Markets Up Despite Stimulus Uncertainty: Taiwan Semi, Pulte and Five Below In Focus

TL;DR

The market had another positive session, with small caps outperforming. Three stocks to watch are Taiwan Semiconductor, Pulte Group, and Five Below.

Transcript

you're on mute ken mute try that again good afternoon everyone from the ibd newsroom welcome to stock market today my name is ken shreeve joined today by justin nielsen on today's show we're going to take a look at the market of course another up session for the market a nice day of outperformance for small caps and a pretty decent close but before... Read More

Key Insights

• 👲 Small caps, represented by the Russell 2000, showed strength and recovery.
• 🥳 The Nasdaq composite has yet to receive an official follow-through day, indicating potential jostling in the market.
• 🛀 Taiwan Semiconductor (TSM) showed strength after a consolidation period and has major customers like Apple and Huawei.
• 🍳 Housing stocks, including Pulte Group (PHM), are breaking out, suggesting optimism for the economy in 2021.
• 🥹 Five Below (FIVE) held gains and cleared resistance, showing strength in the retail sector.
• 👋 Retail stocks are still looking good in the market.
• 🥳 The semiconductor sector, represented by the VanEck Semiconductor ETF (SMH), had a positive day.

Questions & Answers

Q: Which sectors did the analysis cover for the stocks discussed?

The analysis covered the chip sector with Taiwan Semiconductor (TSM), housing stocks with Pulte Group (PHM), and retail with Five Below (FIVE).

Q: What are the key factors contributing to the market's positive session?

Despite some back and forth on stimulus news, the market showed resilience and ended the session positively. Small caps, such as the Russell 2000, showed strength as well.

Q: What is the significance of the Nasdaq composite not yet getting an official follow-through day?

While the Dow Jones Industrial Average confirmed an uptrend, the Nasdaq composite has yet to get an official follow-through day, indicating potential jostling in the market.

Q: How did Taiwan Semiconductor (TSM) perform after a failed breakout?

After a failed breakout, TSM flattened out and allowed the moving averages to catch up. It has since shown strength and recovered above its previous high.

Q: Why are housing stocks, like Pulte Group (PHM), breaking out despite concerns about the economy?

The strength in housing stocks suggests optimism for the economy in 2021, despite worries about stimulus and economic uncertainties.

Q: What were the earnings announcements and sales growth for Taiwan Semiconductor (TSM)?

TSM announced strong September sales growth of 24.9% and is set to report earnings next week. It has major customers like Apple, Huawei, AMD, and Nvidia.

Q: How did Five Below (FIVE) perform during the September correction?

Five Below showed resilience during the September correction, holding the majority of its gains and quickly recovering. It has a solid chart and strong group support.

Q: What are some key considerations for retail stocks like Five Below (FIVE)?

While the fundamentals may be sketchy for some retail stocks due to the COVID-19 shutdown, investors are still interested in stocks like Five Below, which has strong chart patterns.

Summary & Key Takeaways

• The market saw another up session, with the Nasdaq up 0.5%, Russell 2000 up 1.1%, S&P 500 up 0.8%, and Dow up 0.4%.

• Three stocks to watch are Taiwan Semiconductor (TSM), which showed strength after a consolidation; Pulte Group (PHM), which broke out of a flat base; and Five Below (FIVE), which held gains and cleared resistance.

• Retail stocks, including Five Below, continue to show strength in the market.