping he had forgotten.

3:55But there were some names. So if you're a copper producer in the US, like FCX, that one did well today. It came off highs. And then SCCO, which I do not believe has U.S. operations are not significant ones, that one reversed lower. So it'll be interesting. That does mean higher prices for, we're going to see higher copper prices. And we already had higher copper prices prior than the rest of the world because of the anticipation. So interesting move on copper.

4:23Ed Carson:Yes. And before we take a look at those individual names, let's check out the 10-year yield. Now it looks like a five-day win streak for the 10-year. Pretty significant. It is bouncing off of a two-month low. But it is breaking the downtrend. It'll be interesting to see if that comes in. It's just a lot of things going on. There's been some stronger economic data. The tariffs are back in play. So yeah, this is something that'll influence stocks. It'll also influence gold and other things that have been rallying maybe on lower yields. This podcast is brought to you by MassMutual. For 175 years, MassMutual has been there for policy owners, financial professionals, and communities through economic shifts and societal change.

5:11Ed Carson: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. Okay, now let's turn our attention to some individual movers here. Very indicative of the tough market in pockets that we've seen, Ed, despite the strength at the index level. Chef's Warehouse tickers see HEF, a breakout in Monday's session, but a disappointing follow-up today with the stock down 6.4%. So a breakout turned into a fake out. Yeah, this is really disappointing. I mean, it had volume yesterday.

6:03I mean, the highest volume in quite a while. So there was a lot to like about that action. But yeah, it came right back down. Intraday was really well below the 50-day line and, you know, well into the sell zone. I mean, I suppose you could have tried to hold on or only sold part of it and see. But, you know, that's a pretty ugly action, even at the close. It's not, this is not great. Again, could bounce back. But this is not what you want to see. I think that maybe, look, if the market's going to go sideways, you know, or go down a little bit, it just means that the risk reward on new buys might be just a little more tilted toward risk.

6:36I'm not saying, oh, no, some will work. I mean, and if the market stops, you know, sort of going sideways. But, you know, it just it does seem like growth stocks are prone to it. It sort of felt like at the open today, growth stocks got really excited. Investors were really excited, even though the indexes weren't doing anything, really. And they're up like two tenths, three tenths of a percent on the Nasdaq, maybe. and but you saw some nice gains on certain stocks and but then quickly pulled back so yeah just just something to watch i think this was one that probably you know people who bought it probably

7:04Ed Carson:just needed to take the lumps and move on yeah from a technical perspective it was a decent breakout and you could even have a stock that's checking off all the boxes from a fundamental and technical perspective and this could happen axon kind of comes to mind it had a picture perfect looking breakout a number of months ago that failed and it had incredible fundamentals. But one thing that I would say a mark against Chef's Warehouse is even though it's had accelerating earnings growth the last couple of quarters, the revenue growth has just been in the single digits. So this isn't your powerhouse growth stock here, at least by the textbook definition and something our chief content officer, Chris Gessel, has been focused on lately is stocks with really strong revenue growth.

7:58Ed Carson:So looking at that top line growth, some research he shared internally with us is that he looks at stocks with a certain liquidity threshold over the last year. What were their returns and what sales growth did they have? And the stocks that had at least 20 % sales growth definitely were better performers over the last year. So one little tidbit there, sales growth is definitely something to think about when you are selecting stocks to buy. I completely agree. And I do want to make one other point is that one reason why we talk about these buy points, sometimes early entries, sometimes traditional buy points, is that if things don't work, it lets you know that's not what's supposed to happen.

8:42So it lets you know if you bought this, if this had run up 20 percent and then the stock is down 6 percent. I mean, that might be the start of something bad, but you don't really know. But this is again, it could this anything can happen. This could bounce right back. And we all know. But this is a this was a negative signal. And it tells you something in a way that if you bought somewhere randomly, that it wouldn't tell you.

9:04Ed Carson:Right. And we know this through studying stocks throughout stock market history. right? IBD has looked at what are those common traits with the most powerful stocks? How do they act? And where's the ideal time to get in? It is these proper buy point areas. And then it's an odds game. Like you said, anything can happen. But more often than not, when you see this type of action, it leads to either further weakness or more base building more often than not. Yeah. Okay, let's go to AMD, the chip stock that you mentioned up on the day by two and a quarter percent here, Ed. Still somewhat in the early stages of a turnaround, it seems.

9:48Yeah, I think some people were buying this as it went through the 200-day line. I get it. There was like some, not just the 200-day line, there was that line that you drew. So it was a reason to buy that. Now it's sort of pausing and sort of forming a handle. I mean, it's too low. If you not a proper handle okay because it's too deep i suppose if you start the base you know more the 170 level i mean maybe it's maybe it's in the upper end but so there's still a lot of overhead resistance let's be clear uh it'd be great if it formed a longer like a new base within here but i can see why if this one made a strong move from here especially if it paused for a little while that people would say okay now i'm gonna buy it because it made a big run from the tuning You could say, well, maybe it needs to take a break.

10:30That almost doubled from the lows in a couple of months. Is this really going to go or is it just sort of short covering and bottom feeding, not really moving? And it seems to be showing some staying power, but it's just there were some AI hardware plays. This was an area of strength was some of these AI chip and hardware plays, especially some of those that were laggards a little bit. Let's be frank. I mean, they're not NVIDIA. NVIDIA is at new highs. AMD is not. And so, you know, you could say, well, why should I bother with AMD? And that's a good question. That's an internal debate. And like maybe you should wait for it, like, you know, wait for another opportunity for one of the leaders.

11:11But AMD is making a case that it's trying to come back. And so are a few others.

11:15Ed Carson:Yeah, absolutely. And while buying with a cross of the 200-day line can pay off, and it did in this case, I like buying at least when you get a first base above those major moving averages, including the 200-day. but even then it's more my style to wait for those moving averages to all turn in the right direction. We still have that declining 40 week line on the weekly. It's still a declining 200 day line on the daily chart. So for my style, I'd like to see a little bit more progress, but like you said, Ed, maybe it forms a nice orderly base here. We'll have to see over the next couple of weeks.

12:00Ed Carson:And let's round things out with a look at QFin. This is Kifu technology in the China space, up 2.1 % on the day, Ed. Yeah. And this one has sort of spotty on the revenue growth for sure. Very strong earnings growth and the sales growth, just okay. Last quarter, double digit, but not great. And, you know, the track record, this has been doing pretty well. This one had, you know, today you could sort of, it's gotten in a couple of handle base. It's sort of today broke the downtrend of a handle within that handle. You know, you can sort of see that. I suppose somebody could have been there or, yeah, like could have started a position here.

12:39This is one of the better performers in China. Again, I think that given the way the market has, some sectors can move back and forth. There's an argument for some China exposure. If you think that maybe, well, maybe the U.S. is going to go cyberspace or just to hedge your bets, even if you don't feel that way. I do think some people will say, I don't want anything to do with China. And I definitely think there's a lot of reasons to say, I don't want to get heavily exposed to China for a whole sort of all sorts of reasons. But this one has strong growth. It's not it's not some crazy sky high valuations.

13:11There's a lot to like about this this name, you know, out there with some solid growth. So there's a few of these names that are acting well. You could do could have made it taken a position here. You could use this handle within a handle, that actual top or the trend line that you drew from the top of the base. But definitely some places where you could enter this name, you know, over time.

13:33Ed Carson:And a couple other ways to look at the action in the China market, as well as international stocks. One way would be K-Web. This is a China Internet ETF. Similar action here, clearing a trend line within a handle up 1.8 % on the day. So this, at least you're a little bit more diversified. You don't have that single stock risk. But it's not immune to taking hard hits down 9.4 % on 4.4. So this one can swing pretty wildly, even though it's a basket of securities. And then a little bit more broad, we have VXUS. This is the Vanguard Total Stock Index, XUS. We've seen an uptrend from those lows in early April.

14:24Ed Carson:But as of late, as the U.S. market really started coming back to life, this has underperformed, even though it remains in a strong uptrend here, Ed. So just some additional perspective there on the international market for folks. Yeah. And I think on VXUS, especially when you think about Europe and Latin America and other places, I mean, what's been really pushing higher with the U.S., a lot of it's been the AI stuff and a lot of it's speculative growth. And that's not when you think about, oh, Europe and Latin America, you're not thinking about those. And so, I mean, there's certainly other things that are working.

14:58But, I mean, I do think some of the reasons why Europe was outperforming the U.S. just on a sector basis, some of that has shifted a little bit. But, you know, those are good ways to try to, again, if nothing else, think about diversifying while still trying to diversify into leading areas, not diversify into weak stuff, you know, and just sort of hope that something vaguely goes up. But these are definitely other ways to play sort of the outside U.S. market.

15:28Ed Carson:Great points there, Ed. We appreciate it, as always. And thanks, everyone, for tuning in. That's it from us for today, but we will be back with more tomorrow morning on IABD Live investors.com slash IABD Live for all the details. We'll see you then. Then we'll see you tomorrow after the close. And we have our weekly Wednesday Investing with IABD podcast hosted by Justin Nielsen live at 5 p.m. Eastern on Wednesday with guest Mish Schneider. So make sure to check that out. We'll see you then.

16:26Thank you.