Nasdaq, S&P 500 Hold Firm Ahead Of Inflation Report: SharkNinja, Advantest, ASE Technology In Focus

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0:25Hello and welcome to another episode of the Stock Market Today video. It's Justin Nielsen here, Market Research Director at Investors Business Daily, and I'll be your host for the day. And joining me is Ken Shreve, one of our senior markets reporters. And we will go through the action in the markets. It's one of those things where things are holding up, but they're just not going forward. Not breaking down, not going forward. It's just a little bit more of the chop. What do you got on tap for us today, Ken? Well, Justin, we saw that 10-year Treasury yield go all the way up to 5.29%. Luckily, it backed off highs by the close.

0:58So we got that. It was good news for the NASDAQ and the S &P 500 today. Very modest losses. But three stocks to watch today. I want to take a look at Shark Ninja outside of the tech sector, ticker symbol SN. But I also want to take a look at two chip stocks today. Chip Equipment Group was the top performing industry group today. So I want to take a look at a chip equipment firm based out of Japan. that is Advantest. It's a five-letter ticker, A-T-E-Y-Y. It's kind of a mouthful, Advantest. And then Chipmaker based in Taiwan, that is A-S-E Technology, ticker A-S-X. Sounds great. We'll get right to that.

1:46And first, we will cover a little bit on the markets. The NASDAQ Composite, which has been the leading index, that was down about one-tenth of a percent The NASDAQ 100, represented by QQQ, that was up 0.2%, closing about in the mid-range for the day. Over on the S &P 500, that was down about two-tenths of a percent. Dow Jones Industrial Average, down about a quarter percent. And the Russell 2000, still continuing to take it on the chin, that was down about four-tenths of a percent. and just getting weaker and weaker as that 10-year treasury yield puts the pressure on small caps. So, Ken, let's go back to the NASDAQ composite.

2:30Again, as I said, kind of at the open, the trick here is that we had that really strong day and it looked like we were kind of popping out of this area. We haven't broken down. We're holding the lows of that day, holding the gap, but we haven't made progress either. So we kind of got that move into new high ground and then it was right back at the job fest. Yeah, yeah. Well, I would say overall, I mean, just with the fact that this 10-year treasury yield has been so stubborn and it's just been multiple up days in a row and this selling in the bond market has just been relentless. And, you know, to see this trajectory of the 10-year Treasury yield, I'm, you know, surprised that the NASDAQ is holding as well, you know, as it has.

3:24And, you know, like I said, at the top of the show, the 10-year yield went all the way up to 5.29 % today. And it was, you know, up about five basis points, I think, at its high. But it, you know, settled at 5.25, about, to 5.24, something like that. So it gave back a lot of those gains. And in the end, you know, we have a very, very mild decline for the NASDAQ today. and it's basically just a little test of the 10-day moving average. And meanwhile, we had a great day for chip equipment stocks today with the chip equipment group up 3.5 % at last check. So underneath the surface, you've got several tech stocks out there acting pretty well underneath the surface.

4:17But I think if you're wanting to go long this market, you kind of have one foot in and one foot out, just wondering which way does the NASDAQ really want to go here with bond yields in the trajectory that they are in right now. So it's just a very tricky market. But I don't think you can deny the technical strength right now of the NASDAQ. It still looks pretty good from a technical perspective. If you're an RIA or looking to become one, Schwab Advisor Services is the Watson to your homes. Smart. Dependable. Always has your back. It's no mystery why they're the number one choice for RIAs who want to be the ultimate solution for their clients.

5:05With all the wealth services, technology, and support your firm needs, the difference is so obvious, it's Schwabvious. Follow the clues at SchwabVS.com. Yeah. And again, I think the topic that we keep on coming back to is resilience. Despite the fact that the 10-year treasury yield is, I mean, it's not just edging up. I mean, it crossed five with gusto. And the fact that the market is doing as well as it has been is, I certainly wouldn't have put that on my bingo card If you had given me the headline numbers there, I wouldn't think the market would be as strong as it is. And we certainly have the backdrop of XLE oil stocks.

5:52You know, they've been coming in a little bit here, but still, you know, still kind of higher than they have been. If you kind of take that step back on a monthly chart, you know, we're still up there in terms of XLE. So certainly putting pressure on the inflation side. A lot of underperformance in oil stocks today. They were some of the worst performers in the market today. And oil did take a hit today. I'm not sure what the exact settle was, but I know it was down about 3.5%, and it did go below$90 a barrel. And I know in electronic trading, it was down around close to$89 a barrel. So a big hit in oil today.

6:38Mm-hmm. Well, and it was kind of interesting. One of the other areas that we have been watching is the gold area. GLD was looking interesting here, like it was coming up, especially in the gold miners just recently. It looked like there was a potential move there just last week, and then it kind of fell out of bed. So it was one of the strongest groups today, but still very damaged goods in the gold space and gold miners. Yeah, well, you have DX, with the dollar strengthening, you can pull up a DXY and you see the U.S. dollar index has been just going gangbusters right along with the bond sell-off and the 10-year yield strengthening like it has.

7:25And typically when the dollar is strengthening, that is, you're going to see gold going in the opposite direction. So that's what's been happening. But, you know, the NASDAQ and the S &P 500, I mean, you've got those. These are the two strong indexes in the market. And then you've got the Dow and the Russell 2000 just kind of can't get out of their own way at this point. and the Russell 2000 coming up very close right now to a test of the 200-day moving average line, I'm assuming. So yeah, and SPX, taking a look at that, we did hold above the S &P 500's 50-day moving average line. So just slightly below the 21-day moving average line, not in a big way, you know, about a tenth of a percent below that 21-day moving average line, but still holding pretty well.

8:24And again, didn't cross below that S &P 500 50-day moving average line. Although I do want to have you take a look also at the equal-weighted S &P 500 because this really is a case of the haves and the have-nots. Magnificent 7 has it and the other 493 stocks in the S &P 500 really don't. So the S &P 500 equal weight certainly has a lot of work to do. It looks like we may have lost Ken Shreve. So I'm going to go through and hopefully he will be coming back in. Otherwise, I'm going to kind of just take over and go where I think he wanted to go. SMH, of course, the Semiconductor ETF that we talked about looked like it was kind of breaking out above this little area and didn't close well, close at the lows, but still holding above 600 so far.

9:21And he had a few stocks that he was going to share with us, including a Japanese stock, as he said, a five-letter ticker symbol here, A-T-E-Y-Y, Advantest Corp. That is an ADR. This one, it's going to look a little gappy. That's very normal because you got to remember this is trading overseas. You know, it's very liquid. It seems like it has low liquidity here because it only trades at 15 million in dollar volume. But this is a market cap well over 100 billion, closer to 150 billion. And we have what looks, again, very gappy, but that's just because it has to correct for the overseas market when it opens.

10:05but I think what Ken was kind of going towards here is that this has a trend line that it's broken above. So kind of interesting action here. Very strong today. Some volume behind it. Looks like it was about 40 % above its average volume at the close and coming up with about a 3.4 % gain for the day and closing at the peak. So whereas a lot of things were kind of going back and forth. If you take a look at the intraday chart, I'm going to go to the 10-minute chart here on Advantist, and you can see that this kind of started a little bit wild, but it made progress throughout the day, and that's kind of what you want to see with a very strong close near the peak of its trading range for the day.

10:53So that's one to keep an eye on, and in addition to that, We'll also take a look at ASX in the semiconductor manufacturing space. You know, Advantest is in the equipment. This is in the manufacturing. Looks like kind of your classic cup here. A little bit of a pause as it got up to this 45-52 area. Paused for a few days, and now it looks like it's trying to challenge that area again. 12 % increase in volume over the 50-day average for the day. It was up about 3.5%, but a strong look for the manufacturing space. And as you can see, for both of these, this is the number 17 group out of our 145 groups for the semiconductor manufacturing and our ATEYY example, that's also in a strong group, number 27 out of 145 for the semiconductor equipment.

11:50So certainly a area of space that has been very strong. This episode is brought to you by Charles Schwab. Decisions made in Washington can affect your portfolio every day. But what policy changes should investors be watching? Washington Wise is an original podcast from Charles Schwab that unpacks the stories making news in Washington right now and how they may affect your finances and portfolio. Listen at schwab.com slash Washington Wise. One other thing that we should also take a look at is Shark Ninja. So taking a look at the kind of outside of tech, there is still some strength here as well.

12:31And this had quite the move coming out of this base at around 134 in June when, remember, a lot of the market action wasn't great, a lot of choppiness, and this just really trended very nicely above its 21-day moving average line. Took a hit here and came back below its 50-day moving average line, but it looks like it's on the recovery path right now. Got above this kind of little area of resistance here, and now it's recently crossed 180 and this little bit of resistance here. So we'll see if it can cross above that and finish strong for the month. Because we do have the end of the month. A lot of times people look at the end of the quarter as having particular window dressing as some of the mutual funds and institutional investors kind of adjust things to make it look a little bit better or maybe not as bad as it could be.

13:30we also have a number of inflation reports that are going to be on our radar to watch is in addition to a very important earnings announcement coming up with Micron that's going to be tomorrow after the close I do have a position in this myself so it's going to be very interesting to see if what happens there this has been another area of strength in the memory chip space but we'll have to see if this continues to hold well that inflation report is going to be something that I think a lot of eyes are on as folks are trying to decide whether or not we're going to be getting another rate hike. It was kind of scheduled for two, potentially, according to the Fed Funds Futures Market, to end the year.

14:16Right now, it looks like we have about a 50-50 chance for our next meeting on October 28th. And it looks like the chances have gone a little bit lower for that second rate hike possibility, maybe closer to 40%. That's going to wrap it up for us today. Sorry that Ken dropped off and wasn't able to come back. We missed him. We will be back here tomorrow for another episode of the Stock Market Day video. And if you haven't joined us on IBD Live, try checking us out, investors.com slash IBD Live. We start about 10 minutes before the market open. And then we go for a full hour, hour and a half. Tomorrow, we're going to have Mark Minervini on iBody Live.

15:05He's a crowd favorite. He's going to be talking about what his action plan is right now, what's going to get him more involved in the market and how invested he is. So it's always a great time with Mark. We'll be looking forward to that tomorrow. And then tomorrow on the podcast, I'm going to have a new guest, John Pokoroba. He is the lead of Ranking Insights and a long-term IBD methodology follower. So we're going to get some insights of his into how he sees this super cycle playing out. Hope you can join us for that. We'll see you next time, everyone. Take care. This show is for informational and educational purposes only, and nothing should be construed as a recommendation to buy, hold, or sell any securities.

15:46Any securities and investment strategies discussed may not be suitable for all investors. Make sure to consider consulting with your financial advisor before making investment decisions. At Janice Henderson, we strive to deliver better outcomes through insight-led investing, innovation for clients, and a partnership approach that's core to our identity. I'm Jessica Lianzini, Head of Fixed Income Client Portfolio Management. I'm passionate about my role in investments. It allows me to partner with our clients, simplify fixed income, and support them in achieving better outcomes for their clients.

16:19Janice Henderson, investing in a brighter future together.