Market Fades From Highs; Eli Lilly, Google, Bloom Energy In Focus

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0:40Hey, good afternoon, everyone. Welcome to Stock Market Today for Wednesday, January 7th. My name is Ken Shreve. On today's show, we'll take a look at a mixed performance for the stock market. Dow Jones lagged today, and we had a day where the NASDAQ gave back some early gains and modest declines for the S &P 500 and the Russell 2000. Before we discuss today's market action, let me bring in our news editor, Ed Carson, who, as usual, has got three stocks to watch. Good afternoon, Ed. Good afternoon, Ken. I want to take a look at Eli Lilly, Google Parent Alphabet, and Bloom Energy. All right. Great stocks to watch, as usual.

1:19Let's start by taking a look at the major stock indexes as we usually do. And today we'll start by taking a look at the Dow Jones first because that was under a little bit of pressure today. The blue chip index after a nice day of outperformance yesterday, blue chip index down about 1 % at the close here today, but that's after two days in a row of all-time closing highs. So blue chip index down about 1 % today. Also had mild losses for the S &P 500, which also marked an all-time record high yesterday. Modest loss for the S &P 500, down 0.4%. Russell 2000, modest loss as well. That has not marked an all-time high.

2:10Just missed yesterday. I think it came to within seven, eight points of an all-time high. Modest decline after four straight gains. And then just take a look at the NASDAQ composite, which just closed off highs with just a modest gain here. So maybe volume a little bit lighter today, breadth slightly negative on the NASDAQ, but a pretty darn good start to the year. And boy, growth stocks have been performing pretty well to start the year here. Yeah, I mean, it could be that certain things are, you know, some of the way where the breadth wasn't that strong today. But the general trend of a broad based rally and a lot of leading stocks from a lot of sectors remains.

2:56I mean, biotech's had a strong day. Software, which damaged that rebounded. Not many stocks in that sector look particularly good. But yeah, there's a different mix. But you're right. The Nasdaq hit a two month high, backed off a little bit. But a lot of stocks are setting up like the Nasdaq or breaking out. The S &P and Dow fell back, but you're right. That's after hitting fresh record highs. Russell 2000 is still pretty close. So while the day session wasn't great and the fade wasn't great, there were still stocks that were showing strong action and the indexes are near highs. Great start to the year for the Innovator IBD50 ETF.

3:38This is sort of our proxy for how growth stocks are behaving in the market. Four straight gains and a nice move above the 50-day moving average yesterday for FFTY. And didn't, you know, only up 0.1 % today. So it took a little breather, but a nice close up near highs again today for FFTY. Quite a start to the year for top-rated growth stocks. Yeah, and just getting above, you know, the recent highs too. So, like, definitely helps because that was one of the signs that was weak. I mean, and yesterday, you know, FFTY and ARK getting above their 50-day lines was a little signal that some of the more high beta names were in general getting back above their up.

4:21Still plenty are not, but definitely seeing some names like Bloom Energy, which we'll get to later, that were showing that kind of strength again. Yeah, you mentioned the breadth in the market today, taking a look at the equal-weighted RSP, S &P 500, equal-weighted ETF. That was down 1 % today, and we mentioned the S &P wasn't down nearly as much. So underlying breadth a little weaker today, same with QQEW. you. That wasn't as bad. That was actually flat, but I saw breadth negative on the NASDAQ and a little weaker on the NYSE today. We did get some jobs data this morning ahead of a key jobs report later in the week.

5:09Anything consequential in the ADP employment report today, Ed, are mostly in line with expectations, maybe a little weaker than expected? Just a little bit. In the prior It was lized up a little bit. I don't think it changed anything, really. Yeah, that jobs report will be really nice to see at the end of the week. Very good. Very good. And then I mentioned more strong movement in the biotech area today, IBB. This is a very liquid biotech ETF. Look at that move today. Biotech IBB up 3.2%. Another biotech ETF that we hold in the leaderboard model portfolio, XBI. Another strong move, 3.5%. Nice rotation going on in biotech stocks.

5:58They were big winners in 2025 as well, Ed. Yeah, but definitely they had paused. They found support and really came on. Just a reminder, I've been reminding the last few days, is that the JPMorgan Healthcare Conference is next week. So a lot of biotechs and other healthcare companies are going to be pre-announcing. There's going to be deals. There's going to be drug trial information. So a lot of individual names might see some big gains or losses. So, I mean, arguably this is the way to play biotechs. I mean, there's plenty of individual names that look good and have been acting well. But this is an area that may be a little bit safer in that regard with all the news coming up.

6:38Yeah, and Alexis and I, on yesterday's SMT video, we did mention XLV, which had a very nice little breakout in yesterday's stock market, and it extended gains today. This is the healthcare select sector SPDR ETF. That was up another 1 % today. So seeing still some good action among some technology stocks, but healthcare stocks definitely participating as well as leadership really broadens out here. And then you mentioned the weakness in IGV, a lot of software stocks really continuing to lag the market. They did outperform a little bit today, but still on a downtrend here and below the 50-day moving average.

7:28Palantir, I know, is, I believe, a top-weighted holding in this ETF. And this one, Palantir, is a name people are still following, trying to get above its moving averages here, but couldn't hold a nice gain today, closed in the bottom half of its range. trying to rally, but still, I don't know if it's a broken stock, but still trying to break out of a downtrend, not having much luck yet. Ed, what do you think about Palantir? This is one of the better looking ones. And there's definitely a lot that are well down two or three months, pretty clear downtrends, like IGV. I mean, honestly, you know, or worse, MongoDB is one of the only ones that come to mind, but there's not really anything that really, there's not too many that are actionable.

8:12I'm sure you could find something, But the group, there's just a lot of damage. Palantir is wounded. I think that was the way Mike Webster referred to it on Ivy Live. That's where others are sort of broken down. Palantir could, I mean, I suppose if it came back and it got back to like 199, 200, people would be saying, hey, this is viable again. And I couldn't really argue with them. But, yeah, it was nice to see this software come up, but it was, there's a lot of damage in the area. Yeah. Yeah, just some of the big, really liquid names in the software sector, a name like, you know, Salesforce has started to come off lows, but you can see that relative strength rating of 38, very, very weak.

8:49You have Microsoft in the Dow that has really been, you know, struggling below its 50-day moving average and a big mega cap like, you know, ServiceNow. A lot of these software names have really, really been struggling. This podcast is brought to you by ReliaQuest. Cyber criminals are constantly attacking. They want your data. They want your identity. They want your innovation. ReliaQuest AI detects, contains, and eliminates cyber threats faster. It helps your security teams move faster at the work that matters most to protect the business now and delivers insights to help them predict what's next.

9:23ReliaQuest, AI-powered cybersecurity. Learn more at ReliaQuest.com. That's R-E-L-I-A-Q-U-E-S-T dot com. All right. Well, let's take a look at Lilly, which we moved from the leaderboard watch list to the leaders list today. It had been sitting on our watch list for a little while, but finally got the breakout that we were looking for today. Nice 4 % gain for Eli Lilly, LLY. What do you think, Ed? And yeah, this one was really strong. I mean, there's another buyout that they might do. Not that big of a buyout, but Walsh just seemed to like it. You know, another way to replenish their pipeline if that deal happens.

10:06It went above the short-term high. It briefly got above the high here. And if you look on a weekly, you can see that there's a flat base. You can sort of treat 1088 as a handle. It's on a weekly. It's also a three-weeks tight. and I really like how it looks here because boy, it came down to the 10-week line and it found support. I mean, you know, like exactly where you'd like it to and, you know, this one has a, and also it basically was coming down, it basically has formed a fairly tight base over a long consolidation. So, you know, if you didn't get into that first time, especially there was sort of a handle entry on that long consolidation, but by the time it got to record highs, it was getting pretty extended.

10:48Now, not so much. So often the way, when you have a messy consolidation, what you do is look for that base or that long handle next to it or just above. And that's a safer place to go. There's a lot of drug news, a lot of obesity drug news, some of which you could say, well, that's not great. Its competitors are doing this and this and this. But the market has, you know, the stock has shrugged it off. And, yeah, I think it was definitely actionable today. Yeah, well, the news that initially hurt Eli Lilly for a millisecond when Novo Nordisk, they launched their oral weight loss pill in the U.S.

11:25Lilly has an oral weight loss pill of its own that is expected to be approved by the FDA as early as the spring. At least there's a lot of optimism that that is going to happen. So we will see. But Lilly has a$1 trillion market cap, and it is still growing like gangbusters. You can see the annual earnings here really expected to ramp up this year and next. And just look at the growth that this company is delivering, just outstanding growth, including in the third quarter when they delivered 54 % top-line growth. And look at that 495 % earnings surge. So this is just the kind of growth that we look for in the leaderboard model portfolio and a nice breakout here from a long consolidation and breaking out again, thanks to strong fundamentals.

12:19That's a look at Eli Lilly. Let's take a look at another magnificent seven stock that is performing really the best at this point. And this is Google parent Alphabet that, boy, huge breakout here, rides the 10-week moving average higher and is forming another base up near all-time highs. Let's take a look at Alphabet, Ed. Yeah, and it sort of got above short-term highs, definitely intraday. It may not have really quite done that at the close, but got above there, showing strong action, you know, a 21-day line. So it's actionable here, I believe, with today's move. You know, another thing is that this is the first time Apple, I mean, Google's market cap now all the way to$3.89 trillion.

13:11It's not at a record high, but it did pass Apple, which has faded. It now has passed Apple's market cap for the first time since 2019. I think, you know, Mike, you know, this is now the second most valuable company out there. I mean, it's doubled really since April. I mean, I know a lot of stocks have doubled since April, but, you know, this was seen as an AI loser and is now seen as an AI winner. There was a real transformation how that's gone. You know, honestly, it wouldn't be that shocking. You know, it's, you know, if NVIDIA went on a downturn, Google could be the most valuable company. So not that that's the reason to buy it, you know, but it's really had an impressive run.

13:55It looked like the laggard and now is clearly the top performing name in that sector. Gemini, as you've pointed out many times on IBD Live, Ed, Gemini is really gaining a lot of traction as an AI bot and really doing well as an AI model, doing very well and gaining market share. Take a look at a name that I haven't been following in a little while, but this is Bloom Energy, ticker BE.

14:35Pull this up here.

14:41Bloom Energy. All right. Looks like a stock forming a base, trying to come up through its 50-day moving average. Bloom Energy, ticker BE, on the New York Stock Exchange. Yeah, and I mean, it's hard to show here, but it's like this one kept on running, running. A few times, it looked like it was blowing off, honestly. I mean, you know, we're at least set to do it, but it kept fighting. And when other names in this sort of speculative, super high beta AI-adjacent energy plays were selling off, this one kept on powering higher. It did finally break down, and it sold off a lot. It basically lost half its value or almost, but it's come back.

15:23It looks like a double bottom is underway. It just needs to show a little more strength. And maybe today will be enough. Maybe it's high enough in the base that we'll see it. But there's clearly seems to be a double. It's a huge double bottom. It may not show up because it's such a deep base, but it's, you know, this might be a place to get at it. I think intraday, it clearly showed was actionable. It backed off. At this point, I'd say if you're looking at it, well, I'd probably use today's high as an entry if you were to do it. This is one, though, you know, and we talk about sometimes having a diversified portfolio.

15:56Well, you could definitely see where, like, I want a stock that's not going to fall 15 % in a day like a Google or a Lily. I mean, those stocks might go on long downtrends, but you might have an opportunity. You won't get crushed at a moment's notice in all likelihood. But a Bloom Energy, this one could be up 20 % tomorrow. It could be down 20 % tomorrow. So be careful about how many of these names you have. I mean, this is profitable, so it's not like speculative, like something like an Oclo nuclear startup that may not have revenue for another bunch of years. This one's a real company, real growth.

16:30But just be aware of what's happening, you know, like about how much risk do you really want to take on. But I think this one has definitely, you know, come back after a pretty heavy sell-off. It's come back once again. Yeah, pretty impressive. Big winner in 2025. You can see this breakout in this area right here. Breaks out over the 2025-30 level, runs all the way up to 140, pulls back down to just below 80 and is working its way back. You can see in late October, they inked a pack with Oracle Strategic Partnership to provide power for AI data centers. So this is a power provider. Like I said,$25.5 billion market cap.

17:19Let's look at Bloom Energy in the energy sector. So in the process of moving back above its 50-day moving average, we'll see if it can take out this recent high just below 120 right here. So, all right. Well, thank you very much, Ed, for your insight as usual. Have a great rest of the day. We appreciate it. All right. That'll do it for today, folks. Folks, we appreciate you watching as usual. Ed and Alexis will have you covered for tomorrow on the SMT. In the meantime, Rachel Fox will be in the host chair tomorrow for IBD Live. If you haven't checked out IBD Live yet, just head over to investors.com forward slash IBD Live.

18:11You can check out a, I think it's a three-week trial. You can see what we're up to every morning, starting at 6.20 a.m. on the West Coast. Every morning, we go for about an hour and a half talking about the stock market, sector trends, leading growth stocks. It's a great show every morning, five days a week. So, investors.com, IBD Live is where you can get more information. Until then, we will see you tomorrow. Have a great afternoon.

18:45Thank you.

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