Your Weekly Blip 3/5/21

Your Weekly Blip 3/5/21

It was a wild finish to a wild trading week as markets opened today’s session with more tech losses while value stocks traded mixed. Heading into the close however markets all reversed higher and at the ending bell the Dow had gained 572 to 31,496 while the NASDAQ gained 196 to 12,920. Trading volume was off slightly but the upside reversal was a positive indicator. IBD is now listing markets in “correction” mode due to a series of high volume down days. For the week the Dow finished up 1.9% and found support at its 50 day moving average while the NASDAQ has fallen below its 50 day line and continues to search for support.
The labor report for February was better than expected with 379,000 jobs created vs a consensus of 175,000. The unemployment rate fell to 6.2%. Most of the new jobs were in the leisure and hospitality sectors along with food services (bars and restaurants). Average hourly earnings for all employees on private nonfarm payrolls rose by 7 cents to $30.01 and the average workweek declined to 34.6 hours. All in all it was a good report and erased concerns over weak labor reports from December and January.
Costco reported its latest numbers beating both top and bottom line estimates as revenue was higher by 15% and net income higher by 21%. Shares however reacted negatively and fell back to the level not seen since the early stages of the pandemic. Reasons for the pullback could stem from the prospects of a slowing sales growth rate plus higher costs due to upping its minimum wage to $16 per hour. The downside could also be the result of Costco’s stock being pricy from a PE standpoint and with interest rates rising, valuations tend to revert to more reasonable levels. While shares were down big early in the day they did rally and close out the week with only a small loss.