Its Friday the 13th and stocks closed out the week with a 92 point gain on lighter trading volume to finish at 25,021. For the week the Dow gained about 2.2% or 550 points. Both IBD and “Dan the Man” at BTS indicate positive market sentiment and even the head guru at JP Morgan noted that she sees few, if any, potholes in the US economy and that global competition for banking services is on the upswing.
Lumber prices continue to take a breather as the Random Lengths Framing Lumber index fell another $5 and now stands at $542. This is down from an early June high of over $580 but still up from a year ago level of $399. Indications show that buyers are holding back and anticipating lower prices. Mills continue to be modernized across the US which should eventually eliminate production bottle necks and improve pricing. Housing prices in Canada are starting to stabilize as they are in the Seattle area. This recent stabilization trend began about 6 weeks ago. Rural communities that surround Seattle continue to experience strong housing demand as people on fixed or limited incomes sell out of high priced areas like Ballard.
Bank earnings are being reported today. Citigroup came in with a 10% revenue increase and a 27% gain in bottom line profits. Shares of the company fell however as the revenue figure missed estimates due to lower global consumer banking revenues which were down 8% from Q1 even though they were still up 14% from this time last year. Wells Fargo also reported disappointing numbers and the company is still struggling with the fake account scandal. Wells posted a revenue gain of 2% and net income that was unchanged from a year ago. JP Morgan on the other hand posted better than expected numbers with a 14% revenue gain and a 26% jump in net income. JP saw strong consumer banking and community banking activity.