Your Thursday Blip 12/17/20

Your Thursday Blip 12/17/20

Stocks were higher today as stimulus talks appear to be making headway. At the close the Dow was up 148 at 30,303. Trading volume was higher and both IDB and BTS indicators remain positive.
Let’s talk a bit about increasing prices in steel, timber, gas and oil.
Steel stocks have been moving higher lately. Steel Dynamics increased its 4th quarter earnings guidance by 30% citing steady shipments of steel coupled with rising prices which are more than offsetting increased raw material and scrap steel costs. The company is also rumored to be in the running to supply steel for the Tesla Cybertruck and is in the process of building a factory just a few hours away from Tesla’s Austin, TX location.
Timber company Weyerhaeuser received an upgrade from Raymond James which cited lumber price strength and strong housing fundamentals as bolstering revenue and earnings near-term. Weyerhaeuser has also reinstated its dividend which had been cut or “logged off” in the early phases of the pandemic. Higher lumber and log prices coupled with strong housing is driving shares of several timber companies higher.
WTI crude oil topped $48 per barrel today which is a 9 month high after gubment data showed US crude stockpiles fell last week. Ed Moya, an oil analyst based in New York City said the headlines right now are bullish for oil prices and traders are in a festive mood as global demand remains strong and inventories are dropping.
Natural gas prices are also spiking as shortages of LNG in Asia are pushing spot prices to multi year highs. India made a major move toward natural gas with what it called the Blue Flame Initiative as it attempts to reduce pollution from coal. Japan, China and Pakistan are also experiencing shortages and gurus are expecting power plants to shift back to cheaper fuel oil where possible to get them through the crunch. Japan is the largest LNG importer in the world and a recent record snowstorm has been driving demand for gas used in heating.