Indexes, Top Groups Hit Hard As Oil Tops $80 A Barrel; AVGO, CIEN, CTRE In Focus

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0:35Ken Shreve:Good afternoon, everyone, and welcome to Stock Market Today. It's Alyssa Coram here. And once again, the action in the major index is not quite telling the full story with major groups getting slammed in today's session. We will discuss that and more on today's episode. Joining me now is Ken Shreve with the details. Hey there, Ken.

0:57Alissa Coram:Hey, Allie. Yeah, just looking at a lot of leading industry groups in the market getting taken to the woodshed today. But I wanted to take a look at a couple of important earnings reports in the market today. Take a look at Broadcom AVGO, which had a great earnings report and not a bad close for the stock today. Also in the fiber optic group of Sienna had a great, great earnings report. But fiber optic stock sold off pretty hard today. And also a real estate investment trust that came down, retested a buy point today, CTRE Care Trust, looking pretty good here.

1:34Ken Shreve:All right. We'll take a look at those stocks. But first, let's analyze the major indexes and take a look perhaps at some of that group analysis, Ken, that will add a little color to what's really going on here to help us make sense of the market. So here's a look at the Nasdaq composite. Closing off lows today, down about a quarter of a percent. Meanwhile, the S &P 500 down some six-tenths of a percent on the day. Also off lows and finding support above that 6 ,800 level once again. Meanwhile, the Dow down 1.6 % on the day and small caps. Hard hit here, Ken. The laggard index of the day, at least in terms of the major indexes with the Russell, down 1.9 % on the day.

2:26Ken Shreve:Still managed to close above the low from a couple of days ago, but sliding back below that 50-day line. So a lot to digest here because we do have quite a few cross currents rattling the market at the moment.

2:43Alissa Coram:Yeah, I mean, I'm just really the your two lagging indexes today were clearly the Russell, the Russell 2000 that closed down near its low. You mentioned that decline of nearly two percent. And then, you know, seeing a lot of damage in the Dow Jones industrials today, that was also a lagging index. Goldman Sachs down close to 3.7 percent. Caterpillar down 3.5 percent. Walmart down 3.5 percent. So a lot of damage in the blue chips today. But then you look at the NASDAQ composite. I really didn't look at the NASDAQ past 1230 today. I was actually kind of shocked to see it only down 2 percent by the close.

3:29Alissa Coram:So we got a close actually in the top half of the range for the NASDAQ today. Now, we saw software stocks rally hard again today. So IGV is our proxy for software stocks. And look at that rally off lows. Now, you know, the software stocks were, you know, rallying back from very, very oversold conditions. They have been, you know, really the selling in the software sector really started to pick up the pace in early January this year. started in November, really started to pick up in January. So seeing a lot of software stocks bounce, and that was a big reason why the NASDAQ has been able to hang in there.

4:12Alissa Coram:So decent close for the NASDAQ today, and not a bad close for the S &P 500 either. Of course, you've got a lot of software names tracked in the S &P 500 as well. So, yeah, market is, we've been saying on IBD Live, it's quite tricky here. But when you look in a lot of the IBD growth screens, like in the market surge of growth 250, there was just a lot of your worst performing growth groups today. And we'll look at Sienna in just a little bit. But your fiber optic group today, one of your top performing groups in the market, you know, down down 8 percent just today to today alone down 8 percent.

4:56Alissa Coram:The airline group down 7 % today. Mining stocks down 6%. So just a lot of damage underneath the surface. So it's really a lot of selling. Look at these. Yeah, some of these groups just in some trouble here. Breadth in the market today was not great. Not surprisingly, NASDAQ breadth was a little over 2 to 1 negative. It was, you know, close to three to one negative on the on the NYSE. So some of your equal weighted ETFs here, the equal weighted NASDAQ 100 QQQE, you know, that is kind of dancing around the 50 day moving average here. So it's just, you know, we've got oil prices now, I know, crossed$80 a barrel today and reports that Iran may have hit a ship with a, you know, with some say, I don't know if that was confirmed or not, but it's just so many cross currency in this market and the volatility is just, you know, so extreme out here.

6:15Alissa Coram:You know, tough to have an edge in this market with the whipsaw actions. So, you know, David Ryan was on IBD Live earlier today, and, you know, he was saying it's just, you know, right now a good idea to be watching from the sidelines. If you don't have an edge as an investor, you don't know if the market's going to be, you know, whipping up one day and whipping down the next. That's just kind of the environment that we're in right now. Lots of uncertainty out there, so many layers of uncertainty that you're trying to, you know, cut through. It's just a very, very difficult environment right now.

6:52Alissa Coram:What we know, you know, just going back to the NASDAQ is, you know, we're dealing with an index that's still underneath its 50-day moving average. you know we're dealing with an index that has got a lot of higher volume declines since it has come off that that high just below 24 000 lots of lots of distribution days that we're we're dealing with and you know we know we see distribution days you know at or near market tops in in in the past so these are these are some serious you know yellow flags that we're dealing with here. So we know that the risk level is very, very elevated. You know, we pay attention when we see a close off lows like we saw today and like we saw a couple of days ago, for that matter, just on Tuesday when we closed off lows.

7:49Alissa Coram:We're seeing a market. So it's actually four days in a row where we've seen the market close off lows. So we're seeing, you know, we're seeing some buyers out there lifting the market off lows, but yet we're still in a market that's under some distribution here. And you have to be careful in this type of environment, especially when you're seeing leading growth stocks, which is our specialty, starting to come under some serious selling pressure here. So lots of risk out there. I still think it's a dangerous market. And if you're going to be buying stocks, you got to be You got to be careful and just understand where the weakness is out there.

8:31Ken Shreve:Well said there. I have a lot of cash as of now as well. Okay, let's take a quick look. You mentioned USO oil above$80 a barrel. So let's quickly check in on the energy sector here. Ken, continuing to hold up very well. seems like one of the top performing sectors this year with that explosive move to kick things off right as January began.

9:05Alissa Coram:Yeah, I mean, higher oil prices is never going to be friendly for, you know, not only the U.S. economy, but just really all around the world. It's, you know, You don't want to see persistently higher oil prices. It just tends to slow things down all over the world. I mean, if you get higher prices at the pump, it's likely going to slow down consumer spending. It can slow down the economy, and then it's just going to bring worries about a slowdown for the U.S. economy, maybe a slowdown around the world. I mean, it's too early to say, but it's just been such an explosive move here for this ETF, you know, USO as well.

9:51Alissa Coram:And as long as this conflict in Iran continues and we don't know how long it's going to last, it could be several days, it could be several weeks. But as long as oil stays elevated, that is also going to be a layer of uncertainty that's going to be tough for the market to navigate here. And, you know, the stock markets does not like higher oil prices. It's not going to like higher oil prices staying up at these levels. I mean, 80 is a psychologically important level. And I'm not sure where oil eventually settled today. But, you know, it's a pretty explosive four-day move for crude oil. And so hopefully we'll see things settle down in terms of this Iran-U.S.

10:45Alissa Coram:situation. So get oil prices to settle down here a little bit. That would be helpful for the market here. But just a tough, very tough environment out there right now.

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11:36Ken Shreve:You mentioned the earnings report here and a bit of a bright spot, perhaps, with some outperformance today up 4.8 percent. But this has been a laggard stock in a group that up until recently wasn't showing a lot of damage. Ken, what do you make of the earnings reaction here? What that says potentially about the short-term future of the stock? And putting this into context of this industry group, because one of the big names in the group is NVIDIA, and that did not have such a good reaction to earnings.

12:14Alissa Coram:Yeah, I mean, they've both been very similar, both Broadcom and NVIDIA. I mean, NVIDIA has probably been performing a little bit better, but they both have been generally having a hard time. Both stocks have been having a hard time attracting buyers. Like I said, NVIDIA is just price performance-wise has been acting a little better than Broadcom. Obviously, Broadcom had a really bad sell-off the last time they reported earnings. But you can see that the charts of both are quite similar, despite, you know, very, very strong fundamentals for both companies. I mean, Broadcom was saying equally bullish things just like NVIDIA did.

12:56Alissa Coram:So, you know, Broadcom's numbers were very, very strong. They doubled their AI revenue to$8.4 billion. I think it was up 106 % year over year. They declared a share buyback of up to$10 billion. They've got a big infrastructure software business that did$6.8 billion in sales. So the numbers were strong throughout, just like NVIDIA's. Now, technically, Broadcom, you can see it ran right up to its 50-day moving average, where it's done a few times over the past few weeks. But this is, you know, when a stock is on a downtrend, that 50-day line can turn into a resistance level. And it has been resistance for some time now, and it is still resistance, at least it was again today.

13:48Alissa Coram:So for now, Broadcom is still on a downtrend. And this is just, yeah, it's just bumped up against that line several times. So numbers are still excellent at Broadcom. And on the top left, you can see the annual earnings this company has delivered. And you look at the estimates for fiscal 26 and fiscal 27. I mean, the growth is just superb. So, you know, between NVIDIA and Broadcom, still excellent growth stories here. But the stocks are just kind of having a hard time getting out of their own way. And Broadcom, a good response to earnings today and outstanding numbers and a big, big share buyback.

14:30Alissa Coram:So we'll see. We'll see if the NASDAQ can eventually get going here. If it can, it should help Broadcom and NVIDIA. So good numbers from Broadcom, but still kind of stuck underneath the 50-day line, just like the NASDAQ.

14:47Ken Shreve:right let's move on over to sienna in the fiber optics group which you said got hit really hard today and that's quite notable on the chart here for sienna down 13 on the day gapping below that 21 day line the green line on the chart here a level that it had been holding for quite some time here ken so is this the beginning of a new base potentially here for Siena. And should those who have been riding this move up, should they be selling their entire positions or just trimming back on a move like this?

15:24Alissa Coram:Probably, you know, probably trimming back. The fact that it held above its 50-day moving average and it did close off lows, I think, is a positive. Obviously, there were some big sellers in the stock today. And again, the earnings report was excellent. You did have acceleration in growth in terms of our earnings and revenue. Earnings were up 111 % year over year. I think the revenue was up 30 % plus. They raised their adjusted gross margin guidance, bumped up their full year revenue guidance a little bit. I saw their revenue was just a little bit above expectations. So overall, the numbers were pretty good.

16:05Alissa Coram:Maybe they wanted a bigger revenue beat. So again, the stock closed off lows, but, you know, market's really, really picky when you're a stock that is, you know, rallying so much after a breakout. The market wants these numbers to be superb and really, really good. So even though they were, you know, really good at Sienna, they, you know, the investors still sold the stock. Again, this is the fiber optic group, which is the top group in our database right now. It was the worst performing group today down about 8%. So if the fiber optics stocks start to roll over, and again, by rolling over, we mean breaking through support levels like the 50-day moving average.

16:45Alissa Coram:And Sienna has not done that yet. This could cause more problems for the market. So in terms of the leading stocks like your fiber optics, not seeing sell signals yet, didn't get one in Sienna today because it's still holding above its 50-day line and it did close off lows, but we're going to keep an eye on the fiber optic stocks because they're the big, big market leaders that we're going to want to pay attention to as this market kind of wobbles here. So good numbers here and definitely an important stock to watch. The other big leader in this group is Lumentum, L-I-T-E. I want to check on that one and see how that one is looking.

17:26Alissa Coram:And you can see that one is still holding pretty well here. I think that's still holding at the 21-day line. It is. Yeah. So, again, this is the big leader in the group right along with Sienna. And so this is not showing any sell signals either. So very tricky out there, Allie. Very tricky.

17:50Ken Shreve:It sure is. Yeah. We'll keep an eye on both of these stocks in the top-rated group that they're in. And CTRE, this is Real Estate Investment Trust Care Trust. And a little upside reversal after breaching the 21-day line in yesterday's session. Going back a number of weeks, this was a nice breakout headed into earnings. And taking a look at a weekly chart, we are seeing support above that 10-week line. Or at least the stock hasn't breached the 10-week yet.

18:24Alissa Coram:Yes, yes. And this is another one. I like these stocks that come back and retest buy areas here. This is a real estate investment trust and looking for the dividend yield on this one. And I know this is the newly designed market surge. I just switched it.

18:42Ken Shreve:I'll go back to the weekly. It is on here. The dividend yield, 3.4%.

18:48Alissa Coram:There it is, a 3.4 % dividend yield. Yeah. So back to the daily chart here. This is a stock that broke out and it did not rally 10 % from the buy point, that 38-32 buy point. It rallied about 8%, a little over 8%. And then what it did is it came down and it pulled back pretty close to that 38-32 pivot. And then today it's had a little upside reversal. So it's still pretty close to that 38-32 pivot, still in that buy zone. And again, REITs in this type of market where you're getting a dividend yield, probably not a bad safe haven to be. So obviously there were buyers in CareTrust today. This is just obviously a health care, skilled nursing, senior living, growing through acquisitions.

19:41Alissa Coram:They just made an acquisition in the U.K. They have some 35 ,000 beds around the U.S., but good dividend yield here. Still in a buy zone, kind of a low-volume pullback here. So if you're looking for kind of a safe haven real estate investment trust, I think this is a good pullback into a buy zone. And then you just look at the fundamentals here, and they're growing very rapidly because they're kind of a serial acquisition company. They grow through acquisitions and, again, a company that's managed its growth quite well. So really growing the top line and bottom line very well here. So figured we'd end with some good news, a name that is pulling back into a buy zone here and trading very well in kind of an ugly market right now.

20:32Yeah.

20:33Ken Shreve:And we'll wrap things up with a very quick rapid fire look at some stocks with earnings out after the closing bell. It looks like we are expecting the report from Marvell Technology in that same semiconductor Fabless group that Broadcom and NVIDIA are in. And it looks like the early reaction can very positive the stock up 10 percent. The share price action is not the best. It looks even weaker than what we saw from Broadcom and NVIDIA. But it definitely is getting a pop on this report.

21:10Alissa Coram:Yes. Custom AI chip designer, very similar business to Broadcom, like you said. But, you know, again, a laggard, kind of a laggard stock in the Fabulous group. But this one looks like, at least in the aftermarket, could try to gap up close to its 50-day moving average. And then we also have Costco reporting after the close as well.

21:36Ken Shreve:Yeah. So I'm pulling up the chart here. I'm not seeing a whole lot of action stock-wise just yet. So maybe the report hasn't quite come out yet.

21:47Alissa Coram:It may not have come out yet, but Costco is a nice performer and retailer. Looks like it just came down below its 21-day moving average during the regular session, but a recent breakout and a pretty decent performer in retail recently.

22:05Ken Shreve:So we'll be watching for the reaction in tomorrow's regular session. And then we also want to take a quick look at Euro Copper, ticker E-R-O, with results out after the bell. Looks like shares up 3%. This is in that mining group, a fast-growing copper producer here.

22:23Alissa Coram:Yes, this is a smaller company that is a competitor to Southern Copper, SCCO, which is really a big leader, a much bigger company, SCCO. And again, this mining metal ors group was another big decliner in the market today. It's been a big, big performer in the market. And so you can see Eero Copper. It looks like it's moving a little bit in the pre-market. Gave up its 50-day line, so we'll see how this one trades tomorrow. But the growth at Eero Copper is exceptional as well. So both Southern Copper and Eero Copper doing very well. Great.

23:07Ken Shreve:All right. Well, thank you so much, Ken. We'll leave it there for today. always appreciate it. And thanks everyone for tuning in. That's it from us for today, but we will be back with more tomorrow morning on IEBDLiveInvestors.com slash IEBDLive for all the details on our daily morning live stream. Tomorrow, we will be joined by this week's special guest returning to the show, Charles Harris of O 'Neill Global Advisors. So we will see you then. And then we'll also see you right back here tomorrow to wrap up the week. Thank you.