Stocks pulled a nice reversal to close in the green on higher volume. The Dow opened by falling over 100 points before a late rally brought it to a closing gain of 52 points at 24,886. The reason behind the rally was a Federal Reserve press release saying they would allow inflation to run above the 2% target in an effort to keep the economy going.
The first major modification to the Dodd-Frank banking bill passed the House with bipartisan support and is headed to President Trump’s desk for signature. The bill will reduce the number of systemically important banks from 38 to 12 because the asset threshold which delineates this group goes immediately from $50 billion to $100 billion and then over the next 18 months works its way up to $250 billion. The bill also cuts regs on community banks and allows them to compete more effectively in the lending business. While some felt the bill did not go far enough the folks voting against the bill are worried about a return to the days of 2008.
Things in the timber business are hoppin’. The framing lumber price index is at an all-time high having jumped $25 last week to close at $568. Mills are raising prices in an effort to quell demand but it’s not working and buyers are jumping on orders like hungry bulldogs on a meat wagon. Another issue affecting lumber is transportation. One trucker in Minnesota pushed wages up 15% and still cannot get drivers to deliver lumber. Timber stocks like Potlatch, Rayonier and Weyerhaeuser continue to outperform the overall markets. Canadian railroad operator CN Rail reportedly purchased 350 rail cars plus leased another 300 in an effort to get enough rolling stock to meet lumber hauling demand.