Market Pauses After Two Strong Days; American Healthcare, Schwab, Nvidia In Focus

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0:40Good afternoon, everyone, and welcome to Stock Market Today for Tuesday, February 10th. My name is Ken Shreve. On today's show, we'll take a look at some, well, some AI fears, once again, weighing on some stocks in the financial sector today. Another record high for the Dow Jones Industrial Average today. Lots of earnings reports to take a look at after the close. Before we get into all of that, let me bring in our news editor, Ed Carson, who's got three stocks to watch for today. Good afternoon, Ed. Good afternoon. I want to take a look at American Healthcare, Charles Schwab, and NVIDIA. American Healthcare, Charles Schwab, and NVIDIA.

1:21Sounds good. Well, before we do that, let's take a look at the major stock indexes here. And it looks like we had a little close near lows for the NASDAQ and the S &P 500 today. So let's start by taking a look at the NASDAQ composite here. See where we closed here. It looks like the NASDAQ was down six-tenths of a percent or so. Let's see where it finally settled out here. NASDAQ composite. It looks like we might have had a little bit of higher volume, too. We've seen some clustering of distribution days on the NASDAQ composite, just below its 50-day moving average. So NASDAQ down 0.6%. S &P 500, also a little bit of selling into the close here.

2:03Not as big a percentage decline. S &P 500, that looks like it's down about 0.4%. Selling in the Dow Jones Industrial Average mentioned, at least on an intraday basis, hit an intraday high. It did close near its low, holding just above that 50 ,000 level. Then the Russell 2000, not much action in the Russell today. That did reverse slightly lower, down about two-tenths of a percent on the day. So breadth today, Ed, on the NASDAQ composite, just slightly negative, but positive again on the NYSE today. We had that RSP looking very strong, another new high for RSP today. We had the S &P 500 lower today, but RSP up three-tenths of a percent.

2:56So seeing strong breadth on the NYSE, much better than the NASDAQ lately. But after two days of gains, the NASDAQ pulled back a little bit, still challenged here, a little bit below the 50-day moving average. Yeah, still a little bit mixed. And that's sort of been the pattern, especially for the NASDAQ. I mean, the NASDAQ has really gone sideways, you know, since October. The other indexes have had slight to solid gains over time, but it has been a couple of days up or four days up or five days up and then rolling over. So it makes it tough. It makes it tough to make a big aggressive moves on anything.

3:33You need to be nimble. You maybe take smaller positions. And if you're going to do it, do it quickly in a bounce, but also be ready to pull back. I mean, you don't have to do a whole lot. If you were to say, you know what, I'm just going to not, I'm going to let my winners sort of hold up. And as long as they don't do anything damaging, I'm going to hold them and not do a lot. Well, then the gyrations don't really matter too much. It's just a little tricky when you don't have that real decisive trend. I mean, it's hard to say today is meaningful. But then again, it's hard to say that the prior couple of days, how meaningful are they?

4:05You know what I mean? You know, especially for the NASDAQ. But the Dow is looking strong. RSP is looking strong. wrong uh so there's definitely things working i think the fact that you definitely look at need to look at how the indexes and the breadth and all that is going and think well how should my portfolio be at the very least you should have a substantial amount of nicey type stocks i mean as this just be clear i mean it doesn't mean yes there are some techs that are working yes there you can do that yes you can have some long-term winners but you can't just beat your head over and say i'm going to jump in and buy a bunch of ai names that are high beta names uh that has not in a strategy that has been for low stress in the last few months.

4:44Yeah, I mentioned another all-time high, even though the Dow Jones did give back some gains today, another all-time high for blue chips today. Another index we don't look at too much, but we know small caps have been outperforming. Check out MDY. This is the mid-cap 400. Look at the outperformance for the mid-cap 400, up near all-time highs as well. And then the NYSE composite, another broad-based index we don't look at very much, but just look at the incredible relative strength of the NYSE composite index. So underneath the surface, I mean, just seeing some selling, undercurrents of selling in the technology sector, but the broad-based market still showing a lot of strength out there.

5:29I mentioned RSP. Again, that is just reflective of the underlying strong breadth that we're seeing on the New York Stock Exchange. And we do have another chart that we look at here. Don't look at it much on the SMT video, but this is a chart that looks at the advanced decline line for the New York Stock Exchange. And you can see the advanced decline line compared to the 10-day moving average shooting into new high ground right here. And you compare that to the NASDAQ's advanced decline line, and it's a totally different picture. See a downtrend here and an uptrend for the NYSE. So just an entirely different picture.

6:15A couple of ETFs outperformed today, Ed. XHB seeing some homebuilder strength. Look at this move for XHB lately. What's going on with the home builders? Yeah, there was some positive news about maybe some kind of so-called Trump homes. I'm still not quite sure exactly what that was, but that helped last week. And treasury yields are coming down. I mean, let's be clear. They've fallen for a number of days. If you look at zero TNX, you know, that is a big deal. It's not just that it's fallen. It's now fallen clearly back into a sort of a prior range that it was at. You know, it was starting to look like it was going to move out, move out.

6:54And all of a sudden, last several days, pretty solid declines. That feeds into lower mortgage rates the 10-year into the 30-year. So more important than even the Fed in many ways, getting this to come down. There were some weak retail sales numbers, some other data that you could, that sort of linked to inflation that was a little cool. But for whatever reason, yeah, I think that's a big factor. A lot of housing-related names are doing well. Yeah, and maybe not surprisingly, I was looking at CME FedWatch earlier today, and the odds of a rate cut have really come in quite a bit. I was looking in June, about a 75 % chance that the next quarter point cut is going to be at the June meeting.

7:42That is a little bit earlier than what I was seeing before. I don't know if you've been kind of keeping track of that, but at least today, 75 percent chance that the next quarter point cut is going to be at the June meeting. And that's fluid. But maybe with this drop, this precipitous drop in the 10-year yield, maybe the odds of a rate cut have been moved up quite a bit. I don't know. In the April meeting. Now there's almost it's almost getting to be a 50-50. It's now a 43 percent chance of a rate cut or of a rate cut in late April. Just a week ago, it was like 77 percent chance that there would be no cut.

8:22So, yeah, obviously we're going to have so many earnings reports even between now and April, let alone June. But yeah, that does it. That is a shift. And that is something that's probably helping a lot of things, especially a lot of NYSE stocks. Yep, yep. And then we did see a lot of action in the financial sector today. Let's check in on XLF. This is a very liquid popular ETF. It was down 0.76 % on the day, but we did see a lot of selling in the investment bank broker group. We'll take a look at Charles Schwab in just a little bit. But just seeing names like Ameriprise, A-M-P-R-J-F, some really violent selling in some of these names.

9:12We'll get to that in just a little bit. But the investment bank brokers group, you can see Raymond James down sharply. But we'll get to that when we talk about Charles Schwab in just a little bit. When you want your spring break to feel like. And your kids' pool day to feel like. And your hotel bed to feel like. And room service to feel like. Because at Hilton, hospitality feels like. Your cabana's ready. Would you like fresh towels? It matters where you stay. Book now at Hilton.com. Hilton for this day. Why don't we start by taking a look at some individual stocks here and we can start by taking a look at AHR.

10:08AHR, American Healthcare REIT. Maybe not a bad idea to have some defensive of names in the portfolio, Real Estate Investment Trust. This is a pretty nice setup here. AHR setting up in a nice base here, up for several days in a row, kind of flirting with a breakout here. Yeah, nice action here. You know, you probably could have bought it the last few days because when I went above the 50-day line decisively, it was getting above some short-term highs. But even now, it's not that far away from the 50-day line. So at this point, you might say, I'm going to wait for the breakout because it's really not too far from there.

10:46I'll wait to see that. But that's a nice move there. The volume hasn't been tremendous the last few days, but it's made a nice run. The earnings growth has been strong. I mean, it's sort of been shifting into profitability after there was a couple of weak quarters. Should be solid growth through next year. I mean, so again, is this going to have the most amazing, You know, this is probably not going to be the S &P 500 leaders say, but solid performance, 2 % dividend yield. There's, you know, it's paused after a nice run. So you can see how that, you know, just a nice pause after some nice action here.

11:25Yeah, I mean, I think a portfolio could definitely be looking at this. David Ryan brought this up. And yeah, I think that investors should be looking a lot of this area. There's a lot more. this owns a lot of real estate properties where health care facilities are on. They're not doing the health care facilities themselves. But there's a growing senior population, a growing population of 75 plus. A lot of need for this. When you look at job report, which we'll get tomorrow morning, almost all the job growth in the private sector has been basically health care. And a lot of it's because we're an aging population.

11:59I mean, this is – so there's fundamental reasons why there'll be a tailwind to this whole sector for quite a while. No doubt. Demographics definitely working in this company's favor here. Look at the big, big increases in mutual fund ownership in this company as well. 541 funds had a position at the end of the first quarter. That number had jumped all the way to 746 at the end of the fourth quarter last year. You see revenue growth expected to accelerate this year. So lots of good signs here. And then you mentioned that nifty dividend yield of 1.99, basically 2.2%. So you're getting nice price appreciation here, good fundamentals, good technicals.

12:47So a nice combination here for American healthcare REIT. Okay, well, let's take a look at SCHW because we mentioned weakness in this brokers investment bank group and Charles Schwab was not immune. Bad break for Schwab today below the 50-day. It was down 7.4%. So what exactly was the news here, Ed? Yeah. I mean, there was some startup, you know, from Altruist released a new AI-powered tax software. And it just spooking people. At this point, we're seeing more and more. Yes, software has been slammed. We saw the travel sites slammed. We've seen some data providers slammed. And it's just sort of like this fundamental kind of things like, man, maybe a lot of these businesses will be changed.

13:36And maybe this is way overdone. And it'll all be turned around. but we saw this some big, big losses. And a lot of them like Schwab. I mean, Schwab was, you know, a little extended, or you could argue it was just above a little shelf. It was actionable, you know, as of yesterday, looked really good. And bam, I mean, it's just tumbling down today. And, you know, through the buy point, through the 50-day line, it's hard to deal with that sort of thing. And that's just going to spook things because the fundamentals have been pretty good. A lot of things have been working well for Schwab. But yeah, I mean, this stuff comes in and is there going to be a fundamental rethink or will it be back and forth?

14:16Will there be this kind of, no, no, it's great. And then no, no, it's not. You know, everybody's sort of back and forth for a while. It may be a while before we know. And to think that, oh, no, this will shrug it off. That's well, think about how software was. I mean, software, oh, yeah, it'll bounce back and And it would bounce back a little bit and then, you know, then just keep on selling for quite a while. So, you know, for those who didn't sell, I mean, it's sort of like, well, you're going to barely wait until tomorrow. You can see if it can bounce back. But you may want to might even want to think about, depending on when we got it, if you want to take some partial profits or just or partly cutting your position.

14:54If this can't really, really power above the 50 line tomorrow, because it's you don't know where this is going to go. how this will shake up in the next. I mean, it's not this next quarter. It's what's going to happen a year, two, three years from now. Yeah, here was a breakout from a long flat base here. And you can see this one-day move. It basically came down and just came down right to the top of this base, this 99-59 pivot. It closed at 99-25. So it basically retraced this entire gain in one day. And it wasn't just, you know, the online brokers. I mentioned, you know, the Ameriprizes. LPLA was LPL Financial.

15:43Look at the decline in LPL today. That stock was down 8 % in the group. Ameriprize also in the group, a very, very sharp decline. And then RJF, so broad-based selling in the investment banking group as a result of this new AI tool. And like you said, it has spread into various industries. It started in software, and then we had a lot of selling in a lot of these data providers. Moody's, MCO, look at the damage that's been done to Moody's and some of the other stocks in the commercial service market research group. So we'll see. I do want to bring up JP Morgan and Wells Fargo and some of those names.

16:29They fell a little bit. I mean, they have wealth management is a huge business for these companies. You know, I mean, again, this was modest. That's OK. But just pointing out is that that could be a tailwind. Wells Fargo is a little bit more. They both sort of came down to test their 50-day line today. But they were making some positive moves. And it's just something to note that, you know, this may not be as big of a deal. They have so much more else going on. But if that's a drag for them, yeah, a lot of these other names could come under, too. I mean, there's other things. Goldman Sachs are a little different.

17:05And the narrowing yield spread was probably something that hit some of the banks today. But, you know, I just wanted to bring out that, you know, this could hit a lot of financials as well. Absolutely. All right. Well, let's take a look at NVIDIA because NVIDIA, not far away from reporting earnings, just 15 calendar days away. And it is sitting right above its moving averages here in a kind of a lengthy consolidation, just kind of biding time, kind of wait and see here. Another strong earnings report expected, kind of biding time here ahead of earnings. What do you see here in NVIDIA, Ed? You know, this is just one so much to watch.

17:48I think in two weeks, you know, there is, if it can power above the short-term highs, I think that'd be actionable. I mean, I think yesterday there was a trend line buy, and I think maybe leaderboard took advantage of that to add a little bit more because there was something. But at this point, given that it sort of dipped back below, I would say, oh, let's get above these short-term highs. You know, the 193, 194 area. And if it could pause for a few days, and there might be time that you could get a move. But definitely know that earnings can go a lot of ways. And sometimes the earnings can go great and then it reverses lower.

18:20There's definitely been a trend there. But this is still such a huge deal. And what they have to say about their upcoming chip, their next one, Rubin and other things. I mean, the growth is, look at that, accelerated. Yeah, you know, that it accelerated in the last quarter. Just still huge growth. On a forward basis, it's not that expensive of a stock. I mean, I know we don't talk about it very much. But honestly, after this enormous growth, there's still so much to go. and it's still supposed to be strong for the next couple of years. And, you know, obviously there's, you never know when that might end or there's competition or so on.

18:52But yeah, this is definitely one to watch because it's held up for what I, it showed a little bit, I don't want to go over too bored, but while a lot of AI infrastructure names had some real volatile action in the last few weeks, I mean, there's some big nasty sell-offs. NVIDIA wasn't great. I don't want to be, you know, it's not like, ha ha, that was fun. but it wasn't as violent. And so I just think that, you know, with so much volatility in some of these high beta names, if you still felt like playing in that AI hardware space, if this one makes a little bit more of a move, this one, you know, on a relative basis is, you know, is a little safer because that growth is so strong for the short run.

19:34You don't, you know, it doesn't seem like it'll be disrupted in the near term. So look, always got to keep an eye on NVIDIA. I'm not really breaking any molds by saying, hey, maybe you should take a look at NVIDIA. Exactly. It's pretty incredible. NVIDIA just is still churning out the growth that it does because it's going against some difficult comparisons, and yet you still look at the results for the January-ended quarter. I mean, they're still going to be churning out 62 % growth. And this is supposedly against some difficult comparisons. And then for the April quarter, July quarter, I mean, they are still growing like gangbusters.

20:16So it's very, very impressive growth. And we took a little nibble yesterday, just a little 2.5 % position. And we'll see. But we're still big believers in NVIDIA's growth story and earnings not far away. And, of course, it's going to be an important earnings report for the market. No doubt about it. Well, we still have quite a few earnings reports to take a look at after the close. Where do you want to start, Ed? Let's look at Hood, Robin Hood. Mixed results. I think Bitcoin's weakness might be hitting crypto trading. I haven't really looked at the details. This is not having a good reaction. I mean, it's like, so that's not that.

20:58But that was already struggling. Astera Labs. People really love Astera Labs because it's made a couple of big moves. Well, it's also made some pretty big declines as well. That's A-Labs pattern. It beat views. It was initially up. It's right around where you could say it's actionable, but selling off now. I mean, who knows where this will go? Cloud Flare took our net. That one's making a nice move, but it's also beaten down. Can it get back above some moving averages? I'm not sure where it is exactly, but it probably needs some more, you know, I'd like to get above 200 probably, but interesting area there.

21:33Advanced Energy Industries, AEIS, that's making a solid move on earnings. That was sort of near the top of a fairly messy consolidation and above a prior base, like an LSCC lattice semiconductor, very similar, sort of at the top of a messy two - or three-week pause above a prior base. That one also doing very well. and Gilead, that one was down 5%. And there's a lot more. There's a lot of other things out there. So don't get me wrong, but those are some of the bigger names out there. Still very active. Very active, very active. And then, yeah, I'm looking tomorrow, tomorrow morning. We've got McDonald's before the open and then a big one tomorrow night that we're all going to be watching in the data center cooling space, Vertiv, VRT, kind of floating right at the top of a buy zone here.

22:33We're going to hear from Vertiv tomorrow night. So still pretty busy on the earnings front. So always fun looking at these earnings reports. Actually, it's reporting before the open. It's actually Vertiv is before the open. Thank you very much. Yeah, and I have that here, Vertiv before the open. And so we'll be talking about Vertiv tomorrow and I'll be handling the headlines for IBD Live and I'll be hosting tomorrow morning as well. So I'll be covering that. So please, please join us. Ed, thanks very much for your insight. We appreciate it. All right. And yeah, like I said, I'll be hosting IBD Live in the morning.

23:14So be sure to join us. Just go to investors.com slash IBD live to check out what we're doing every morning. And yeah, I'll be doing the headlines as we get going and be going over a bunch of earnings reports. In the meantime, thanks for joining us today. Ed and I will be back tomorrow for another edition of Stock Market Today. In the meantime, have a great afternoon, everybody. We'll see you back here tomorrow. Take care. Bye-bye.

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