Small Caps, Techs Lag As Oil, Bond Yields Rise; Nvidia, Avnet, TVTX In Focus

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0:39Ken Shreve:good afternoon everyone it's Alyssa Korman Ken Shreve here with a look at the action in today's session Wednesday July 22nd and the major indexes easing ahead of some big earnings reports out after the close we'll have to see how the AI ecosystem reacts to Google Ken what are your thoughts on what we're going to be discussing today. Yeah, not a great close for small caps and the NASDAQ, Ali, but not much movement as usual in the Dow and S &P 500 today. So we'll get into all of that, Google and Tesla earnings, but some good movement in large cap tech today. So let's start by taking a look at NVIDIA.

1:24I want to take a look at a biotech that is showing some good price action. That is a TVTX Trevere. And then an AI infrastructure stock that's actually setting up in a base that is back above its 10-week moving average. That is kind of a rare site in the market these days. That is Avnet, A-V-T, based in Arizona. So there you have it.

1:51Ken Shreve:Sounds like a plan. We'll get to those stocks. First, a closer look at the major indexes. You You mentioned the down day for the NASDAQ, 6 tenths of a percent was the decline there. But small caps, it looks like it took a little bit of a harder hit down, almost 1 % on the day, still holding above the 50-day moving average. Also, the S &P 500 down about one-tenth of a percent today, so a mild day there that you highlighted, Ken. And here's the Dow closing essentially flat on the day. So the focus right now is the tech sector because of all the mega cap earnings coming out, the hyperscalers. What are they going to say about AI capital spending and all that?

2:40Ken Shreve:So the NASDAQ composite still in a vulnerable position here for now, Ken. Yeah, I mean, the silver lining is we didn't have a whole lot of volume in the NASDAQ today. Volume was never really heavy on the NASDAQ today. And again, we're in the summertime. So we're just kind of in a volume low in the market right now. So volume was lower than yesterday. But we did close near the session low, down about six-tenths of a percent. I was watching the NASDAQ 100 most of the day. And it was a day where growth stocks were under pressure for a good portion of the session. It was interesting to see chip equipment stocks outperforming for a good portion of the session.

3:29One of our best performing industry groups today was the chip equipment group. In fact, let's take a look at the chip equipment industry group if you just click that link on the top left. Yeah, look at that chip equipment group. Let's see here. Semiconductor equipment. Look at the daily chart. So I guess it, I thought it was up for the day. I thought it was, it was up 2 % for the day. I don't know. Is that today? Well, yesterday. Yeah, yeah. Let's see. Let's get today.

4:01Ken Shreve:Yesterday they had a great day. Okay. Yeah. Okay. Well, I swore the group was up 2.2 % today. Anyway, but the chip equipment group, I saw A-Lab was up nicely in the NASDAQ 100 today. There's Astera Labs. Maybe it's the Fabless Group. Fabless Group. That you're thinking of. Yes. I was talking, was I saying chip equipment group? My mistake. Yes. The Fabless Group. Thank you, Allie. Yes. So in the Fabless Group, we had NVIDIA outperforming and Astera Labs, Broadcom outperformed. And AMD had a good day. So this is the group that I wanted to look at. Yeah. So all of these stocks actually outperformed nicely in the NASDAQ 100.

4:49So it was interesting to see these stocks in NVIDIA's industry group outperforming. It was sort of a bright spot in an otherwise kind of a down day for the NASDAQ. And then small caps, a good day yesterday, up 1.5 % outperformed. but they were under some pressure as well today. So kind of a, you know, just kind of a strange market, Ali. You know, I was looking at growth stocks in general. I think if you were a growth investor today, it was kind of a disappointing today. You know, growth portfolios probably, you know, didn't fare all that great today unless you were in some of these chip design companies.

5:30FFTY was down, you know, it looks like it closed up near its highs, but that was under pressure for a good portion of the day. But, you know, the Dow and the S &P 500 just kind of finished mostly unchanged and not much movement in those indexes today. So your NYSE indexes, the Dow, you know, gave back a pretty good gain today, but just kind of sitting right at its short-term moving averages here and S &P 500 trading tightly and just kind of sitting right at its short-term moving averages as well here.

6:06Ken Shreve:And I think that we have very clear levels that we're watching for the S &P. We have the recent highs that we want to see getting back up there. And then also to the downside, we now have the recent lows just above this on the VOO, the 680 level. So are we going to stay range-bound? Are we going to break out, break down? Will a lot of these earnings reports be the catalyst for a move either higher or lower in the market? We're going to stay nimble, but that's what we're looking at right now, Ken. Yeah, just kind of range bound right now. And, of course, next week we're going to get a whole slew of magnificent seven earnings reports.

6:51And I was going through the calendar this morning, and there's just a whole bunch of top-rated growth stocks reporting next week as well. So it'll be very busy next week, and it's going to be busy this week as well. Not as busy, but still some high-profile reports besides Google and Tesla that are reporting after the close. So, you know, we have Texas Instruments after the close as well and some other reports we're going to be looking at as well. Yeah.

7:24Ken Shreve:All right. Yeah, we'll have that to look forward to. It does look like, since I punched it up, Texas Instruments right now down about three and a half percent. But we'll look at Google. We'll look at Tesla. We'll give you the IABD hot take as the show progresses. Moving on for now, though, a couple of other things that we want to take a look at before those individual stocks is just checking in on oil. You know, when we did have a rally in the market earlier in the week, it was sort of going against what you would expect with rising oil prices, rising yields. But now perhaps this is starting to weigh on the indexes and stocks, Ken.

8:11Yeah, I mean, it's just typically never going to be a good mix for the market. And I think oil eventually, I think it hit a high of$88 a barrel today, which, and it settled, I think it settled at around$87 a barrel. But Secretary of State Marco Rubio said, I think, what Americans have known all along, that Iran is really not in the mood to negotiate any sort of peace deal at this point. And that kind of rattled oil investors and caused oil to spike again. And this is problematic. And, you know, the 10-year Treasury yield was up again. And now all of a sudden you have a rate hike at the September meeting that's very much in play.

9:00The odds there are at about 80 % now that we'll get that first quarter point hike in September. And, you know, you're looking at possibly two rate hikes before the end of the year at this point. So, you know, a rate hike situation with rising oil prices and, you know, pesky inflation, and you just have worries about a slowdown in consumer spending. Just a lot of headwinds for the market right now. So, you know, you have the indexes fighting a good fight here. Obviously, we know that the NASDAQ is a little bit vulnerable here, and the NYSE indexes are still fighting a good fight here. but certainly the Nasdaq exchange is looking.

9:48I'm Laura Thurow with Baird Private Wealth Management.

9:52Ken Shreve:You've been doing all the right things. Saving, investing, building toward your goals. Healthcare can be a major expense today and an even greater one over time. Tools like long-term care insurance or a smart health savings account strategy can help protect what you've worked so hard to build. Learn more at BairdWealth.com slash WSJGuidebook. A little bit tired here. We avoided a distribution day today. We did see some good outperformance from some of your large cap chip design firms. But outside of that, maybe some chip equipment firms that are still holding their 50-day lines. But there's SMH that had a good day of outperformance.

10:41It reversed higher for a 1 % gain, but it's still below its 50-day moving average. And then on IBD Live this morning, we're talking about some of your memory stocks like STX and Micron that ended up having decent days holding above their 50-day moving average. So they're still showing some relative strength here as well. But overall, by and large, you do have a lot of tech names under pressure. Hinge Health is a leaderboard name that we trimmed back from a full position to half today. This was a pretty good break of the 21-day moving average. So we cut this back from a full position to half and took some profits here.

11:27We're seeing some leaders starting to break through that 21-day exponential moving average, which is, you know, we take as a sell signal to at least start to trim back some of our winners. So, growth stocks are starting to look a little wobbly here.

11:44Ken Shreve:Well, let's take a closer look at NVIDIA. You mentioned the strength in this industry group today and NVIDIA up 2.3 % in the session, closing back above the 50-day line. It's trying to round out the right side of this base. And this is a magnificent seven stock that is not going to be reporting earnings for a while, but could very well move on the capital spending plans announced by the hyperscalers. What are your thoughts on NVIDIA's action and how to think about it this earnings season? Well, it's still pretty amazing that NVIDIA is going to be reported. We still have to wait a while. You mentioned NVIDIA is not going to be.

12:32Yeah, 35 calendar days. So it'll be late August until we hear from NVIDIA. But amazingly, earnings and revenue is going to accelerate again. So people wondering if this AI story is still intact and if there's still a growth story. NVIDIA is still showing accelerating growth. It's just amazing that they're still showing acceleration. And so it was a bullish move for NVIDIA today to move back above its 50-day moving average. It was a strong technical move out of all the stocks in NVIDIA's group that outperformed today that I mentioned. None of them, you know, showed none of them moved above the 50 day line and showed the technical action that NVIDIA did.

13:28So I think it's still I think it's still early to think about, you know, buying NVIDIA here, even though it did retake its 50 day moving average. You know, there wasn't a whole lot of volume in the stock today. It did rise from from yesterday. closed off highs a little bit, but it's encouraging just to see it retake a former support level here. So it would be encouraging if it continues to rally and continue to form the right side of a base here. And its accumulation distribution rating, while a lot of other tech stocks really came down sharply, and NVIDIA's pullback from the 230 level down to 1180 or wherever it pulled down to was pretty sharp, but it was not nearly as sharp as a lot of other tech stocks that pulled back much, much deeper.

14:14And it maintained a accumulation distribution rating of B minus. So you didn't really see the massive institutional selling that a lot of these other tech leaders showed when they pulled back in price. So I think NVIDIA held relatively well compared to other top stocks. So we'll see if it can continue to rally here. It'll have some overhead supply if it continues to rally. But decent day for NVIDIA and not a bad day for the group as all, which still ranks pretty highly in our rankings.

14:47Ken Shreve:It sure does. Number 23 out of 145. And the other thing that we do say about NVIDIA at times, Ken, lately, because it's been a while since this stock has outperformed the S &P 500, that maybe this isn't the name in the group that you're owning or in the AI theme, there are other stocks that have even more explosive growth or better price performance. But looking at this as sort of either a proxy on the market's health or at least, hey, if NVIDIA is trending higher, holding above those major moving averages, that is good for the market because NVIDIA is one of the big dogs. So it's going to have that heavy waiting.

15:33Ken Shreve:So we definitely don't want to see this name falling apart if the market uptrend is going to continue. Yeah. Yeah. And again, I thought I wanted to talk about NVIDIA because it was a noteworthy move. Not only was it noteworthy that there were several stocks in the group that all moved to 3 % today, but there were, again, ALAB was a former leader that moved very well, But it's still, you know, it's still below all of the other stocks that moved well in the group today are still kind of damaged here. You know, the pullback for Estera Labs from 500, you know, down below 300, you know, that's probably in the 40, 40 percent range, something like that.

16:15So and it did so in heavy volume. That accumulation distribution rating got knocked down to D, D plus. So, you know, there's some damage in this group, but still, you know, a lot of fundamental leaders in the Fabless group as well. So we'll see. Interesting movement, though, in the Fabless group for sure.

16:37Ken Shreve:Indeed. Let's head on over to TBTX in the biotech space. What orderly action your highs here can? Yeah, some good support at the 21-day moving average. The main drug here is Phil Spari, which treats kind of a rare kidney disease, kind of kidney function that starts to fail in adults. And this is their main, it generates most of their revenue for Trevere. But this is just kind of a pullback to the 21-day moving average. Really is just kind of a flat base that's taking shape here. You had a couple of instances over the past couple of weeks where the stock pulled back to the 21-day line and closed off lows and showed good supporting action.

17:23So I think the flat base is not quite complete. You need about five weeks for a flat base to form. So this is almost four weeks into it. So we'll see if the base can fully complete here. But the pivot right now is about$60. $60. But it's a base that's taking shape in a relative strength line that is kind of sitting near highs. I like the accumulation distribution rating that is holding right at A - here as the base is taking shape. So it just tells you that not much selling going on as the base is forming here. So overall, this is a very profitable company, or it's about to turn its first annual profit this year has got great top line growth.

18:10And just an example of, you know, a biotech in our database that has been actually delivering top line growth for a little while now, even though it's just right on the verge of profitability. So great, great breakout recently. And just a nice little pullback here. You can see it's just close to testing that 10 week moving average on the weekly chart here. So good base setting up with a good relative strength line. We're kind of right in the middle of earnings season here. So you can see earnings are coming up in about eight days. So we'll see how this one responds to earnings, but trading really well and has had a great track record of growth and wouldn't be surprised to see a nice quarter here.

18:55All right.

18:56Ken Shreve:Well, now your thoughts on AVT and AI stock. It got back above the 50-day line in yesterday's session, added a little bit to the gain today. Let's see where it is versus a trend line. It's right at a potential trend line in Treeken, and this has held up really well compared with a lot of other AI names. Yeah. And it's kind of a rarity because You're not really seeing a whole lot of bases being built right now in the market. So when I looked at the weekly chart here, I was like, oh, this is kind of an interesting base in formerly a red hot industry group. This electronic parts group is still highly ranked, and it used to be filled with a lot of AI leaders.

19:44I remember Amphenol, APH, which is still actually setting up and not looking too bad. but the electronic parts group is filled with a lot of components distributors. And what Avnet does is they distribute sensors and power connectors and such to data centers and like. So they're an AI infrastructure play, seeing a lot more growth in AI infrastructure and data centers. So this is an interesting company setting up in a nice base here. Base is forming just above the 10-week moving average here. Really nice-looking relative strength line as the base is forming here. So, you know, again, a lot of questions about can this AI trade, you know, still work?

20:33Does it still have legs? I think in some areas it still can work. And Avnet is showing just by the way this base is taking shape that this one still has a chance of working. I think that the AI trade in other areas, it might be a little questionable. We're just going to have to see how the base is set up in a lot of other areas here. And the stocks will tell you if these trades are going to work or not. We're just going to have to wait and see how the bases shape up. But at least in Abnet's case, this one looks like it's setting up quite nicely.

21:10Ken Shreve:Savvy investors understand consistent growth is built on scale, resilience, and trust. For more than 60 years, Medline has proven this, driven by an unrelenting commitment to their customers. Today, Medline is proudly NASDAQ-listed and is the largest provider of medical surgical products and supply chain solutions serving all points of care. With a focus on what healthcare needs next, Medline strives to make healthcare run better. See how Medline is woven throughout healthcare and learn more at Medline.com. You look at recent earnings. This is another turnaround story because back in 2025, they were showing earnings declines, but then the revenue started to kick into gear.

21:53And then going forward, the top line growth is there and the earnings look pretty good as well. So I'm going to be watching this one. And it looks pretty good as it's setting up here.

22:06Ken Shreve:Okay, thanks, Ken. And let's pivot our attention now to companies with earnings out after the closing bell. Google, among them, it looks like shares hovering around the flat line for now. The report is out. Earnings coming in at$9.11 a share is what I'm seeing. And revenue of$119 billion above estimates. So you never know with the earnings, is that the adjusted number or this and that in terms of comparing it to what we have in here for the estimates. But all that to say, the stock not moving a whole lot in either which direction. It seems like a lot of the jockeying might happen once that conference call starts.

22:57Yeah, and this was a stock I saw that their cloud revenue was better than expected. I saw that it was 2024 and change billion was about 2 billion better than expected. That was up 80 % year over year. So I think all the metrics were pretty good. The earnings and revenue were better than expected. Cloud revenue was better than expected. Well, you look at the price and volume on the chart, you see that downside reversal at the 50-day moving average. That was around the time when they announced that delay to their latest Gemini AI model, which was a big disappointment. So a lot of these magnificent seven stocks are not looking all that great technically headed into earnings.

23:46In fact, the only one that looks reasonably well at this point is Apple. is Apple, but, you know, Meta, Amazon, you know, these, these are all under, you know, quite a bit of selling pressure headed into reports. And so we'll see if we'll see if the magnificent seven are going to be able to help lift us into a good earning season here. But a lot of these names are under quite a bit of selling pressure. So Google, you know, one of many technically challenged stocks at this point, but the numbers looked, looked pretty good, but were they good enough? That's going to be the question.

24:21Ken Shreve:Yeah. Okay. Well, there was another MAG7 stock that reported earnings, and that is Tesla. So here's a look at Tesla shares down about 2.4%. It looks like they had a big earnings miss. Ken, the stock already down in the dumps. Yeah, I know some option traders were saying there's a lot of call buying headed into this report, maybe thinking that a lot of good news was, or a lot of bad news, I should say, was priced into this stock. And maybe that is not the case here. So under some pressure here, it looks like that could be undercutting some recent lows here, at least in the aftermarket here, trading at around$3.65.

25:04So we'll see how it opens tomorrow. Tomorrow, people not so much focused on the car production at this point as they are about, you know, the autonomous driving and the optimist robots here. So I'm sure that the conference call will give more color on that aspect of the business. But it looks like the stock is down in pre-market and we'll have to get more color on the conference call. I know Ed and his team are doing live coverage on the homepage of investors.com. They sure are. So we'll get good info on the homepage regarding more details about the report.

25:50Ken Shreve:Yes, check out that live coverage at investors.com. And a couple of others to take a look at. You did mention Texas Instruments. That stock down about 3.3%. IBM, looking like it cut its revenue outlook, I'm seeing, shares up about 2.7%, though. ServiceNow beaten down in the software sector. A little bit of a relief rally here after earnings as of now, shares up 5.6%. But this is quite an ugly-looking chart here, Ken, to put it simply. Yeah, I haven't seen much good news yet on the earnings front. But I was I'm still watching United Rentals, URI. I don't know if that's liquid. They were supposed to report after after the close.