Indexes Rally Off Lows; Palantir, Micron, Boston Scientific, Sabra In Focus

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0:25good afternoon everyone and welcome to stock market today my name is ken shreve i'm joined today by our news editor uh ed carson and we're gonna just give a little bit of color on a wild day for the stock market i saw the nasdaq down 1.9 percent in the early uh fought all the way back. We'll get into all of that and talk about some stocks to watch. But let me throw things over to Ed, who's going to give us, I think, a bonus stock today. What do you got, Ed? Yeah, bonus stock. Just felt like there's a lot to go on. Palantir and Micron. I'm going to revisit what I looked at yesterday. Boston Scientific and Sabra Healthcare.

1:04Okay, very good. Well, why don't we start by just taking a look at the NASDAQ composite here. I mentioned it was down 1.9 % on an intraday basis. Pretty sharp drop early below the 21-day line. But, Ed, pretty impressive performance here. It looks like volume is going to be lower than the prior session, but a nice close near session highs here. Yeah, I mean, this is where the damage has been, especially the growth leaders. Really nice to see this bounce. Still below the 21-day line, but, yeah, it could have been a lot worse. I do think weekly charts, you know, it's still showing there's pretty significant losses, but, you know, it's contained, at least on the index level here.

1:48And this is the worst index of the bunch. Very good. Let's move over to the S &P 500, which also had a pretty good day, ended with a loss of, I should say, the NASDAQ ended with a loss of about seven-tenths of a percent. Looks like lower volume, like I said, S &P 500 here. Also a close up near its high, down two-tenths of a percent for the day, but good support here, Ed, at the 21-day moving average. Yeah, that was really nice. I mean, this one looks fairly normal. I mean, you expect a 21-day test along the way, and we did it and clearly closed above it. All right. Moving on to the Dow Jones industrial average, sitting up near all-time highs here.

2:32It has kind of stalled in recent sessions, touching an all-time high and then coming back in. But the Dow actually reversed slightly higher for a fractional gain today. Yeah, I mean, financials and medicals and financials, especially insurers, you know, there's a defensive growth and defensive tilt, even with the bounce for growth stocks. There were still clearly the winners generally were in the defensive areas. And so the Dow got a bonus from that. Very good. And then finally, with IWM, just check in on the Russell 2000 small cap index, also holding support right here at the 21-day line. It was also down early and paired early.

3:12So overall, Ed, I think a pretty constructive session for the stock market. We're still going to pay attention to that sharp decline that we had yesterday and see what comes of it. But a pretty resilient performance overall today. I agree. I do think some of the growth leaders we should be cautious is that sometimes you can get an intraday balance. But we'll talk about that. But I think the market overall looks pretty resilient. Yeah, we've been taking a look at some of these equal-weighted index ETFs. Let's take a look at RSP, which is the S &P 500 equal weight. Obviously, the S &P 500 is a market cap weighted index.

3:50This is the equal weighted ETF still showing a lot of strength here. Yeah, really not showing much action at all. It's like, what big sell off? There wasn't much of any, you know, today was sort of a dull day. I mean, there was some up and downs, but all in all, the past several days, really not much movement, really. Yeah, still traded in a pretty, pretty tight, pretty tight range, much tighter than the S &P 500, actually. And then QQEW, which is the NASDAQ 100, equal weight. This is struggling a little bit below the 50-day moving average, but also paired losses today. Yeah. So the losses have been a little less than the NASDAQ the past couple of days, but it's clearly in a weaker position.

4:27Nice to get a little bit. So it hasn't lost sight of the 50-day line, but that's a little worrisome there. Yeah. We've talked about growth stocks under a lot of pressure. They were under a lot of pressure today. Many did pair losses, but let's take a look at FFTY, which took a hit yesterday down four and a half percent. It was under a lot more pressure. You see a pretty sharp break of the 50-day moving average early in the session, but it rallied back right with the market here. Yeah, and I think with a lot of this is that, you know, this is one reason why we talk about selling a little early, and this also goes with other things, is that if you wait and wait until things get really bad.

5:07You might feel compelled to sell all of it near the lows. Or alternatively, you just stick with it. I'm a long-term investor all of a sudden. And it could be a long, long, long time. Or you could decide finally really big losses to sell out. So this is why it makes it easier to hold or to sell either way. And you're in your portfolios in a better position rather than the sort of holding and hoping. But really, really impressive balance. A lot of names came off of some really sharp losses to start the day. Yeah, it really looks just like the way the NASDAQ recovered today. Then we have our chip ETF SMH, the VanEck Semiconductor ETF.

5:49Well, you tell me what's going on here, Ed. Again, resilience. I mean, it came off lows. It was not looking good. When you put it in perspective of weekly charts, especially at the lows, It was getting to be a 4%, 5 % drop getting through the 10-week line. But showed a bounce here. Again, enough to see how tomorrow goes, but this was encouraging. Yeah, nice bounce off the 50-day line for SMH. And then the software ETF IGV, similar action. This is in a little worse shape than SMH, firmly below the 50-day moving average. But this came off lows as well. It came off lows, but it has a lot of repair work to be done.

6:31I mean, clearly showed a pretty negative signal yesterday. Yeah, that was a sharp, sharp. And look at all the volume down at the bottom. A lot of downside volume in that IGV over the past couple of weeks. So I agree. That's going to take a little more time to resolve. A couple of defensive ETFs seeing some money flows here. Let's look at XLV. This is sort of the benchmark healthcare ETF. and seeing a nice rally off lows here. Not very healthy from a technical perspective, but rallying off lows nonetheless. Yeah, there's some names that are looking better, and we'll look at one Boston Scientific that is.

7:10Again, this is why when you say defensive growth or defensive names, it's sort of a mixed bag for the market, you know, if these are what starts coming up. And you can see the relative strength line has been pretty poor on this until just the past couple weeks. Yeah. All right. And then finally, well, I know Travelers was a big gainer in the Dow Jones today, insurance giant and KIE and insurance ETF also attracting some money flows as your typical growth stock comes under a lot of pressure here. Yeah, and it'll be interesting to see how this – because last year, insurers actually had a fair amount of growth.

7:45So it wasn't – but this year, it's a little spottier, more back to normal. So it's more of a defensive play. So again, a mixed bag for the market to see this on the rise. I'm Laura Thurow with Baird Private Wealth Management. You've been doing all the right things. Saving, investing, building toward your goals. Healthcare can be a major expense today and an even greater one over time. Tools like long-term care insurance or a smart health savings account strategy can help protect what you've worked so hard to build. Learn more at BairdWealth.com slash WSJ Guidebook. Right. Well, let's take a look at some individual stocks here.

8:30And I guess we'll start with a big, big market leader, Palantir Technologies, PLTR. This was the mother of all shakeouts. I mean, this was a pretty sharp drop yesterday, Ed, through the 21-day line. The stock was down nearly 10%. I think it was down even another 10 % at one point early, but made a stand at that 150 level. So still showing signs it could continue to be a leader here, I guess. It certainly could be. I think people should just temper their enthusiasm. It doesn't mean that – I mean, this was very real. This was a very real bounce coming off of Lowe's. But it's also, if you look on a weekly, still a pretty ugly drop.

9:09It is above the 10-week line. It's above the 50-day line. It's still a 12 % drop. And just for historical perspective, it's not the 50-day line. But I thought this was interesting. Back here, here we go. oh, it found support of the 21-day line. And then, well, that didn't hold. You know what I mean? It's like, so sometimes you can get that balance. Like, aha, it held a key level, but you just don't know if that's really going to hold the next time. But I, so I wouldn't be like, oh, everything's great. Everything's great. I would just temper your enthusiasm. Look at some of these growth leaders.

9:41Look at the weekly charts as well. You know, it doesn't mean that everything's doom and gloom. It's just that you can't be sure that that recovery. I just want to make sure because some people get really excited. Oh, it's all going. It's like, well, we could easily turn around, whether it's tomorrow or, say, Friday's speech by Fed Chief Powell, if it disappoints or what have you. You could see something. Or not. Yeah. That could be a big deal, and we could see really strong gains. So it's just something to be cautious about after a nice intraday bounce like that. Yeah, very, very tricky market here.

10:14our senior market strategist, Mike Webster, has been saying that. Just a tricky, tricky times in the market right here. I'm glad you pointed out the weekly chart of Palantir because that does give perspective because, you know, anytime you get a weekly close, you always want to see a stock close in the firmly in the upper half or towards the high end of its weekly range. So Palantir still has a little work to do here, at least by Friday's close. You know, holding the 10-week line for now, but I know a lot of longs and people bullish on the stock would want to see a weekly close in the upper half of the weekly range here.

10:49It's not there yet. All right, Ed, let's move on to Micron Technology, MU. Here's a stock that was rallying back towards highs. Looks like it's forming a handle here. Is this a broken chart here or one worth watching? Well, it's still worth watching, but it certainly doesn't look as good as before. It looked like this was a pretty nice looking cup with handle, especially given the weakness in some other areas. So there's like, hey, this is holding up pretty well. I mean, yeah, it fell yesterday, but 1%, you know, that's not, that's not bad. But today, I think there's concerns for some of the chip makers like that the Trump administration may want to take stakes in the company and some others if they want to get these Chips Act subsidies.

11:32So I think that was one reason why this one didn't recover as much. again, it just shows you sometimes, aha, you know, just because a stock is resilient in the, you know, for a given day, doesn't mean it's going to stay resilient. And again, this one might bounce right back, you know, everything might go like, it's not like it's broken, but it's just that you can't, when things are a little troubled, yes, you look for the stocks that are resilient. Yes, you look for that, but you can't be sure that they're going to hold on, you know, and as long as the market's still choppy or weak. Excellent point.

12:04Excellent point. All right. A couple of defensive stocks here to talk about Boston Scientific. Really bullish move here. This looks like a little breakout of a downtrend. Yeah, a nice downtrend break. Recovered the 50-day line yesterday. So it seems like an opportunity where you could have entered it. Again, it's tough to buy anything in this kind of environment. And so it's not – and this is also a stock that has struggled around the 107 area. It's come up there a number of times and hit resistance. So it may be that it might be safer in something like this to try to buy a little early. at a, you know, so at least if it gets resistance there, you have a chance to avoid without taking a loss.

12:51So relative strength line has been weak, but that's, you know, some of these names have been out of favor. If we go to something choppy or something, this could still do, this could still come on. That's one of those things when you do a transition in a rally, you often see the new emerging leadership will have weaker relative strength, at least in the short run. So, yeah, healthcare stocks like Boston Scientific and, of course, a bunch of biotech stocks that we talked about this morning on IBD Live. Biotech's seeing some inflows here as well. So let's conclude by taking a look at a real estate investment trust with a nifty dividend yield here.

13:30I think it's north of 6%, but Sabra Healthcare in a nice little setup here, Ed. Yeah, and I would look at these numbers here for the annual growth. I mean, it depends on how you look at things. I think the quarterly numbers might be using a different perspective, but this is more perspective. It's real slow growth. Let's be clear. It's not going to be – this is more defensive. If you tack on the yield, then you might – then there's a better chance for a decent return. Even if the stock doesn't move much, you might can do that. I don't want to get too excited about it, but it was a nice move today.

14:05A clear move out from a breakout here. So there is a lot to like on that front. But yeah, the growth may limit the upside. So defensive plays can do well in this environment. The Fed may be cutting rates. You expect down the road that might push, make people more interested in reach for that yield. But so stuff to like about it. But a lot of growth investors might say, well, I want something a little stronger. Yeah, I get it. Well, I'll tell you, it still should be an interesting rest of the week. We do have Fed Chairman Jerome Powell, like you said, he's going to be speaking starting at 10 a.m.

14:49Eastern Time, I believe, on Friday at the Jackson Hole Economic Symposium. That could bring some market fireworks. But, you know, tomorrow should be interesting. We had a pretty bearish session Tuesday, a lot to like about Wednesday's session and that the NASDAQ recovered well off lows. So tomorrow will be important to get another message from the stock market here. Ed, as always, thanks very much for your insight. Really appreciate it. And that will do it for today. if you haven't had a chance to check out IBD Live yet, Rachel Fox, our great markets writer, is going to be in the host chair tomorrow.

15:33And just go to investors.com IBD Live if you haven't checked out the morning show that we do five days a week, starting at the market open, going for about an hour, hour and a half each morning. So check that out if you haven't. But other than that, I appreciate you joining us today. It's going to be Ed and Lexi, as far as I know, back tomorrow with the Stock Market Today video. And then Justin and Mike Webster will wrap things up on Friday. So thanks again for joining us today. And we'll see you back here tomorrow.

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