Small Caps Lead Resilient Market; Tesla, Robinhood, Jones Lange LaSalle In Focus

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0:24good afternoon everyone and welcome to stock market today for wednesday december 3rd my name is ken shreve and thanks for bearing with us at some difficulties technical difficulties there but we think we got them straightened out again my name is ken shreve nice day for Small caps today and blue chips as well. NASDAQ Composite and S &P 500 underperformed a little bit today. But overall, another strong day for the stock market. Before we get into the day's action, let me bring in our news editor, Ed Carson, who has got three stocks to watch. Good afternoon, Ed. Good afternoon. I want to take a look at a couple of names.

1:06Some of us you may be familiar with. Tesla and Robinhood, as well as Jones Lang LaSalle, which is tickered JLL. Okay, sounds good. We'll take a look at Tesla, Jones Lang LaSalle, and also Robinhood. Let's do that. Before we get into that, let's take a look at the market here. I mentioned the NASDAQ composite lagged a little bit here. Let's just take a look. Nasdaq ended with a pretty paltry gain here of just two-tenths of a percent. But, Ed, the real story was in small caps today. Interest rates down just a little bit. That 10-year Treasury yield edged just a little bit lower. But look at that Russell 2000 IWM bumping up against that 250 level.

2:00We can take a look at the Russell 2000 index itself here. Big, big percentage gain here, up 1.9%. Nice day for small caps today. Dow Jones Industrial Average also outperformed. Didn't do quite as well as small caps today. Little mini breakout for the blue chip index. We just looked at the NASDAQ composite, just a gain of two-tenths of a percent. And S &P 500 also lagged as well. But really, really strong market and a nice rally off lows since that nasty downside reversal on November 20th. But this is, what, seven up days out of eight. And, again, really nice day for small caps, Ed. Yeah, really nice day for small caps.

3:01Good day for the market. The Nasdaq and S &P lagged because of concerns from Microsoft and maybe what that might mean for AI. But even those areas came off lows. You know, just a lot of strength out there. There's a lot of breadth. Definitely a time when you should be looking. There have been times this year where looking at 5, 10, 15 stocks probably would have been fine. I mean, you know, it would have worked out. This is not one of those times. I also say, look, the look at the Russell 2000, that basically looks like a cup with handle. We've got the S &P sort of looks like a double bottom. And wow, I'm just, what a surprise.

3:34We're seeing a lot of cups. We're seeing a lot of double bottoms. There's a lot of stocks out there that are sort of mirroring how these indexes are looking. One reason why we look at the index is because stocks are going to follow. Even the leading stocks will generally, you know, will show some relationship to how the indexes look. Yeah, yeah. The Dow had a pretty darn good day, we mentioned, up nine-tenths of a percent. And this is, you mentioned, Microsoft finished, well, it did rally back near its session high, but it actually ended lower by about two and a half percent. And just to explain what that headline was before the open information reported, that there may be some soft demand for some of their AI wares, right, Ed?

4:28That's right. And Microsoft denied the report, or at least they specifically denied the fact that they had lowered sales quotas. I mean, so we'll see how it all turns out. Some, you know, maybe they said was true. So, you know, we'll just have to see. The market ultimately dealt with a lot of other things. And it could be a Microsoft issue. This may not have, even if it's true, even if all that report is true, It may be a reflection of problems from Microsoft rather than AI in general. So it'll be interesting to see Oracle's report next week, just because they're a big name in all that, just to get a sense of how AI is doing.

5:04Yeah, yeah. Big gainer in the Dow today was United Health Group by far. It's been a very weak price performer in the blue chip index, but United Health, a top gainer today, up 4.7 percent. Goldman Sachs, the second best performer in the blue chip index. Close to a breakout here, up 2.6 % and very close to an all-time high. Taking a look at semiconductors, SMH, Ed, had another good day. This looks like eight up days in a row, if I'm counting correctly. Pretty impressive rally for chip stocks. And this comes, boy, when you've got some high-profile names like Advanced Micro Devices, AMD still struggling after a pretty nasty sell-off, struggling to recover its 50 -day moving average.

6:03You have NVIDIA, you know, not a broken stock by any means, but it, you know, recently pulled back below its 50-day line. Not terribly far off its highs, but struggling underneath the 50-day moving average. You've got Broadcom, you know, not too far off highs, but, boy, the rally in SMH has been impressive. There's been a lot of other chip stocks, maybe under the radar chip names, that have been doing a lot of heavy lifting underneath the service, including Marvell Technology, which had a really nice earnings report late yesterday. This is definitely one of those times when SMH might be the way to play the chip market or something like a TSM, which makes all the AI chips, makes so many chips.

6:49So those two names, Taiwan Semi arguably is actionable today. I know I might have looked at it, but you guys looked at it yesterday. So don't want to go too much. So there's some names that are more actionable. So SMH and TSM are ways to play it without, you know, you may not be the biggest winner, but you're probably going to do pretty well with those kind of names. Yep, yep. And then, of course, the broadening out of this market rally. It's been obviously a year for artificial intelligence stocks, but some have come under selling pressure. But how about the transportation stocks? We talked about this on IBD Live this morning, but the transportation ETF, IYT, nice breakout today.

7:41There's some airline stocks in here. There's some railroad stocks. Just really seeing a nice broadening out of market leadership here as we head into the end of the year. Yeah, and then trucking and FedEx. And you've got a positive sign about the economy, too. But this, again, IYT might be one of the ways to play it because a lot of the other names are like either coming way off lows or extended. So this is definitely a way that you could be playing resurgence in shipping and transportation. Yeah, I mean, airlines, Delta Airlines is in this, is in IYT, UAL. Even if you look at an airline ETF like JETS, I mean, JETS, you can see this is in the early stages of breaking out.

8:30You can see some of the railroad stocks. Look at CSX making a move of 2.8%. This is a holding of IYT. You look at Norfolk Southern NSC, not up as much. That's up 0.8%. So just a lot of broadening of leadership. And the home builders, Ed, you wanted to look at. XHB making a nice move today. Today, we're going to hear from Toll Brothers early next week, going to be one of the first home builders that we're going to hear from. XHB has come nicely off lows and ITB as well has made a nice rally as well. So maybe the home builders are going to start to participate. We'll have to see. And Toll Brothers, you know, arguably, you know, the best looking homebuilder at this point.

9:26And again, earnings coming out in five days. That's going to be Monday after the close. So it'll be interesting to hear what the homebuilders are going to have to say. You think the homebuilders are going to be able to provide leadership in 2026, Ed? Well, it depends. I mean, interest rates are going to be relatively low. You know, that would be a real positive. I mean, homebuilders have done it. I mean, there was a year where homebuilders led the market, and then I think the following year they were the worst group. So homebuilders can be number one, not just a mediocre one. So, yeah, you don't – this is definitely an area that you should be paying attention to.

10:03And, yeah, I mean, some of these names are setting up, maybe flashing early entries, though. I do think toll will be an important report next week. Yeah, no doubt about it. This podcast is brought to you by ReliQuest. Cybercriminals 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.

10:35ReliaQuest, agentic defense for the enterprise. Learn more at ReliaQuest.com. That's R-E-L-I-A-Q-U-E-S-T dot com. All right. Well, let's take a look at some individual stocks here. And we'll start with let's start with Tesla, because Tesla made a pretty bullish move today above its its 50 day moving average. It looked like it was look like it was in trouble here when it made that bad break of the 50 day moving average. And then it had a really sharp downside reversal on this day right here. And both of these declines came in in pretty, pretty heavy volume. But Tesla has righted itself and technically all of a sudden not looking so bad anymore.

11:21Yeah, I mean, there was definitely a strong move and hit resistance at the 50-day line. And this is one of those risk-reward things where, again, I mean, something bad could have happened. This was an area where it could have sold off. So, yeah, you could have bought yesterday and maybe gotten a slightly lower price. But punching when it got decisively above the 50-day line, definitely better. I'm not in love with this chart. I mean, there is, it's just, there's, it was a bad break. It's not really, you know, I think I will take a look at Robin in a moment. I favor that one a little bit. Maybe it's just, there's also the fundamentals, which have been weaker.

11:55You're obviously, you're betting on some really big advances by Tesla, you know, and self-driving and robotics that may or may not happen or may, you know, or what the timeline is. But so maybe I'm not in love with it, but clearly this was a bullish move, got above this level. Maybe ideally it would rise a little bit, then pause, form some kind of handle, you know, tighten up a little bit. Because I just, I'm not super excited, but it's, you know, it's a rougher on the edges, but it certainly could round into shape for sure. Yeah, yeah. Just a different perspective here. Take a look at the weekly chart for Tesla and see that it is back up near all-time highs here.

12:34So it's definitely a stock to keep an eye on here as it moves back above its 10-week moving average and less than 10 % from an eye here. So a good one for the watch list here. Also going to take a look at Robinhood, which at last check was trying to get back above its 50-day moving average. a former leader that a lot of people may be thinking it's going to base here. And here it is trying to get back above. Looks like it might have closed just a little bit above the 50-day line here. I'm going to turn on my pattern recognition here. This is a good example of a double bottom pattern taking shape here.

13:22This is the second leg down here. a good wave of selling that served to shake out sellers here there was a good shakeout second leg down undercut the first stock has rallied it rallied back and you know trying to get back above the 50 days so another good watch list name here see if it can complete the base here yeah and I think there could be an early entry if you see is a little bit more strength I would like to see I mean because you have to squint and and look over is that above the 50-day line And it is. It is. But, you know, if it's not really if it's not really above that, you know, it's sort of like being one step outside of a haunted house.

14:02Do you really feel like you're safe from the monsters inside? You know, you know, I just run out into the street a little bit. So I think a little more strength if that's to say clearly decisively above the 50 line, there'd be an early entry. And obviously there's the 150 level. This one has some really strong fundamentals. Bitcoin rebounding is helping, just like Bitcoin's tumble was probably a contributor to drop in Robinhood. But yeah, so not actionable, but it's right on the cusp. But yeah, so being a buy point. Yeah, again, on a weekly perspective for Robinhood, this big, big price gain here where it essentially more than tripled in price.

14:44No surprise there. That is just, you know, torrid earnings growth here, several quarters in a row of triple digit earnings growth. And you can see the top line growth was there as well. And it's earnings growth that fuels price performance. So Robinhood, still a very compelling growth story in the market, has always sold at a premium valuation. But the market is rewarding this company for just exceptional earnings growth. So some saying that Robinhood is not done yet, that there is still a fundamental story here that is driving growth. So we'll see if Robinhood is going to be able to complete this double bottom base and ultimately try to break out over this 150 level.

15:33So it's on its way. We'll see if it can continue to rally. It's going to need most likely the market breaking out to new highs to do that. So we'll keep an eye on Robinhood and see if it can muster a breakout. And then speaking of this expanding market leadership, we've seen some real estate stocks acting well here. So let's switch gears and take a look at JLL. This is a company called Jones Lang LaSalle, a big liquid name here. And another example of a double bottom base. You see this low of 274 undercut, a prior low of 281.40 and similar pattern to Robinhood. But this one actually, you know, rose over the 300 level and crossed that middle here.

16:25So this is a breakout, but a stock that is still holding in a buy zone here, Ed. Yeah, nice action here, you know, just sort of after running all that way. I mean, I can understand some people saying, well, I'm not sure if I'm ready to go. The market was just starting to look a little bit stronger, and it's just paused right here pretty bullishly. So, you know, I think you could buy it here. I guess you could treat last week's high as a high handle, but I think just buying here makes sense. This one has some solid earnings. I mean, the growth, I think, is supposed to slow down a little bit. But this one can make some nice advances here.

17:00and, you know, of housing. And if the interest rates are low, you can definitely see this as a tailwind for this sector as well. Yeah, if you go to a weekly chart, it's made a nice advance already, but it's paused. It's set up and, you know, it paused. The relative strength line is near highs. This one's probably, you know, when, you know, on a day like this, if you had all AI stocks, now maybe it ended up okay for today, but there was a time when some of those things were down 2%, 4%, 5%. It's nice to have some names that are solid performers that are sort of somewhat separated from that. I think this is a really good market for a diversity of leadership, not just diversifying for diversifying sake, but find the leading stocks in various sectors.

17:41And I think this one definitely qualifies. Yeah, no doubt about it. You can see the real estate development industry group ranks 44 out of 197. So it's a top performing industry group. and no surprise when you see so many stocks with excellent relative strength ratings in the group. So a lot of stocks showing relative strength in the market. No surprise to see a high-ranking group in the market here. Now, we do always forget to go over stocks reporting earnings after the close. I'm not going to forget this time around. What are we looking at in after hours? Add a few names to take a look at. Yeah, there are a few.

18:25One is Snow, Snowflake. This one's not doing great. Okay. S-N-O-W. And this one, I mean, it beat views, apparently. I'm not sure how the guidance was versus expectations. Obviously, somebody didn't like something. This had been holding up very well. Looks like it's going to fall below, by point, fall below the 50-day line. Salesforce, CRM, that one's just trying to bounce off a 17-month low. But it is rebounding today. It's a positive sign for software in general. So nice to see that. So that was up like 5%. It's got a long way to go. I don't want to. There's five below, which that's up modestly.

19:10That one is that specialty discounter is maybe close to early. Close to early to five below. Yeah, I know. My chart kind of froze up. No, no, I got you. And so that's just one that could be interesting out there. And those are the biggest names that are reporting that out there. So there's still that we're finally winding down in earnings season. A few more names this week and next week. But markets in really good shape. Yeah, we do have Broadcom reporting next week as well as Siena. So we're starting to get into the quiet period. Sorry, I couldn't bring up the five below chart, but I will stop it right here.

20:00And kind of froze up here, but I will end it right here. And thank you, Ed, for your insight as usual. And there we go. That'll do it for today. So, Ed, thanks a lot for your insight as usual. Thank you very much. And that will do it for today. It'll be Rachel Fox in the chair for IBD Live tomorrow. So thanks very much for watching for today. And if you haven't checked out IBD Live yet, just go to investors.com forward slash IBD Live. And we will be on the air tomorrow morning, as usual, starting at 6.20 a.m. That's Pacific time, 9.20 a.m. Eastern time. It will be Ed and Alexis Garcia tomorrow for the Stock Market Today video.

20:56I hope you have a great afternoon, everyone, and we will see you back here tomorrow. Take care.

21:28Thank you.