Nasdaq Surges On Trump’s Iran Deal; Corning, Amphenol, Dell In Focus

0:00Alissa Coram:There's a lot of hype and a lot of good news already priced into the marketplace today.

0:03Justin Nielsen:We're entering a period of so much more change that it could be a tailwind for active management. Women are now in the protagonist seat for the family's financial story.

0:13Alissa Coram:I'm Joe Davis.

0:14Justin Nielsen:And I'm Christine Kashkari. And this is Season 2 of Better Vantage by Vanguard, an 8-part video podcast series hosted by Custom Content from WSJ and Vanguard.

0:23Alissa Coram:All investing is subject to risk, including possible loss of principal. This content was created by Custom Content from WSJ, a unit of the Wall Street Journal Advertising Department.

0:41Justin Nielsen:Good afternoon, everyone, and welcome to Stock Market Today for Monday, June 15th. It's Alyssa Quorum here. Now, cue the John Lennon. War is over. Well, markets sure are optimistic about a peace deal. Joining me now to discuss the market impact and stocks to watch with this bull market reigniting is my colleague, Justin Nielsen. Justin, what do you have for us today?

1:06Alissa Coram:Gosh, there was so much working today. A lot of ad opportunities. Fewer initiate, but we'll take a look at some setups that we saw as we were going through stuff, including Corning, GLW is the ticker symbol there, Amphenol, APH, and then also Dell. which is very easy. It's Dell.

1:26Justin Nielsen:Yeah, a lot of power out there. We'll take a look at some of the sector action that we saw as well, in addition to those couple of stocks. But first, let's take a closer look at the major indexes. A big pop on the NASDAQ composite here today, Justin, with the tech heavy index up almost 3.1 % on the day just coming roaring back. Meanwhile, The S &P 500 up about 1.7 % or so on the day. Slightly delayed data here from this chart. And then the Dow was up nine-tenths of a percent. And small caps up about three-quarters of a percent or so on the day. So tech-led rally here sounds a bit familiar, Justin.

2:16Yeah.

2:17Alissa Coram:Yeah. And again, looking at that NASDAQ, again, almost like, look, the S &P 500 was great. Don't get me wrong. But it was no NASDAQ, right? With a 3 % move. That's very impressive. And certainly, as you said, tech is where the money was going back. Look, take a look at RSP just to kind of give a sense of the S &P 500 equal weight ETF, because this is something that we had been looking at for a while in terms of the, you know, if there was a broadening out. And while the RSP, again, not bad, you know, but, you know, very, very sharp contrast to what the NASDAQ was doing. Also, just to kind of keep your eye on the MAG7, while we were kind of, at least I was a little negative on that on Friday, I thought it was a little lackluster of a move.

3:11Alissa Coram:It was a nice move today, but still not even comparing to what the NASDAQ did itself. So again, when you see a 3 % move in the NASDAQ and the Magnificent 7 are up only like 2.7, it does show you that there's a lot of other things that were working here. And to that point, XLK kind of shows you how, you know, very tech oriented. This was up 3.8 percent. But let's take a look at RSPT, which is the equal weighted, you know, technology sector spider. And that was still a very decent 3.2. So, again, technology, that's absolutely where things were moving. Two more ETFs to just take a look at. SMH, the chips, certainly where a lot of the power was, break out to new highs.

4:02Alissa Coram:And it's kind of like, oh, that whole June 5th, forget about that. We're past that. And it's, again, amazing what headlines can do for you. But IGV, which had really gotten pummeled pretty seriously, that was a nice bounce off its 50-day moving average line. I'm still not thrilled that it couldn't hold the 200-day moving average line, but that was a pretty impressive bounce today out of 2.2. But certainly the chips, you know, that move really kind of showing where it was at, and I'm just going to throw one more in there for fun, DRAM, because a lot of those memory plays, you know, this is a newer ETF, but it has just a ton of the leaders from this rally, And even some that we don't see trading on U.S.

4:53Alissa Coram:exchanges, some of the ones that are on the South Korean exchanges. But here we are right back to new highs and a stunning 9.4 percent move for this one. So, again, technology, AI, that's where things are at. A little bit of software, you know, plugged in there as well. Chips, but a lot of things to choose from. And again, I think more than anything, this kind of shows the flexibility. While we were long-term bullish this entire time, I think there was reason to be cautious over the last week here after June 5th, that big drop that we had. but as much as it would have been made sense to get cautious and I was right there you have to be willing to change when the market gives you evidence to the contrary of your hypothesis and I think that's what we started seeing with that support at the 50-day moving average line I you know you and I talked on Friday about how that was a great opportunity to be you know initiating positions buying things back that maybe you got shaken out of or buying back shares that you trimmed.

6:01Alissa Coram:And now we had no idea that this was going to happen. But again, it was set up for something like this. And so very powerful. And I think today, maybe not so much about initiating positions, but hopefully adding to positions that you got over the last few days.

6:21Justin Nielsen:Exactly. And I think the last week plus shows exactly the power of active investing, because when you do see a character change in the market, history tells us that you do need to take some action, right? It doesn't mean sell everything necessarily and go all the way to cash. But if you are actively managing your portfolio and using technical analysis to adjust your portfolio holdings, that is a day to take action. But we had a positive move here with that support at the 50 day. So there is going to be a time there always is, right? Depending on the market cycle where you get a pullback that continues to develop into something worse.

7:08Justin Nielsen:So I think having these different ebbs and flows and the flexibility, right? To readjust your expectations. And like you said, get back in, add to your positions and find those new opportunities. Again, looking at these different levels on the chart, hopefully investors were able to take advantage of what turned out to ultimately be an opportunity last week.

7:38Alissa Coram:Yeah. And look, you have to kind of go in a little agnostic. You know, the fact is we don't know when you get that kind of jolt to the market. We don't know how bad it could get and we don't know if it's going to be temporary. So I think that's why sometimes just putting yourself in motion. Now, depending on what your time frame is, if you are a shorter term trader, then you might be having a significant raising of cash. But then it also means that you're going to have to act almost just as fast to get back up. And that's kind of what I did. I had, you know, really scaled back quite a bit over over last week.

8:20Alissa Coram:But, you know, Thursday and Friday, I was right back up to 90 percent invested. And then today, basically fully, fully invested again. So, yeah, it's OK to be quick like that, but you certainly can't freeze in that case. And if you do like to make things a little bit more incremental, that's fine as well. But at least doing something puts you in motion so that if If the market goes down from there, well, those sales were good. It tells you, let's do more of that. If the market bounces and it doesn't go down anymore, well, you still have a lot of, you know, a lot of exposure where you're participating and you can just ramp it up pretty quickly.

9:04Justin Nielsen:Exactly. Okay. So then in terms of levels that we are watching, levels that we cleared today on the NASDAQ, 26 ,000. We're now back above that in a big way. Also the 21-day line, a key level that we're looking at. We now have the low above the 21-day line as well, something our senior market strategist, Mike Webster, really likes to see. Let's see if we can get a couple of days with the low above the 21-day. We do have some room. We also got above that, what was that? Was that Tuesday? That Tuesday high. That was Tuesday, yes. And Friday's high. And Friday's high, exactly. So we've cleared quite a few hurdles all in one day here, Justin.

9:47Justin Nielsen:Very bullish. Yeah.

9:49Alissa Coram:And look, there was a little bit of a if you take the the the high or close of today, because they're basically the same thing and draw a line kind of straight to the left from there from today's close. You can see, OK, look, there's a little area there, too, that we're kind of bumping our heads up again. So I would be very interested to see if we can kind of cross that area because you saw we got up there, then tested it a couple days and then broke through, but it didn't last for very long. So and then, of course, there's the 27 ,000. But again, a lot of things looking very strong here. And certainly the bullish scenarios is back.

10:35Justin Nielsen:Yes, it is. Okay, let's quickly take a look at the levels that we're watching on the S &P 500 as well. Similar in that we got above the Tuesday high, the prior Friday high. Now it looks like the next hurdle is 7 ,600 and the prior high at 7 ,620 and change. So yeah, will we bump our heads and roll over or will we get into that new high territory? That's going to be a big question. Yeah.

11:08Alissa Coram:And let's not forget that, you know, if we start filling in this gap, that wouldn't be unusual. But if we start taking out Friday's low, Thursday's low, if we come all the way back to the 50-day moving average line, I'm going to be backing away pretty quick. Mm-hmm.

11:23Justin Nielsen:Yep. Okay. Moving on, we already looked at a number of ETFs. Let's take a look at oil because we know that the Mideast headlines definitely have an outsized impact on the trend of oil. So coming off today, hitting the lowest level in a number of weeks here, Justin finishing off lows, but still down a good bit. This is USO and ETF, which is a rough proxy for the price of oil. Yeah.

11:56Alissa Coram:So, and look, this trickles down to a lot of different things. So you have kind of, oh, what does this do for inflation? What does this do for the 10-year treasury yield? If maybe we don't have as much of an impetus to, you know, need to hike rates because the inflation fears maybe start quelling. So, you know, looking at TNX, which is the 10-year treasury yield, you saw that was down a little bit today, although it did finish off its lows. But there's also a whole host of other industries that start getting benefited, you know, including Jets. We talked a little bit about that on Friday, how that was starting to kind of perk up a little.

12:36Alissa Coram:That had a nice gap out and breakout today above 30. Closed, you know, off its highs and getting a little resistance there at its previous high, but, you know, something to be keeping an eye on. And also we've been watching IYT, which is the transportation area. So remains to be seen how this does. And then of course, again, that 10-year treasury yield, you know, that does affect everything from real estate, your home builders, and small caps just in general, which is again, why we saw a lot of strength come into IWN, the Russell 2000.

13:09Justin Nielsen:Exactly. Exactly. Okay. And then we also like taking a look at the 10-year. So finishing at what looks like 4.47-ish, Justin. So what are the levels that you're watching for the 10-year? Yeah.

13:25Alissa Coram:And again, I don't I don't know that you necessarily apply the same moving average lines, but it's amazing how a lot of times it works. Right. You know, so so that's what we are seeing here, that the 10 year treasury yield kind of came down to that previous low right there by the 50 day moving average line. So, you know, does it does it get support here? Does it go up from here? Which, again, could put a little pressure or a little bit of a headwind on the market? Or does this potentially take another leg down? So I think that remains to be seen. And let's also just, you know, point out that Kevin Warsh will be having his first foray into his leadership role in the Fed.

14:10Alissa Coram:So that'll be a good chance to kind of get an idea of his thinking and how he plans to lead that board.

14:17Justin Nielsen:Yeah, it'll be really interesting to see how the rate hike expectations are shifting in light of all the newness going on on multiple fronts. Okay, let's pivot now to the stocks that we wanted to highlight. Starting with IBD's stock of the day, Corning, shares up 4.8 % for ticker GLW. As the stock continues its bounce off of the 50-day line.

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15:21Alissa Coram:Yeah, and this is, I love the story behind Corning. It's an old company that has reinvented itself multiple times from originally doing glass for the incandescent light bulb when Thomas Edison invented it to now they're stretching that glass very thin and doing fiber optics. And that's gonna be optical cables for all of the AI data centers that need all that data going back and forth. And so big, big AI play here. And it has just been really holding that 10-week moving average line very nicely. Got support there once again, and we're seeing a bounce here. So looking at the daily chart, I think, again, this is something that was actionable.

16:05Alissa Coram:You have a whole host of stocks to choose from in this space, whether it's VIAV or Lumentum. That's V-I-A-V-L-I-T-E, both of which we kind of recently featured in a way from the greatest opportunities, a column that was from our founder and Hub Investors Business Daily, William O 'Neill, because this was JDSU, this split into these two companies. But yeah, this one also getting support at the 50-day moving average line and bouncing. And so, yeah, just a lot of interest in this telecom equipment, specifically for what it does for AI data centers. So again, a lot of these data centers have a lot of requirements.

16:46Alissa Coram:And the big question is, I mean, what happened to the fiber optics back in the JDSU day and Corning as well was, do they oversupply? And then there's this glut because, yeah, Corning is coming out saying, look, we're going to be increasing our production of some of this optical cable by 50%. So it'll be interesting to see what happens here. But right now, this is an area to be in and watch very closely. And it's got some strong fundamentals. You also have a composite rating of 92, EPS rating of 90. Those are some pretty stellar numbers that it has behind it. Solid double digits in growth.

17:26Justin Nielsen:Yeah. I mean, look at this fantastic uptrend, outperformance versus the S &P 500. The earnings line as well on the weekly chart. quite an angle of ascent that we have there, Justin. I guess my only concern here with so many of these AI stocks, right, is you do have an elevated average true range. So a little bit volatile, a little bit on the volatile side, 7.2 % or so. And it does seem like this 200 level round number could be quite a level for this stock to conquer. But instead of waiting for it to clear resistance there, you know, we've been talking more and more about these earlier entries, which I think is really great.

18:15Yeah.

18:16Alissa Coram:And I look at it as it gets your foot in the door. And then that 200 is a great place to be adding to the position if it works. If it doesn't work, let's say it goes right back through that 50-day moving average line, well, then you have a smaller position that maybe you tested the waters with. And so you're not going to lose as much. And that's, again, very important that we're protecting our portfolios, not just trying to grow them, but also making sure that we're trying to protect them as well. All right.

18:47Justin Nielsen:Next on our list, let's go to APH. This is Amphenol in the Electronic Parts Group, shares up 3.1 % today, breaking out of a double bottom base, Justin.

19:00Alissa Coram:Yeah, we haven't seen as many double bottoms here lately, but yeah, kind of a solid one right here. It was interesting, again, the relative strength is a little bit lower on this one because it was basing for so much of this uptrend and you see that reflected in the relative strength. But again, if you're gonna expect some potential rotation, that's kind of one of the things that I was looking for and make no mistake this has very solid numbers as well the EPS rating you know 98 here and double digit growth for both top line and bottom line you know really solid in that regard and as you go to that weekly chart it's another very steep angle for that earnings line that it's had and yeah the only thing is on the relative strength side, this has been a little bit weaker because it's been basing.

19:52Alissa Coram:But now we've got something to work off of. And again, a way to say, look, if this doesn't work, we're going to we're going to know pretty soon it's going to fall back into that double bottom base. And if that's the case, then you can just kind of exit out of there. And to your point earlier, the ATR is a little bit lower on this one. So 4.7, it's not nothing, but it's certainly lower and maybe a little bit easier to handle.