Your Tuesday Market Blip 4/14/20

Your Tuesday Market Blip 4/14/20

Stocks rallied with the Dow bouncing back from yesterdays selloff while the NASDAQ continued to move higher on strength in tech stocks. At the close the Dow was up 558 at 23,949. Trading volume was mixed. IBD still shows markets in rally mode while BTS has taken a partial position into high yield but is still mostly defensive.
The markets sell off when hit with uncertainty but as data becomes available they eventually return to their normal forward looking nature. Recent data about the virus is helping to ease the uncertainty. Worldometer today noted that daily new virus cases in the US peaked on April 4th at more than 34k and as of yesterday the daily new case count is at 26.6k. Total cases in the US are over 592k.
It was a rough session for the banks. JP Morgan Chase and Wells Fargo both reported Q1 earnings today and the numbers hinted the severity of the covid downturn. Wells Fargo posted a 35% profit drop and added $3.1 billion to loan loss reserves while JP saw its net income fall 95% as the company added $6.8 billion to reserves. JP saw credit card use fall in the travel and entertainment segment while grocery store usage rose. Deposits jumped 23% and going forward the “Bank of Dimon” said that while it has ample liquidity and TEIR 1 capital at 13.3% it warned that a “fairly severe recession” was a possibility. Both banks are struggling with the PPP small business loan program and grappling with a staggering volume of applications since the program was launched on April 3. Small business appear to be frustrated with the delay in getting loans funded. Its like the wild west on the PPPlain.
Shares of Boeing were lower after the company reported its Q1 order status. The company delivered 50 commercial planes during the first quarter but had 196 cancellations (150 Max cancellations in March alone) and 49 new orders. The Max recertification flights are now scheduled for May but gurus are expecting more cancellations as global air travel might take a long time to recover.