Your Monday Market Blip 11/19/18

Your Monday Market Blip 11/19/18

Tech titans sold off as trade tensions with China persist. These factors pushed indexes lower at the close of business, the Dow was off 395 at 25,017. Trading volume was very light. IBD is still cautious while BTS is long. Todays action was a perfect example of the effects of “market cap weightings”. When a big trillion-dollar company like Apple sells off it can pull down the indexes and mask upticks by smaller companies like banks, utilities, material and manufacturing stocks.

While the market jumps around, shares of Tesla were higher. An interesting article in the online tech magazine Electrek reported on a recent discussion panel in Germany with auto executives. Apparently at one panel discussion the German Minister of Economic Affairs Peter Altmaier asked the top brass of Mercedes and Volkswagen when they were going to make a car that is half as sexy as a Tesla? He then added “As far as the attractiveness of your e-cars is concerned, you could actually come up with some fresh ideas.” Ouch! While the new Porsche Taycan is sexy, many of the current e-cars in Germany are placeholders (aka golf carts) until infrastructure can be built to produce a car on the level of Tesla. Its interesting to see German gubment officials putting pressure on automakers regarding electric vehicles.

Lumber prices appear to have stabilized after a record high fallowed by a record fall. The Random lengths Framing Lumber Index stood at $340 up from $337 last week. Back in June the index hit a record high of over $580 but then fell to current levels due to increased European imports and new mills in the US coming online which boosted supply all while housing starts slowed because of affordability issues. Also entering the market are CLT or cross laminated timber products which is a new market and can utilize lower grade smaller logs to make homes. While mills in the US have begun to curtail some operations, they are generally reporting higher profit margins. The wood ticks are feeling more bullish these days now that supply and demand seems to have come back into balance after a wild summer.

The Boy Scouts hiked to Anderson Point this weekend and unfortunately, the weather there was perfect. Cold clear sky’s made for great views of Mt. Baker as 12 lunkheads had a great time. Meanwhile the adults in the Troop are ramping up for the Christmas tree sale. Another scout dad and I made a run to Bremerton and picked up wreaths and garland in our troop bus. See the Facebook page for pictures.