Market Bounces To Cap Strong Week For Growth; Microsoft, Amphenol, Bloom Energy, Micron In Focus

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0:35Good afternoon and welcome to Stock Market Today for Friday, September 25th. It's Rachel Fox here for our Friday Stock Market Today show. And today we saw the major indexes bounce and close near highs after a roller coaster of a week. So here to help me break down all you need to know about today's market action, this week's action is news editor at IBD, Ed Carson. Ed, what do you have on tap for us today? Well, I was hoping you could explain this week, but let's take a look at Microsoft, Amphenol, Bloom Energy, and Micron. Okay, sounds good. We will get to those. But first, I'm going to run down how we closed today, which was, you know, positive to see because we saw the S &P 500 strengthen into the close, up 0.6%.

1:23The NASDAQ also closed up 0.5%. The Dow Jones led with a gain of 0.9 % after being a lagging index in recent weeks. And we saw the Russell 2000 was only up 0.2 % by the close. And of course, important to highlight right now, the 10-year Treasury yield ticked up four basis points to as high as 5.2 % today, but did back off from those highs later on. So I'm going to go ahead and share my screen here so we can take a look at market surge and dive into this action because, Ed, we need your help to break down what's going on here. We saw a bounce here at this key level that goes all the way back to May on the NASDAQ, which is a positive thing.

2:14Yesterday we were both on IBD Live and we didn't know if we were going to get that bounce. We didn't really know what was going to happen. And now we're starting to see it form here. So tell us, what do you make of this past week? Well, just to start, this was the first Monday, I think, in five weeks that the NASDAQ actually rose. We had had a series of weeks of where we would, you know, finish the week relatively strong, maybe not at the highest point, but relatively strong, and then roll over again come Monday. So this was like, okay, we had a good end to last week. it's like okay that's nice but then monday it's like okay finally something finally getting above uh some of these areas and then tuesday actually hitting a record high so and you know the nasdaq looking the best out of all the indexes but still really a change then it's like okay now we have momentum now we're finally clearing and it's like then we have this pullback and we you're right we didn't know thursday morning is this a constructive pullback.

3:16I mean, there's some stocks that now look like they have mini handles or other things going on or, you know, letting the 21-day catch up. But yeah, it moved up. Treasury Realtor, a big headwind. They actually came off highs. I actually think, you know, it actually is at 5.18, but actually, I think it actually fell a little bit more in the final hour because Treasury settled at noon Pacific time. But in the final hour of stock trading. I think it actually came down a little bit more. So that's one reason why we closed well. So we basically closed flattish for the day, whatever, but it was still a really big week.

3:50It's impressive how growth stocks have dealt with the last several weeks. It was impressive how they held up relatively well when they were going up, but this was really impressive. I mean, the 10-year yield rose a lot. It would have been easy to see if the NASDAQ had fallen 3 % or 4%, you would have said, well, there's only so much the market can take. There's only so much it can take. Apparently, it can take more than this, at least the NASDAQ can. So really impressive. The other index is less so, but there were stocks of flash buy signals. At the end of the week, if you bought things, say, on Monday, you're probably doing okay.

4:24I mean, some are going to be up, some are going to be down. It was looking worrisome. I was like, oh, maybe everything's going to be down. But yeah, so overall, a positive and really impressive given the backdrop of yields. Yeah, absolutely. The resilience is hard to argue with here. Over on the S &P 500, we didn't see a new high this week. And also it was down, it closed lower slightly yesterday and closed higher today here. Not quite as strong as the NASDAQ, but still we got the same bounce. Yeah. And, you know, this actually, this is great for a chart. You've got handles sort of forming. There's a nice base.

5:04The base isn't that deep. It found support at the 50-day a couple weeks ago. It found support at the 21-day yesterday. So if you saw stock charts like this, you go, hey, this is a pretty nice setup. And so, yeah, that's good to see. Yeah, absolutely. And going over to the Dow, worth checking in on, as it did have a nice gain of 0.9 % today, closing near its highs, trying to sort of maybe get back above. This is the 10-day line here on my chart, this pink line after really lagging the other indexes. Yeah, I think the Dow actually rose for the week. Not much. I was surprised. I let go. It's actually up because it doesn't feel up.

5:49I mean, it was not great. It's sort of not high in the range particularly. It's been trending lower over the last several weeks. It hit a three month lows. So yeah, definitely some laggard action here. Some of the financials in particular, There's a lot of names outside of tech. There was a lot of weakness. And, you know, you look at XLF has been weak, a lot of things there. But you look at the Russell, you look at other things out there that are outside of the tech world, not doing great. I think the Russell did fall for the week. So there was a decent start to the week, but then it faded off.

6:24So we closed pretty low in the range. Yeah, that's just not good action there. And so I think people have to remember that. You don't want to just, you know, you don't want to have your blinders on. Look at the bullish stuff. I mean, it's nice to see growth and growth was pretty broad, but there is a lot of weakness and that is a concern out there how long that can go. If these signals problems with the economy, eventually that can come and hit some of these other growth areas as well. Yeah. I mean, we talked about RSP on IBD Live and how it's really, I mean, this is closing lower for its sixth week here.

7:03really not showing the same kind of strength that we're seeing in the S &P 500. Although, you know, closing up 0.4 % today, that's not bad. No, it's not bad. They're not fighting. And again, even here, you could have imagined a much worse scenario with the yields surging so much over the last month. I mean, oil fell this week, but oil has been up a lot. I mean, oil has risen a lot over the last six weeks or so. So So you combine that for a company that isn't growing to 150%, but suddenly their borrowing costs may have gone up like 125 basis points over the past six weeks. And, you know, their customers are struggling a little bit because of the high fuel prices.

7:43Their diesel prices are, you know, for the company. So a company that's growing 4%, all of a sudden, that's a real squeeze compared to, you know. So it's impressive in many ways how even the weaker areas could have been a lot worse. I could have imagined that. Yeah, absolutely. Next week is going to be a pretty big week because we've got some important U.S. employment and inflation data that will definitely help everyone gauge whether the Fed is really going to have to implement two more rate hikes this year. What should we be ready for? And also, micron earnings will be coming out Wednesday. So throw that in there.

8:22Wanted to bring that one up. Yeah, we'll talk about that at some point. Yeah, the expectations of rate hikes. I mean, we'll see. It's not, it's markets leaning towards two, but it could easily go the other way. And it doesn't even have to happen in October. It's only 64 % chance of an October rate hike. So if you have some cooler data in the next week, that could start shifting things the other way. But yeah, the PC report will be on Wednesday. The Josh report on Friday. There's a lot of economic data next week. Micron earnings Wednesday night. That's a big deal for the whole space because it's really the only earnings report that we'll get from that space in a while.

9:02We'll also have interesting stuff from SpaceX. They're going to be launching the Starship. This is their 14th test flight. But this matters because this is the first flight that is supposed to generate revenue for them because they're going to launch some satellites that will stay in orbit. You know, they haven't really done that before. So that, you know, would be a real marker there. Yeah, there's that 140 area. It's finding support of the 21-day line. You know, you could use the recent short-term highs as sort of a quality handle. It's too low in the base to be a handle. So you could imagine a strong move off the 21-day line might provide some kind of entry.

9:39Tesla, SpaceX's sister company, they're going to introduce the roads there. We'll see if that really matters. per se, because there's only so many sales you're going to get out of that, but they're also going to release sales on Friday. A lot of China EV makers will as well. Yeah, I think that trend line is exactly, that's exactly what. So Tesla's made some progress, but here it is. A decisive move over the 200-day line, and the 400 level would get above that trend line. And that would be an aggressive entry, I think. But those are sort of the big things that are coming out next week. Yeah, all good things to mark on your calendar and be wary of.

10:16This episode is brought to you by Charles Schwab. Decisions made in Washington can affect your portfolio every day. Washington Wise from Charles Schwab is an original podcast that unpacks the stories making news in Washington. Listen at schwab.com slash Washington Wise. Let's go over a couple more things here, maybe some ETFs. Let's actually take a look at the US dollar, which backed off of highs. I mean, it's had such a run over the past few weeks, kind of got almost up to this resistance level and then really backed off here today. Yeah. So that's been something that's pressured, like gold and other things.

10:55And I think that people are getting concerned about things with the dollar, especially when the yields are still rising for part of that. But yeah, partly this is the higher yield. So it's making the dollar more attractive. If you scrunch it back or go to a weekly, you can see that we sort of keep buying. I can sort of see that. I go back to a daily. I go back. Okay. Okay. But you can sort of see how it's flat. It's been sort of flat for a while. It's been in these little ranges for a while, you know, for the past year or maybe the 15 months. So it's sort of been going up. It was going back and forth there.

11:27But yeah, this is a factor that's pressuring commodities and certain things out there. Yeah. And speaking of commodities, let's also take a look at GDX, which is not gold, but gold miners. This one had a nice bounce off of the 200-day line here below these other moving averages. It's come off quite a bit in recent weeks, but still a decent move here today. Look, if the yield fall back and the dollar comes back and reverts to the mean a little bit, you can imagine gold coming up quite a bit. I mean, gold, you know, going again, like a loss, showing the resilience. Yeah, this made a big bounce, and it hasn't given up that much of the gain, ultimately, especially when you consider that gold doesn't seem as attractive when the yields are rising and the dollar is strengthening.

12:19But, yeah, and so it's definitely felt it, but it hasn't fallen apart. And I think, again, if you go to a weekly on this, something like this, you can see how this one has really just made a big, big move. And now this looks like a nice cup with handle. I mean, it may be relatively deep. So, yeah, you need to see some strength out of this, but it's definitely, it's not out. It's not finished, in my opinion. Yeah, looking at the broader picture here, this is just a mere handle so far. So, if it can get a bounce here, that would be definitely noteworthy. Let's also take a look at SMH, check in on chips here, which really, I mean, on a weekly chart, this looks really solid.

13:03and on a daily chart we have um it kind of came down a little bit but closed uh near near highs for the week their highs for the week it's now clearly above the 50-day line which it struggled to do a few times uh and it's above that short-term high so it's sort of i think that would be a place where you could have bought it you could still buy it here i mean uh yeah so a lot of chip and AI plays are looking like this. And it's just a change. We are just struggling to get the AI names out there. Yeah. I think technically this looks like a great place to potentially start a position if you, you know, for whatever reason you don't have exposure to this area.

13:48This is definitely a great option. Let's take a look at software. Let's go into IGV, which, you know, did not have as good of a day, closed down over 1 % here, struggling a little bit more this week, definitely did not close near its highs. Yeah, it still had a decent week, but you're right, closed off highs. It's nice to see, honestly, just a week where chips and software are both up decently for the week, because it just feels like it's been hard to sustain. I mean, the big week sometimes for software has been the terrible weeks for chips. It's almost like been working against each other. So not a great finish that we put on a daily, it feels like it's hitting resistance.

14:30So it almost feels like, hey, this could be constructive. You can imagine if it could punch above here, that we could see that would be viable. And yeah, some of the leading software names came off highs, but generally are still looking pretty good. Yeah. And you could easily see this getting support at the 21 day line and continuing higher, definitely not broken. And, you know, a few months ago, it was like no one wanted to really go near software or mega caps, which we'll also take a look at here with Mags ETF. Again, on a weekly chart, this definitely is showing significant strength. Yeah. And again, so, yeah, so the chips, the software, the mega caps, all advancing now.

15:14Mags is probably getting a lot of help. I mean, it was hit or miss at Pine Center. It was meta. and to a lesser extent Microsoft, they were really pushing this up. But hey, the trend has been positive. I mean, you know, and so, yeah, a lot of things working right in growth. Yeah, absolutely. Let's look at XBI. Let's check in on medical stocks because this has been an area where a lot of these names have been looking good, I would say, better than XBI has. XBI has really struggle to follow through on this breakout here. It's trading in the sell zone of this flat base. We're below the 50-day line, so struggling a bit here with biotech.

15:58Yeah, it looked good on Tuesday. I mean, at least interesting, oh, there's an early entry kind of thing. I don't know why it sold off. There's no one component that's really that big. And I think the biggest component was Moderna and that rose. But I mean, it's only like a 2 % position. So I don't know really what knocked it, but other ETFs in the biotech space look pretty good. I mean, that's sort of interesting. So that's always the case. It's like there can be definitely individual things going on, but yeah, XBI, not so good, but IBB and ArcG. IBB is, I think, I think these are, um,

16:36let's see if it'll load for us. Um,

16:42see sometimes i just by doing the name so if you do i shares bio or something maybe that will yeah let's see here i see okay there we go there we go so that one looks better i mean that one looks better so i don't know exactly i mean like different different kinds of stocks are in here uh and then arc g just looks like the strongest thing ever um and yeah you know the components in there are just ripping i mean they are just ripping higher uh for several weeks several months and you know so you have to dig around biotech is much more to disperse a lot of names and good news for one company may be irrelevant for 99 of the other companies uh so but definitely this is an area i think despite xbi i think is still definitely worth looking at again a lot of things in growth working together as opposed to so much struggle just like this whack-a-mole where you i'm going to jump here and then it's like and then the other sector rises and it just like it was really hard to do it this week i'm not saying it was easy but generally the various sectors rose in the growth space and so even if you weren't a huge winner you can't you know there was it wasn't one of these like really you know another tough week uh in that regard yeah i mean really nice volume coming in here in recent days for ArcG.

18:03So yeah, definitely, definitely strength there. This podcast is brought to you by HPE. Every business has a there. Automation, transformation, scale, maybe all of the above. The HPE self-driving network gets you there with a network that's self-optimizing, self-healing, and self-protecting, and only continues to get smarter. Whether you run it or rely on it, it's a network that gets you there. Learn more about this self-driving network at hpe.com slash networking. Let's go ahead and break down some of the stocks that you brought up at the start of the show, starting with Microsoft, which, as I said a little bit ago, neither software nor mega caps were appealing at all just a few months ago.

18:53But now, I mean, They're doing really well. This one had a nice move in late July and has been sort of drifting sideways. You could say this is a handle to a much larger base here. And today it did get above or almost got above this recent high of 5.17. Yeah, and it did intraday get above it, but yeah, it didn't close above it. So you treat this whole area sort of a flat base. There's a four weeks. It's been trading tightly. It's a 21-day line. It was a nice move off to 21 days. So this is probably the highest close in quite a while. So I think this was definitely an actionable thing. And again, this was nice, relatively tight action after a base.

19:35Okay, I mean, this had a base, but it wasn't really, I mean, maybe there's a prior uptrend, depending on how you interpret it, but it sort of felt like it almost hit a new low. So it didn't really feel like, normally we like bottoming bases where there's a clear uptrend. And this form below the 200-day line, form below the 50-day line, I mean, it was hard to get excited about this, even though it was a powerful move. But sometimes what happens is you get this. You get bases that are either right next to it or just above it. That's a much tighter area. and that can be the time where it seems like better odds to get into it.

20:12So yeah, as you're right, MegaCap software name was something you wanted to stay away from, but not right now. Yeah, Software Enterprise Group now ranks 9 out of 145, which definitely shows strength. We prioritize the groups that are 40 or under, so this is a really great sign. And yeah, this one, that gap up on earnings, it went up and just never looked back and has been trading tightly since. So a lot of many signs of strength here with Microsoft. Definitely one to be watching into next week. Let's take a look at APH, which is another one that you brought up. This one's been grinding higher here.

20:55Consolidation didn't really follow through on the breakout. formed another consolidation here. I think on a daily chart, though, this is a bit more interesting as it kind of bumps up against resistance at 84.48. Yeah, hit resistance there on the other side, like if you did a trend line from the handle, top of the handle, I think it cleared that today. So, you know, viable at this point, you might say, well, I want to see it get over 84.48 because, you know, you're talking about half a percentage point, you know, if you haven't entered it here. So might as well wait for that a little bit rather than, you know, on that.

21:32Yeah. I mean, it has been a little disappointing in terms of its performance in the last several months. On the other hand, its earnings are still really good. If you go back to the weekly, you can see that earnings line, you know, maybe it just needs to sort of catch up a little bit or just, you know, that's been going on. So it's, again, not made a lot of progress over the past year, but so it is something, but, you know, one can imagine this one comes on. Microsoft was added to Swing Trader today. This one, I think, was added to leaderboard. So, you know, definitely one to be watching. And the RMS line isn't that far from highs.

22:05It hasn't gone anywhere. You can imagine with one good day, this jumps out to a new high. And all of a sudden we're talking about, hey, look at this. It's this leading stock. So, you know, right around here is something. And I think in general, people should be looking, build your watch list, because especially if the market's still choppy or you're worried it's going to be choppy. If you're going to do entries, you want to try to get to them as close as possible to the buy point because you don't know when you might get that rollover. I'm not saying that'll happen. Maybe we're finally on a track where we're going to trend higher, but I think in these kind of markets, earlier entries and really being nimble is still really important.

22:44Yeah. Early entries, get in the balance off of the moving average line if you can. That's definitely ideal here. And this provides, yeah, those early entries that we look for. So a good one to be thinking about. Another one that we'll take a look at here is BE. And when I saw this on the list, because I hadn't looked at it since yesterday, I was like, why are we talking about this? And then I looked, and what a nice move here today, as BE sometimes will surprise us with. It got above this recent high here, just really nice strength and pretty decent volume as well. Yeah, yesterday it tumbled at the open because it's one of the suppliers to this data center that Oracle declared force majeure on, which suggests we may not pay you.

23:30And it's like, okay, that's not great news. And it probably raises broader fears about, oh, what happens if some of these data centers fall apart? but it came off the 21 day right away and it did generally trend higher so it was possible you didn't know how it was going to go but look like a bullish shakeout and actually i think this is not this this is not going to show up as a base on market surge because it's over 50 percent deep but if it did this would be a cup with handle because yesterday was day five so today was a breakout and i like this it's like it paused really over a couple of weeks because it's like where were you going to buy it when it first went over the 50 day line i mean you know you could have and that would have worked out don't get me wrong uh but then even just the second day you're still not quite over the 260 here i think you know or maybe you're right on it and you're already sort of extended from the 50 day so it's like you know a situation like this with really deep bases it's it's nice to have a handle it's nice to have some kind of thing here uh because it can be hard to to enter.

24:32It's not like a base that's 20 % deep and you find an early entry. There's a lot of, there was a lot of overhead. And so the fundamentals are great. This is also one that can surge 40 % in a couple of weeks. It can plunge 40 % in a couple of weeks. So people have to be aware of that. Yeah, definitely. I mean, this one composite rating is, you know, not, not super pristine, which is kind of surprising because it does have really nice fundamental growth. Maybe one more, maybe just the end of the year, then we'll get three years and you'll get that three years of the yearnings. Right, right. Because we were not profitable back in 2023.

25:09That's a good point. Yeah. So a breakout here for BE, another one to see if it can follow up on that strength going into next week. Finally, let's take a look. Let's look at Micron here. Earnings coming out next Wednesday after the close. This one closed off its highs, but it is nice to see it get above this 10, 36, 13 level this week on a weekly chart. Definitely a sign of strength. Yeah, I think it was actionable this week. At this point, I think investors might want to wait until the earnings, unless they do some kind of option play. But So, you know, some chip names, a lot of chip names came up to around those levels and are just below those levels.

25:55But Micron being above is a positive. Honestly, if it sold off on Monday, Tuesday, not sold off, but if it came down, did a little bit of a shakeout, I wouldn't mind. Even if it got below a little bit those levels, just to shake some people out. And then when earnings come in. But, yeah, I mean, this looks really good. It's a deep base. A lot of these memory plays, they have deep bases. So we'll see. The earnings should be tremendous. I mean, we very easily could have another thousand percent earnings growth. So it's going to be earnings are going to look amazing. The guidance will look strong.

26:25But the thing is, is how will they be versus expectations? How will they be versus, you know, the reaction to it? If they say we're going to have one more good quarter and then boy, oh boy, nobody, the pricing is going to go down. I mean, I don't think people expect that. But if they did, you could imagine that really negative reaction for Micron and the, you know, the broader memory space. So really important here. but this is one of the very top stocks of the year and it'll be a really important report. Yeah. According here to Market Surge, 940 % year-over-year growth for the September ended quarter.

27:04That's impressive to say the least. And we've been seeing that obviously for many quarters for Micron and revenue growth expected to be 351%. So we will have to tune in and see what happens on Wednesday and, and yeah, see how that affects other stocks in the group and really the market in general. All right. I think that'll do it for stock analysis and market analysis. Ed, do you have any final, any final thoughts for viewers before we head into next week and what we should be on the lookout for. Work on watch lists and you can be looking to add exposure, especially if the growth stocks should do well.