Your Weekly Market Blip 2/12/16

Your Weekly Market Blip 2/12/16

Stocks today rebounded after yesterday’s selloff. IBD still had the markets in correction mode but the current 16,000 level continues to hold. Trading volume was weak today which might indicate a lack of conviction for today’s rally. At the close the Dow snapped a 5 day losing streak to close up 313 to 15,973. For the week the Dow was down 1.7%.
As investors seek safety, some are asking how a strong foreign private bid for US Treasury bonds and a strong US dollar can affect the US economy. One local example is out in Westport, WA where there is a buoyant crab and fishing industry. In speaking with the Westport Mafia, I discovered that prices for chum salmon to Asia had been running in the 75 cent to one dollar per pound range but that current and projected prices for this year are down to 40 cents per pound. The fishing boats are in a bit of a panic over this and the price fall is mostly being blamed on a strong US dollar which is making US chum more expensive and causing buyers to look for alternatives.
Shares of Boeing were off hard yesterday after the SEC announce an investigation into accounting practices at Boeing related to 747 and 787 production. Boeing came public in 1972 and yesterday’s selloff was the worst single day move since the IPO. In a related note, Boeing’s protest of the $80 billion bomber contract that went to Northrup Grumman took a new turn when recent documents reveal that the wife of an officer involved in the process to award the contract worked for and now gets a pension from Northrup. Oh the webs we weave!
Economic news continues to be mixed. US retail sales grew by a better-than-expected 0.2% figure in January however consumer sentiment hit a four month low and business inventories rose to 139% of sales which is the highest number in 7 years.
Talk about volatility! WTI crude rose 10% today to $29 bouncing off 12 year lows on rumors of a potential OPEC production cut. The US rig count meanwhile fell by 28 to 439 down from 1,056 this time last year. Analysts were skeptical of a production cut but you never know since Russia, Saudi Arabia, Iran and Iraq are not the best of friends. Gold fell $8 an ounce to trade near $1,139 after a big move Wednesday.