Stocks End Mixed After Fed Statement, Tariff News: SEZL, ZS, FLUT In Focus

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0:25Ken Shreve:Good afternoon, everyone, and welcome to Stock Market Today for Wednesday, July 30th. It's Alyssa Coram here. And stocks finished mixed after the Fed's decision to hold interest rates steady. We have more on that. And we'll also be checking in on some key earnings reports out after the bell. Joining me now to discuss all of that and more is my colleague Ken Shreve. Ken, over to you for today's rundown. Yeah, lots of headlines, particularly in the afternoon, Allie. So we'll talk about all that and talk about three stocks to watch as usual. I wanted to take a look at buy now, pay later firm Sezzle, S-E-Z-L, in the security software group.

1:09Let's take a look at Zscaler, ZS, and Flutter Entertainment, F-L-U-T, trading very, very tightly ahead of earnings next week.

1:18Ken Shreve:Sounds like a plan. And among those, we'll be checking in on after the close with earnings. We'll get Ken's hot take on Microsoft Meta and more. But first, let's take a look at the major indexes. Finishing mixed the Nasdaq, the sole index up on the day in less than two-tenths of a percent by sessions close. A lot of intraday volatility. I think we can tell where that Fed news and the conference hit, but up about two-tenths of a percent by the end of the day. Meanwhile, the S &P 500 down about one-tenth of a percent. Five sessions closed. The Dow off by about four-tenths of a percent. And the Russell 2000 down about seven-tenths of a percent or so headed into the final stretch.

2:03Ken Shreve:Both blue chips and small caps can now testing that 21-day line. But let's go over to the NASDAQ and your take on this uptrend that we are continuing to see play out here. Pretty amazing. You know, the Nasdaq still respecting its 10-day moving average. You can see several weeks ago it came down to the 21-day line at that low of 19 ,334. But it's been a nice uptrend since then. We did have the Fed statement come out at 2 p.m. Eastern time today. I think there was a thinking that the Fed would be maybe a bit dovish and maybe talking explicitly about a rate cut in September. But, you know, the market got a slightly different tone from Jerome Powell.

2:56It does not seem to be in a rush to cut rates and still concerned about the effect of tariffs. I think I heard Powell say that a company of the U.S. is taking in$30 billion a month in tariffs. still thinks that that could fuel some inflation later in the year. So pretty interesting statement from the Fed. And then President Trump started talking about another 40 % tariff on Brazil, tax, putting tariffs on copper imports. So a lot of headlines that the market is dealing with. Great to see the NASDAQ close off lows and hold support here at the 10-day.

3:38Ken Shreve:Exactly. You would think, I mean, if you went back six, eight months, Ken, and you talk about, you know, holding off on cutting rates because of inflation likely to spook the markets. But it seems like we're shaking that off. Well, the markets, you know, the markets were spooked because the actual odds for a rate cut in September fell quite a bit. I mean, we were, what, 60 % to 65 % chance of at least a quarter point cut in September. Those odds have faded now to about 50-50, maybe even a little bit less than 50 % that we're going to get a rate cut in September. So that was a little surprising to the market.

4:22But, again, pretty good close for the NASDAQ. Most of the selling was concentrated in blue chips and small caps today. Even when the selling was at its worst, the NASDAQ and S &P 500 were holding up better than the blue chip index. But you can see the Dow here, as you mentioned, Ali, making a key test of the 21-day moving average like it did about two weeks ago when it hit that low of 43 ,758. So the Dow closed off lows and Russell 2000 did not, yeah, closed a little bit off lows, but it's testing the 21-day line as well here.

5:01Ken Shreve:And the S &P with a mild decline here just coming down to the 10-day line. We'll keep an eye on the 21-day as well for this key index. We're about 1.3 % above that level. A test would not be surprising. it's a level that you see during a powerful trending market act as an area of support as you mentioned but if you're just looking at the nasdaq and s &p it doesn't look like we're on shaky footing in terms of that fed rate cut path at this moment but we'll see what the day two reaction is like that's something else that we like talking about with the statement and the conference coming later in the day, perhaps some overnight digestion into the next day.

5:50Ken Shreve:And we've got a lot of earnings reports to digest as well. Yeah, no question about it. And don't forget, tomorrow on Thursday, we get the Personal Consumption Expenditures Index, which is one of the data points the Fed really likes to keep a close eye on. At last check, that's expected to come in at 2.7 percent. This is the number that the Fed wants to see closer to 2%. It registered 2.7 % the prior month. So it's supposed to be unchanged. We'll see how the market reacts tomorrow. But overall, a pretty good close for the NASDAQ and the S &P 500, considering the fact that the odds for a rate cut actually went down after this Fed policy statement.

6:37I think the perception is that Fed Chairman Powell is not Still not in a rush to cut rates, and he is still not convinced that inflation, he thinks it could tick higher. So we'll see how that all plays out, but overall a pretty decent close for the NASDAQ and the S &P 500.

6:57Ken Shreve:No doubt. Well, with the Fed holding rates steady, let's check out the action in the 10-year yield today here, Ken. What are you watching? Well, I saw a big drop yesterday. There was a lot of bond buying yesterday that caused a pretty key technical move for the 10-year Treasury yield. I think that was down about 10 basis points on the day. It rallied back a little bit, recouped about half of what it lost yesterday. So bond yields higher today. Again, I think tomorrow will be an important day for the market. Sometimes we get that one-day lag. You know, the market, like you said, likes to think about what the Fed said, and we'll see.

7:42Hopefully, we'll get a tame PCE reading. And then, you know, Friday, we look forward to a pretty key jobs report that has become a lot more important lately. 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.

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8:23Ken Shreve:Absolutely. Okay, well, let's take a look at some stocks of note, starting with Sizzle, which sure has been sizzling, Ken. up 6 % on Wednesday. We've got earnings coming up in a little bit over a week, but this is a strong digital payments name that really has been on fire for about the last quarter or so in particular. Yeah, I mean, you just look at the last four quarters of results down at the bottom here, and the revenue acceleration has been super impressive. Obviously, some big earnings increases as well. But, you know, you see that growth, that top line growth accelerating from 71 % to 101 to the latest quarter.

9:09Those were Q1 results when revenue surged 123%. So, yeah, this is buy now, pay later. It's a pretty crowded field and a firm, AFRM, was one of the first bellwethers to enter buy now, pay later. But Sezzle is, you know, they're serving kind of a niche market. I think Sezzle is a little more popular in the millennial crowd. The loans that they make are shorter term. Many are interest free. So they've carved out a nice little niche here. Beautiful earnings breakout several months ago and just went on a really, really strong uptrend like the way the stock is consolidating here comes down to its 50-day moving average making a pretty good case for support here sometimes stocks come down to their 50 days and you know they they kind of hold support but you know really really starting to see buyers appear here at the the 10-week moving average on the on the weekly chart it was about a bad break a few weeks ago when uh when sezzle plunged but it has um you know it's firmed up where it should and We'll see how the base shapes up here on that weekly chart.

10:26You got the relative strength line still up near high. So this one still looking like it has a chance to be a market leader. Obviously, earnings next week, but one that we're keeping an eye on.

10:39Ken Shreve:Yeah, the triple digit growth, no doubt impressive in seeing that acceleration that you pointed out. And then from a technical perspective, in addition to the impressive performance as evidenced by that relative strength line, Ken, you know, it's impressive to me since it's bottom in early to mid-April, this stock has only had one down week. One down week since early April. That is impressive. Yeah, pretty, pretty, pretty, pretty impressive. I agree. And How to Make Money in Stocks, which, you know, written by the founder of IBD, Bill O 'Neill, he often talked about, you know, seeing weekly charts where you had 10, 11, 12 up weeks in a row.

11:22So you often saw that in some big market winners, just buying demand so explosive. And there was quite a bit of volume when Sezzle initially started that move over pretty much the 60 level. But, you know, forming in the early stages of forming a new possible base here, but firming up where it should. And again, you know, fundamentals are driving the story here. So a lot of people saying that Sezzle is still well positioned for growth as a young, newer company. Yeah.

11:54Ken Shreve:So with earnings next weekend, it seems like this is a top watch list name for you to see what that reaction is like and see if there's a potential viable entry point here. Yeah, I think so. You know, it's really been a nice start to second quarter earnings season. Looks like we're getting some really solid reports after the close today. But, you know, a lot of these top-rated growth stocks that have been rallying ahead of earnings have actually gone on and made pretty nice gains of post-earnings as well. So we'll see what Cecil has to say. But, you know, again, still technically strong ahead of the results.

12:36Ken Shreve:Yep. Okay, let's go on over to Zscaler in the security software group. Similar in that this stock also had a really impressive run from the early April lows and is pulling back to key support. Yes, and security software stocks have obviously been in the news the past couple of days. Palo Alto Networks looks like they're going to buy CyberArk software in a$25 billion deal. So that's put some of these security software stocks back in the spotlight. Zscaler, another stock that's been a big leader after that breakout over the 216 level. The stock ran up to, you know, 300 easily and is now testing support right at the 50-day moving average.

13:29So, yes, a similar setup to Sezzle. We'll see if support holds here. But I always looked at Zscaler as one of the better performers in the security software group. Here again, a stock that had multiple up weeks when it first started breaking out. 1, 2, 3, 4, 5, 6, 7, 8, 9, you know, just really, really acting well. The decline lately has been in lower volume. So this uptrend can stay intact. I think Zscaler still has a chance of working just like Sezzle.

14:02Ken Shreve:So we have a little over a month until Zscaler's earnings report. So what level would you consider an actionable buy, Ken? Would it be some of the recent highs right around the 290 area? Would you want it to get above 300 or form more of a base here and take a little bit more time to digest that powerful move? I mean, yesterday's high looks interesting to me because it's sitting right at the top of these short-term moving averages. Zscaler had a nice close today. It dipped, rallied off lows, but still stopped short of yesterday's high. I think if it can move above yesterday's high with some conviction, you could get an early aggressive entry here.

14:51So I think that's the high to keep an eye on and good close for the stock today. Relative strength line is not in as good a shape as Sezzle. Remember, Sezzle came down as testing its 50-day line. Its relative strength line still looks pretty good, getting up near highs. And the Zscaler, kind of a relative strength line lagging a little bit, but not in bad shape, not too far off highs here.

15:22Ken Shreve:Okay, let's go to Flutter Entertainment in the Leisure Gaming Equipment Group holding in a buy zone. We've got earnings coming up next week here as well. Yeah, hard not to find companies that are kind of right around earnings time because we're right smack in the middle of our earnings season. But here's another stock that has really made a nice move. And the price action last week and the price action this week is resulting in some very, very tight action, not only on the daily chart, but also on the weekly as well. You can see just kind of holding tight here. And so we'll see, you know, earnings, like you said, are next week.

16:05DraftKings also in the same industry group in kind of a similar setup. And DraftKings looks like he actually, you know, probably got a little buy signal today. So two stocks in the group acting quite well. Well, Flutter, what draws me most to this one is just that tight trading over the past five, six, seven days or so. So kind of paving the way for a possible breakout healthy-looking relative strength line here. Revenue growth has kind of slowed a little bit in recent quarters, so not perfect from a fundamental standpoint, but still a pretty good composite rating and I think a breakout candidate.

16:43All right.

16:45Ken Shreve:Let's take a look at some earnings out after the closing bell on Wednesday, starting with Meta. A very impressive reaction here. Shares up almost 11%, Ken. We had a strong earnings and revenue beat from the company. So we're looking at the earnings reaction here. And it looks like Meta also raised its forecast. So potentially in position to buy tomorrow, depending on how the stock is looking. But a very encouraging reaction. Yeah, well, it's possible that this could get extended pretty quickly from its 50-day line and its 10-week line. But, you know, you're looking at that recent high of 747.90 and it's trading about, what, 20 points above that in after hours trading.

17:38So we'll see. This stock does to me look to be quite liquid in after hours. So we'll see if this strong gain holds in the morning. Sometimes that happens and sometimes not. But Meta tends to trade pretty liquid in extended trading. So it looks like a super strong move. I know we'll have a lot of coverage on the homepage of Investors.com about what investors like so much about the report. I got to check that out myself. But really nice response so far.

18:08Ken Shreve:Exactly. So if this gain holds tomorrow, that would definitely put Meta firmly in new high territory. Let's go to the other biggie or one of the other biggies. And that is Microsoft. Also a strong reaction here. Shares up 8%, Ken. So the company reporting revenue from Azure and cloud services for the first time. So that's also something to note here. Had a gap up last quarter and the stock has been on a steady run ever since. Looks like investors are liking this quarter's report as well. Yeah, big hyperscaler just like Meta Platforms is. And you can see it's been a tremendous run for the stock after breaking out of this long consolidation.

18:56This was back end of May, early June in that area. So another large cap tech name showing a lot of relative strength with the relative strength line up near highs. Out of position here, tough to buy it after such a strong uptrend. So this is one that's obviously going to, well, it looks like it's going to gap up pretty powerfully. You know, so it's not really viable here, but very encouraged to see Meta and Microsoft responding so well on earnings. I imagine that's lifting the queues pretty nicely in the after-hour session. Queues up eight-tenths of a percent. So we'll see if the NASDAQ can get a nice open tomorrow.

19:42Ken Shreve:Yeah. And then a couple more to check out. Let's go to LRCX. This is a chip equipment maker, shares up 4%. Also, Carvana, out with its report, shares up 14.5%. And then AEM, let's see if we can go. All right. I was going to say if we can go five for five here. Doesn't look like there's a whole lot of action just yet for Agnico Eagle Mines. Yeah, it's not up 10%. What's going on here? I know. But, you know, the gold stocks are still catching a bid in this market. And Agnico, you know, I'm not sure they've reported yet. The stock is not moving a whole lot, but still kind of toying with this 126.65 entry.

20:34And, you know, like I said, gold stocks, you know, continue to be a nice pocket of leadership in the market. The group ranks eighth out of 197. So it tells you that the six-month price performance has been very strong among gold producers. So we'll see if Agnico gets going here. But lots of good news on the earnings front, it looks like, among large-cap tech stocks.

20:59Ken Shreve:All right. Well, thank you, Ken, for checking out all of those stocks. We really appreciate your take. All right. Thank you, everyone, so much for tuning in. that's it from us for today, but it is Wednesday. So we do have a new episode of the Investing with IEBD podcast ready and queued up for you live at 5 p.m. Eastern on our YouTube channel with host Justin Nielsen. He's going to be joined by Bob Lang. They're going to be talking about earnings option strategies. So make sure to check that out at 5 p.m. Eastern live, or you can check the recording at investors.com slash videos or listen wherever you get your podcast.

21:39Ken Shreve:So we'll see you over there. And then we'll see you in the morning on IABD Live, investors.com slash IABD Live for all the details on our daily morning live stream. We'll have the Meta, Microsoft, Carvana, etc. earnings reactions for you and how the team is handling those stocks and looking at their overall portfolios. So we'll see you there in the morning, investors.com slash IEBD live for all the details. And we'll see you right back here tomorrow after the close.

22:27Ken Shreve:This episode is brought to you by MassMutual. When people count on financial guidance, they want a company known for strength, stability, and trust. With the solutions to fit their needs, financial professionals can help people move forward with confidence, backed by MassMutual's 175-year legacy. Learn more at MassMutual.com.