Stocks Slump Amid Huge Earnings; MongoDB, Eli Lilly, Interactive Brokers In Focus

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0:41Good afternoon, everyone, and welcome to Stock Market Today for Thursday, October 30th. It's Alexis Garcia here. and stocks slumped after a mixed set of earnings results from some of the Magnificent Seven members. You know, we also had a Fed rate cut announcement thrown in there for good measure. And here with me to help break things down is IBD News Editor Ed Carson. So Ed, it's an All Hallows Eve or whatever you want to call it, but, you know, some scary action today in the market. What are your thoughts and what do you have on tap for us today? Yeah, there have been a lot of treats for the market, but today was more of the trick side.

1:23I want to take a look at three stocks that are doing reasonably well. MongoDB and Eli Lilly, those clearly did well. And Interactive Brokers is hanging in there. All right. Well, we'll check in on those stocks, but let's first just do a quick roundup on the market. The S &P 500 finishing the day down almost a full percent. The Dow down about two-tenths of a percent. The NASDAQ down 1.6%. And small caps also in the red today down 7 tenths of a percent. So Adam, I'm going to get my screen share going here. But talk to me. You know, we've had a lot of news in the last couple of days. We had a bunch of earnings from mega cap players.

2:07We had the Fed rate cut announcement yesterday that the market's digesting. We can see the action here on the NASDAQ down almost a full percent, but falling off those intraday highs and closing at the bottom of the range. So thoughts here on the current action. Yeah, and we also had a China trade deal, or at least a China trade truce. I mean, I think a lot of it, it's like we've been running up quite a bit. You know, yesterday was mixed, but the mega-casts have been running. There's been a lot of enthusiasm. I'm not saying that that's, and that may continue, but today we had some selling, especially on the tech side from Meta and others.

2:42on the, you know, so Meta was down. And NASDAQ in particular, that was up for five straight days. Yesterday, it closed 7 % above its 50-day line. So it was getting sort of extended. It was sort of, you could argue, due for a pullback, at least a one-day thing. I didn't mean it had to happen, but, you know, with some of the mega caps, it wasn't so much the earnings. It was more, you know, the guidance wasn't amazing. And maybe the capital spending is so high. It's like, well, where is that going to pay off? Especially with Meta. So that was a drag on things. And that, you know, while that spending is good news for all these other companies like NVIDIA and others, still it's a negative sentiment.

3:18And also at some point, maybe somebody will tell Zuckerberg to stop spending. You know, they sort of did that in 2022 and they cut costs and stuff like that. And the stock took off. But if they did that, that would obviously have an impact. But anyway, I mean, we're still close to highs, but it was it was a weak day. And honestly, there had been some weakness in the market that you didn't see on the NASDAQ and S &P so much because the breadth has been weak. You know, NVIDIAs and other things have been lifting the market. But, you know, looking at RSP, you know, in the morning, it looked like we were going to have a reversal where the mega caps were weak, but RSP and breadth was positive.

3:54But breadth didn't end up positive. It was actually a decisively weak day in terms of breadth. And we hit resistance at the 50-day line. So not a whole lot of things. It was not a good day. It was not a good day. But you could also argue that, you know, so it would be nice to see some breadth. QQEW, not terrible, but we've had a few down days now. That doesn't show the strength that we were seeing in the NASDAQ. The Dow is just sort of hanging in there. That's sort of weird. You know, that's an interesting mix of 30 stocks. So it's hard to take too much from that. But it's just, you know, there's just some weakness out there.

4:30It's just something that, you know, and, you know, we're talking about this on IBD Live. Two different investors could have very similar styles, but they could have very different portfolio outcomes. Because, yeah, there's been all these individual earnings and there's been different things with sectors and this and that. And so little decisions about what stocks are in or not. You could have had a very different week, a very good week, a very bad week. Probably most people didn't have a very good day today. Yeah, it seems like trying to thread the needle in this current market is the name of the game.

4:59Let's just take a look at the 10-year Treasury yield, just because we had some Fed news yesterday. This one ticking up today, almost four-tenths of a percent, getting close to this 50-day line. But any thoughts here on what's going on with yields and, you know, what are investors looking at when it comes to rate cuts? Yeah. I mean, the Fed said, well, maybe we won't. Powell said, well, maybe we won't cut rates in December. I think it's more not so much that he won't cut or that the Fed won't cut. It's just like they wanted to push back that it was a guarantee. But it also could be some of this might be a reflection of, you know, if you think the economy might do a little better, the China trade war, there's a safe haven flows may not be there.

5:44If you're not as worried, you know, that safe haven flow goes away. I mean, we're still in a long downtrend, certainly from since May and arguably since January. You know, we're in a downtrend of yields. I mean, there was that weird spike in April, but we were well off the highs, you know, or well off the highs that came in. So, you know, it's hard to say, you know, we've risen a few days where we've been awfully low. So in some ways, this is a positive sign, but it's not as like it's it could be a little positive sign for the economy that we're, you know, but not great for some of the growth stocks out there.

6:17We've talked about how these are related to small caps just in terms of borrowing. And we saw small caps today falling about eight-tenths of a percent below the 21-day line. So any thoughts here before we move on? Yeah, and there's some wild names that make up the very biggest names in there right now. But yeah, down a little bit. I mean, this is more volatile. It's below the 21-day line. Not terrible, but not great either. All right. Well, let's check in on a few ETFs, starting with ARK-K. That's the ARK Innovation ETF. A lot of growth speculative names in this one. This went down at 3.9 % today.

6:56Ed, again, undercutting this 21-day line here. So, yeah, give me your thoughts about ARK-K. And what is this saying about growth stocks today? I mean, again, it depends on what names there are, because you could look at other things, like the NASDAQ or FFTY. It's like, oh, they're right at highs. And so it's not like it really can depend on what you're in. And I don't mean that I think ARX and some stocks that have been doing well. I mean, obviously, this is just that lately it just hasn't had that huge surge. But, you know, OK, it's fallen through the 21 data. It's not bad, but it's also in a range.

7:27This one's still in sort of a range, whereas the broader market got out of it. But that's because NVIDIA and some other names really powered higher that this one doesn't necessarily have big concentrations in. But, you know, it's sort of neutral. I think you'd be more concerned if it undercut those lows and undercut the 50-day line. But honestly, it'd be one good day and all of a sudden people would say, hey, this is making a move, you know. So I think we're in that area. You don't want to overthink it too much. I mean, some of these things might be having bad days, but it's not like this is a bad-looking chart.

8:02All right, let's take a look at SMH. That's the VanEck Semiconductor ETF. So chips down 1.3 % today. But again, this is after a big run, Ed. I mean, we had this touch of the 50-day line back here in early September, but has been finding support at the short-term 21-day EMA. So what's going on with chips? Yeah, a little bit like the NASDAQ. I mean, a big run-up and just a blip. I mean, just really, I mean, yeah, if it keeps on going, going, going. But that looks great. And let's just take a look at software. That's IGV. This one reversing lower today, 1%. But again, undercutting this 21-day line, but still in a flat base here, technically with a$117.99 buy point.

8:52So thoughts here? Yeah, and this actually did reasonably well because some of the biggest names were down, like Microsoft and Oracle, you know, some of those names. So there was some outperformance here for a while. I think it just eventually everything got dragged down. But there was some encouraging news. But yeah, so some of those names, which aren't necessarily your classic software software names. So, you know, this is so I think that was I think software did a little better than this ETF would suggest. This episode is brought to you by Google Chrome. You think, you know, a browser, but Gemini and Chrome, that's new.

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10:08So what are your thoughts? Yeah, this one was a breakout fairly early. The volume wasn't great, but at least the volume was much better than the last few weeks. I mean, you know, so there's that. The chart looks really good. And since it gapped up on earnings, and then, you know, it held. I mean, it ran up, you know, held on that and held that and relatively tight base breaking out. You can sort of view this base as a handle to like a consolidation going back to, you know, late last year, that whole big thing, however you want to do it. But, you know, that often happens, big, messy bases and then either a handle forms near the top or a base forms just above the base.

10:48The only downside really was that late in the day, this faded off, but the market was fading off. So if you go into an intraday chart, you can see, you can just see how it obviously just came off at last 30 minutes. Not great there, but that just goes. The fact that this bucked at all without earnings was a positive sign. We'll see how Amazon earnings and the details and, you know, because I believe that there's a pretty good partnership with Amazon. So this stock can rise or fall to some extent with Amazon's earnings. And we'll look at that after the close, but not necessarily joined to the hip.

11:21But this one was nice. And the relative strength line, right around a new high, or at least a 52-week high kind of thing. Or maybe not a 52-week high, a 10-month high. So it's not going to be a blue dot because it isn't a 52-week high. But that really shows outperformance. All right. Let's take a look at Eli Lilly. That's ticker LLY. This one up 3.8 % today, Ed, on some drug news. So fill us in here and tell me what you're seeing set up in the chart. Yeah, I mean, it's just really strong. This was really strong earnings led by those two, you know, the diabetes and the obesity drug, Mujaro and Zep bound.

12:00Obviously, there's still a lot of demand. The revenue growth accelerated. Just it was really strong earnings would be up above and beyond above and beyond the expectations. I mean, there might have been some easy comparisons relatively for this particular quarter, but 54 % revenue growth is the strongest in quite a while. And that's after several quarters of really strong growth. It's not like, oh, wow, we just got these new drugs and boom. I mean, these drugs have been going out there for a while. You could sort of view, I mean, there's been a long slide here. So here's where it is. Like this is tough.

12:32The relative strength rating is terrible. The RS line's not that good. So let's make that perfectly clear. It has been in a downturn now. Could it be if there's a market rotation towards drugs or some such, This could be, you could just sort of view it from that point. You could view this little, the recent action here as a handle to either a base that goes back to say all the way there, or maybe a little shorter, either way, I think it would work. So today's action came up toward maybe, you know, those highs. And I think that would be something where you could use that as a buy point. Again, the RS line is going to jump today.

13:09RS rating is going to jump, but only to something like 45 or something. It's not going to be a good rating. So that's to keep in mind. But if you think about a transition, perhaps, like maybe this after a long time, people will get back into it because obviously these obesity drugs are not going away and they seem to just be the real leader. There's been a lot of concerns about pricing and other things. And so maybe with this report and with their bullish guidance and a lot of the policy moves, maybe this one can make a move. Right. So we're looking at this$8.64,$8.35 area maybe as a potential move there.

13:47And as you said, Ed, I think all eyes right now on the industry are on these oral weight loss pills that are potentially coming to market. We know Eli Lilly has really kind of, I guess you can say, eaten into Novo's market share here. So coming on strong. But let's take a look at one more. That's Interactive Brokers. That's IBKR. this one, another one today, Ed, down almost a percent. But, you know, right here at this 21-day moving average. So testing this buy point of 6 ,807. Yeah, I mean, it's not great, but it's like, you know, it's really falling just in line with the market. It's still in the buy zone.

14:30So technically, you could buy it here. I think if it got above today's high, you could use that sort of breaking the short-term, you know, above short-term highs. There's sort of a trend line that it was trying to break today. There's sort of maybe another emerging base, but that's obviously not imminent. But that would give an excuse. If it could punch above there, it would still be in the traditional buy zone. Revenue growth has been picking up. There was, you know, strong, strong earnings in the latest quarter. Relative strength line is pretty close to highs. So this one is just one that to watch.

15:02I mean, again, you know, don't necessarily want to pull a trigger on a day like today, but you're looking for things that are setting up more than anything else. No, and as you mentioned, this one already has earnings out of the way. We've seen so many stocks setting up that have earnings right around the corner. So potential issues sidestep there. You know, we talked about Amazon, that reporting after the bell. We can just check in quickly. this one up almost 10 % after hours here, Ed. So what are your thoughts with Amazon and do we have any updates on those earnings? Yeah, I mean, the earnings were strong.

15:38It looked like the holiday guidance wasn't that great, but Amazon was strong. The Amazon Web Services, which is so critical. I don't know if we have any guidance about CapEx because that was one thing that sunk meta. It's like, oh, you're spending that much money for that. But this one looks like it's going to be a breakout. Now, just getting above yesterday's high would be an early entry. So definitely one to watch. It hasn't been a real outperformer for quite a while. You look on a weekly, it hasn't really led for a long time on the relative strength side. You could argue that it really has sort of gone sideways for a few years now.

16:13But nice move here today. I don't think Apple is reported yet. I think that one's going to be a little later. But another name that people are interested in is Western Digital. We don't really have to look at it long. It already spiked on Seagate. It's spiking. It's jumping again today. So Western Digital WDC is really moving nicely again. So I think that's pretty extended, but strength there. You know, a couple other names is Cloudflare, ticker NET. BeatViews, stock isn't really moving, and it's teasing right around a buy point. so EW Edwards Life Sciences that one that one was moving up it's his run up from the bottom but it's sort of like right at a buy point and it's moving there and Coinbase Coin that was up nicely Atlassian you know that one's not doing doing great so it's just seeing it set up Atlassian that's a positive sign for which is team that's and it is sort of like a team player because it's this isn't doing particularly well but this is another thing that will help software ServiceNow has been a laggard it did well probably lifted software team is up and Twilio T-W-L-O and those are some names I'm sure there's a million more names out there but those are some of the names Apple is probably going to be coming in just a few minutes so we'll have to see how that one does but you know because obviously that's a huge report but They just keep coming, and it's going to be a lot next week as well.

17:49All right, Ed. Well, thank you so much for your insights today. And that wraps it up for us. 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 be sure to come back tomorrow. Justin will be doing his extended version of stock market today with Ed Carson. So you're getting more ed tomorrow, but they'll be going a little bit more detail over how the week shaped up and what to look for in the week ahead. So be sure to join that. And we'll see you right back here tomorrow after the close.

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