Your Weekly Market Blip 5/15/20

Your Weekly Market Blip 5/15/20

The Dow closed the day up 60 points at 23,685. Trading volume was higher. During the day stocks traded both sides of the fence and the late rally was a positive technical sign. It was an overall down week for the Dow which lost about 645 points or roughly 2.6%. IBD still shows markets in rally mode while BTS continues to sit mostly in cash and treasuries.
Chip stocks were off today after the US Commerce Dept. changed an export rule so that foreign companies must obtain a license before certain US chips used on their platforms can be exported. Motives behind the rule change were concerns over China’s efforts to undermine US export controls and “obtain” US high end US chip technology. Meanwhile Taiwan Semiconductor Manufacturing Co or TMSC announced Friday that it will build a $12 billion semiconductor plant in Arizona. The company is a big supplier of Apple, Huawei and Qualcomm. Construction is expected to start in 2021 have 1,600 workers once completed.
The latest retail sales numbers showed a record 16% drop in April from a year ago. Hardest hit were electronics, clothing and home furnishing stores which saw sales fall anywhere from 60% to 90%. The non-store retail category which includes Amazon saw a gain in sales along with grocery stores like Kroger and Costco. Building materials outlets like Lowes and Home Depot also had a year over year increase in sales even as they metered store traffic.
Manufactures in the US saw a big drop in April. Output slumped 13.7% from the prior month. If you include utilities and mines the output dropped 11.2%. Utility output fell 0.9% while oil and gas drilling fell a record 28%. Capacity utilization slid to 64.9%.

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