Your Wednesday Market Blip 2/12/20

Your Wednesday Market Blip 2/12/20

It was another strong day for the US markets as the Dow powered to a new all-time high of 29,551 up 275 points. Trading volume for the Dow was higher meaning that institutions are buyers at the current level. IBD continues to show stocks in rally mode.
Federal Reserve Chair Powell spoke before Congress yesterday and said “the US economy is in a very good place.” He said they are monitoring the coronavirus and feels it could lead to disruptions in China which could affect the global economy but in terms of the US he cited a strong labor market and inflation running at a 2% targeted rate which means that as long as that persists the current monetary policy will stay in place.
Carnival Corp shares have fallen 17% since the outbreak of the coronavirus on January 21st. The Princess Cruise Lines, which is a unit of Carnival operates a ship called the Diamond Princess which is now in quarantine in Japan. Adding to woes on the ship another 39 passengers made the list of people who have tested positive. How long with saga continues is anyone’s guess but it is putting a crimp on the cruise ship industry. China is trying to restart some factories but workers are scarce since they do not want to travel so the startup process could be slow.
Oil prices finally got a boost when reports from China suggested the coronavirus outbreak may have peaked. WTI crude in the US rose 2.8% to $51.34 per barrel. Pushing back against a rise in oil prices was a recent US oil inventory report which showed big time growth of over 7.2 million barrels well over estimates and a report said OPEC slashed its global demand growth forecast due to the effects of the virus slowing economic activity in China. OPEC thinks oil demand in China is set to plunge by as much as 20% which would leave OPEC members with an even bigger supply glut than forecast.

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