Your Wednesday Market Blip 5/6/20

Your Wednesday Market Blip 5/6/20

The Dow traded both sides of the fence but sold off into the close and finished down 218 points to 23,664. Trading volume was lower and tech stocks continue to lead as the NASDAQ was higher today. While IBD has markets in rally mode, BTS indicators continue to stay cautious as the stimulus from the Feds is up against greater than expected job losses and the prospects that getting back to work with a normal lifestyle might take a while.
Trailing economic data continues its historically ugly display. The ADP private sector job report for April showed 20.2 million jobs lost. The hardest hit sector was leisure and hospitality which shed 8.6 million while construction lost 2.5 million and manufacturing shrank by 1.7 million. When looking at the lob losses by size, large businesses (500+ employees) lost 9 million, medium businesses with 50 to 500 workers laid off 5.3 million and small business canned about 6 million employees.
Disney reported earnings last night. The House of Mouse reported better than expected revenue but missed profit estimates. Profits fell 63% and since the lockdown hit late in the quarter, revenue still managed to gain 21% driven by strength in media networks and Disney Plus which offset a 10% drop in theme parks. Disney Plus hit 54 million users which is well ahead of schedule. The company will forgo the dividend for the first half of 2020 to conserve cash and plans on opening its Shanghai Disneyland within the week.
One of the nation’s largest oil refiners, Marathon Petroleum, reported earnings yesterday and in doing so shed light on demand trends within the energy sector. Marathon posted a revenue decline of 16% and lost money largely due to having a non cash adjustment to the value of its oil reserves. The company kept its dividend in place citing resilient cash flow and when asked about demand trends management said that since mid-April demand for gasoline has been on a steady rise. This sentiment was also echoed by Bank of America CEO Brian Moynihan who noted in an interview that credit card data showed spending at gas stations bottomed three weeks ago and has been moving up since then.