The strong US jobs report from last week is causing a repricing of risk around the globe and the odds of the Federal Reserve cutting interest rates in July has tumbled from 100% to 25%. Global markets pulled back and here in the US the Dow closed down 115 points at 26,806. Trading volume moved up from last Friday’s holiday levels.
Boeing continues to grapple with the 737 fallout as discount airline Flyadeal changed their name to “Noadeal” and cancelled an order for 30 Boeing 737 Max aircraft and announced a purchase of 50 Airbus A320neo jets instead. This is the first airline to cancel a 737 Max order and the gurus figure Boeing just lost $5.9 billion in revenue not counting for any penalties they may get. Flyadeal is owned by Saudi Arabian Airlines.
Random lengths reported that lumber prices continued to creep higher even though holidays in Canada and the US kept buyers out of the office. The framing lumber index moved up to $359 from $354. US buyers said demand was higher than expected and mills in Canada continue to curtail operations.
While the US economy chuggs along things in Germany, which is the economic heart of the European Union, are a bit tumultuous. Over the weekend Deutsche Bank announced a major shakeup/restructuring and will lay off 18,000 workers, lose $2.8 billion and not turn a profit until 2021. Meanwhile over at BMW, CEO Harald “ICE Man” Kruger, (“ICE” means “internal combustion engine”) is calling it quits and exiting the autobahn so to speak as the company struggles in the new age of the electric vehicle. BMW’s North American sales performance over the past year has been “nichte gut” with car sales dropping over 14% thanks in part to Tesla grabbing massive market share with the Model 3 in the small and mid-sized luxury sedan segment.
The lunkheads left for summer camp early Saturday. They will spend the week at Camp Easton on Lake Coeur d’Alene in Idaho. It was a full house with over 40 scouts going.