Market Quiet As Government Shutdown Looms; Nvidia, Ralph Lauren, Pagaya In Focus

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0:39Good afternoon, everyone, and welcome to Stock Market Today for, let's see, today is Tuesday, September 30th. Almost said Wednesday. Tuesday, September 30th. My name is Ken Shreve. I'm joined today by our news editor, Ed Carson. Pretty good day for the market. We had mild losses all day, and then we closed slightly higher, up near session highs. I think a record close for the Dow Jones. We'll talk about all that in just a minute. But Ed has got three stocks to watch, as usual. Yeah, nice finish on a relatively quiet day. NVIDIA, Ralph Lauren, and Pagaya. Three stocks I'd like to take a look at.

1:20NVIDIA, Ralph Lauren, and Pagaya. Sounds good. All right. Well, go ahead here and share my chart of the NASDAQ. Ed, the first thing I wanted to do, actually, let's see, where is my NASDAQ chart here? Come on now. There it is. First thing I wanted to do, Ed, on the NASDAQ is just do a quick change date here because the government shutdown is on everybody's mind. And I just wanted to just take a look at what the market did in late 2018, early 2019, when we had a shutdown a little over a month, about 30 days or so. I think the shutdown was right in this area here. Let's see. Get my temporary line pen right at the bottom.

2:08Government shut down all the way in this area. And then we had a nice rally after that. So maybe these shutdown fears, at least for the stock market, may be a little overblown. I mean, there's other things going on. I mean, obviously, there was a bear market that ran into it. So this is a different situation. The market has rallied. I don't think the market's going to be too concerned. I mean, there are some differences. President Trump has threatened to permanently fire a bunch of workers. That normally wouldn't happen. But I do think markets generally feel like, ah, if it's a few days, it's not a big deal.

2:40I mean, we'll see. And there's so many other things going on. It is something out there. Investors should be aware of this. But yeah, it doesn't seem like the markets are concerned. And the historical pattern has been somewhat mixed if it matters much at all. Yeah. And you mentioned on IBD Live earlier today that if the government does shut down and it goes through Thursday, we're not going to see that jobs report this Friday. So a lot of economic data is going to be on hold. We'll eventually get it. But that just depends on if they can reach an agreement or not. Yeah, so that'll be an issue. Luckily, the Fed isn't meeting the following week or something like that.

3:23So we'll have time to react to all that data. And there will be other data reports, like tomorrow we'll get the ISM Manufacturing Index. Private reports will still come out. But there's a lot of government data. Yeah, we had a mixed economic data this morning. We had a weaker-than-expected reading on consumer confidence. But then we also had the JOLTS report that was better than expected. And that is still indicative of a pretty healthy jobs market. So I mentioned that the indexes were lower for most of the day, just showing mild losses, not moving much in either direction. But then you can see the NASDAQ composite here closed up near its session high.

4:09A little rally late in the session. Looks like the NASDAQ finished with a gain of, let's see, it was close to three-tenths of a percent. S &P 500 outperformed by a little bit. It was up four-tenths of a percent. And then I mentioned an all-time closing high, I believe, for the Dow Jones Industrial Average. You can see that right here. Small caps, I think the Russell 2000, Ed, was down 1.4 % at one point today, but it did turn higher for a modest gain. So still seeing a lot of underlying strength in the market, even though we're seeing some selling in growth stocks below the surface. Would you agree with that?

4:59Well, some, and it's definitely mixed back. I mean, there are definitely some areas that there are some weakness today. There's some strength. I mean, NVIDIA was strong, CoreWeave was strong, Palantir was strong. We definitely saw payment stocks and gaming stocks, some of which aren't leaders anymore, coming down. But yeah, there were some names. So it's definitely a stock picker's market. It's not always easy to pick those stocks. It's not like, aha, that's an obvious no, no. Some of these stocks, they look good one day, and then they come down the next, or they keep running up. So there is a bit of luck, and so you have to be nimble.

5:31Chris Gussle, I know, has taken smaller positions on new buys. You could also just choose to say, you know what, I'm pretty heavily invested. I don't need to buy a whole lot. It's whatever sort of fits your style. I will say if you look on a monthly basis, I mean, we can dance around different things. I mean, we've just had a really strong market. I mean, from early April, because we basically bought them to the beginning of the month, and it's just been really strong growth. I mean, yeah, there have been little pauses here, but at the end of the day, the NASDAQ's been up every month. Some of those monthly gains have been really impressive.

6:05And that's just indicative. It's been a really, really good market to be part of. If you could get into some of those leaders in April and May and hold on to them, or at least hold on to most of those, that gain, you could really have racked up a lot of gains. This is why you want to get in early, and this is why you want to play these rallies. no doubt about it i thought it was an interesting point that you made earlier this morning on ibt live that qqew which is the equal weighted version of the nasdaq 100 that actually hit hit an all-time high yesterday but the nasdaq 100 didn't do that so still seeing some pretty pretty good breadth out there yeah and the qqew was like the real laggard just a month ago it was stuck below the 50-day line, couldn't really get above it, and all of a sudden just took off.

6:55And, you know, when the market was sort of pulling back last week, it really didn't have much of it. Well, like the market really pulled back. But, you know, to the extent that there was any pullback, QQEW took off a little bit better. So, yeah, they were showing some breadth, at least among these bigger techs. There's some breadth out there. So, again, a lot of reasons to be positive. Yeah, no doubt about it. Bond yields really haven't been doing a whole lot since we had the Fed meeting. They've come off lows quite a bit. That 10-year yield looked like it hit a low of 4.10, but closed all the way up near its high to 4.15%.

7:38What's the market thinking the Fed is going to be doing for the rest of the year? Still expecting more rate cuts this year. Still expecting a little less likely than a couple of weeks ago. And keep in mind is that the 10-year yield has been moving off higher since that Fed rate cut. It's not a guarantee that the 10-year will come down due to the short-term rates. I mean, short-term rates will fall, but it may not do it. And I will just want to say one thing. One thing that probably helped the market is that there's probably a little window dressing. Retail funds were buying up stocks. It's hard not to say, you know what?

8:09I'd like to tell my investors that I own NVIDIA. I own Palantir. I mean, it's like, so there's definitely some of that going on probably the end of the day, but it didn't have to. And we've had a strong month, but nice to see no matter what the reason. Yeah, we'll take a look at NVIDIA in just a little bit. But that concept of window dressing at the end of the quarter, fund managers want to show investors that they hold a stock in a quarter. So that those that did not own NVIDIA in the third quarter, maybe a little bit of buying today, a little window dressing just to say they could show it as a third quarter holding.

8:47I mentioned the Russell 2000 was down as much as 1.4. Actually, the Russell 2000 was only down 0.9 % today. It did close off lows. I was thinking about FFTY. That was down more sharply today. I think that one was down 1.4 % on an intraday basis, but it paired losses significantly. Mentioned we saw some growth stocks under pressure for a good portion of the session. That dragged on the FFTY ETF here. Again, intraday decline of 1.4, but closes with a loss of less than two-tenths of 1%. Strength here as well, Ed. Yeah, I mean, so it held the 21-day line ultimately. Again, the market had a nice modest pullback last week, but didn't ever show real signs of stress.

9:33Individual stocks might have done it, and we're seeing that with this growth ETF here. No doubt. Let's take a look at IPAY. We don't look at very often the amplified digital payments, IPAY. This is where we saw some selling in the market today. it. 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 fortifies your business with agentic defense, AI that detects, contains, and eliminates cyber threats in minutes. It helps your security team move faster at the work that matters most to protect the business now and delivers insights to help them predict what's next.

10:18ReliaQuest, agentic defense for the enterprise. Learn more at ReliaQuest.com. That's R-E-L-I-A-Q-U-E-S-T dot com. Yeah, and this is probably, you know, understating the problems because there's like Visa and MasterCard and other things. We definitely have seen some names, including one that we'll look at later. But there's Capital One was a big loser. There was a firm. There's a lot of, and there's also some lenders. There's just sort of out there. I don't know what exactly all the reasons why. Maybe, you know, it's not a great sign for consumer spending, but let's be honest, consumer spending has been strong so far.

10:51So it's not, you know, it's something to maybe pay attention to, but just we're seeing some of these names come off for whatever reason. Maybe it's just putting money to something even better. It may not be so much that this is bad as other things look better. But, yeah, payment stocks and some lenders are having a tough, tough couple of weeks. Yeah, so FI has been a big, big leader in this market. Still, you know, down for several sessions in a row, lost support at the 21-day line. And this opens up the door for a possible test of the 50-day moving average here. So as you said, lenders under some pressure as well.

11:31Let's also take a look at BETZ. Got some new tickers here, Ed, for me. I appreciate that. BETZ. This is Round Hill Sports Betting. Pretty bad break here in heavy volume. Yeah, this is sort of an existential threat. Right. All these gaming, it's a little bit like big box bookstores. They became gigantic for 10 years and then they've almost completely disappeared. I don't know. Could something like that happen to something like DraftKings and all these other sport betting sites? Because now Robinhood a day ago just said, we've got we're getting tons of our prediction market. We're getting a lot of business already.

12:09And so the concern is that brokerages, prediction markets are just going to run into sports betting and basically take it over. or at least become a very serious threat. So a lot of sports betting plays would seem like, aha, there's more sports betting than ever. How would this not do well? Not doing well today, that's for sure. Yeah, yeah. And didn't I think Amazon announced some sort of partnership with FanDuel today as well. So that's a look at BETZ. All right, let's start by taking a look at NVIDIA because even when the market was slightly lower, There were names like NVIDIA. You mentioned CoreWeave doing pretty well.

12:51NVIDIA actually delivered a breakout today. Not a hugely powerful breakout, but it did close above a buy point of$148, excuse me,$184.48. So still in the—my eyes are getting bad. Still in the 5 % buy zone here. Volume picked up the pace a little bit. that relative strength line, which had been trending lower, that's bumping up against new high ground. So at least for a breakout, again, not hugely powerful, but a good close and pretty nice looking technical setup here. Yeah, I mean, a modest gain, but it's like the market wasn't doing a whole lot today until the final few minutes. We have seen some volume, above average volume on gains a number of times in the past couple of weeks.

13:39So that's encouraging. The AD rating isn't great, but man, I've seen that as an E or a D minus a lot. I don't know why NVIDIA's AD rating has just looked so terrible, even though it doesn't always look like you're seeing massive decline, volume declines. I mean, there were some in the middle of this space, some declines, but anyway, volume was strong. Maybe the CoreWeave deal, I mean, NVIDIA is a CoreWeave investor. CoreWeave turns around and uses a lot of NVIDIA chips. And so every time there's a big cloud computing deal, it usually means it's probably positive for CoreWeave and And good for NVIDIA.

14:12CoreWeave was flirting with an early entry. It's also really extended. It's hard to know where to enter on something like this at this point. But NVIDIA, you know, it was viable. It's not that extended from the 50-day line. You know, not really. You know, so this is one that sometimes some of these breakouts, if you didn't jump on them right away, you know, oops, you had your moment and it's gone. But this one doesn't feel gone. This one doesn't feel that extended. and look, the growth is still great. Obviously, you can understand why mutual funds would say, I want to own more of this at the end of the quarter because nobody's going to fault you for that.

14:50But yeah, it showed real strength. Yeah, no doubt. CoreWeave, that big deal with meta platforms. Yeah, CoreWeave is a big buyer of NVIDIA AI chips and CoreWeave essentially rents out their AI servers to people like Meta and pretty, pretty strong business for them. All right, let's switch gears and take a look at Ralph Lauren. Not a technology stock, obviously, but a name that has been performing pretty well after that breakout over 286.77, right in this area here, and just kind of holding support at the 50-day moving average. Yeah, there's a lot to like about this one. And it's been sort of gradually but steadily moving higher on a weekly chart.

15:38It has a four weeks tight. Might be headed towards a five weeks tight. It would need another week to be a flat base. But when you get to a five weeks tight, I think you can basically treat it as a base. And it's not that far above a prior base. And it's right now the 10-week. All of those give a reason why you could enter with a new position. I think you probably could have done that today. You know, sort of broke a trend line. You know, not a very, you know, sort of modest trend line today. on a daily. It did back off highs a little bit, but you sort of could have done that today. The growth is solid.

16:12It's not going to be a world leader. But I mean, honestly, to have some diversification from just AI and some of those names, if you don't want to lose your shirt, owning Ralph Lauren isn't a bad way to go. Yeah. Anytime we're also analyzing price price action in a weekly chart. Ed alluded to the tight weekly closes here. And what we mean by tight weekly closes, the stock is just trading each week and not really giving up any ground from the prior week. That's a sign of strength and support. And Ralph Lauren is certainly showing that as it holds above the 10-week moving average. All right. PGY was a big, Big winner.

16:54Has come under a lot of selling pressures. A provider of software to the financial industry. So, again, kind of financial related here. Bad tough week last week. Closed just below its 10-week line. But the selling has continued this week. So, sharp decline last week and more losses this week. Let's start with the daily chart, Ed. Yeah, 32 % drop over eight sessions. I mean, this is, again, I try to warn about this to people whenever I can. And it's like, you know, these stocks that move up a lot, just be ready. Just think about how would you deal with a stock if it starts falling down? Like when it's through the, like David Ryan went over the stock, because he had been in this one for a while.

17:37And he talked about how we had scaled out when it started going to the 21 day line. And then when it broke through the 50 day line yesterday, and then he said, it sounds like he had token shares as of this morning, you know, just, so you just have to be ready. What is your game plan? because these hot stocks, you know, when there is a sector rotation or a market downturn, those hot stocks will tend to be big losers. So it's just something to watch for because this was acting well. Yeah, there were some volatile moves here and there, but this made a really powerful move. There were some great fundamentals, but all that can just go away.

18:11You know, the stock chart can turn from stellar to the dustbin very quickly. You know, a lot of high volume action is really ugly, ugly action. Yeah, I would say the leaderboard model portfolio, we lowered exposure. We're down in the low 70 percent invested at this point, but it's perfectly fine. There's still a large number of growth investors that likely still have invested percentages between 80 and 100 percent. I would say with Pagaya and if you own leading stocks at this point, you really want to pay attention to that first break of the 21-day line. We're using the 21-day line for the major stock indexes.

18:56So I think with Pagaya, that first break of the 21-day line right here where volume really picked up the pace was your first sell signal. So paying attention to a stock's technical is always very important. important. Yeah, you don't have to sell everything all the way, but sell some when you start doing these things. Have some strategy, whether it's a quarter or a third or a half, you know, so, and that gets you going because now it's sort of like, now the problem is if you didn't sell anything, it's not just that you've lost a lot of capital, but it can be hard to exit. It's like, you know, it's like, oh no, now I can't because I want it to go back about 40.

19:30If you sell some at 39 and sell some at 35, you know, like it becomes easier to sell those last shares. Like you still made money, you know, you're doing that and you can feel good about that. It just, there's your financial capital and your emotional capital. Those, you want to preserve both of those, you know, with sound sell rules. Very good. Very good. Well, it's shaping up to be a pretty strong end of the year. Again, this is the final trading day of the third quarter. So we've got the whole fourth quarter in front of us here. We could see some volatility in the month of October, obviously November, December seasonally, pretty decent times for the market.

20:16So we'll see what the rest of the year brings us. Ed, as always, appreciate your insight very much. And that'll do it for today. I'll be hosting IBD Live tomorrow. I always just want to give a heads up if you haven't checked out our stock market show. It starts just before 9.30 a.m. Eastern Time every day. We talk the market. We talk individual stocks. We talk industry groups, sector trends. So be sure to check us out, investors.com slash IBD Live. It'll be Ed and I tomorrow for the Stock Market Today video for Wednesday. So we'll see you back here tomorrow. Thanks a lot for watching. Take care.

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