In typical pshyco fashion the markets opened up triple digits then drifted south like a cowboy with winter coming on. At the close the Dow was down 148 at 24,163. Trading volume was down significantly in what was a quiet session.
McDonald’s reported better than expected earnings which were up 22%. Revenue was 9% lower but this was due to the company selling company owned stores to franchisees. Same store sales in the US were up 2.9% while global same store sales were up 5.5%. CEO Steve “Big Mac” Easterbrook said the menu changes are working as people come in for the low margin dollar meal but end up buying the higher margin custom burgers instead. I wonder if they will soon offer financing.
It was merger Monday as several big deals were announced. T-Mobile and Sprint “re-announced” they had agreed to a merger. This has been an on and off love affair for over 4 years but now appears to be a reality. Another announced deal was the $35.6 billion takeover of Andeavor (formerly known as Tesoro Refining) by Marathon Petroleum which will create the largest US refiners with 16 refineries across the country. Assets that Tesoro owns in the state of Washington include the Anacortes refinery plus interest in a pipeline that takes refined products from Spokane to Salt Lake City. Tesoro aka Andeavor, is a west coast operation while Marathon is mainly in the Great Lakes region down to the Gulf Coast so their operation should dovetail nicely.
Prices of framing lumber are on the rise again as the Random Lengths Framing Lumber Composite price rose to $506 up from $498. A year ago the price was $435. With the spring building season here the demand for lumber is moving up and shipping times are lengthening. A consulting firm called ForestEdge LLC released a study saying that lumber prices and demand are projected to rise well into the next decade as demand for housing in the US projects out solid for an extended period of time. The report suggests demand will drive investment in mills and CLT as well as push timberland values……in the words of Jackie Gleason…”to the moon Norton!”