Stocks started the trading week with an uptick as the Dow was up 89 to 25,758. Trading volume was lower but the NASDAQ reversed from opening losses to close with a gain. Markets remain positive but appear stuck at current levels as the August doldrums play out.
British Columbia currently has about 500 forest fires burning and as a result mills are curtailing some production which is helping to firm up lumber prices. The Random Lengths Framing lumber index rose from $440 to $441 and is up from $414 a year ago. At this point downside risk in lumber prices appears minimal as inventories need replenishing. Housing starts in the US have slowed as higher interest rates, labor and construction costs are having an effect. Trade wars with China are also affecting some lumber prices but the US now appears close to a new NAFTA deal with Mexico and is set to meet with China again on trade issues.
Last week Seattle based online real estate firm Redfin reported earnings which beat estimates with a revenue gain of 36%. The company posted a loss however due to investments in new markets and continued marketing efforts. Redfin said that while market share gains continue to unfold at an increasing pace, they are expecting growth to slow due to a slowdown in housing markets which materialized about 3 weeks ago. The lower forward guidance caused gurus to sell the stock. Redfin continues to roll out its “buy now” program and is seeing good referrals to boot. The company currently accounts for 19% of home sales in the Seattle market and said that millennials are not taking to houses like baby boomers did long ago due to things like student loan debt, high prices and tight inventory.
Companies around the world are paying a record amount of cash dividends to shareholders. According to the Janus Henderson Global Dividend Index, cash dividends have broken records in 12 countries to include the US, France and Japan. The index hit a fresh high of 182 meaning the global dividends have risen by more than 80% since 2009. Dividends in the 2nd quarter were up 12.9% year over year to $497.4 billion.