Your Thursday Market Blip 5/14/20

Your Thursday Market Blip 5/14/20

Job losses continue to mount along with economic uncertainty as parts of the economy slowly return to work. The Dow opened the day lower but rallied into the close and finished up 377 points at 23,625. Trading volume was higher. It seems the Dow found support at the 22,900 level which is also the 50 day moving average.
The covid pandemic is accelerating the digital trend both nationally and globally. Visa reported that in Latin America 13 million Visa cardholders made an e-commerce transaction for the first time in April. In the US the company saw and 18% increase in digital spending last month even as in-person transactions fell 45%. While in-person transactions were lower due to the shutdown contactless tap-to-pay transactions were up 150%. The digital shift was seen in Cisco’s earnings as the company noted strength in sales to data centers which are seeing record demand for cloud and digital services in general.
As major oil producers both globally and in the US continue to cut production and demand slowly recovers the price of oil creeps higher. WTI crude was priced at $26.22 today up 3.6%. Auto plants for F150s, Chevys, Jeeps and Tesla’s are set to reopen this coming Monday. The restarting process takes time to get the robots and stamping machines checked, powered up and running again.
UBS released a report on the muni bond market in the age of covid. After an initial hit, the muni bond market recovered and is holding up well. The report cited water & sewer as well as electricity bonds as low risk while healthcare and airport bonds having moderate to higher risk. State finances also played into the equation with state pension liabilities a key factor. The report listed Washington as having the lowest pension liability while Illinois, New Jersey and Connecticut with the highest pension liabilities. Illinois by the way just issued $750 million in bonds and the offering was 4X oversubscribed. The bonds are one notch above junk and pay a 5.85% yield and mature in 2045.

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