Small Caps Charge, Big Caps Pause; GE Vernova, Genmab, Eli Lilly In Focus

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0:24Good afternoon, everyone, and welcome to Stock Market Today for Thursday, December 4th. It's Alexis Garcia here. And small caps charged higher today, outpacing the major stock indexes as investors reacted to a surprise drop in jobless claims. And here with me to help break down everything that you need to know about today's market action is IBD News Editor Ed Carson. So, Ed, what do you have on top for us today? Yeah, I want to take a look at GE Vernova, GenNab, GenMab, and Eli Lilly. All right, well, we'll get to those stocks, but let's just check in on how the major index is finished. The S &P 500 up about a tenth of a percent.

1:09The Dow down fractionally. The NASDAQ up two-tenths of a percent. And small caps leading the way up eight-tenths of a percent. So let me go ahead and get our handy charts going here, Ed. But we'll start on the S &P 500. And again, finishing basically flat today, Ed. But, you know, what a wild couple of weeks it's been since this downside reversal day on November 20th. Index has rebounded. It's up near these short term highs back here from November 12th. And, you know, it's not so far off the highs here of 690-20. Yeah, I mean, really, really impressive turnaround. And this is why you have to pay attention to what the market is doing, not try to guess where it's going, because there's been some twists.

2:00There have been some plot twists that you weren't expected, you know, especially the last couple weeks. If anything, it would have been nice to see the major indexes retreat today. The Dow did, but just a fraction. But just to get more of a handle, because we're seeing a lot of cup bases and double bottoms because a lot of these, because that's what the indexes are sort of forming, sort of these cup-ish double bottom things. And it'd be nice to see some more handles form. And, you know, it's grinding higher. So that's the only downside. But generally, it's like this was sort of, it's been a constructive pause on the major indexes.

2:34you know, after some big gains, pausing here is nice. We're seeing a lot of stocks form handle, the finished basis form handles, etc. So a lot of positive action on the major indexes. Yeah, things really tightening up here over the last week, especially compared to some of the price swings we've seen over the last few weeks. But talk to me about small caps, but this one's really been leading the way the last couple of days up again, about nine tenths of a percent today. And as you can see, it's really inching closer to this 252.77 buy point here in a flat base. Yeah, I mean, just really impressive action here.

3:14Now, there's certain names that are like sort of bigger names that are still in the small cap index because they haven't been reset. But financials, there's a lot of industries. A lot of things are doing well. This week, we've seen, I mean, tech has had some issues. There's been some certain AI concerns here and there. I mean, they've continued to rise. But the NASDAQ has sort of lagged, not so much today, but small caps and a lot of sectors are showing a lot of strength right now. This came just within a few cents, just a fraction of getting to all-time highs. So really, really looking great there.

3:50And talk to me about market breadth. We'll take a look at RRSP. That's the S &P 500 equal-weighted index. This, again, up fractionally today. But talk to me about what you're seeing in terms of the types of stocks participating in this move. Yeah, that's the thing. And this is this, I mean, one thing, this market is more work because it's just like you could just do a handful of stocks and like, oh, get your Palantir, some of those mega caps, yada, yada, your portfolio is fine. But right now, there's just a lot of things going on, medicals, you know, like including especially biotechs, there's industrials, there's financials, There are some techs.

4:24There's all sorts of steel and some energy plays and a variety of energy plays. Some of them are AI related and some of them are not. So it's definitely a lot of breadth. That's positive as we're seeing that lately. And just jumping over to QQEW, that's the NASDAQ 100 equal weighted ETF, down about three-tenths of a percent today. But we can see how much it's come off these lows from that November 20th downside reversal. And again, just looks like it's tightening up here, Ed. So again, telling us that, as you said, we thought maybe we could coast into the holidays, but a lot of things moving here in this current market.

5:06Yeah, so pulling back a little bit, but that could be constructive because, yeah, you can imagine stocks that look like this. It's like, well, wait a second. It's sort of gone this V shape. It's nice to get a pause in there. And it's hard to pause. If you're a leading stock, if the market keeps going up, you're supposed to outperform. So, you know, it really helps to have that pause. So not at all a concern here. All right. Let's take a look at some sector ETFs, starting with ARK-K, Ed. And this one, again, has been rising. We've seen a lot more growth speculative names doing a lot better over the last couple weeks.

5:41Retook the 21-day line yesterday and inching closer to that 50-day line. Nice day today, up 2.4 % and finishing at the top of that trading range. And definitely some names in here. And obviously Tesla, that's moved up. Robinhood, I think, is a top 10 name. That's moved up. Those are both above the right side of the tracks. And ARK overall, ARKK, is not above the 50-day line yet. So that's still a big level. So in general, these high beta names still have road to recover in a number of do, but they are coming back. The other thing that this tells you is that this is why you should be looking elsewhere as well.

6:16I'm not saying that there aren't some high beta names, as I just mentioned, some that are doing well, but there's definitely a lot of other areas that did recover faster. So it's possible that you don't just want to assume, okay, these stocks are going to be the ones that will lead again. And some will, and others might come back, but it's just still a little recovery there. Let's take a look at XBI. That's the biotech ETF. Nice day for this, up 1.2%. I mean, Ed, biotech has just had such a great run here since this breakout in August, August 2nd. It tested the 21-day line one time, but it's continuing to move higher.

6:58So talk to me about what's been going on with the biotech sector. I mean, talk about an area that's been working. Yeah, that's been working really well. And as you say, just one test of the 21-day line in a strong ascent. Today, there was some positive news or perceived positive news. There's a report that the FDA might reduce the number of trials instead of those big two trials that you need, maybe just one. Now, it's not clear that that may report may not be as big as the headline suggested, but we definitely saw biotechs rally, certain names. And we also saw names like MedPace, which helps run clinical trials for drug makers.

7:34MedPace fell. So that was an issue, but MedPace fell pretty sharply because maybe there'll be fewer trials. Again, we don't know how serious, if it's true or what it really means. Another name is ARCG. I go ahead and put up ARCG. That's more speculative biotech and genomic, not just biotech, but some genomic plays and testing plays. And that's done quite well. That broke out today. That was a nice move today. Yeah, 3.6 % breaking above this 3119 buy point. But again, you also mentioned financials, Ed, doing well. the XLF financial spider ETF up two-tenths of a percent today. And again, retaking that 50-day line this week and continuing to move higher, moving above, it looks like this short-term high here for$53.88.

8:28Yeah, and even some of the laggard parts of financials are coming back. But I guess a big thing, the big banks are doing really well. If you would just punch up KBWB, that sort of gets a lot of the big banks. And that one, a number of them have broken out. So that one's really doing well. But even some of the weaker areas are coming up now. So again, showing the breadth. And how about XLI? Just to wrap this part up, the Industrial Select Spider ETF up half a percent today. Again, retaking that 50-day line yesterday, Ed. But again, another one that's really rebounded here from this November 21st low.

9:05Yeah. And the only downside here is you can see the RS line has been sort of weak for several months because this has gone sideways while the market generally moved higher. Yeah, there was a big sell-off, but there was a big uptrend before that. But this is coming on. Again, we're seeing a lot of names come on right now. I'm Steve Booth, CEO of Baird, an independent wealth, asset management, and global capital markets firm. At Baird, our 5 ,000-plus employees are united by an unwavering commitment to excellence and a genuine passion for helping our clients and each other succeed. As a privately held, truly employee-owned company, we treasure our independence since we can focus on delivering results to clients and taking care of our people throughout the cycles in our serve markets.

9:49Learn more at rwbear.com slash wsj. All right. Let's take a look at some individual stocks, starting with GE Vernova. This up four and a half percent today. Again, retaking the 50-day line earlier this week and really punching above this 600 level here, Ed, and forming a consolidation with a 677-29 pivot. Yeah, so this one's a really tough stock. You can see these times where it's sort of punched above the 50-day line several times in this base and then quickly come back around. So we'll see. I mean, it just did that a few weeks ago. It sort of got a short-term high that November 10th high just a couple of weeks ago.

10:30It reversed lower really badly just a couple of weeks ago when it got spiked up. Now a little bit further to the right when it went up to over 600. and then just reversed lower and then came down. And yeah, it found support. But that's just sort of Bennett's pattern here. It was easier back in April, May, when it first sort of provided some opportunities down there. You know, the breakout or even early, it generally trended higher. This has been choppier. So maybe this is when it finally goes. We saw a lot of AI-related energy names go today or showed bullish motion. Also, you know, you could also say, I want to go for some of those.

11:12like Constellation Energy or some other names. That one didn't show a lot of volume today, but you can see it broke a trend line, rebounded from the 50-day line. So that would also be one that you could use. That's not as growing as fast, but at least there's not quite as much mess there. So these are names that definitely seem to be coming on again after having some troubles for a while. All right, let's move on to ticker GMAB. M-A-B, that's Genmab. This is a biotech name, up over 1 % today. And again, looking to build up the right side of this cut base with a$33.65 buy point. Yeah. And if it has one more day, it stays in this little range, that will be a handle.

11:56So you could use, I think it's$3.247 or something, but whatever. It's something like that right there, that if it's one more day, that becomes the new buy point. You could certainly use that as an early entry anyway, especially now, sort of like a little proto handle. It was almost coming up there. You probably could have tried a sheet here today as it broke the downtrend of this little proto handle. But, you know, whatever. It sort of backed off. So I think at this point, you just want to see it get above that level, whether tomorrow or next week. Accelerating growth for a couple of quarters.

12:28This was our stock of the day. Accelerating growth on both earnings and sales growth. And it was our stock of the day. and Alison Gallen, who really covers, you know, medical is great. She did a good job talking about why, you know, some of the drivers, they made a big acquisition or announced one a few months ago. And that one is seen as, you know, maybe provides the next round of drugs for them going forward to keep the momentum. So an interesting name, forming the shallow cut base after a nice run. So a lot of nice things going on. Yeah, the RS line's on a new high, but after a run, you know, that, you know, stocks that are formed bases are going to do that in this kind of market.

13:08But nice action here. And speaking of medicals, Ed, let's take a look at Eli Lilly. That's ticker LLY. This went down 1.9 % today testing the 21-day line. Yeah, this is really interesting. This is why tests are fun. I mean, tests are tests because you might fail. People will say, well, let's see if it comes back and pulls back to the 21-day line. Now, maybe you would have liked to seen it more gradual in terms of price, but the volume's been light and it was a huge run, especially if you consider the buy point at 854 or whatever that was, like something in there, that might've been the real buy point or even lower.

13:41So that was a big run. And so it's pulled back. So now it's come down to the 21 day line. So this is now and back into what could also be considered the buy zone. If it shows some strength here, maybe this could be a place to add shares or even start a position though. it's still a ways from the 50-day line. This might have also fallen on that FDA news I talked about, fewer clinical trials because, okay, yes, it will help Lilly develop new drugs, but it could also mean new rivals for things. Like if you punch up VKTX, Viking Therapeutics, they have an obesity drug in Phase 3 trials or some other late-stage but boy, they'd like to go faster.

14:19So that stock rose 9 % today. Probably on speculation, hey, maybe they could get sooner or maybe there'll be a buyout candidate because it's seen as sooner out there. But, you know, that could be one thing hitting Lilly a little bit. But Lilly's held up like a champ. That's a great run, you know. But now we have to see. This is the test. Can it rebound from here or will it keep sliding? If it falls further from here, you know, then people who bought this, especially, you know, near there, definitely wouldn't want to be cutting some profits there. some profits there. If you bought lower, like at 854, you might consider if it decisively went through the 21-day line.

14:57You have to decide where you want to get out or at least make sure our pair gains. But it's been a big winner. It's on a lot of our IBD lists. And so now it's going to be interesting to see what it does from here because this is what a lot of people have been waiting for. All right, Ed. Well, we'll be keeping an eye on that level. And thank you so much for your insights today. That wraps it up for this edition of Stock Market Today. We'll be back tomorrow morning starting with IBD Live. You can head on over to investors.com slash IBD Live for all the details there. And we'll be back with Justin tomorrow for the Friday edition of Stock Market Today.

15:39So check that out. We'll see you back here after the closing bell.

15:59You