Your Weekly Blip 10/9/20

Your Weekly Blip 10/9/20

The on again off again Stimulus talks are driving market action and today the talks were back on and the market powered higher. At the close the Dow was up by 161 points at 28,586 on heavier trading volume. For the week the Dow gained 3.2% and is now positive for the year.
As we head toward the election there seems to be some sector rotation occurring in the markets. Tech has outperformed this year but we have noticed that banks, utilities, energy and other value sectors are starting to rebound all while tech seems to be leveling out. Some gurus think that oversold value stocks will bounce after the election and one guy even speculated that a corona virus vaccine could hit tech stocks because a return to normal will ease demand for tech related products and services. Only time will tell how this all plays out but for now beaten up value stocks have started to catch up to the highflying tech stocks.
Earlier this week we had a conversation with a client who is a log buyer for a lumber mill. I asked how it was going and he said the log yard is full, demand is strong and prices are up. The mill is cash flow positive. During the pandemic the mill struggled and its owners funded payroll from their own pocket but when Home Depot and Lowes saw a spike in demand due to home projects, lumber was caught in a supply crunch which pushed up prices and continues affecting builders and supplies who are scrambling to find building materials. While the mill owners know that high prices will not last they are intent on making hay while the sun shines. Another client at a veneer plant said they are working flat out and the warehouse is empty because everything they make gets snapped up.