Stocks Skid On Bank Fears. DoorDash, Guardant Health, Zions Bancorp In Focus.

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0:25Good afternoon, everyone, and welcome to Stock Market Today for Thursday, October 16th. It's Alexis Garcia here, and the indexes turned moderate gains into losses by the end of the day as earnings news failed to sustain investors' bullish sentiment. We also had some concerns about banks out there as well. So lots of news to get through. And here to help me break down everything you need to know about today's market action is IBD News Editor Ed Carson. So Ed, it looks like it's shaping up to be another volatile week here on Wall Street. So what do you have on tap for us today? Yeah, the intraday swings aren't so much fun to navigate on a day-to-day basis.

1:13But I want to take a look at DoorDash, Garden Health, and Zion's Bancorp. All right. Well, we'll take a look at those three names. But let's just see how the major index is finished. The S &P 500 down about eight-tenths of a percent. The Dow down eight-tenths of a percent. The NASDAQ down half a percent. And small caps taking a hit down about two percent today, Ed. And I'm going to go ahead and get our handy little chart up here. But talk to me about what you're seeing. And again, another volatile day here. So what are your thoughts on the current market? Yeah, it's been tricky for new buys because, I mean, shopping markets are terrible for active investors because there's enough buying opportunities out there, or at least temporarily, to draw people in.

2:01But then you get shaken out. On the other hand, really close to all-time highs. Let's not talk about this. It's not like some, oh, no, horrible correction or bear market. We're still all within basically the major indexes. We're basically trading within last Friday's bar, that big, ugly sell-off. You know, the S &P and Dow are a little below the 21-day line. The NASDAQ just held it. Small caps had a bad day, but they've been doing really well. I think small caps got especially hit hard because of regional banks, and we'll talk about that more. But there have been growing concerns about credit.

2:34So there were some more bad reports, and investors were sort of already on edge. So if nothing else had been out there in the background, I'd be like, oh, that's not good. But the fact that there had been some other news, I think unnerved investors that were sort of waiting for some bad signs. So it's just tricky. We could easily rally back tomorrow. It's just sort of back and forth. It's just these intraday moves. I think if you could go five minutes, you know, the thing is the closes don't look so bad. And it's not even the ranges have been that huge. But it's just this up and down, up and down.

3:05So it's easy that there's been buying opportunities on a lot of those high points, but you can see how very quickly a lot of the times that's it. And so, again, that's just, yeah, it may all work out fine, but you also can't neglect your sell rules because you don't know. If the market continues to sell off and, you know, when they have these downtrends, you can get caught pretty quickly. So it's just tough to navigate. It's probably best to say like you're still significantly, maybe even heavily invested, but just not doing a whole lot of new activity. All right, Ed. And we can see the NASDAQ here trying to hold at the 21-day line.

3:41But let's check in on RSP. That's the S &P 500 equal weighted index to see how market breadth was today. This down nine-tenths of a percent and below the 50-day line, Ed. And so, again, what is this telling you about the types of names that are participating here? Yeah, that's still in the range. But, yeah, that, you know, that was mounting a comeback, which is encouraging, but it's down. I mean, like the strength hasn't been in there. And with financials getting hit so hard, that, you know, is a lot of parts of the market were down today. Not much breadth after a couple of good breadth days. Yeah, let's just quickly check in on QQEW.

4:17This one also down about six-tenths of a percent today, looking for support at that 21-day line. Yeah, so pretty much similar to the NASDAQ and the S &P in that regard. All right, well, let's check in on some sector ETFs starting with FFTY. That's the IBD 50 growth index here. This one down 1.7 % today, but again, you know, hit another high before reversing lower. It looks like it's wanting to sit right here at this 40 level. So again, growth continues to be strong here, but taking a little bit of a hit today. A little bit of a hit today. And definitely, you dig into the IBD50. There are some winners, some pretty big losers.

5:01Gold plays continue to do well that are in there. So it depends on what it was. I mean, you could have had a bunch of IBD50 stocks that were really strong today and others that really got hit hard, which is the nature of the index. But yeah, but this has been doing very well overall. All right. And speaking of gold, Ed, let's take a look at GLD. This went up again today, 2.3%. I mean, look at just how extended this is. But again, gold continuing to stay strong here, Ed, in this market. It's been one of the interesting things to keep an eye on here. So again, your thoughts on gold and, hey, this one just keeps going.

5:44Yeah, it's weird. We have this weird mix of growth and fear out there, and it's just been working for gold. And it does feel like the angle of ascent is picking up too. Like it's just sort of ramping up to almost vertical. After all, it was on a strong clip, but more recently. And again, that maybe reflects some of the fears we're going on into. So it'll be interesting to see how that goes. Weaker yields that we had. are something else that, you know, actually we probably should take a look at the 10-year treasury yield as well, because that was a big thing today. And partly that was concerns about banks and there's some weak economic data or at least meh.

6:21So this went below 4%. It was the lowest level since six months when we had that, when we were at the tariff and deep-seek lows, but it's the lowest actual intraday close in a year. So it was, And the two-year yield, which is more closely aligned to Fed policy, was at a three-year low. So definitely some safe haven flows that are going on in this market right now. And let's take a look at XBI. That's the biotech ETF. This one has been on a nice run as well, down about half a percent today, Ed, but still, again, near these highs here. Yeah, I mean, yeah, not great if you're buying extended on something like this is that high.

7:02But yeah, this has been doing quite well. There were a number of biotech and genomic type names that were up or held their ground today. So if you're looking for a growthy area that isn't necessarily crazy extended and you can find stocks with real revenue that isn't so tied to AI, this is definitely an area that people should be looking at. Let's take a look at one more. That's KRE. That's the regional banking ETF. And you can see this one sliding today 6.3 percent below the 200-day line here. So what's going on with banks? Yeah, we'll talk more about it specifically. But basically, there have been some concerns for a few weeks.

7:41There was an auto prime lender, auto subprime lender that went bankrupt. There was an auto parts lender that went bankrupt. And so last night, a couple of more banks, including Zions, which we'll look at, basically warned of bad loans. And it's just like, people just did not want to hear it. They did not want to hear it. that was not the time for it. So you're seeing just a big sell-off. Now, some of the big Wall Street banks, they did fine because they're not as tied to lending. They're more like investment banking, equities trading. But for actual pure lenders, you start having problems with loans, especially with things like autos, big ticket items.

8:18That really, that hits where their profitability is. And so definitely some worries here about the economy and banks specifically. here. Yeah, I personally don't need a repeat of a 2008, but you know, we'll see. 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.

9:02Learn more at rwbear.com slash wsj. Take a look at some individual stocks then, starting with DoorDash, Ed. This one down 2.2 % today, below the 21-day line. So talk to me about this one. It had a recent breakout here on September 29th, hasn't moved much from this buy zone, or excuse me, from this pivot point. So again, what are the thoughts here as DoorDash tries to advance? Yeah, there was sort of ugly action today. There was positive news at the open. It's teaming up with Google to do like automatic, you know, self-driving Waymos will help deliver packages or food in Phoenix, and that presumably could roll out to other places going forward.

9:49So the stock sort of was clearing this little short little area right above, right at the top of the base, but then reversed lower. There were a lot of downside reversals among techs. A lot of them weren't that bad. But this one looked a little bit more damaging. On the other hand, it's right below its buy point. It's not, I mean, you could even see it bounce back. That's what makes it so tough. It was sort of like a, if you bought near the highs today or didn't add on, you're probably down for 5 % off of that buy. It's just tricky. It's just tricky. Maybe this balances right back, but I didn't like that chart action, given that there was positive news out there.

10:26So just part of what makes a choppy market difficult. Yeah, and we could see this increase in volume today as well to the downside. Let's take a look at Garnet Health. That's ticker GH. This went up over 5 % today. And again, this is another one in that biotech space that provides genomic analysis and liquid biopsies. So it looks like it's just below this 68 buy point here, but really charging up the right side of this cut base. Yeah, and this was like not quite a handle. It was like four days. So if it had waited another day, this would have been a handle. So I think when it cleared the recent highs, you could have used that as an early entry.

11:13And I think that's probably what Swing Trader did today. I think they added it to that. One thing that happened here is a G-R-A-L, GRAIL, which it's also a genomics testing. I don't know exactly how close they are, but this one gapped up on a big Samsung investment. So again, biotechs and genomics generally doing well. Something specifically in its space doing well. This one's really extended, but GH, this one is right there. Nice move, nice volume. The recent days have been a little bit quieter in volume. It bounced off the 21-day line. The relative strength line isn't at highs, but it's above that quasi-handle high.

11:53You can sort of see it's getting up there. It's got solider revenue growth. It's still losing money. That doesn't look like it's going to change anytime soon. So that's something to note. But it is an interesting company with real revenue, real products out there. All right. Well, let's head on home with Zion's Bank here, Ed. That's ticker Z-I-O-N. Again, this one plunging over 13 % today, well below this 200-day line. So, again, talk to me here about what you're seeing with this chart and regional banks. Yeah, and this was the heaviest volume we've seen in quite a while. You know, that's 10 million shares or so, well above what we've seen recently.

12:38It's more closer to the April lows maybe we got above there. You know, this one, just from a stock chart, this really wasn't doing that well, even near the highs a month or so ago. You know, it hadn't really come back to highs. The relative strength line was still well off. But let's say you were still playing it. Okay, I like this company or I like banks like this. But then it broke below the 50-day line last week. Now, I know that there were other things going on, but that was pretty decisive. of, you know, investors should have been, you know, there was a lot, there weren't a whole lot of reasons to be in it before then, but they should have probably been at least significantly scaling back unless they had a long, long-term, you know, holding with a big thing.

13:15And so that's just something people should be doing ahead of this. You didn't know how this was going to go. This was bad luck. And, you know, again, if it wasn't Zions, you know, Zions would have been down pretty sharply anyway, even if it weren't for Zions, because there was another bank wall, WA Western alliance that they had talked about some bad loan issues. So there was, you know, when there's these credit concerns, you have to watch out with banks because those can fall in such a hurry. The regional, now your JP Morgan's and others, those are too big to fail. They're diversified. They're not going to be like that, you know, so they didn't have a good day and everything.

13:49But, you know, that's not showing panic selling or selling. But something like Zion, it was already weak in a position that you probably should have been out of it. But this is what can happen when those credit concerns mount. Now, yeah, when they end, you might see an amazing rally in some of these names. There might be a day when Zion, if we fall quite a bit, I could see Zion rallying 30 % in one day because everything's fine now. Everything's going to be fine. But you don't know when that day is, and it's just better that you want to try to avoid being in a situation like this, you know, in this from the beginning here.

14:22All right, Ed. Well, thank you so much for your insights today. That wraps it up for us for today's episode. If you want more market analysis, you can tune in to IBD Live. That starts tomorrow morning. You can head on over to investors.com slash IBD Live for all the details there. And again, we'll have an extended version of Stock Market Today, wrapping up the week with Justin Nielsen and Mike Webster tomorrow. That'll be right after the closing bell. Thank you so much for watching and we'll see you all next time.

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