Stocks rallied on hopes of a gubment shutdown being avoided and trade talks being held in China. At the close the Dow was up 372 points on heavy trading volume to close at 25,425. Both IBD and BTS indicators have markets in rally mode. With the bulk of corporations having reported Q4 earnings the YOY earnings growth is about 14.3% with 72.1% of companies beating earnings estimates.
Ron the Logger, chief editor and wood tic over at Random Lengths, reports that lumber prices are finally starting to rise again after a record plunge in price last year. The latest framing lumber index moved up $16 to $370 as retailers in the US continue to raise their 2019 sales estimates causing buyers to pick up the pace. The Index stood at $492 this time last year. Other issues facing the lumber industry are things like inconsistent railcar supplies causing west coast producers to ship lumber via trucks and winter weather related delays.
Brian Wesbury, Chief Economist at First Trust, honorary member of the Westport Mafia and esteemed University of Montana graduate, reported on the latest ISM manufacturing data which rebounded in January from 54.3 to 56.6. With talk of a recession starting to fade, Brian noted that the ISM data would need to fall to a reading of 45 or lower to be considered a signal for a recession. The ISM service sector data also came in at 56.7 in January which was down slightly from December. Both readings show the US economy is in growth mode. The majority of gurus are forecasting a slowdown in US economic growth from 3.5% to 2.5% this year but this could go either way due to trade talks and possible congressional action related to infrastructure.