Your Wednesday Market Blip 3/4/20

Your Wednesday Market Blip 3/4/20

Stocks rebounded hard as central banks around the globe continue to cut rates in the face of corona beer virus choking off travel and trade. Healthcare stocks led the way as the sector is attracting attention for the potential virus cure plus the super Tuesday Primary results cooled talk of a gubment takeover of the healthcare space. On top of that Congress passed an $8.3 billion funding deal to cope with the virus. At the close the Dow was up 1,173 points to 27,090. Trading volume was lower and with all the up and down volatility both IBD and BTS are still on the sidelines.
NPR had an interesting article on the corona beer virus in China. According to China CDC people in Wuhan who got the disease early from Jan 1st to Jan 10th suffered a 15.6% mortality rate due to its unknown nature and the healthcare system being unprepared for the initial rush but as information and preparedness improved mortality rates plummeted. Wuhanners who became sick from Feb.1st to Feb 11th experienced a 0.8% Mortality rate. It is estimated that this pattern of progressively dropping death rates will be seen in other countries as people learn more and mobilize to handle the outbreak. Information is power.
US economic data is good. February showed the fastest pace of service sector growth in a year, as orders surged despite coronavirus concerns. The ISM service sector reading increased to 57.3 and beat estimates. The increase was broad-based, with sixteen industries reporting growth, while only two showed decline. The two most forward-looking indices – business activity and new orders – moved in opposite directions in February. Orders surged 6.9 points – the largest monthly jump in more than two years – to a strong reading of 63.1. The business activity index, meanwhile, declined to a still healthy 57.8 in February, but it's important to remember that levels above 50 signal growth, so it's not that activity dropped in February, it simply grew at a slower pace. Respondents noted strong consumer demand and a pickup in activity from existing clients. One sign of continued growth coming from all the disruption in the tech and auto space was GM today rolled out a $20 billion investment to compete in the EV market.