At the close on Wednesday the Dow fell 9 points on heavy trading volume to close at 23,828. While trading up by triple digits for most of the session, stocks once again faded into the close in what is becoming a disturbing pattern of buying in the morning and selling in the afternoon because traders do not want the risk of having long positions over night. The NASDAQ posted another down day as FANG stocks continue to retreat. The Dow is now off 3.5% year to date after falling 10% from the high hit back on Jan 26th.
The 4th quarter GDP number was released today and it came in better than expected with a reading of 2.9%. This gives 2017 a final GDP growth rate of 2.3% which is up from a reading of 1.5% in 2016. Consumer spending, which makes up 2/3rds of the economy, grew at a 4% rate in Q4 while business spending grew 11.6% making it the best number since 2014.
With the 1st quarter 2018 coming to a close corporations will begin reporting earnings in a couple of weeks. FactSet reported that projections for earnings growth are 17.5% while top line sales gains are estimated to increase by 7.2%. FactSet also noted more than 50 companies have already revised guidance higher which is a record.
Lumber prices are abating somewhat. The Random Lengths Framing Lumber index fell from $506 to $491 while the plywood/OSB index held steady just below an all-time high. Buyers are holding back and not wanting to purchase sticks at record prices. The Case-Shiller home price index gained a half point in January to 6.2% which is an acceleration from the 5.6% rate for 2017. Seattle and Vegas led the nation in home price increases.