Major Indexes Fall But Bounce Off Lows Ahead Of Nvidia; RTX, Medpace, Alnylam In Focus

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0:24Good afternoon, everyone, and welcome to Stock Market Today for Tuesday, November 18th. My name is Ken Shreve, and on today's show, of course, we'll talk about another volatile session for the stock market. It looked like the market was going to try to turn positive for a little while, but the stock market bulls did not get the close they were hoping for. Kind of sold off a little bit into the close. We'll get into all of that in just a little bit. Before we do that, let me bring on our news editor, Ed Carson, who, as usual, has got three stocks to watch. Good afternoon. Ed, what do you got for us?

1:03Yeah, good afternoon, Ken. And I want to take a look at RTX, MedPace, and Alnylam Pharmaceuticals. RTX, MedPace, and Alnylam Pharmaceuticals. All right. That's a bit of a mouthful, but we got it there. All right. Well, let's start by taking a look at the NASDAQ. And it was a volatile session. I think the NASDAQ at one point, if my math was right, was down 2.1 % on an intraday basis. You can see it did close off lows a little bit, but it did end lower by about 1.2%. You can see that it did undercut Friday's low. Take a look at the S &P 500, which also closed off lows just a little bit here. It closed lower by about 0.8%.

1:56Pretty decent day for the Russell 2000. That actually reversed a little bit higher. Selling pressure never got too intense in the Russell today. It closed higher by about a half a percent. Dow Jones Industrial weighed down a good part of the session by a weak earnings report from Home Depot. It extended losses for the fourth day in a row. Traded in a relatively tight range here. You can see lost about 1 % for the day. But, Ed, like I said, the NASDAQ for a while there, I think it shaved that 2 % intraday loss to about, what, maybe three-tenths of a percent, four-tenths of a percent, something like that.

2:38It really, really tried to turn positive. I thought the bulls were going to make a stand here. But we do have growth stocks, AI stocks coming under some selling pressure here ahead of NVIDIA's earnings report tomorrow. Yeah. And I would just say, even if we finished at the highs of the day, you know, or even turned fractionally positive, it's not like we've been here before. I mean, how many times in the past couple of weeks or last four or five weeks have we sold off and then rallied off lows or even turned reversed higher? And that just hasn't lasted. So you wouldn't have gotten, you wouldn't have been like, aha, here we are.

3:14I mean, it's always nice to be a better close is always nice. But yeah. So, you know, the market is struggling. Gross stocks are struggling. I think that if you, you know, if you look here, just a Nasdaq, we really haven't gone anywhere for like two months when you really all in all. And so I think that investors should not be really have much exposure to tech in terms of recent holdings. If you bought something in May or if you own something from two years ago at the start of the AI revolution, that's a totally different story. but I think that it's not a time to be too invested, especially in tech.

3:50We're starting to lose sight of the 50-day line. I mean, you know, we've gone up and down, but it's mostly been down. Yeah, yeah. It's been a pretty rough go for growth stocks over the past few weeks. From that high of 24 ,020, give or take, from peak to trough, It's been a pullback of about 7.4 % for the NASDAQ. That doesn't seem like a lot. Hasn't even been a pullback of 10 % off the recent high. But when you look at FFTY or ARKK, it's been a tough slog for growth stocks. You see FFTY has come all the way down to its 200-day moving average almost. Hasn't touched it yet. But ARKK, another growth stock proxy, far below the 200-day, hasn't quite gotten down to the 200-day moving average.

4:46So growth stocks under quite a bit of pressure here. SMH, Ed, that we like to talk about, that is still fighting a good fight here, just a little bit below its 50-day moving average. We do have NVIDIA earnings after the close tomorrow. This one is still trying to hold up. There are people saying that NVIDIA is still going to have good things to say about AI. Just wondering if there's anything that NVIDIA or CEO Jensen Wang could say tomorrow that's going to continue to fuel this AI rally. It seems over the past few earnings reports, he's been able to talk a still bullish story about AI. But it just seems there's going to come a time when maybe the demand picture is going to start to wane.

5:41I don't know what expectations are tomorrow. I mean, just any take from you as to what market expectations might be or how the market might react. I mean, NVIDIA itself is still holding up here. And in terms of growth stocks in general, it hasn't been a serious break yet of the 50-day. It's below it, but it hasn't been a really harsh break yet. Yeah, I will say technically it is the first time it's closed below the 50-day line. And that old buy point, if you're still using that, you know, after testing it several times. But the expectations are high. I think the issue is not only has Jensen Wong been bullish, but he's been very bullish in the last few weeks too.

6:22So it's sort of like how many exclamation points at some point, if you put extra exclamation points on, you're like, this is so exciting. It's like at some point it's like, you know, putting another exclamation point doesn't do it. We know the results are going to be strong. We know the near term guidance is going to be strong. So it's a question, what's the whisper number? Are they going to say anything that people want to hear that the supply, that they can ramp up the black wall, maybe even that the Reuben is coming on time, which is the next chip down the road. So those would be things. I mean, because clearly the numbers are going to be strong.

6:52That's not the issue. And they're probably going to be, but are they going to beat by enough to beat the whisper numbers out there? So we'll see. And I would also caution is that we have had some times in the past year where NVIDIA is strong to start and then fades. I mean, that happens with a lot of companies. But when it's NVIDIA, it's so important because this is NVIDIA. And then you include Broadcom and Taiwan Semi and AMD. And then all the AI plays and all the AI energy plays and all that. And, you know, the market could just have a massive swing. On top of all that, we have Walmart that will report the next morning and the jobs report the next morning.

7:28So it's just, you know, the Fed minutes, Fed minutes before NVIDIA's earnings report at 2 p.m. Eastern time tomorrow. So lots of headlines tomorrow for sure. One thing about the NASDAQ, even when the NASDAQ was under a lot of pressure earlier in the day, I was watching the NASDAQ breath, and it never seemed to get more than 2 to 1 negative, which I thought was pretty impressive. Even when you were hosting IBD Live earlier in the morning, Ed, and the NASDAQ was under a lot of selling pressure, I noticed NASDAQ breath was less than 2 to 1 negative. So it was making a stand breath-wise. I'm looking at something that suggested it ended up positive a little bit, even with the late day fade.

8:17Yes, exactly. And which I was thinking, because, I mean, maybe that's not finalized, but at the very least, it's very, it looks like it's going to be at the worst sort of break even. Nice. Break even. It actually did turn positive late in the day. Now, as the NASDAQ started to turn lower by 1 % and even a little more than that, I'm not sure, but it could have been even just evenly matched between winners and losers. So here's the equal-weighted QQEW down just a little bit today, down 0.4 % and the equal-weighted S &P 500 RSP. You can see that was basically flat today, just edged a little bit higher.

8:57So decent breadth in the market. And then that 10-year Treasury yield didn't move a whole lot. We've got kind of closed off lows today. We've got really that quarter point cut at the December 10th. I think it's the Fed meeting is December 10th. But really a 50-50 shot at this point, whether or not the Fed is going to cut rates by another quarter point. Let's just take a look at XBI. It's an ETF that, you know, we still wanted to note all of the money flowing into biotech. So I'm going to be talking about a couple, two more base breakouts in the biotech area today. XLV, this is your health care ETF still showing a lot of relative strength out there.

9:48This is the relative strength line just shooting into new high ground. You can see this huge, huge move. Look at all these up days in a row. And what is it doing? It's just kind of trading, just holding on to those gains, trading sideways. Bitcoin still under a lot of a lot of pressure here. We had Jim Ropel on IBD Live last week on Friday. He's a big Bitcoin follower. This is under a lot of a lot of selling pressure. It's like Ibit here halted a five five session slide. What is driving the selling in Bitcoin here? Any color you can offer, just people exiting Bitcoin and going into other asset classes?

10:34I mean, it could be somewhat the dollar stronger a little bit because a lot of what's pushed up, you could argue, for the Bitcoin the last couple of years has been expectations of Fed rate cuts and there's been a weaker dollar. But I don't really know. But it's also just the whole speculative high beta stuff has been weak. Like Monday night, Bitcoin got below 90 ,000. It did rebound. It actually rose to about 92 ,700 at 4 p.m. Eastern, up about 1 % from a day earlier off from earlier highs. But it stopped the bleeding. But yeah, it's down. But we're seeing this with a lot of high beta speculative stuff.

11:11Deal replaces fragmented payroll vendors with one global system. No third parties. Hire, manage, and pay teams in 150-plus countries. operate like a local everywhere visit deel.com slash wsj okay very good well aerospace defense stocks still still fighting a good fight in this market company formerly known as raytheon we'll start with that now they did change their name to rtx that is the symbol that's the first name We'll talk about today. RTX had a nice earnings gap a few weeks ago on earnings. This one, you know, in a time where a lot of stocks are losing their 50-day moving averages, this one is holding gains very well after earnings and just kind of holding support at its 21-day line here.

12:05Yeah, and the growth has been picking up. I mean, I don't know how long that'll last, but I mean, it's nice to see the growth pick up for this name. the relative strength line is basically at highs, even though the stock is going nowhere. Going nowhere is pretty good right now, as you're saying. On a weekly chart, I believe this one has a four-weeks tight. I get my tight pattern sometimes confused, but it's at least three weeks. And it's just holding really, really tight. It may be a while technically, but I think if we got to a five-weeks tight, I sort of treat that as a flat base, even if it isn't a flat base yet.

12:39And the 10-week line's coming up. So this is just showing strong action. There's been some ups and downs, but the group is still pretty strong. And so, yeah, medicals, yeah, drugs, but this is another area people should be looking at. Makes a lot of sense. I mean, again, there's that huge weekly gain on earnings and three weeks of tight action and another week of tight action taking shape here, showing a lot of strength and support. market cap of close to$250 billion, large cap liquid name, still attracting some money flow in an uncertain market, at least in terms of AI stocks. So aerospace and defense, still a top ranked industry group in the market and pretty good breadth in the group as well.

13:28So let's move on from Raytheon, take a look at another, I don't know if it's a safe haven group in the market, But it is it is health care. And it was a good a good. Let's see. Medpace is M. M. M. E. D. P. I get it confused with Medtronic all the time. Medpace. Medtronic actually reported today, but. Yeah, that's why it was. It was center front front front of mind. I thought about doing that one. But yeah, but Medpace is doing well. I mean, does have a pattern of like making these huge moves on earnings and then not making enormous. move. So it did, between the last earnings report, it did make a move.

14:10But here it is, it's pausing tightly. I mean, it's just forming a tight pattern for several weeks, maybe another week on the horizon. Growth is pretty solid with this name. And it's definitely one to be paying attention to. It's another tight pattern. I think that right now investors should be looking for relative strength. It's nice if they can be tight. Relative strength is really important to me. So even if the stock is not acting particularly, isn't setting up, this one is, I think that's good enough because right now you're looking for raw talent in some ways more. But this one could easily make a move and clear the three weeks tight, or at least get the bulk of that three weeks, four weeks tight and take on advantage of that.

14:53Look, yeah, solid growth here that we've seen sort of a little bit of acceleration in the last couple of quarters on revenue and the earnings growth was the best for a couple of quarters. I mean, we'll see if that That can go. This is going to also sell off like crazy. When earnings go bad, it can be bad. So when earnings season comes around, that's fine. But you have a couple of months before the next earnings report. So definitely one that is one that you sleep on and then you get jolted awake in a good way or bad way. So definitely worth looking at. Classic IBD stock here. Composite rating of 99, the highest possible.

15:32You've got great annual earnings here. Look at the growth in recent years. You've got the quarterly top line and bottom line growth. You've got excellent relative price strength. And just like Raytheon, it's going up and it's holding on to these gains, showing a lot of relative strength. MedPace is a contract research organization, a CRO. So they provide clinical development services to biotechs, pharma. They help companies get drugs to market quicker, basically. So really all about efficiency. There's a lot of them out there, but MedPace is one of the leaders. Let's stay in biotech and take a look at all NILAM, A-L-N-Y.

16:20And I'm guessing we're going to be looking at a pretty strong weekly chart here. And I think I'm correct here. Let's start with the daily chart here. It's a big company,$61 billion market cap coming back up, trying to get back up of the 50-day moving average. We see a composite rating of 85, and I see big revenue growth in the latest quarter. Talk to us about all NILAM. Yeah, and it's turning profitable. So that's always a positive when you can see that shift. It's supposed to really be strong. Look at that enormous growth next year, too. It's not just, oh, and it's a real company. This is getting, you know, it's a big biotech.

17:02I mean, you know, it's not like an Amgen or something like that, but it was a little disappointing how it faded, but then the market faded. There was, this one had a base and it was trading tightly. It was, you know, it was like, it was teasing. It was getting, and then it sold off and it sold off on earnings. The earnings were great, as far as I could tell. It was just that there was a price probe and that's out there. That's something that's out there. So that's something to note. But this one could have another flat base. I think, well, actually, I did the math. It's just over 15%. So it needs a little bit more time to have another base, but you could probably still use a strong move over the 50-day line or use 484 or use 44.95 as entries.

17:40The relative strength line, you know, is held up pretty well given that sideways is no longer a bad thing in this environment. So strong growth, it's not, you know, there's obvious things out there. But just when I'm watching, I didn't like that break. Nobody liked that break on the price probe, but it seems like it's one that might be setting up again. Look at the biotech group, number five out of 197. So we're just seeing just broad-based strength. We track 50 stocks in the IBD 50, and I've lost track of how many biotechs are in that screen right now. But when the next, you know, next IBD Weekly comes out, we'll look at look at that paper and just see a whole slew of biotech stocks in there.

18:29No, there are not too many earnings reports after the close. But I know that tomorrow morning we're going to get a bunch of retailers, including TJX, which is in a nice setup here ahead of earnings. That stock outperformed today. It's kind of near the top of a consolidation. T.J. X, another fundamental giant in retail. They're going to be reporting tomorrow morning. Target, a real laggard. Still interesting to hear what they have to say in retail, in the retail sector, a company that kind of has lost its way. Home Depot sold off today on earnings. So that will be interesting to hear what Lowe's has to say tomorrow morning.

19:16L-O-W. That is also in a lot of pain. They report tomorrow morning. And then an AI infrastructure building stock at DICOM, which is actually in a pretty good setup here. Interesting to see what they have to say tomorrow morning in a nice setup. DICOM report earnings tomorrow before the open. And then, yeah, NVIDIA after the close tomorrow. That'll be a big one. And Palo Alto Networks, Security software stocks have come under a lot of selling pressure, like a lot of other AI and technology stocks, Palo Alto below the 50-day moving average. So let me go ahead and stop my share. And that is going to do it for today's show.

20:11And thank you very much, Ed. We appreciate it. All right. All right, folks. Thank you very much. I will be hosting IBD Live tomorrow morning, so be sure to join us. You can go to investors.com forward slash IBD Live to join us. I will be back here tomorrow with Ed Carson for another edition of Stock Market Today, so be sure to join us. Have a great afternoon, and we will see you back here tomorrow. Take care.

20:56You