Indexes Retreat On Trump Tariffs; Uber, Fortinet, Toast In Focus

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0:25Ed Carson:Good afternoon, everyone, and welcome to Stock Market Today for Monday, July 7th. It's Alyssa Coram here. And a down day to start the week on Trump tariff headlines. But we've been in a strong bull market. Here with me now to discuss more and some notable stocks from today's session is my colleague, Ed Carson. Ed, over to you. All right. Thank you, Allie. I want to take a look at Uber, Fortinet, and Toast, three stocks that did pretty well today. All right. We'll take a look at those standout names. But first, let's take a closer look at the major indexes and provide added context to the action we saw today.

1:01Ed Carson:The Nasdaq down nine-tenths of a percent in today's session. Meanwhile, the S &P 500 down about eight-tenths of a percent. The Dow down nine-tenths of a percent here. and headed into the closed small caps, looking pretty weak on the day with the Russell 2000 down some 1.6 % after recent outperformance and getting above that 200-day line. So here's a look at the NASDAQ and stepping back, putting things into context, Ed. Not only has it been a great move, to say the least, off the lows, but the last two weeks provided some pretty powerful gains here. So even though it was a headline-driven decline today, that aside, it seems like we're still in a healthy position overall.

1:52Ed Carson:And short-term, we were getting kind of stretched headed into this week. Getting kind of stretched. Look, we've had a really good couple of weeks and a great three months, as you said. There were some stocks that are nearby points. There always seem to be some stocks that are going to be nearby points. But a lot of stocks moved out the last couple of weeks. So, yeah, we're a little stretched. The context here, less than a 1 % decline after big moves. We're at record highs for the S &P and NASDAQ. The Dow was almost there, so it's essentially at record highs. Even the Russell's still above the 200-day line.

2:23So, I mean, yeah, you would like to be up every day, but we're not going to be. Yeah, today, President Trump, as he had said, as we knew we were coming, you know, laid out some, sent out what he's going to lay imposed tariffs of 25 % against Japan and South Korea. Some pretty high tariffs among some smaller countries as well. More will be coming over the next couple of days. But those won't kick in until August 1st. So maybe the market is saying, well, we don't really think they're going to be that bad or maybe they'll be pushed back some more. I don't know. But so far, the market's taking it in stride.

2:57And I think that's, you just have to, you know, just sort of put that in perspective. Yeah, if the market really sells off, plunges through the 21-day line, you know, et cetera, et cetera. But those are things that are not happening. So I think that investors probably didn't necessarily need to be doing a whole lot today. There weren't a whole lot of buying opportunities. But people should be pretty heavily invested and probably not doing a whole lot today. Right.

3:22Ed Carson:I totally agree. Because even though you're seeing some potentially actionable setups out there, with the market being stretched and pulling in, it seems like the timing could be off a little bit. If most stocks move with the major indexes, buying a breakout that could have increased odds of failing or at least testing you, it seems like the door is open for that potential. Yeah, it just feels like there's more downside risk to the market, not initially because the news is going to be bad, but yeah, it's just because we're a little stretched. A pullback just to the 10-day line would be something.

4:02You could see 3%, 4 % declines in growth stocks if the market did that. So it's just little things like that. Again, things that wouldn't really matter that much in the long run, but could upset things if you bought new stocks right now.

4:16Ed Carson:Exactly. Okay. So the S &P 500 and the NASDAQ still holding near highs above prior highs as well. The Dow, anything to note here with the Dow's action? Nothing really with the Dow. Just one more point. There's really not, aside from the tariffs, there's not a whole lot of news this week. But next week, we'll get starting to getting earnings season really kicking in. And there'll be some other economic data. But earnings season, you know, it's been sort of eased off for the last few weeks, but definitely going to start picking up. So that's just something for investors to be considering, not in the near future, at least.

4:57Ed Carson:Yes. Okay, well, let's take a look at the 10-year treasury yield. A notable move here today, I would say, Ed, breaking a trend line. So moving back up a little bit, just shy of that 4.4 % mark. Yeah, so it's picking up a little bit. Obviously, there have been a pretty sharp decline. So, you know, it is notable. I mean, it's got above those levels. I just don't know how meaningful. If we just trade around here, that'd be fine. I think it would have to go a lot higher, get closer to those highs around 4.6%, etc., before people would get really worried. We have seen Fed rate cut odds fade a little bit.

5:32The tariff, if we do see higher tariffs and we do see tariff uncertainty, that just makes it harder for the Fed to want to take action. So that's just something out there, but yeah, just something to watch.

5:46Ed Carson:Yeah. I feel like Powell's made that pretty clear. Yeah. All right. Well, let's take a look at some stocks, starting with Uber. Full disclosure, I do Savvy investors understand consistent growth is built on scale, resilience, and trust. For more than 60 years, Medline has proven this, driven by an unrelenting commitment to their customers. Today, Medline is proudly NASDAQ-listed and is the largest provider of medical, surgical products and supply chain solutions serving all points of care. With a focus on what healthcare needs next, Medline strives to make healthcare run better. See how Medline is woven throughout healthcare and learn more at Medline.com.

6:25Ed Carson:own this one as of that gap up about a week and a half or so ago, but a full-fledged breakout here today, Ed, up 3.3 % volume picked up here as well. And it seems like perhaps Tesla's pain is Uber's gain. It might be. And again, it may not really matter for the fundamentals. It certainly doesn't in the short run. I mean, it doesn't matter at all in the short run. But yes, if you thought something, something, you know, with robo taxis that could hurt, that could hurt Uber. There's also other things out there, but today it's rallying off of that nice move. As you say, higher volume. It was nice to see this pause because when it first sort of tried to break out about a week or so ago, well, it was looking a little stretched from the 50 day line.

7:12So it's a little less. So I'm not sure where it is now versus the 50 day line is probably a little bit, but still nice to see that pause. It is up there at 11%. I think where you bought, it made a lot of sense because it was not only breaking the downtrend, but it was getting above the old buy point. There was a lot of, wasn't a whole lot of resistance there. So that a relative strength line is basically at highs on a weekly here. You can sort of see that are getting, or at least at a close to 52 week highs. So been showing, showing pretty good action here. I think that the earnings are declining.

7:42I think they have some investment stuff in there. So it gets a little bit sort of weird. You know, some of the numbers can get inflated, not necessarily related to the operational stuff, but still showing solid revenue growth along the way.

7:57Ed Carson:Yeah, I really like that relative strength on the weekly chart. And the recent earnings growth has been quite strong. As you said, we'll have to see how ultimately the annual numbers play out here. But as of right now, a strong stock and some strong fundamentals behind it. And the story there, for folks who weren't watching IBD Live this morning, we were reminding, well, what was behind that gap up a couple of weeks ago on 624? Well, they happened to announce that day they were continuing their partnership with Waymo with a rollout of robo-taxi services to Atlanta. So it had that tidbit of news that day, roughly coinciding with the Tesla robo-taxi launch in Austin.

8:46Ed Carson:So it was almost like Uber was saying, hey, cool that you're doing that in Austin, but look at what we're doing. We're continuing to expand our robo-taxi partnership with Waymo. So seeing some recent momentum there. And we'll have to see if this breakout can work while the market, as we mentioned, is getting a little bit short-term extended. But this definitely bucked that market weakness today. Absolutely. Okay, moving on. Let's go to Fortinet and the security software group, Ed. There were a few names that were sort of moving out. Rubrik actually looked like it was going to be the stronger performer today.

9:24And again, maybe this is the beginning of something, but it's like right at the day's highs, it felt like it was moving out, like breaking a downtrend, but it just pulled back a little bit, actually bounced back again. So that's looking fine. That might be more the leader, but maybe, but Fortinet felt a little bit more like a closed actionable above these early entries. So again, if you say, well, Fortinet's not growing fast enough, I went rubric, you know, kind of think that's fine. Just wait maybe for to get above today's high. But Fortinet, it sort of made a comeback. If you look on a weekly chart, this one, this one sort of struggled for a while, you know, I had sort of ugly areas, then it made a move, you know, has these sort of lumpy areas.

10:02But, you know, so, you know, it's come back, relative strength line could be a little stronger, but that's after a pretty decent run here. So cybersecurity does go in little sort of hands off the baton. Cybersecurity seems to do well consistently, but there's definitely, oh, this time it's these two or three stocks. Now it's these two or three stocks. So this one is trying to sort of in the middle of the pack, but was showing some actionable traits here today.

10:29Ed Carson:I feel like a pretty solid earnings line here. So good earnings track record, strong double digit growth for a number of quarters, perhaps decelerating a bit lately from, you know, that 54 % a couple quarters ago to 35 % in the most recent quarter, which is still quite strong. And revenue growth has re-accelerated generally from that single digit growth that is saw in the March 24 quarter. And moving on, let's round things out with a look at ToastEd. Speaking of triple digit growth, turning from negative to positive, but we'll take it. So taking a look at the daily chart here, a day of strength for Toast, no doubt up 2.9%.

11:18Yeah. And there was some strong volume here. It was, you know, it's pretty tight action here. And it was nice to see this one, the prior breakout sort of hold because Toast does have a history of sort of like breaking out and then failing and then setting up again. You know, I think you could have taken action on this one today because it's, you know, maybe due to a partial position because it would be nice to get above the highs from a couple of weeks ago, which is essentially at the same levels. This whole above 45 is where the buy point is and there's little early entries you could do. But maybe you could do an early, you know, to start a position as it bounced off the 50-day line or the 10-week line, the 50-day line there, and I think the 10-week line from last week.

11:59So it's still in range of that. So there were some areas there. Look, yeah, strong growth. Obviously, you know, it's getting off versus losses, but that's when you start seeing the, you know, the valuation suddenly quickly come down because the profits come roaring, you know, lapping up on losses. Strong tight action here. I mean, there were some looser bases. And so it's like, well, that prior breakout was like, it was nice to see, but it was like, it wasn't the most perfect situation in some ways, but now it's sort of traded more tightly. So if you didn't get it on that prior one, that's often the chance you can get the, you know, a messy, deeper consolidation and then something more, more appropriate, more, you know, more dignified, as Chris might say, Chris Gessel, our boss might say.

12:45So, actionable here, you can still wait for the breakout, maybe to fill out a position or to start a position.

12:51Ed Carson:Yeah, I like your thoughts there, Ed. The depth of this base, about 12%. So, definitely an orderly structure here. But not without its twists and turns. It did have a down day of 7 % in the base where it closed at the lows. But the very next day, as you mentioned, got that nice support right where you'd like to see it at the 50 day. So if you are a pullback or a reversal buyer, just like you said, maybe you initiate a position there. But I've got to be honest, that would have been a little tough for me after a 7 % down day in heavy volume. So maybe it's settled down a little bit more and showing that renewed strength.

13:33Yeah, I think that's a good point. It's it's there does seem like while growth and is doing very well, there have been individual days or even when the market sort of like not doing that much. And maybe it's a bad day, but nothing terrible. Individual names sort of out of the out of the blue just have these bad days. And it is something to watch. It just seems to be the character of the market that some of these growth names just like, boom, it's down five, eight percent. It's like, oh, what just happened there? So it's just something to keep in mind with concentration, with making sure you enter at a good spot.

14:09I know that like you, I try to look for early entries, trying to minimize those kind of impacts. It doesn't protect you entirely, but just looking for ways to try to get those entries to minimize the risks a little bit.

14:23Ed Carson:I totally agree. Just because we are arguably in a raging bull market, a very strong uptrend, no doubt, doesn't mean that you want to get too wild with your entry points. You still have to stay disciplined because, as you mentioned, some days for growth stocks could really test traders if you're not getting it at the proper entry point. And even still, you know, shakeouts do happen. So something to keep in mind there. All right, Ed, we appreciate it. Thanks so much for your thoughts today. Thank you, Allie. And thanks everyone for tuning in. Just want to give you a heads up that today at 5 p.m.

15:07Ed Carson:Eastern, we have the next installment of our monthly market report with hedge fund manager Jim Ropel and myself. Looking forward to seeing you there live at 5 p.m. Eastern. Can't wait to pick Jim's brain about what we're seeing in the current market. We know he's bullish long term, but what about right here? What's he seeing out there? What are his top stocks to watch and what he's thinking about at the current market juncture here? So make sure you tune in live at 5 p.m. Eastern today on our YouTube channel. And then, of course, as always, we'll post that video to investors.com slash videos as well if you're not able to make it live.

15:48Ed Carson:That's it from us, everyone. We will see you also in the morning on IABD Live, investors.com slash IABD Live for all the details of our daily morning live stream starting 10 minutes before the opening bell. See you there tomorrow. And we'll see you right back here after the close.

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