The Dow opened the trading week by gaining back another 399 points to close the day at 25,709 on heavy trading volume.
It was reported today that new home sales are down 8%. While some feel this might indicate a slowing economy I checked lumber prices and the Random Lengths Framing Lumber Composite Price jumped to $509, just $1 short of the all-time high set in 1993 back when Bill Clinton was a rookie President and Seattle still had an NBA basketball team.
To get another indicator on how the economy is doing, just ask Bob “Mr. Walker” Wheeler, CEO of Airstream. Bob announced today that business is so good they need to increase capacity by 50% with a $40 million investment in a new plant that will create 300 jobs. The new plant will be built somewhere in Ohio. Wheeler said that while there is plenty of speculation as to when the next economic slowdown will occur the current indicators (fuel costs, credit availability, consumer debt levels) all point in the right direction and that strong demand is creating the need to expand. Ground breaking on the new plant will begin in May with completion expected in 2019. I wonder if they could make one of these Airstreams out of curved solar panels. They could call it a Solarstream. Maybe Elon Musk will buy one and then launch it into space to go with the roadster that’s already up there.
GE continues to struggle as the company announced changes to the board, a possible DOJ investigation and a restatement of earnings for 2016 and 2017. News also came out that Warren Buffett, famed value investor, had quietly exited his position saying he was “staggered” by the recent $15 billion insurance reserve charge. Buffett had acquired a large position in GE during the 2008 crisis but apparently took gains because he was not too thrilled with GE’s accounting practices.