Your Thursday Market Blip 1/23/20

Your Thursday Market Blip 1/23/20

China continues to crack down on travel as the virus spreads. Chinese stocks were down on the news and caused US Markets to open in the red before rebounding. The Dow ended the day off only 26 points at 28,160 on higher trading volume. Both IBD and BTS indicators are positive.

Earnings reports are coming fast and furious. The results are mixed. Union Pacific Rail was up thanks to upbeat guidance now that a China trade deal is signed. Kinder Morgan reported a 26% jump in profits as natural gas volumes were up 14% and the company cited strong cash flow for funding future projects. Proctor & Gamble posted mixed results sending shares lower and airliners Southwest and American posted weak results but shares moved up on strong forward guidance.

An interesting trend is developing within the energy patch. WTI crude oil prices have been dropping of late and hit $55 per barrel today off over 2%. So what’s going on here? Oil has a monopoly on the transportation sector but with technology helping to squeeze more energy from every barrel of oil and the advent of the EV which uses electricity from a variety of energy sources to include renewables, nuclear, nat gas etc the need for oil has lessened while supplies are booming which means oil prices and the companies that produce oil could be in for a long spell where the supply demand equation is not in their favor. Utilities meanwhile are benefitting from the EV boom and increased use of electronics all while diversifying their energy sources to greener pastures.

Things in Seattle are crazy with guns blazing in the downtown area. We think the Mayor and City Council are going to propose a safe gun handout site for criminals to go along with the proposed safe injection site for drugs but hey…we taxpayers are not bitter or frustrated at all!