Stocks Slammed As Oil, Yields Surge Again; Applied Materials, Viking, United Rentals In Focus

0:09Ken Shreve:Good afternoon, everyone, and welcome to Stock Market Today for Thursday, July 23rd. It's Alyssa Coram here, and it was a brutal day for the major indexes. We're going to talk about that Google oil yields all pressuring the major indexes. Joining me now to discuss that and more is my colleague, Ken Shreve. Ken, great to see you as always, even on a bad day. Good to see a good colleague like you. Appreciate it, Ali. Yes. Well, it was a tough, tough day for the market. Kind of bad all day. Higher bond yields, higher oil prices. Let's take a look at three stocks. Still liking the way some of these chip equipment firms are trading.

0:50Let's take a look at applied materials. Oil up 5.5 % today, but look at Viking, cruise line operator Viking having a good day. So I like the price action there, VIK. And then a nice earnings report. Actually, a lot of good earnings reports today. Take a look at United Rentals, URI.

1:10Ken Shreve:Okay, we'll take a look at those stocks. But first, a closer look at the major indexes. Here's look at the tech-heavy Nasdaq down some 2.2 % on the day. Earnings from mega cap names Google and Tesla had very poor reactions. Meanwhile, the S &P 500 down 1.2 % on the day, undercutting recent lows. So that is notable there, back below, solidly below the 50-day moving average at this point. Here's blue chips, the Dow down 1%, now getting pretty close to that 50-day moving average of its own. And the Russell 2000, represented by the IWM ETF, down about six-tenths of a percent or so. It's touching the 50-day line.

2:00Ken Shreve:So a lot of the selling in tech, there were some tech winners or at least some in tech holding up better than others. But if you're looking at the index level here, Ken. We're now seeing in the short term here a series of lower lows and a major test of the June lows. Yes, and there was a positive because we did get a pretty good test of that 25 ,000 level, and we did get an undercut today for the NASDAQ, that low of 24 ,900 that you have marked there that was undercut. But you had that undercut and you did have the NASDAQ close off lows today. So that was a positive sign. So we'll take that as a positive.

2:50Now, we did have a 2 % decline and it looks like volume did pick up the pace from yesterday. We're still well below average though. You can see over the past two, three weeks, we're kind of in the summertime low volume period for the market. So it didn't have the feel of massive institutional selling today. So you had the undercut for the NASDAQ today. Just a tough day, though. We mentioned bond yields have been spiking and the situation in Iran just does not look good at all. And And President Trump is threatening to expand this, you know, war to where the Houthis are and the Houthis are in Saudi Arabia.

3:36So it's just not looking good at all. And big spike in oil prices. I think Brent crude, which is the European benchmark, that crossed$100 a barrel today. So these are, you know, two, the bond yields and oil prices are two major headwinds for the market. and you throw in earnings sell-offs for Google and Tesla today, you just got the market hit with a lot of really bad headlines. So we're going to have to somehow work our way through this. And, of course, next week we've got a very busy slate of earnings. Tomorrow morning we've got American Express in the financial sector. We thought that Goldman Sachs last week was going to get, you know, earnings off to a great, great start with that nice surge last week when it went through that 1100 level.

4:30And then just it kind of fell apart after reporting earnings. So what looked like some good reports in the financial sector, you know, that's all of a sudden quite questionable. So we'll see what American Express has to say tomorrow morning. Hopefully they'll have some some some good news. But a lot of MAG7 reports next week. And we were talking on IBD Live this morning when you just look at how, you know, meta platforms and Amazon and Microsoft, how these stocks have been trading ahead of earnings. It's, you know, you want to be optimistic that these companies are going to have good things to say about their earnings.

5:09But, you know, certainly the price action in these charts are not all that great. So, you know, maybe the bad news has been priced in here, but we'll hope to hear some good news from these companies next week. But definitely a pivotal week of earnings next week for sure.

5:26Ken Shreve:It sure is. Okay. Well, the major indexes looking vulnerable here as we are weakening that key level to the downside that we talked about in the NASDAQ. You know, are we going to see dip buyers come in at these levels or are we going to see things really break wide open? We'll have to see. We do have those macro headwinds, as you mentioned, as well as more key earnings. But I think on that aspect, it seems like investors shouldn't be counting on these big earnings to come in and save the day necessarily. You know, we just need to focus on the stocks in our portfolios. Are they triggering sell signals?

6:12Ken Shreve:You know, is a weakening market warranting a reduction in exposure? Or, you know, are traders in some of those bright spots? Because, Ken, it seems like even some of the bright spots that are triggering recent entries, those haven't been panning out too great by and large. No, it's been overall a really, really difficult. I mean, you've had the rotation out of your big leaders from last year, but even the rotation trade has been kind of tricky. It's been hard gaining traction in some of the financial stocks, for example. Again, you know, thinking that Goldman was going to make good progress. I mean, that was just a very disappointing reaction to earnings.

6:55I mean, it did come down and, you know, find support. But, you know, and then the transportation sector, you know, you thought that the airlines and some of the trucking stocks were going to be working. But then they started to sell off today. The railroads actually did okay and held pretty well. But it's just, you know, when you're in a weak market, it can tend to just kind of seep into a lot of different areas. So it's just a tricky market right now. I will say with the NASDAQ, though, you know, you did get a good shakeout today. So to see the NASDAQ close off lows and that undercut of 25 ,000 and to see it, you know, finish off lows today, that is, you know, some people will look at that as a positive.

7:45It is probably going to end up being a distribution day for the NASDAQ. So we've seen plenty of those in recent weeks. So, you know, I mean, the bulls are going to look at the fact that it was a good shakeout today and it was a good undercut. They're going to look at the fact that you did have some pockets of strength again in the memory area. Let's see how DRAM held up today. D-R-A-M. This is the ETF that is housing your memory and storage stocks. And again, that traded pretty tightly today. It's a pretty sharp pullback for DRAM, but it's been trading pretty tightly over the past three days. And it didn't move a whole lot today, but that held up pretty well.

8:33Let's check in on SMH and the chip stocks, how they did today. And that was not such a bad day either. That traded pretty tightly, three days of strong gains, and it really didn't lose much ground at all today. So, you know, I think that was not a bad day for chip stocks either, considering that the NASDAQ had a pretty rough day. So I think looking at DRAM and SMH today, fairly healthy price action in those two ETFs. So maybe a couple of silver linings here.

9:05Ken Shreve:Exactly. Yeah, and only time will tell if this shakeout leads to the next rally because we had a gap down and a shakeout below a recent low only recently, you know, last Friday. And we ended up rolling over. So we'll continue to take things day by day. But you mentioned some sectors of note. Here's a look at the IYT. Not a great finish to the day. It did close off highs, but it was up on the day, right? So seeing some relative strength there and an uptrend that continues. And we did punch up something like a CSX in the transportation rail group. A really nice pop on earnings here. So continuing to focus on this space.

9:52Yeah, CSX and Union Pacific and Norfolk Southern. So UNP and NSO. UNP, you know, it was a nice early move. still up 4 % on the day, but gave back a lot of those gains. And then NSC, Norfolk Southern, also had good earnings. And that one, you know, a nice gain as well, up 5%. That gave back as well. We were really optimistic. IYT was in the leaderboard model portfolio, and we actually decided to cut that one loose for a very tiny gain. We were disappointed by the price action. Today, we just decided to cut it loose for a small gain and free up some cash. We raised a little more cash today, pretty lightly invested going into today.

10:43We were below 70%, about 67 % invested. We raised a little more cash because we're still a little bit above the upward band that we have on the homepage of investors.com right now. So we raised a little more cash, just cut ties with IYT, just because the trucking stocks and the airline stocks were a real drag on IYT today. And we also trimmed Toronto Dominion Bank back a little bit today, just because that broke through the 21-day moving average. So we played a little more defense today in the model portfolio, just to raise a little more cash. But, yeah, a little disappointed in IYT. Just thought those railroads were going to give that a little more lift.

11:32But, yeah, some weakness in other areas of the transport sector today.

11:36Ken Shreve:Okay. Well, one more ETF to look at before the three stocks that we want to highlight. And that is RSP continuing to weaken here. So we've seen a number of days here now, Ken, clustering where you get a strong start and a weak finish. So starting to see some concerns there. And we're trying to hold the recent lows, but this is the lowest close below the 21-day line in this move, really. Mm-hmm. Down four-tenths of a percent, a lot less than the S &P 500. So, again, breath watchers, you know, again, breath probably not too bad on the NYSE today in relation to how much the S &P 500 fell today. How about QQQE, the breadth on the NASDAQ today?

12:33Yeah, that was a little worse. I mean, that's below the 50-day. That undercut some lows as well today. But it fell less than the 100, so not great. Okay.

12:50Ken Shreve:Well, let's take a look at a chip equipment name holding up, and that is Applied Materials AMAT up 1.6 % today. We looked at ASML earlier in the week. That was today's stock of the day. Three tight closes there. But looking at AMAT, even though it is off of its highs, it's holding up above this 50-day line. So looking at this point more like it's in base building mode versus breakdown mode like some of the other AI plays. Yes, indeed. And, you know, we talked about the chip equipment stocks. You can see the growth for applied materials, 2026, 2027. They're still in big-time growth mode. A lot of these chip equipment stocks are growing because they're big equipment suppliers to the memory and storage stocks, the Microns and the Western Digitals and the Seagates.

13:52So they're supplying equipment to these companies that are growing like gangbusters. So, you know, this is some of the pockets of strength in tech that we're seeing. I don't know that, you know, we'd be rushing out and buying the chip equipment firms here, but, you know, they're acting well, and this is just, you know, something to pay attention to because, you know, you're just seeing strength in the NASDAQ in this area. Not so much in the chip makers and the chip designers, but specifically in the chip equipment group. So not all of them are holding the 10-week moving average, but, you know, applied materials is fighting a good fight here.

14:37The decline to the 10-week line, you can see it initially came in heavy volume, but as it came closer to the 10-week line, the volume just kind of quieted down. Finding support right now, and volume is pretty light, but so far it's a pretty good test. So I think this is a name that you want to watch. Now, there are some other big, big, well-known names in the group that aren't looking as well. I mean, they lost support. It doesn't mean that they're going to be laggards and they're doomed to be laggard stocks in the group because there are a lot of high-quality names in here, like a LAM Research, LRCX.

15:16You can see that one has been, it's another kind of a lower volume pullback, but support did not hold here. So maybe this one is going to base, but I would just kind of stay focused on the names that held support like an AMAT. And, you know, ASML is, again, the stock of the day, which has held up, you know, quite nicely, just like AMAT.

15:38Ken Shreve:It has. And, Ken, we know that drawing upper channel lines is an art. But I have this on here from a number of weeks ago. We must have either discussed it on this show or IBD Live. We produce a lot of video content, so I'm not sure which one. But since it's here, I think it is good to bring up for those out there who have been disappointed by their portfolio performance since that early June timeframe or over the last couple of weeks even. you know we were talking about selling into strength a lot of these names whether it was the chip equipment or some of the memory stocks so and it doesn't have to be an all or nothing decision but myself I'm trying to layer in more of that proactive selling too right versus waiting for the breaks of moving averages so just a tool for the toolbox a good lesson here a good reminder Again, not always clear cut, but when you do see some of these upper channel lines, you just see that rate of acceleration increase, especially then when you see a downside reversal on the week, right?

16:47Ken Shreve:That can be a signal to, hey, maybe this is getting overheated in the short term. Let's take a little bit off the table. At the very minimum, you want to draw an upper channel line that at least connects two highs during that uptrend. So I think this is a perfectly fine upper channel line. And I know some people that like to connect at least three highs. But this one looks perfectly fine to me. And I think it did a good job of marking that downside reversal that kind of marked the top for applied materials. So whether you're connecting two highs or three highs, I think that was a perfectly fine upper channel line there.

17:27Ken Shreve:Great. Okay. So you mentioned the action in Viking. It's actually up on the week, almost 3%. and especially impressive given the rise in oil prices. You typically see a lot of the travel names struggle when oil is on the rise. Viking holding up exceptionally well. I thought this was one of the more interesting moves in the whole market today, especially on the daily chart, because this one just kind of popped up, and I said, look at Viking coming off the low so impressively. And, you know, volume picked up the pace from the prior session. So, you know, volume was higher than Wednesday. It rallied nicely off lows.

18:14It paired a big intraday loss to less than 1%. It was only down six-tenths of a percent for the day. Lots of buyers come in, you know, very late in the session. This with oil up 5.5%. So we're so used to seeing Viking and, like you said, The cruise line operators, a lot of travel stocks, they move with oil. Oil's, you know, down big and the cruise line operators are up and, you know, vice versa. So I thought this was really interesting price action today and, you know, a great, really a great tell, I thought. So the weekly chart, this is a nice test of the 10-week moving average. And, you know, I thought it was a buy signal today, honestly, with, you know, getting support at the 10-week and, you know, so used to seeing, you know, Viking down when oil is up and just saw buyers come in and, you know, supporting the stock today.

19:16So I just thought it was interesting price action. So we'll keep an eye on it tomorrow. And this has been a leaderboard stock in the past. So we're going to keep an eye on this and maybe take a close look at it tomorrow. Okay.

19:31Ken Shreve:Next on our list, we want to check in on URI, United Rentals. This is a favorable earnings reaction today. Shares up 10%. We did see acceleration on both the top and bottom line. Earnings up 22%, revenue up 12%, pullback to the 10-week line, 50-day line. That was pretty orderly, I'd say, and a nice move after that. So maybe some buyers interested in this non-AI name. What do you think, Ken? I'm a bit disappointed that this one kind of fell off my radar because United Rentals, it seems like for as long as I've been working for IBD, this one has been in our database as a top-rated stock for a long time.

20:21And then it kind of fell off. Yeah, it kind of fell off our database because in recent quarters, the growth had really started to slow down. In fact, if you look at last year in like the second and third quarter, you can see the earnings kind of slowed down. They had some earnings declines last year. And then in the first quarter, you had a nice a nice pickup. So in the March ended quarter, you had earnings that were up 10 % and then you had revenue that was up 7%. So it was a nice turnaround quarter for United Rentals after, you know, three, four quarters of declining earnings and single digit sales growth.

21:00But you had a nice pickup in earnings in Q1. And I just, I'm mad that I missed that turnaround in Q1 because the The Q2 growth was nice acceleration from Q2. So this wasn't on my radar, and it ended up being a nice quarter, and the stock responded very well. So it's been a well-run company for many, many years. And as far as I know, return on equity has been very, very solid here. And again, it's just been a top-rated stock in our database for a long time. So equipment, as the name would indicate, just industrial equipment rentals and nice breakout here. Pull back to the 50-day moving average and a gap up in price here.

21:51So market rewarding the stock for a nice earnings report. And I don't know that you can buy it up here, but, you know, could put it on a watch list and maybe get an alternate entry. Okay.

22:06Ken Shreve:Let's quickly check out some stocks with earnings out after the close today, Ken. We had Intel in the Semiconductor Manufacturing Group report. Shares are up 9 % right now, so investors liking the Intel report. Let's see, after hours, trading around$109, the 50-day line is at$115. So even with the move higher, it still has that 50-day to conquer. Yes. So that after-hours move is not going to do a whole lot to repair the stock, you know, the technical damage that's been done. But it looks like there's something to like in this report. So we'll see how the stock opens tomorrow, and we'll see what kind of lift it can give the semiconductor sector here.

22:56Looking forward to see what Intel has to say here. But this is a company that has completely reinvented itself. It's kind of an exciting growth story here with a new CEO in place. Obviously, an ugly pullback for Intel, like a lot of other chip stocks. So we'll see if it's eventually going to be able to get back above its 10-week moving average here. But nice response so far. We'll see if it holds.

23:27Ken Shreve:Also in the chip sector, Max Linear, seeing shares down a 7%, Ken. Such a high flyer in the April, early May timeframe. Then it got kind of wild with a failed high-tight flag-type move here. It just looks like it needs more time, really. and especially if it's going to have a 7 % down day tomorrow. We'll see, of course, after hours action doesn't necessarily always translate to the following day, but shares under pressure here late. Yeah, super high multiple stock here. AI, data center, connectivity, very fast growth. Very interesting company. Not many people know about it. you know, mid-cap, a mid-cap company, but, you know, kind of a violent pullback through the 50-day moving average and, you know, trying to get back above the 50-day ahead of earnings.

24:28But so down 7%. But again, you know, some technical damage suffered here. So it looks like it's going to get turned away at the 50-day moving average. We'll see how it opens tomorrow. Very, you know, compelling growth story here. And, you know, it looks like I think the numbers, I don't know if the numbers have been put in yet. They probably not. They just reported. So the estimates were for 51 % top line growth and big, big earnings, 1 ,500 % growth. So I wouldn't be surprised if they beat, but this is really all about guidance. So we'll see what they had to say. But obviously, the expectations were pretty high.

25:08So they would need to beat and a big raise. And if it was good but not good enough, that's probably why the stock is softening.

25:17Ken Shreve:Okay, one more for you, Ken, and that is Inova, E-N-V-A, earnings out, shares up 2%. Strong uptrend, recent pullback, but it has fared fairly well amid all the market damage in recent weeks. Yeah, just a little bit below the 21-day moving average. Another very steady grower here, 20 % annual earnings growth, a subprime lender, mid-cap stock. And, you know, beautiful, beautiful breakout over that 176 level. And just kind of gently pulling back here. Stock is not moving too much. Fairly low ATR stock, so we'll see. It doesn't seem like it's very liquid in after hours, but we'll see how it responds tomorrow morning.

26:10But, you know, pretty steady track record, 90, you know, high composite rating. So good record of growth here. And we'll see how it opens. It doesn't really look like it's trading too much. But I've been following this one because just the breakout was so powerful and it came in so much volume. You know, it showed those little black hash marks. It's got the ANTS indicator. So lots of accumulation in this stock and a fairly mild pullback here. So we'll see how it opens tomorrow.

26:44Ken Shreve:Yeah, sounds like a plan. All right. Well, thank you so much, Ken. We love your insights as always. Good stuff. Thanks a lot, Allie. Appreciate it. All right. Thanks, everyone, for tuning in. That's it from us for today. And we'll see you tomorrow morning on IBDLiveInvestors.com slash IBDLive for all the details. We'll be joined by Portfolio Manager George Kachuk of RCM Wealth Advisors. He's doing pretty well in the Investing Championship Money Manager Division. So we'll get his thoughts on what's been working in this market, how he's been weathering the storm over the last couple of months as rotation makes its way into the leading stocks.