AI, Chip Stocks Lead Nasdaq Rebound: AMD, Methanex, Hilton In Focus — Stock Market Today

[00:00:00] Speaker ?: Субтитры сделал DimaTorzok [00:00:30] Alyssa Coram: Good afternoon, everyone, and welcome to Stock Market Today for Tuesday, November 3rd. It's Alyssa Coram here and a rebound with midterms in focus. Joining me now to discuss all the action from today's session is my colleague, Ken Shreve, who joins me now. Ken, what do you have for us today? [00:00:50] Ken Shreve: A little bit of a rally for semiconductor stocks, Sally, today that lifted the NASDAQ. So why don't we take a look at AMD, which rallied 3.5% or so, but closed near its low. A decent rally, let's call it that. We'll take a look at AMD. And then also want to take a look at Methanex, world's largest producer of methanol. And then after that, let's take a look at Hilton. These hotel operators have been moving as a group, showing a lot of relative strength. They sure have. Yeah, Hilton, HLT. [00:01:26] Alyssa Coram: Okay, well, we'll check out those stocks. But first, a closer look at the major indexes. We'll give the context behind the percentage moves today. Here's a look at the NASDAQ composite up 0.8% after a touch near the 200-day line in the previous session. But an inside day pretty considerably here, Ken. And meanwhile, the S&P 500 on the day was up a little less than 4 tenths of a percent or so. This also, eyeballing it, looks like an inside day here. The Dow was down about 4 tenths of a percent today. So back near its lows from two days ago. And the Russell 2000 was up about a quarter of a percent. So small caps here. And closing off high. Still ping-ponging between the 50-day and the 200-day line, which are narrowing. So we did see an advance for the tech-heavy index. And maybe some desires coming in around the, it seems like, the 200-day line. But is the coast clear, Ken? [00:02:35] Ken Shreve: I mean, it was a rally. It was a rally for the NASDAQ. I don't know that we could say much more than that. I mean, when you looked inside the NASDAQ 100, you did see, you know, at the open, there was a lot of explosive gainers. And it was, yeah, I mean, a lot of 3%, 4%, 5% movers at the open. It was just like old times when you saw all the AI stocks and all the chip stocks that were, you know, going gangbusters and really just showing big, big percentage gains. But all these big gains came when these stocks had just gone through some serious pullbacks. So it was just like a lot of, it really just looked like a lot of dead cat bounces today. So, yeah, I mean, the Qs, you know, you can see the Qs tried to rally after a pretty sharp sell-off down to the 200-day moving average. You know, the Qs ended near their session lows with a, you know, with a decent percentage gain today. But even a lot of these strong percentage gainers in the NASDAQ 100 today, a lot of them faded off highs by the close. So, you know, it was, you know, basically a first day of a rally attempt for the NASDAQ composite, for the NASDAQ 100 as well. But you can see, you know, quite a bit of technical damage has been caused here. And NASDAQ composite's holding the 200-day, you know, moving average for now. But, you know, it may take some time here to sort this selling out here. Now, you know, we just started the month of November and, you know, some thought that we, you know, we may be getting ready to start a year-end rally here. The indexes still look a little challenged here, technically. I'm not going to put the possibility of a year-end rally. It's still possible, but we still look challenged here. But, you know, we had a rally today, and we'll see where it takes us. But, you know, it's, you know, some data out there that might take a little bit of time to resolve here. [00:04:59] Alyssa Coram: Exactly. It very well could. And we do have the midterm elections. Ed Carson, our news editor, he's going to have a live blog going, updating investors with his futures column overnight with any activity that we're seeing on the index level, as well as sectors, individual stocks. So all of this through the investor lens. What's the market's reaction to the midterm-related headlines? And that's what we're going to be watching. So we're prepared here at IBD for any scenario, including an explosive move to the upside. And then I think if we do get a best-case scenario in terms of the market reaction, then we would be using our follow-through day count, right? So you mentioned today, day one of the rally attempt. Day four or later, we could be looking at a quote-unquote confirmation of the change in trend. Right now, we do have a downtrend, you know, starting in late September, early October time frame there, Ken. And so we really need to see a little bit more proof building on today's update. And then, of course, you know, if we do get that downside scenario and the NASDAQ slicing below its 200-day line, then we sort of have our game plan for that trading mindset and what we'll be looking for after a break of that long-term support level. So those two extreme scenarios and anything in between, we're ready for it, Ken. [00:06:27] Ken Shreve: Yeah, I think that's accurate. And, you know, the prediction markets right now, they're feeling pretty comfortable that the Democrats have a pretty good chance of sewing up the House of Representatives. The Democrats most likely are going to regain control of the House. The Senate is a little more up in the air. I think they're, I think at least on Cal Street this morning, it was about a 75, maybe 70 to 75% chance that they're going to take control of the Senate. It was better than 90% that they would take the House, but less, maybe 70% that they would take the Senate. So the Senate may be a little more up in the air. But, yeah, Democrats definitely seem to have some momentum going into these midterms. But we'll see. It could be a surprise by tomorrow morning. But we'll see the market's reaction either way. [00:07:25] Alyssa Coram: Exactly. I mean, we've seen big market moves when expectations become reality. We've also seen big market moves when you see something unexpected. So we'll just have to see what is in store for us and remain flexible. [00:07:44] Ken Shreve: And we know the polls sometimes may or are sometimes not as accurate as they, you know, lead on to believe. So we just have to wait and see. And I don't know that this is going to be resolved by, you know, the wee hours this morning. We may have to wait until very, very, very late tonight. So we'll see. I will say one thing about breadth today, Allie, on the NASDAQ. It was just, you know, it was barely, barely positive on the NASDAQ today and barely negative on the New York Stock Exchange. So not earth-shattering news there, but just, you know, advancers had a little bit of an edge over decliners on the NASDAQ and just slightly negative on the New York Stock Exchange today. So, yeah, just first day of a rally attempt for the NASDAQ here. And, you know, for the S&P 500, again, we haven't corrected nearly as much off highs as we have on the NASDAQ here. But kind of similar look here, S&P 500 trying to recover after a break below the 50-day moving average here. But, you know, inside day for the S&P 500 as well. You know, percentage gain, not as big for the S&P 500 today, but, you know, just sitting right there. So early stages of a rally attempt for the S&P 500 as well. [00:09:10] Alyssa Coram: Okay. And let's now take a look. I also want to mention IABD Live tomorrow morning, Jeffrey Hirsch of the Stock Traders Almanac. He's going to be joining us. So he has done a lot of work about presidential election cycles with market cycles. So looking at balance of power, what typically happens following midterm elections. So it'll be really interesting to get his perspective on the market, looking at real-time market action, but also layering in those historical norms. So just a fun little tidbit there coming on IABD Live tomorrow morning. Meanwhile, though, let's just give a quick look here. Blue chips and small caps like we typically do, Ken. Here's a look at the Dow. [00:09:59] Ken Shreve: Yeah, well, initially it was Apple that was weighing on the blue chip index. Apple was not the worst percentage decliner. Apple's earnings report was in focus. It did not have a great day, obviously, gapped below its 50-day moving average. It closed up near its session high, but still ended lower today. Apple's margin guidance for its holiday quarter was not great. They're still talking about, you know, elevated memory prices. But we know the memory stocks have been talking about strong pricing, you know, in coming quarters. So Apple is still being negatively impacted by that. So their margins are going to be under pressure. Sherwin-Williams and Merck actually fell more than Apple in the Dow today. But we did get some nice outperformance in the Dow today by Microsoft. Some tech names. Microsoft really firming up at its 50-day moving average. Take a look at Microsoft real quick in the Dow because that is really showing good technical action. And MSFT, yep, just, you know, reported earnings recently and getting good support. Looks actionable here, you know, getting support at the 50-day moving average. And NVIDIA lagging Microsoft quite a bit, but still sticky at that 200-day moving average. So Microsoft, NVIDIA, and Amazon, the three best performers in the blue chip index today. So there you have some quick highlights in the Dow. [00:11:33] Alyssa Coram: Yeah. Thank you for that, Ken. And it'll be interesting to see if some of these actionable trades, like you say, with Microsoft, if they end up paying off. We do, again, just have to layer in this potential risk event tonight with the midterms. But either way, traders should have a stop with any trade. And hopefully that'll help keep their portfolio intact if we do experience any volatility. And I think that if we do get some strength, either tomorrow or as the week progresses, there could still be an opportunity for something like this, Ken, since it is so close to the 50-day, maybe even traders looking at the downside reversal from Monday getting above that level or even from the highs of the prior week. So there are still some levels, you know, for the more cautious investors out there who are, because of the NASDAQ with its weak positioning in cash, waiting for a better pitch to take a swing. [00:12:41] Ken Shreve: Absolutely. [00:12:42] Alyssa Coram: Okay. Next on our list, you mentioned chip stocks. So here's a look at SMH up 2%, also around its 200-day moving average. [00:12:55] Ken Shreve: Yeah. Not, you know, really not much of a rally for SMH. I mean, you did get a lot of chip stocks outperforming today. But just, I mean, you can see, I mean, SMH came down to its 200-day moving average. It tried to recover the 200-day line today, but you can see the percentage gain. You know, it was okay. And tried to recover the 200-day line, but it's just getting some early resistance here. So kind of a feeble recovery for SMH as a whole here. So a recovery for SMH, but just, you know, just so-so, really. And the volume was lower than the sharp drop from the prior, you know, from the prior day. So kind of a low conviction rally here. So SMH tried to recover, but not a real impressive recovery today. So we'll see where it goes. But as I think David Ryan pointed out today, when something comes down, when something comes down hard like this, and we've seen a lot of stocks come down hard, whether it's a stock or ETF, you'd like to see the recovery happen just as powerfully. And if it doesn't happen, you know, powerfully and it happens kind of meagerly and without conviction, sometimes it can, you know, forewarn of additional weakness. So we just want to keep an eye on that. And we'll see. We'll see if SMH can recover from here. But, you know, this is a similar situation that most chip stocks find themselves in, just a lot of heavy volume selling on the way down. If this rally, you know, starts to happen in light volume without a lot of conviction, you just need to be wary of the potential for more downside here. [00:14:48] Alyssa Coram: And let's also just take a quick look at the 10-year Treasury yield. It did tick back up again today. And, Ken, we know that the home construction area, very tied to what we're seeing happen in interest rates, a great example would be this ITB ETF, a great performer over the last couple of days, but today off some 3.6%. So kind of moving in lock step at this point with rates. Your thoughts? [00:15:17] Ken Shreve: Yeah, well, those yields had come under pressure for three days in a row. And they probably, you know, yields probably got a little oversold here. And they bounced today. And you mentioned that ITB came right up to its 200-day moving average. And, again, that 200-day line can be a resistance level. And that's what resistance looks like for ITB. It tried to recover that 200-day line and got turned away. So we'll see if the homebuilders can continue to rally here. But that 200-day line could be a wall for now. So we'll see. But, you know, a little bit of strength in that 10-year yield today. But, you know, it had been weak and just maybe a little oversold bounce today. [00:16:06] Alyssa Coram: And Adele, let's take a look at some individual stocks of interest, AMD, in the chip sector. What are you seeing here, Ken? It looks like earnings. Nice reaction. The early take in the after-hours tape up over 7%. [00:16:26] Ken Shreve: Well, I just wanted to, since chip stocks were on the move today, I just wanted to take a look at AMD during the regular session because it was kind of typical of your chip stocks today. It was a 3.5% gain, a little over 3.5% gain during the regular session. But, you know, again, it kind of faded and closed near its low. Still a decent gain, like I said, 3.6%. And we can go over its earnings when we're finished here. But it looks like AMD had pretty decent numbers. I know their data center growth in Q2 more than doubled. So I expect that data center growth was strong again in Q3. But, you know, again, stock trading up around 5.19 and after hours, it's going to lift it back above the 500 level, but, you know, still is going to be on a downtrend here and still below its moving averages. So it still has some technical repair work to do, but nice to see it moving higher on what looks like a strong Q3 report. But, yeah, I mean, again, chip stocks outperformed today, but, boy, they've just been beaten down so hard. Even big percentage gains like this, not going to be enough to repair the technical damage, but good to see it trading higher on what looks like a good number. [00:17:55] Alyssa Coram: And, like you said, we'll dig into that report a little bit here soon. And then let's go to MEOH, Methanex, in the Specialty Chemicals Group, which broke out on earnings late last week. And, Ken, it does look like the bottom line growth here, pretty incredible uptick. [00:18:16] Ken Shreve: Yeah, like you said, earnings, great response to earnings and just sitting right at the top of a base here. So I think this is an interesting name. As the company name might indicate, this is the world's largest producer of methanol, which is an alcohol that's made primarily from natural gas used in adhesives and makes plywood and plastics and really all sorts of things. But, you know, Methanex is, like I said, just at the top of a base here, kind of floating right near the top of a buy zone here. So it's just kind of, you know, it could just sit around at the top of the buy zone here. It could kind of float back, you know, back into buy range. Like I said, it's still in buy range here. So I think it's actionable, like on the daily chart, that relative strength line just pointing up near highs. But I think the really positive response to earnings and the fact that the stock is kind of holding and sitting right, you know, at the top of the range here, holding gains. I think the stock looks good here. So you can just either buy it here or maybe just maybe it pulls back a little closer to the pivot to the 10-day line. But I think post-earnings, it's trading quite well and showing a lot of strength and support. You have earnings out of the way. Nice big percentage of earnings, like you said, earnings percent change in that most recent quarter. So good, solid company here and good technical setup to boot. [00:20:00] Alyssa Coram: Okay. And then Hilton, add this to the list of travel-related names. We've seen perk up recently, earnings out of the way. We saw growth pick up in the most recent quarter. Not a methane X level growth here, Ken, but it did improve. So should traders be thinking about checking into some travel stocks? [00:20:26] Ken Shreve: This may not be a bad one to check into. I think we actually had Marriott either today or yesterday as our stock of the day. Kind of two similar-looking setups here. But, you know, I think Hilton looks great here, especially after that earnings pullback to the, I think that was to pullback to the 21-day moving average. And then it bounced after earnings, so good support at the 21-day line, and that pushed it right back in to reclaim that buy point. And unlike methane X, this one's kind of more in, you know, right, not at the top of the buy zone, but just right at the buy point here, just a little bit above the buy point here. So another stock that's actionable in a buy zone. And again, there's really broad-based leadership in this leisure lodging group. There's not only Marriott, but there's just a lot of different hotel operators that are showing relative strength and are sitting near highs. But, you know, two institutional quality names, Hilton and Marriott, you know, they're both outstanding stocks. You see Marriott is up near highs as well. But, you know, Hilton, I think, looks great here, relative strength lines shooting into highs. And, you know, just another, as much as we're talking about this market alley that has got some risk out there, and you're looking at the indexes, yes, the indexes technically are quite challenged here. But when you're looking at the market of stocks, you know, whether we're on IBD Live or we're going over stocks on stock market today, you know, we're finding a fair amount of stocks that are looking pretty good out there. And, you know, we're looking at RSP holding above its 50-day moving average, sitting up near highs, so the breadth picture still looks pretty good. So it's kind of a tricky market. If you're focusing on the indexes, you may be, you know, you may be favoring cash, which is fine. But if you're looking at a market of stocks, you're seeing, you know, you're seeing, you know, some buy opportunities out there. So if you're going to be invested, you know, you want to, you just want to, you want to, you know, be careful and keep your stop losses tight, but be open to some opportunities out there. I mean, the leaderboard model portfolio, we're still, you know, we're still close to 70%. We're still close to 70% invested, but again, we're not in technology stocks. We're in a lot of retail and consumer-facing stocks, but, you know, still keeping an eye on sell signals like we always do, but still seeing some opportunities out there. [00:23:18] Alyssa Coram: Yeah, just that risk management piece, like you said, just to make sure that's in check. Let's check on some earnings movers after the close. [00:23:27] Ken Shreve: Well, it was up 107, data center was up 107% in, in, in Q2. So if it's around, if it's around that, that number in, in Q3, I know the market is going to, is going to, is going to like, is going to like, is going to like that a lot. And I know the Q3 revenue was expected to be up 42% year over year. And that was going to be a little bit of a slowdown from a 50% revenue growth in, in Q2, but we'll see. I mean, the stock trading at 520, that appears to be a pretty favorable response so, so far. [00:24:21] Alyssa Coram: So yeah, we'll take it. And then a few more that we want to quickly just look at the reactions, Arista Networks, which came all the way down to its 200 day line in the computer networking group, shares up 9%, Ken. So good to see this as well. [00:24:40] Ken Shreve: Yeah. You know, formerly just a plain old fashioned vanilla networking stock, but now this is AI networking. So big, big time AI stock here, so up 9%. Yeah, big time major growth. It had been in growth mode before this whole AI phenomena, but this is even more in growth mode now. So not surprising to see this one up 9%. Long time, long time performer, great fundamentals. You know, technically, yeah, down to its 200 day moving average. So it should, looks like it's going to, it's going to gap up, but you know, again, early stages of base building here. I don't think it's going to be actionable tomorrow, but we'll see. A gap up will, will help the base building process, but it's going to need a little more work. [00:25:35] Alyssa Coram: And then let's go to a lab. This is in the fabulous semiconductor group, not seeing a whole lot of movement, shares up about a half a percent or so right now. Broke below the 200 day line to kick off the week this week and still below that level. SMCI, another one out there. Any computer hardware group. Also just pierced its 200 day line recently. This is another one that's up about seven, eight percent. [00:26:05] Ken Shreve: This is a company that competes with Dell, very big in AI servers. So not a big, not a big move. So this one is at 3370. Is this one even going to get to its 200 day moving average? That's, that's, that's the, that's the question here. So. [00:26:26] Alyssa Coram: 200 day is at 3267. So yeah, it would be just above it. [00:26:30] Ken Shreve: It'll be a little gap above. Right now it would gap above its 200 day moving average. But you can see, you know, these even good earnings reports and strong percentage gains, you know, I mean, a gap above the 200 day moving average will improve the stock's technical picture. But it's still going to have some moving averages to contend with still a lot of overhead supply for SMC to deal with as well. [00:26:55] Alyssa Coram: Yeah. In a weak position heading into this report. Let's also check out Amgen. It's like after breaking out along with a lot of other medical sector names in recent days and weeks, hanging out in a buy zone shares off a little bit down 1.8%. So it seems like the reaction well within the personality of this stock with an average true range of 2.6%. So not too concerning at the moment. [00:27:26] Ken Shreve: No, it could, it could end up being a great pullback buy here, depending on what the pullback looks like tomorrow. So trading about 10, 10, 11 points lower here. Look at the 10 day moving average. Look at the 21 day line here. Just watch the nature of the pullback and just really watch where it opens tomorrow because sometimes the after hours activity does not really, sometimes doesn't translate to the, to the open. But if it's a, if it's a pullback, sometimes buyers will come in and lift the stock off lows. So maybe it firms up at some short term moving averages tomorrow, but high quality name and, and, and healthcare. And, uh, we'll see what the pullback, uh, if it pulls back, we'll see what the pullback looks like tomorrow. [00:28:09] Alyssa Coram: Okay. And then, uh, toast. Another one, uh, recently presented an aggressive entry. Ken with a bottoming base, but it looks like the early reaction here shares down almost 6%. [00:28:23] Ken Shreve: Yeah, this was, this definitely would have been, uh, an aggressive early entry, uh, ahead of, of earnings, uh, because it was kind of breaking out from deep inside this, uh, consolidation. So, um, yeah, we'll see. It looks like the stock's under a little bit of, uh, pressure. This is a stock that provides, uh, equipment to the restaurant, uh, restaurant industry, uh, and that I'm familiar with. But you can see, it's been, uh, kind of, kind of, uh, uh, uh, uh, laggard. If you look at the weekly chart here, it's just been kind of stuck in this long kind of sideways, uh, consolidation here. So, uh, not the best, uh, technical setup headed into earnings. Uh, so we'll see where it opens, uh, tomorrow under some pressure in, in the pre-market. There was one other interesting stock in the, I think this is in the insurance, uh, uh, yeah, Jackson, uh, Jackson Financial. This is a stock that broke out ahead of earnings. It had the, a relative strength line with a blue dot, uh, wanted just to see how this one was doing. [00:29:21] Alyssa Coram: I'm not sure if it's even trading or a little less than 2% after that blue dot breakout. [00:29:28] Ken Shreve: Yeah. In a, in a strong, uh, in a strong industry group, the insurers have been doing, uh, uh, you know, uh, pretty, pretty well. How did Ethos end up doing? [00:29:37] Alyssa Coram: Okay. That kind of had a crazy finish. [00:29:40] Ken Shreve: Ethos, Ethos was, had a crazy open and a crazy closed, quite, quite volatile. Uh, Ethos, uh, had great, uh, great revenue growth, a big revenue beef, uh, a big, uh, revenue beat as well. But, uh, yeah, that was a disappointing close for Ethos. We're, uh, still slightly profitable on that, on leaderboard, but we're, we're not happy with how Ethos closed today. But Jackson Financial, good, uh, good breakout ahead of earnings. And this one looks like it's a little bit, uh, a little bit higher. So I wanted to keep an eye on tomorrow. [00:30:09] Alyssa Coram: All right. Thank you so much, Ken, for breaking down all of that for us and be sure to check out the election-related live blog tonight from our IBD news editor, Ed Carson. He also has an AMA on Reddit happening tomorrow. So that'll be fun with Ed and then we'll see you in the morning on IBD live. Thanks, Ken, investors.com/IBD live for all the details we'll see you there. And then we'll also see you right back here tomorrow after the close.