The Dow continues to trade near all-time highs and finished today up 104 at 36,432. Trading volume was off a bit. Upside market action was centered on banks, materials, energy and manufacturing all of which could benefit from the infrastructure bill passed by Congress on Friday. IBD has markets listed in rally mode for now. There has been lots of news as of late with strong earnings, a good labor report, the passing of the infrastructure bill, elections and economic challenges in China/Europe centered on energy prices but through it all the stock market continues to show upside bias.
The Economy and Earnings
Oil prices in the US are up 70% this year with WTI recently trading around $83 per barrel. Gasoline at the pump is at a seven year high and US consumers are feeling the pinch of inflation. While nations met in Britain to address climate change the US and other developed countries are asking OPEC + to increase oil production heading into winter in an effort to reduce prices. At a recent meeting however OPEC ministers signaled they like the current situation and intend to keep production at current levels which means higher oil and gasoline prices through the rest of this year and possibly well into 2022.
Included in its earnings report, Seattle based Zillow Group announced it was closing its house flipping business and cutting headcount by 25%. Share fell hard as institutional investors like Cathie Wood sold their holdings and flew the coop. While Zillow posted a revenue increase of 164% they posted a big net loss. CEO Rich “Ouch” Barton said they were shuttering the home buying division not because of any weakness in housing rather it was because volatility in the housing market made pricing a challenge. Word on the street was that Zillow was overpaying for houses. The company has over 7,000 homes in inventory and plans to bleed these off over time.
Items of Interest
The scouts will host our fall court of honor this weekend. We will have rank advancement, merit badges and recognition for scouts that were on trips over the past several months. The troop currently has 60 to 65 scouts who are eager to get out and experience the joys of being wet, cold, hungry and tired.