Your Monday Market Blip 11/5/18

Your Monday Market Blip 11/5/18

Stocks traded in mixed fashion as the Dow was up while the NASDAQ was lower. Bank stocks were higher and tech stocks, led by Apple and Amazon traded lower. At the close the Dow gained 190 at 25,461. Trading volume was lower.

Berkshire Hathaway moved up 5% after reporting good earnings. Revenue was up 7% and net income gained 99%. It seems Warren Buffet has kept the Geico Gecko busy.

Random Lengths posted the latest Framing Lumber index and prices, while they are starting to firm up, continue to drop and fell another $9 to $337 per mbf. Last year at this time, the price level was $431. The sharp decline in prices of framing lumber and structural panels from late June highs left many retailers unsettled and prompted them to lower sales expectations and reduce inventories. The general feeling is that lumber prices have found a bottom however and might rise as inventories are built up again.

Gurus are speculating about why markets are down over the past month and the general feeling is that heading into next year interest rates will be higher and the boost from the tax cuts will wear off. One hedge fund manager noted that sales growth this year has been great with revenue gains running over 7% but that next year this will slow to 5% and in doing so will cause investors to adjust the portfolio and get more defensive. Countering this argument is hope that a trade deal with China, if it happens, will be good for stocks. Solid underlying fundamentals for the economy and earnings are still “in a happy place” and this, coupled with a renewed round of stock buybacks will lend support for stocks.

The Boy Scout troop might face some headwinds. The church where we have met and called home for the past couple decades has been sold and we might need to find another location. The church was great because we could park the bus there and it had a gym where the boys could run around and play games. Many thanks to Trinity United Methodist Church for hosting us all those years.