Stocks End Day On Positive Note Amid Fed Investigation News; Alibaba, Walmart, Amphenol In Focus

0:00Alexis Garcia:I have created the most advanced AI soldier. The wait is over. Tron Ares now streaming on Disney+. We are looking for something. Something you've discovered. Give me something to believe in. And some of us will stop at nothing to get it. Ready? The countdown is complete. There's no going back. The directive is clear. Hang on! Tron Ares now streaming on Disney+. Rated PG-13.

0:39good afternoon everyone and welcome to stock market today for monday january 12th it's alexis garcia here and stocks ending the day with gains and some indexes even hitting fresh highs That, of course, coming as news of a possible criminal investigation into Fed Chair Jerome Powell rocked the market earlier in the trading day. Seems like that shrugged off, though, by the trading action we saw later in the day. But here with me to help break down everything you need to know about today's action is IBD Market Research Director Justin Nielsen. So, Justin, interesting day today. What do you have on tap for us?

1:24Alexis Garcia:Yeah, we'll take a look at a few stocks that were interesting. Certainly, we can spend a little bit of time on China and nothing better than BABA, Alibaba, B-A-B-A, to take a look at there. Also, on the retail side, there were some hits, but Walmart looking pretty strong as it finished the day very, very well. And then also we'll take a look at the stock of the day today that was written about by Scott Latonen, our very own Amphenol. All right, well, we'll get to those. Let's just quickly do a roundup here of the major indexes. The S &P 500 finishing the day up two-tenths of a percent. The Dow up also about two-tenths of a percent.

2:01The NASDAQ up about three-tenths of a percent. And small caps up four-tenths of a percent. So let me get my trusty charts up here, Justin. But talk to me about some of the market action today. We had some breaking news yesterday. but it seems like the indexes shook that off as the day wore on.

2:23Alexis Garcia:Yeah, I would say that's the story here. The impressiveness of the resilience of the market, you know, S &P 500 that you're showing right now, right there at highs, you know, came in a little bit. But even, you know, given that news, you would have maybe expected a little bit of a harder hit, but it was only down half a percent at its worst today, if I'm reading this right. So, yeah, a very mild day considering the news. And all the indexes seem to be kind of participating. In fact, the NASDAQ, if anything, is maybe the laggard right now, because while most of the other indexes are making new highs or have already punched into new high territory, the NASDAQ is still looking at that 24 ,000 level from back in October as an area that it has yet to conquer, whereas all the other indexes have.

3:13Alexis Garcia:And certainly worth mentioning that the Russell 2000, the small cap index, has certainly come on very strong lately. So that's something worth watching. Oh, and before I forget, I do have a position in some IWM type products. Well, they're leveraged. And then I also forgot to mention I do have a position in Amphenol, that stock of the day that we are going to discuss later. All right. Yes. And yet you're on the small caps chart here for IWM. And just really nice move here, Justin. since flirting with this 50-day line back on January 2nd. Let's go ahead and just check in on RSP. Let's get your thoughts on market breadth.

3:53Because again, up maybe flat today, Justin, but we have some movement there, QQEW down slightly today. But what were your thoughts in terms of market participation?

4:06Alexis Garcia:Yeah, the RSP is kind of what I'm really paying attention to in this regard. And just for contrast, let's take a look at FNGS, which is kind of your FANG plus. You know, these are your mega caps, still below the 50-day moving average line, a very different picture. So when you consider that this is where a lot of the heavy hitters are, the biggest weights in the indexes, both the NASDAQ composite and the S &P 500, the fact that this is below the 50-day moving average line, yet the indexes are still looking as good as they are, well, that's your breadth, you know, doing the heavy lifting for you.

4:39Alexis Garcia:And RSP is a very, very clear example of that. Now, it's not just, I would say, breadth in the U.S. market. I think it's worth also taking a look at. Let's just real quickly look at VXUS. This is a Vanguard ETF that is basically all the international stocks minus the U.S. So it's a global look of everything except for the U.S. And you're seeing a lot of strength here. You can look at EEM, which is the emerging market ETF. This has been looking very strong. There's a lot of countries, you know, country ETFs. One that I was looking at today was Colombia, C-O-L-O. You know, and of course, we got to talk about FXI, which is China.

5:25Alexis Garcia:So there have been a lot of very strong looking charts on the international side, emerging markets, as well as our own indexes. So when you see kind of everything growing in the same direction, that's a really good sign. Yeah, a lot of China names moving today, Justin. Let's go ahead and dive into GDX. This one also on the move today up about 3.4 percent, but falling from those intraday highs. But again, gold continues to be running here into 2026. Yeah, I mean, it's just been a stellar move. 2025. I was stunned. Ken Shreve wrote a article on the best stocks of 2025 in terms of performance. And I was stunned by how many gold stocks were on that list.

6:14Alexis Garcia:And for all those people saying, well, gosh, the move has got to be done now. Not so fast. It really seems like it's still moving quite a bit. SLV is also, you know, the silver ETF. That's another area of a lot of strength that we've been noticing. I mean, almost going vertical here. Yeah, 7 % today, 6.6%. Yeah, and then XME. If you just take a quick look at that, I was kind of joking that this is an ETF that I hate because it's such a mismatch of everything. Like, you know, you got copper in there, gold, silver, coal, aluminum, steel, you know, all of it, but they're all working. You know, all of these are kind of going in a very positive direction.

7:01Alexis Garcia:So, yeah, there's just a lot of that on the commodity side that's worth looking at. So, again, it's not just tech that's doing this. It's you've got your materials, you've got your industrials, you've got a little bit of everything and a lot of stocks setting up. The biggest problem right now is how many stocks have quickly got extended to start the year. So that's probably the biggest challenge. Yeah, waiting for things to come back in and set up. Let's take a look at TAM. That's the Invesco Solar ETF. This one, nice gain of 3.7 % today, breaking above this 5178 cup with handle buy point. Yeah, I bring that up just because not everything is extended.

7:41Alexis Garcia:This is a fairly decent looking setup. We tried this earlier on Swing Trader. You can kind of see there was almost a very similar setup just like a week ago where you had a strong day coming right up to the, you know, that level that you mentioned on the cup with handle and, you know, got turned away briefly, but we're giving this one another shot. We put it on Swing Trader at the end of the day, but something that's not too extended, maybe, you know, maybe something where solar gets in gear. And one of the stronger stocks there, I do have a position in this one, NXT, Next Tracker. That's one that looked like it was clearing an area of resistance today.

8:21Yeah, up 8.7 % today. Sorry, next power, not next. You talked about metals, industrials, but what about some growth names? Let's jump at, take a look at ARKK here, Justin, up about 2.7 % today and moving above this 50-day line and clearing that 80 level, which seems to be where it's been holding over the last week or so.

8:45Alexis Garcia:Yeah, I think we saw a lot of things breaking their downtrends today. And so that's a pretty good, you know, a pretty good indicator. FFTY, that's also kind of an indicator of growth. But I would caution right now, FFTY has lately seemed like it has a lot of gold stocks in it because it really kind of goes where the relative strength is. And so I've been, again, very surprised at how quickly this can fill with gold. Yeah, how about take a look at XLP? That's the Consumer Staples Select Spider ETF. This was up 1.2 % today, Justin, getting above this 200-day moving average. And again, this is not what you would expect.

9:25Alexis Garcia:With all these names, all these growth names doing so well, you really wouldn't expect the staples to be doing well, too, or gold, for that matter. But one of the stocks we'll talk about today, Walmart, is a big component in this. And again, it just kind of goes to show you that a lot of things are working in conjunction. Everybody's rowing the same direction. All right. How about SMH? Let's take a look at the chips, Justin. Again, this up about four tenths of a percent today and looks like it's just into new high ground here. I believe so. But another good day for chips. I know NVIDIA was up earlier in the day, finishing the day mostly flat.

10:04But thoughts here?

10:06Alexis Garcia:Yeah, there's a lot of stocks here. Again, NVIDIA is the one everyone talks about. But in the semiconductor equipment space, I think we talked about this last week. There's a lot of names in there that have been looking very strong. AEIS is one that was coming to mind that I know I was looking at today. You know, that retook a buy point after some ugly action last week. Yeah, there's KLAC, LRCX, which is a leaderboard stock. There's quite a bit. Yes, you can see, I'm sorry, my dog has some opinions on chip stocks right now. But let's go ahead and take a look at XLF, Justin, and get your thoughts here on the financial select spider ETF.

10:53This went down about eight tenths of a percent today. It looks like it tested that 21 day line here. So maybe you can bounce above this level and find some support.

11:03Alexis Garcia:Yeah, certainly an area of weakness today where a lot of strength existed. And look, There was some news here, too, when President Trump was talking about capping some of the credit card interest rates. So certainly you've got Visa, MasterCard, American Express, American Express being a Dow component, you know, taking some hits there and that also affecting the financial space. But again, when you have all these areas that are looking great, it's OK to have one that's maybe maybe doing its own thing or taking a rest. You know, it's got time to improve here, Justin. But let's go ahead and take a look at some individual names then, starting...

11:37Alexis Garcia:Today we helped a... Latte for Sam. ...coffee shop get an insurance quote simply and easily. And made sure... A floral delivery van was able to make someone's day. We're the Hartford, with decades of experience insuring millions of unique small businesses. When it comes to your small business insurance... Thank you. One size absolutely does not fit all. Get a quote or find an agent today at the Hartford.com slash small business. With Alibaba, Justin, this up over 10 percent today, gapping above the 21 day and 50 day moving averages. Yeah. And again, a lot of names in China doing very well. Just a few that kind of caught my eye.

12:23Alexis Garcia:And BABA, of course, CYD. Is it CYD or CYO? I can't read my own writing. Yeah, CYD. And also Billy, B-I-L-I. So yeah, BABA was not alone. There were a lot of strong stocks here, but BABA, this one has been kind of consolidating for a while. Seemed like it was getting stuck underneath its 50-day moving average line. Well, today's action really kind of broke that downtrend in a very powerful way. Look at all that volume behind it. This was trading basically triple what it normally trades. So big spike on this upside. And again, China is looking, a lot of stocks are looking great in China. BABA is certainly one of those that we've been tracking a lot because it's such a big behemoth there.

13:12Alexis Garcia:So FXI might be one way to play it. There's a number of ETFs for China. KWEB is another one. or if you want to go with some of the individual stocks that I mentioned, that's a possibility too. You can always look at the holdings of some of those ETFs to kind of go through, oh, here's some of the big players in the ETFs and that can be a great place to find. BABA tends to be a large position in a lot of those ETFs, but there's certainly a lot of others that are worth looking at right now. All right, let's go ahead and jump over to Walmart, Justin. This went up 3 % today and really moving above this buy zone gear from a recent breakout.

13:52So give me your thoughts here on the technical action.

13:55Alexis Garcia:Yeah, so there certainly was a little bit of a shakeup with retail. Some of the retail sales came out and it was kind of a ho-hum holiday season. But Walmart, I mean, that's not having a problem at all. So very interesting action there. And look, this is, you know, again, as I mentioned, this is in the Staples area. So when you have kind of a big stock like this, that's able to make, you know, such a move. And look, we've got a good technical technical pattern here as well. So it seems like a lot of things going for it. And yeah, it's worth taking a look at. Not too extended. Again, that's the biggest problem that we have with a lot of the stocks right now is how extended they are.

14:35Alexis Garcia:This did just kind of clear that one 1745 area that you've, you know, you've marked. You could have gotten this earlier, maybe with the upside reversal that we had at the 50-day moving average line or on Friday as it kind of cleared an area. So it's getting up there now, but you still have right there at that 117.45 a way to kind of say, OK, look, this is crossing an area of resistance. And here again, look at that volume, 147 percent above average. All right, let's go ahead and jump to and fin all. Justin, sorry, I put the wrong ticker in here. There you go. There we go. It's a Monday, everyone.

15:15All right. This went up 3.5 percent, breaking out of this double bottom with a 143.48 pivot. Yeah.

15:22Alexis Garcia:So a very nice looking double bottom. Of course, one of the things that really kind of struck people was last week. There's a big widespread there. News came out that, you know, Jensen Huang, CEO of NVIDIA, was saying that their new Rubin is going to not require so many cables and stuff. And what does Amphenol do? Well, they make cables, fiber optic connectors, all those things. So that took a big hit. But look at how it closed. Basically, some outfits were saying, oh, look, there's going to be some dense connections here that are required with some of these things. And so it did kind of shake off that news.

15:57Alexis Garcia:It did pull back one more time. But here we are retaking that 143, 48 level in some very strong power. This wasn't up, you know, three times its average volume or even, you know, Walmart's 150 percent. But it was still a very decent move on volume and, again, clearing a breakout area. For more information on this one, as I mentioned, Scott Latonen did a nice write-up as stock of the day on this one. And I do have a position just to remind everyone. And also great fundamentals as well. We see pretty solid earnings and sales over the last few quarters here. EPS rating looking good, pretty solid accumulation distribution rating.

16:38So yeah, some good fundamentals to go with the technical action here, Justin.

16:43Alexis Garcia:I'm really glad you mentioned that, Alexis. Let's just take a quick look at the weekly chart. One of the things I do like to look at is the annual numbers and that EPS growth rate of 19%. So that's kind of, this is what it's able to do year in and year out. So over a five-year period of time. I mean, you might say, well, gosh, That's not 20%, which is what we like to see, or 25%, but that's still pretty good. And that nine right below it, the earnings stability, that tells you that this is a fairly stable, consistent earnings mover. So plus, look, this has been a stock that had a really strong move.

17:19Look at how well this really just trended right above that 10-week moving average line.

17:24Alexis Garcia:And certainly there was really, I mean, yes, you had all these three weeks tight and things like that, But there really wasn't kind of a new entry until we had this double bottom. So a very strong stock, very strong move, a good trender, good earnings. A lot of the a lot of the components that we look for with the IBD methodology. All right, Justin. Well, thank you so much for your insights. And as we all know, you're a very busy man. You've got a lot of things going on for IBD. So what's coming up for you this week? Well, we do have our swing trader status update. That's going to be tomorrow, if I'm not mistaken.

18:02Alexis Garcia:We had a great conversation with Jim Ropel last week. So that's something to check out. We also have coming up on the podcast this week, we've got David Cox. So he is a senior portfolio manager at Raymond James Limited up there in Canada. We're going to talk about biases and a lot about breadth international. So can't wait to have that conversation with David on Wednesday. Well, Justin, thanks so much. And that wraps it up for us today. We'll be back tomorrow morning with more market analysis, starting with IBD Live. You can head on over to investors.com slash IBD Live for all the details there.

18:38And I'll be back in the hot seat tomorrow with Ed for Stock Market Today. So we'll see you right back here after the close.

19:23Transcription by CastingWords WSJ.com slash take on the week to subscribe now.