Stocks Tumble Amid AI Disruption Fears; C.H. Robinson, McDonald’s, TJX In Focus In Focus

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0:39Alexis Garcia:good afternoon everyone and welcome to stock market today for thursday february 12th it's alexis garcia here and a sell-off in stocks knocked down some of the major indexes on Thursday with the S &P 500 undercutting a key support line and the Dow retreating from the 50 ,000 level. And here with me to help break down everything you need to know about today's trading action is IBD News Editor Ed Carson. Ed, great to see you as always. A little bit of a A scary Friday, or a scary day ahead of Friday the 13th here at Verge Raiders. What's out there today?

1:26Ed Carson:Yeah, the slasher film came out early. And do we need to break down anything further? I feel like everything broke down enough today. But I want to take a look at CH, Robinson Worldwide, one of the biggest hit out today, as well as two staples that are doing pretty well, McDonald's and TJX.

1:42Alexis Garcia:All right. Well, we'll get to those stocks. But let's just check in on the major indexes. The S &P 500 falling 1.6 % today, the Dow down 1.3%, the NASDAQ down 2%, and small caps down 2.2%. So let me get my charts going here, Ed. But again, it seems like we're seeing some renewed fears here of this AI thesis here that's been powering the market. We see SPY here, ugly downside reversal day, breaking the 21 and 50 day lines.

2:19Ed Carson:Yeah, there's a few things going on. I mean, there's AI disruption fears, which have hit software for a while. The fear is that they'll get that some of these incumbents will be just overwritten pretty quickly. But it's spread to several other industries. Trucking was an industry this time, but we've seen plenty of industries. There's also just concerns. Memory prices are surging. That's good for the memory stocks. but it's bad news for all these companies that use memory like Cisco. And then the other companies that are spending lots of money, that's good for some A stocks, but we're still seeing that weakness in Amazon and Cisco and so on.

2:52Ed Carson:So there was just some weakness. There was a lot of weakness today. And it's been a frustrating market. You know, SPY going through the 50-day line, it's not decisively below the 50-day line, but it's not great. And it's something David Ryan was saying is that we've had this tendency for the last few months It's a few days up, a few days down. Makes it hard to know. Is this the beginning of a sell-off or is this almost the end of a sell-off? I don't know. And that's the same thing with the other side. Just when you see some strength, that's when the market seems to pause. It's just sector rotation and such.

3:27Ed Carson:All of these things just make it – the market is more volatile than even the S &P has been showing over these last few weeks. It just makes it a difficult environment to be trading in. And I think that, you know, most investors should be looking to see how can I step on, step on the tap on the brakes versus step on the gas. Right.

3:44Alexis Garcia:It's been a roller coaster and just so hard to identify any kind of trend. So what level are you looking at here then? Maybe the low here from the fifth, that's about 675, 79. You know, because again, one good day, this could be back up to record highs almost. So what levels are you watching for?

4:05Ed Carson:Yeah, I think that undercutting there, that would be a big deal. And there's a lot of other things. We'll look at some of the other indexes. The NASDAQ is almost there, almost at the January 5th level. And that January 5th level, February 5th level is even worse because that's already undercutting some other lows. So it gets below there. All of a sudden, the next target is below$22 ,000 in that longer term thing. And then the 200-day line, which would be creeping up. So, you know, that's the laggard there. The Dow has been a strong sector. It's only 30 stocks. It only came down to the 21-day line, so not that bad.

4:43Ed Carson:But again, one good day, it's at new highs. One bad day, and it's at the 50-day line. So that just back and forth. IWM, yeah, a day ago, it was flirting. It was pretty close to record highs. And here it's not too long. basically gave up the buffer zone between it and the 50-day line. That's sort of gone. So if that went below the 50-day line, I think that would be quite concerning as well.

5:13Alexis Garcia:Yeah, let's take a look at RRSP. That's the S &P 500 equal-weighted ETF. I'm just getting a gauge of market breadth. Again, this one reversing lower today, down 1.3 % here, Ed.

5:26Ed Carson:Yeah, so obviously this had a bad day like everything else. but it hit a new high intraday. I mean, so this is why it's been so maddening. I mean, the NASDAQ looks terrible. The S &P is weakening again. But RSV really is at record highs. I mean, so, you know, it just makes it that much harder to know, you know, where the direction is. And when you don't know where anything is going, it's hard to have an edge. And so you should tread lightly, especially with new purchases. It's one thing if you own stuff for quite a while and you have big gains. It's like, OK, I'm going to let it ride, blah, blah, blah.

5:58Ed Carson:That's different. But with new purchases, it's just really hard. You know, some will work. Some have worked. But, you know, it's difficult to do it. Either don't do it or just be really quick to cut the losses on the ones that don't work. And probably not many work today. That's for sure.

6:15Alexis Garcia:Yeah, and we're also in the thick of earnings season, which is just adding a little extra spice there, Ed. I know we've got NVIDIA still kind of out in the ether there. We're looking at the 10-year treasury yield. This is down 1.6 % today. It has been kind of hanging out around this 4.2 level, but falling today.

6:34Ed Carson:Yeah. A few weeks ago, we were at four or five months highs. And this was a three-month low. I mean, you know, just barely. But it's all the way back to where we were, you know, quite a while ago. So it's a real shift. There's been some weaker economic data. You could look at things, you know, depending on things. And there's a flight to safe haven. And for whatever reason, there's a safe haven flow back into treasuries and away from, for whatever reason, silver, say. I mean, silver SLV has been this huge, you know, there was that huge rush into it. And it was a bad day. Again, we've had a lot of bad days after a massive run.

7:11Ed Carson:And so, you know, for whatever thing now, there seems to be a safe haven back into treasuries. And, yeah, so that by itself is good for stocks, but it's a reflection of some of the risk off that we've been having in the last few weeks. All right.

7:26Alexis Garcia:Well, let's take a look at some ETS, starting with ITA. That's the U.S. Aerospace and Defense ETF. This one, about seven-tenths of a percent today, Ed. You know, it fell off those intraday highs, but notching again here just above a buy zone.

7:43Ed Carson:Yeah, this was acting pretty well. I mean, yeah, it came off highs, but anything that shows a rise on a day like today is pretty good. There was a number of positive earnings reports in the sector. Some other big names were sort of moving up, at least intraday. You know, I think this was added to Swing Trader. I mean, it fell back from there. But I think if it got above today's highs, that could be one way to play it because a lot of things are extended. And so that would be a way to play the group, which seems to be doing pretty well. Again, not sure if that will work, you know, again, with the market, how it is.

8:18Ed Carson:But an ETF might be a good way to go, you know, with this sector right now. All right.

8:25Alexis Garcia:So potentially actionable at the 237.15 level here. Let's take a look at chips, ticker SMH, down over 2 % today. But, you know, this has been an area of strength here, Ed. So thoughts on this chart?

8:42Ed Carson:Yeah, so definitely some weakness today. There's, you know, it's actually sort of intraday was looking better, but there were some definitely some losers. But this is one of the better ways to play it because some of the hottest things, I mean, there's Micron and other things, but it's a way to play some of the hot names in memory and chip equipment that is extended for the most part. And then, you know, that is one of the better ones to play. But yeah, it doesn't seem to be particularly in position right now. And this is one of the stronger areas of the market, and it's down 2%. So there you go.

9:13Alexis Garcia:Yeah, and let's just look at IGV. That's the software ETF. And again, just continuing to get pummeled here, down 2.7%. But, I mean, we've seen just this major downtrend here with software stocks.

9:29Ed Carson:And I think this is important. It's not so much, okay, the last couple days. Let's see that bounce. We had that bounce for a few days. Bounces can happen. Some of the best days. Now, I mean, we're talking about markets. The best days in the market tend to become in bear markets, you know, and this is a sector sell off. But you can imagine software having one of its best days ever in the coming days. But one day won't mean much. And that goes for individual names. Individual names might have a good earnings report. And that's so far lately, rarely is at work. That still seems to be triggering sell offs.

10:00Ed Carson:But you can see some stocks having good days on earnings in the midst of a market or sector weakness, but then it just continues on. Then it's like that's one day and then it falls off. So you're going to need to see a lot more. And we've been saying that for a while. This needs a lot of repair work. I don't know when that'll come. It could be a substantial time before people feel comfortable with it. And they may not. I mean, there may be a fundamental revaluation of software in a lot of other sectors. I don't know. The market is going through that right now, and maybe this is like a deep-seek moment, and everybody realizes AI is not going to disrupt this stuff.

10:35Ed Carson:But right now, that's not where we're at.

10:37Alexis Garcia:And let's take a look at XLF. That's the financial select spider ETF. This went down over 2 % today, again, breaking the low of this flat base here, Ed, and well below the 200-day line.

10:52Ed Carson:This is involving some of the disruption fears. I mean, there may be some yield compression stuff, but there's some real issues here. And we'll get to it a little bit later when we talk about C.H. Robinson. But just a lot of individual names that have really come in hard, including some giants have had some tough times, too. So, you know, a sector that was doing all right, you know, is really starting to look weak now.

11:16Alexis Garcia:Yeah, let's wrap up with IYT. That's the iShares Transport ETF. This one falling 2.6 percent today. But, you know, the area of transport has been holding up relatively well here. So, again, hit a high intraday high yesterday, but again, falling back and flirting with the 21 day.

11:36Ed Carson:Yeah, there's some disruption stuff. And we'll get to that soon. There's also the airlines fell again. I don't know exactly what's going on with the airlines. And there was good news for transports that FedEx had, you know, basically guided higher for the current quarter. That's one of the biggest names. It's like, oh, here we go. So, but even so, this group just had a really tough day. And again, yeah, so that's an issue. Certainly why we don't want to buy extended is certainly in a sideways market because you don't know when things are going to roll over. But yeah, this has been one of the strongest sectors out there and really, really got hit today.

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12:47Alexis Garcia:at, again, falling below these 21 and 50-day moving averages.

12:53Ed Carson:Yeah, so we'll see how it is. There is some kind of, some company, I think it used to do karaoke machines, and I guess they'd sold off that unit, but they came out with some kind of coding that suggested they could, you know, handle a lot of the things that these logistics firms do in the trucking space. I mean, I don't know how you can get, the thing is people could probably do things that do things roughly well. Can you really, how much can you get in there? in those fields, but this got whacked. I see, you know, we also had like J.B. Hunt, you know, is another name just in there. Just so it's not just C.H.R.

13:27Ed Carson:Robinson. That one had a big self. So there's a lot of losses here. Just the fear that AI could quickly go in a lot of data-heavy, labor-heavy tasks that can be automated with, you know, with a lot less stuff. And these companies are probably going to be using AI anyway. So there might be disruption internally for those workers. But then the threat is, is that, no, no, maybe the companies themselves will be disrupted very quickly. Just to show other things that have been out there, Schwab got hit pretty hard. A lot of brokerages, wealth management firms, because there's some company came out with some tool, who knows if anybody will ever use it, but wham, that just came down really hard.

14:08Ed Carson:There's a lot of other names, and this other name is not as hard hit, but it's a huge named JP Morgan is just another thing just to show how that at first there was like, oh, not too bad, but they have big wealth management arms. And, you know, you can see it's had a pretty significant drop the last three or four days. CBRE, you know, is another is real estate investment, real estate, commercial real estate brokers. Wham. OK. I mean, just out of nowhere. They also had earnings and they weren't perfect, but that's really about the AI disruption. And looking further back, There's something like Expedia, which actually had earnings after the close.

14:45Ed Carson:But the travel firms, you know, you see there's been a couple of sell-offs. One was like a couple of weeks ago, which is like, oh, they could get disrupted. So all of a sudden, it just makes ads onto it. I know there was a lot, but it just keeps on coming. It just keeps on coming. Maybe that will turn, but it's making it really tricky. These areas that were doing quite well just have the rug almost just literally pulled under you. And, you know, just like it's just out of nowhere, really, really tough. And, you know, just investors have to be aware of that.

15:21Alexis Garcia:Yeah, let's just take a look at MCD. That's McDonald's. One doing well here today, up 2.7 percent. You know, it looks like it tried to break above this flat base 326-32 pivot point, kind of moved sideways. ways, but a powerful move today into the buy zone.

15:39Ed Carson:Yeah. So nice, nice move here. The revenue and earnings growth, about 10%. And that's better than we've had for a while. I mean, you know, again, other companies go, what, 10 % growth? That's nothing. But, you know, for McDonald's, that's not easy. And they seem to be pretty bullish about the future. And we've just seen a rush into staples, you know, consumer foods, some of these, you know, some of the cheaper fast food, discounters, which we'll get into as well. That's just where the market's going right now. So this was nice action. You can see how the relative strength line has really ramped up.

16:11Ed Carson:It was nice to see this pause because it had run up, but then it paused right before earnings. Unfortunately, you know, so it broke out on earnings. So it did provide an opportunity. Again, if we do get risk on, will these names really lead? They could easily fall back. But yeah, Nice action on some solid numbers today for McDonald's.