Your Wednesday Market Blip 5/20/20

Your Wednesday Market Blip 5/20/20

Stocks were higher today with the Dow bouncing up 369 points at 24,575. Trading volume was mixed and IBD has markets in rally mode. Over at BTS, Isaac and the crew have changed their allocation to 75% high yield up from 25% which means they are seeing positive trends developing with less volatility and emerging trends that support equities. They are still maintaining a 25% treasury allocation as downside protection given the uncertain times but this latest move is a positive sign for equities.
Oil prices continue to rally after the latest stockpile data showed a surprise drop of 5 million barrels versus an expected gain of 2.4 million barrels. US oil production has fallen from 13.1 million barrels per day in March to 11.5 million barrels per day currently. The price of WTI crude rose 4.25% on the news to $33.32 per barrel. The news sent energy stocks higher.
Iron ore prices surged to a seven month high as demand from China improves while production in Brazil falters due to virus shutdowns. Prices are up 20% since April and front month futures for ore hit $107 per ton.
Target stores reported earnings with both top and bottom lines beating guru estimates. Revenue was up 11% which was huge as Target did “Black Friday” like sales numbers for March and April. Digital sales rocketed 141% for the quarter which included a 282% jump in April. While revenue was strong net income fell 61% due to a rise in virus related costs like hazard pay plus a shift in sales to lower margin things like toilet paper, food and essentials.

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