Stocks closed the week on another uptick. The last three days have seen strong buy volume come into the markets during the final hour of trading which is known as “happy hour” because it is when ETFs have to square their positions against trades that have occurred during the day. At the close the Dow was off by 76 points at 23,062. Trading volume was light. For the week the Dow was up 2.6% which is hard to believe considering the bungy jumping that occurred over the past week.
Oil prices were up 1.6% today with WTI crude trading at $45.30 per barrel. This is the third week in a row that oil prices have fallen. Massive US and Russian production coupled with a pause before announced cutbacks in OPEC production and Iranian sanctions are messing with the supply demand equation. Up north in Alberta, the local gubment mandated a production cut starting in December which has resulted in the rig count falling from 174 to 70. It has also led to a 100% increase in the price of crude oil coming from Alberta. Alberts crude now trades at $29 per barrel up from about $12. Canadian crude trades so cheap because of limited access to end markets.
Timber stocks have had a rough go lately. With the growth rate in home sales slowing and falling lumber prices, the shares of Weyerhaeuser, Potlatch and others have suffered. Last year at this time the lumber price index stood at $432 but then by late June had shot higher and set a new all-time high of almost $580. Then, however prices made a record decline and now trade at $332. Why the record decline occurred is open to debate. Some feel that new mills coming online bumped supply along with imports from Canada and Europe. A slowing US housing market was also a contributing factor to the price decline. Random Lengths seems to feel the bottom has been reached however and stability is returning to the market after some distributors are done clearing out inventory to avoid year end taxes. Buyers are now starting to position for the first quarter.
Markets will be open Monday but closed on Tuesday in observance of the New Year hangover.