Your Weekly Market Blip 2/7/20

Your Weekly Market Blip 2/7/20

Stocks pulled back after a 4 day rally. A blowout labor report was not enough to overcome Chinese coronavirus fears. At the close the Dow was off 277 points at 29,102. Trading volume was off. We seem to be developing a pattern where investors take money off the table on Friday to mitigate weekend risk. Shares of Amazon were higher as gurus are stating the long term bull case after strong earnings for a week ago. Amazon did announce it would bring 15k jobs to hit new Bellevue hub. For the week the Dow gained over 3% or roughly 660 points.
The January jobs report was positive as expectations of 160,000 new jobs were bested when the report showed 225,000 jobs being created. The unemployment rate ticked up to 3.6% from 3.5%. Wages were up 3.1% on a trailing 12 month basis which was also better than expected and the labor force participation rate increased to 63.4%. Hiring in the construction sector led the way with 44k new jobs.
China remains on hold. With virus cases now over 30k and upwards of 50 million people on lockdown S&P Global lowered China’s GDP growth rate from 5.7% to 5%. Hotel rooms in China are now estimated to be only 20% occupied and layoffs and wages cuts are the order of the day. The slowdown is also affecting Germany which just reported a 3.5% drop in industrial production. Next week could show improvement as the 14 day incubation period starts to end and some gurus are forecasting a possible rush of economic activity later this year as people get back to normal activities and catchup on lost vacations, travel and business. We shall see however. It all depends on how successful the CCP is a slowing the virus spread rate.