Snowflake Earnings Fuel Big Nasdaq Rally: SK Hynix, SpaceX, Marex In Focus

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

0:03Ken Shreve: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. I'm Joe Davis. And I'm Christine Kashkari. And this is season two of Better Vantage by Vanguard, an eight-part video podcast series hosted by custom content from WSJ and Vanguard. All investing is subject to risk, including possible loss of principle. This content was created by Custom Content from WSJ, a unit of the Wall Street Journal Advertising Department.

0:41Ken Shreve:Good afternoon, everyone, and welcome to Stock Market Today for Thursday, September 3rd. It's Alyssa Quorum along with Ken Shreve here. and some notable gains in the market today, continuing this rebound after some tests that we had intro week. Ken, a lot to discuss today. Yeah, more earnings reports, Allie, and lots of stock action. But as usual, three stocks to talk about. I want to talk about SK Hynix, these memory and storage stocks, Kind of a mixed bag, but SKHY had a good day today. Also watching SpaceX, SPCX. Lots of large cap technology stocks had a good day today, including SpaceX. And then take a look at a name that we added to leaderboard today, MRX Marex.

1:35So there you have it.

1:37Ken Shreve:Sounds like a plan, Ken. We'll do that. First, a closer look at the major indexes. Here's the NASDAQ composite. A strong day here with the tech-heavy index up 1.4 % to lead the day's gains. And the S &P 500 on the day up 1.1%, battling back nicely after undercutting the 21-day line earlier in the week. Let's check out blue chips. The Dow up 1.2%. Here a touch of the 50-day, a test of the 50-day and continuing to bounce there. And the Russell 2000 small caps, a muted reaction versus the major indexes up about a half a percent or so. Still below some key moving averages there. So what do you make of the action today, Ken?

2:29Well, I think we can safely say that the Russell kind of sat the rally out, which was ironic because this was the index that outperformed yesterday. But, you know, the Russell 2000 is the challenged index at this point. It lagged today. It's still kind of, you know, on a downtrend here and stuck below the 50-day moving average. Had a lot of biotechs that lagged in the market today, and that was probably a bit of a drag on the Russell today. But then when you look at the three major stock indexes, it's a completely different picture here. You have the NASDAQ composite, the S &P 500, and the Dow Jones.

3:13They all closed at their session highs. They all moved decisively above their short-term moving averages, all comfortably above their short-term moving averages, all above their 21-day lines. They all closed near their session highs with strong percentage gains. And the NASDAQ led the way with a nice solid percentage gain. We had volume on the NASDAQ a little bit higher than what we saw yesterday. Not huge volume, but we're going to see volume pick up in the market next week after we come back from the Labor Day holiday. So we'll start to see volume pick up again once people come back from vacation.

3:59So, you know, very bullish session for the major stock indexes. And, you know, we still need to get S &P still needs to get above that high from last week to fully get going out of this downtrend here. But that's a little resistance level it still has to conquer here. But overall, you know, pretty good action. The breadth was OK today. It wasn't I don't think it was quite two to one positive. It would have been nice to see better than two-to-one positive breadth. I don't think we quite got there. I checked late in the day, less than an hour to go in the session. It wasn't quite two-to-one positive on both exchanges.

4:46It was close, but not quite. So decent breadth, but overall, a pretty good day. And it was, you know, Snowflake earnings before the open that really, you know, had, you know, tech investors in a good mood. It wasn't, you know, a huge, huge interday gain for Snowflake. Still ended with a nice percentage gain, but it, you know, closed near its session low. Also had comments from a Fed governor who was saying he was kind of leaning towards leaving rates where they are at the September 15th, 16th Fed meeting. And that caused that 10-year Treasury. You remember we were talking on yesterday's Stock Market Today video after multiple updates in a row.

5:33Maybe you see that 10-year yield start to back up a little bit. And that's what it did today. And that gave stocks a little bit of a reason to rally as well. So we got that rally that we were looking for. So, you know, a good day.

5:49Ken Shreve:We did. We'll take it. And since we're looking at the 10-year, we might as well mosey on over to the dollar as well. We saw that come off quite a bit today. And then Bitcoin, a big breakout here, Ken, from a bottoming base, I bet, up almost 6%. So that was looking quite bullish today. Yeah, there was a big, big, this was a lot of movement in the market, too, with a lot of sort of ancillary Bitcoin related, you know, Bitcoin related stocks, a lot of Bitcoin related stocks that are, you know, kind of far off highs. But, you know, hood is certainly moves with Bitcoin. Robinhood used to generate, they still generate some of their revenue via crypto, not as much as they used to.

6:43But I think in the second quarter, their crypto trading revenue was about maybe, I don't know, 10 or 15, 20 percent of their trading revenue was crypto related. But a nice technical breakout for Robinhood today. And beneath the surface, again, lots of crypto-related stocks did very well today. But again, the U.S. dollar index, quite a sell-off for the greenback today. And a lot of money moved into Bitcoin as a result. But again, some kind of dovish comments from a Fed governor today that kind of went in opposite of what Kevin Warsh said last week at hawkish comments from Warsh last week in Jackson Hole.

7:29That caused bond yields to back up a little bit, and that was just a nice recipe for a good rally today.

7:36Ken Shreve:It sure was. And you mentioned that recent downside reversal still to conquer for the S &P 500. Same for the NASDAQ composite. So we'll be looking at that level. But I think today did seem like a day for bullish active investors, perhaps to put a little bit of money to work here as we are rebounding. What's been tricky, though, Ken, is this chop. Right? We had an explosive move in that, what was that, that late July, early August period. And ever since then, it's been quite choppy. So, you know, having to back away when things start weakening and then ramp back up when we see things turn in the other direction, I think has been challenging for some investors.

8:27Ken Shreve:But today, who knows, maybe that's the start of a bit of movement out of this sideways range. So that's what I would want to see from here. It's been very difficult. I mean, just a couple days ago, we were talking about energy stocks outperforming. They lagged today as money moved into tech. And we were looking at some breakouts, some technical breakouts in the drilling group. The drilling group lagged today. They were selling in the drilling stocks. We were looking at a breakout for Helmert and Payne, ticker HP. There were big sellers in HP today. You can see this was a stock that really started moving in recent days.

9:11And then look at the stock today. It was up sharply for three days in a row, but you can see it was a big percentage decline for that stock today. So a lot of back and forth action. And if you look at just the software ETF IGV, before today, I mean, this stock was down, this ETF was down sharply for two days in a row. I mean, these were two sharp declines in a row. Nice rally today because of the great earnings from Snowflake. You look at a name like Palantir that rallied sharply today, but look at what Palantir did for two days prior to this. I mean, this was some really, really nasty selling for two days in a row in Palantir, and then it just turns tail today and is right back up.

10:06So just a lot of volatility in the market, a lot of back and forth chop, which has been difficult to navigate. So we'll see, like I said, next week. I think, again, the month of September could be difficult to navigate. But again, as a lot of institutions come back from vacation, we'll start to see volume pick back up in the market again. and we'll see what the month of September brings. But at least today, it was a nice recovery for the market and indexes showed some renewed technical strength today. So next step for NASDAQ, S &P 500 and Dow will be to get over that high from last week. And then for the NASDAQ anyway, we'll see if we can conquer that 27 ,000 level.

11:03Ken Shreve:Yeah. Over 60 years, Medline has demonstrated a track record of delivering consistent growth. Today, Medline is proudly NASDAQ listed and is the largest provider of medical surgical products and supply chain solutions serving all points of care. See how Medline makes health care run better at Medline.com. All right, Ken. Let's take a closer look underneath the surface and check in on SK Hynix. Kind of a wild ride since it's U.S. market debut, but calming down here a little bit. Yeah, I mean, when I look at SK Hynix in relation to its competitors, you know, the names that we've been following like Micron and Western Digital and, you know, STX Seagate, we can kind of run through them all.

11:55They're all in various, stages of technical disrepair. They're actually all looking kind of weak. I think SK Hynix is, you know, Micron is not too bad, but SK Hynix is probably looking the best, I would say, out of all of them at this point. We don't have a 50-day moving average yet for SK Hynix, but it is holding above its short-term moving averages here, and it is in an interesting setup here. So if the NASDAQ is indeed ready to maybe start another uptrend here, I think SK Hynix is one to watch here. It doesn't mean that Micron and Western Digital and the others, they could be ready to move as well.

12:42But I think SK Hynix is in a position where it could be ready to break out over some of these recent highs here. Now, SK Hynix is the market share leader. I think they have about 50 % of the high bandwidth memory market. They're in front of Samsung at this point. Micron is a pretty big player in high bandwidth memory as well. But again, SK Hynix just came public in the U.S. market, obviously a major player in South Korea. But kind of an interesting technical setup here. Obviously, it is kind of prone to some volatile swings here, but a major player here. And it's kind of in a setup here where it could try to break out here.

13:29So in light of the NASDAQ's strength today, I think that SK Hynix is probably in the best setup right now out of all the players in this industry group here. So we're going to keep an eye on it and see if it can get moving here and make a run towards that 170 level. Mm-hmm.

13:49Ken Shreve:Yeah, I think it's just really fascinating what's been going on in the Korean stock market. And if you are looking for ways to play that, SK Hynix is definitely an interesting one there. Their EWI is the South Korea ETF that we tend to look at, especially on IBD Live. And it looks a lot like a lot of those memory players. And you do have SK Hynix, a pretty big percentage weighting in this ETF. I think typically fluctuating, I just looked it up, between 18 and 26%. So that's a pretty hefty weighting. You know, so I think that this EWI is of interest too, but it's sort of a very specific way of looking at the AI market in a way.

14:46Ken Shreve:So, yeah, it'll be interesting to see if this can get back up on its feet. We know that largely the U.S. chip space, broadly speaking, has looked weak, to your point, with some of the U.S.-based names. Yeah, this is EWI is actually not surprisingly in a very similar setup to SKHY here. So I think they're both kind of sitting right around their short-term moving averages here. So I think that Western Digital and Micron are still kind of struggling around their 50-day moving averages. And, you know, I think even with Western Digital, you know, it's on a more pronounced downtrend at this point and probably has a little more overhead supply to conquer.

15:43Micron probably set up as a little more similar to SK Hynix, probably a little healthier than Western Digital at this point. So still an area of the market where there's great growth going on here. So an area to watch here. So like I said, watching SKHY at this point the most. And we'll see. New issue. And I think it's got potential.

16:11Ken Shreve:All right. Well, another new issue that you want to check back in on is SpaceX. Look at the move that this stock had today, Ken, up 6.4%. And loosely in the spirit, I think you could say, is a cup with handle breakout. Of course, not a traditional one by any means, but you do have that move off lows and then a little bit of a consolidation, a little bit of a digestion and some power today. Yeah. You know, we're just kind of looking through the market surge growth to 50, looking through the NASDAQ 100, just looking through screens. I mean, this is what we would call a bottoming type of structure.

16:58I mean, you did technically have a prior uptrend here. It is coming. It is off highs. And I know this was discussed on IBD Live a little bit this morning. And the issue with a bottoming base is that, you know, when a stock tries to break out when it's far off its highs, it still is going to have some overhead supply to conquer. So SpaceX, obviously, when it came public, it corrected very sharply in price. So if SpaceX is going to, you know, continue to move higher from here, it's probably going to run into some overhead supply from people that were selling on the way down and you're going to be buying or buying on the way back up to selling to break even as the stock rallies.

17:45That's the whole concept of overhead supply. So SpaceX starts to rally and crosses the 150, 160, 170 level. There are going to be people that are selling that were, as the stock was going down, they're going to be selling just to break even on the price. And that's the whole concept of overhead supply. So it could be a headwind for SpaceX. So we'll see how this breakout works. There was a good volume in the stock today. A lot of people watching the stock after the IPO. But it did have a nice rally off lows. And it was just a nice little mini base that formed here. and a little downward drifting action here.

18:33So, you know, again, I know it's a stock that a lot of people have been watching, and volume did pick up quite substantially today. So this was definitely a breakout, you know, not a riskier breakout just because it's a base that formed, you know, far off highs. But I thought it was interesting just to see volume really pick up the pace today, and we'll see if it works.

19:02Ken Shreve:Yeah, a more aggressive entry. So thinking about position size, where traders are setting their stop, all things to be thinking about with that. Let's go to MRX, Ken. A breakout from an ascending base. This is a rare pattern that we see, but a breakout and a blue dot one at that, underscoring the stock's outperformance versus the broad market. So quite an interesting move here today from a stock that has not only that technical strength, but fundamental strength, too. Yeah, we've been following this one for a while. I think it actually has been on leaderboard in the past, but I just really like the setup here.

19:44I like the fact that the relative strength line was in new high ground before the stock actually hit a new high here. So we did take the opportunity to put it on the leaders list today. This is basically a financial services platform. They basically connect institutional clients, commercial clients with financial commodity exchange markets. They do some market making services, things like that. But great breakout today and close near highs. And you can see volume picked up the pace a little bit today as well. Very consistent track record of fundamentals here as well. So, you know, we like that blend of, you know, fundamentals and technicals.

20:39Very healthy relative strength line. Not easy to find healthy relative strength lines in this market. And, you know, the blue dot especially. So when you can find that in stocks showing great relative strength against the S &P 500, you want to pay attention to stocks like this. So great accumulation going on here. So a lot to like. One of these stocks that checks a lot of boxes in terms of fundamentals under accumulation. Great fund sponsorship. So we'll give it a shot here. And I think we've had, like I said, had some success with this one in the past. And we're going to give it another shot here.

21:21Ken Shreve:The questions that matter most are about what happens next. Will the Fed cut rates or how far does Bitcoin run? Polymarket is the world's largest prediction market where you can trade on elections, the economy, finance, crypto, sports, tech, culture and more. Each market asks a simple question. Will this outcome happen or not? As sentiment shifts, markets move, giving you real-time information on where the market believes things are heading. Download Polymarket and use code W20 for a$20 bonus on your first trade. That's code W20. 18 plus trading involves risk of loss. Terms apply not available in all jurisdictions.

21:51Ken Shreve:Okay. Yeah, it does check off a lot of boxes. Ken, before we go, let's get some quick thoughts on earnings out after the close UI path and the enterprise software group seeing shares up a little less than 1%. Very volatile after hours, I'm hearing. Let's take a look from Ed Carson. He's keeping us in the loop. Here's DocuSign up about 7 % right now. So a good sign for enterprise software here if the momentum can continue. Zscaler in the security software group, also volatile after hours, but right now seeing it up about 1.5%. Let's go to IoT. Here's another enterprise software name, Ken. up 12 or 13 percent.

22:42Ken Shreve:So seeing all of these names, all software names up after hours. Yeah. And you know what? I'm doing my earnings preview column for next week. And I looked at the earnings calendar very, very light next week. But I have five enterprise software stocks next week as well. Highlighted by Adobe, which has rallied off-flows. It's been a bit of a laggard in the software sector, but nice rally in recent weeks. But it's going to be all about software next week as well. So yeah, more software reports after the close. That UiPath, P-A-T-H has been a nice little winner in recent weeks. And so we'll see how that trades tomorrow.

23:34But look at that. Been a nice rally in recent weeks for UiPath. They do, yeah, that's an interesting company, business automation platform. So they use these robots to automate kind of repetitive tasks. So UiPath is kind of an interesting name in that enterprise software group. Zscaler, you know, security software. And everybody knows DocuSign, those e-signatures. Yep. So more software.

24:04Ken Shreve:All right. DocuSign and IoT as of now look like the big movers percentage-wise. After hours, we'll see if those gains can hold into the regular session tomorrow. Ken, always a pleasure. We appreciate it. Now go write that big pick. Time for the big pick. Yes, indeed. All right. You can check out that at investors.com whenever it publishes to get all the information you need to know as an investor for the pulse on the market. Ken does such a great job with that as well as the rest of the markets team. And that's it from us for today. We will be back with more tomorrow morning on IABD Live. Investors.com slash IABD Live for all those details.

24:50Ken Shreve:we're going to be welcoming back Dan Fitzpatrick of Stock Market Mentor to the show. Always a good time with Dan. So check that out, investors.com slash IBD live for all the details. We'll see you then. And then we'll also see you right back here tomorrow to wrap up the week.

25:22Ken Shreve:This show is for informational and educational purposes only, and nothing should be construed as a recommendation to buy, hold, or sell any securities. Any 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. The questions that matter most are about what happens next. Will the Fed cut rates, or how far does Bitcoin run? Polymarket is the world's largest prediction market, where you can trade on elections, the economy, finance, crypto, sports, tech, culture, and more.

25:50Ken Shreve:Each market asks a simple question. Will this outcome happen or not? As sentiment shifts, markets move, giving you real-time information on where the market believes things are heading. Download Polymarket and use code W20 for a$20 bonus on your first trade. That's code W20. 18 plus trading involves risk of loss. Terms apply. Not available in all jurisdictions.