Stocks opened lower then shot up as hopes improved regarding tariffs and trade. At the close the Dow was up 336 points to close at 24,874. Trading volume was off a bit from Friday.
Tariff chatter and trade war drums continued over the weekend with both pro and con arguments being put forth regarding the proposed steel and aluminum duties. The official announcement will come on Thursday. The main culprit with cheap steel is China and they appear to be taking a subdued role in the debate while Canada and Europe are speaking out. It will be interesting to see where this all goes. Dr. Quincy “Kybosh” Krosby, chief strategist at Prudential noted that recent trading action in Harley and Cat suggests a diplomatic solution could be in the cards and that President Trump is showing signs of flexibility with his NAFTA comment. On a side note I wonder if Prudential would consider hiring Duane “The Rock” Johnson as its spokesman in an up market and Stone Cold Steve Austin in a down market.
Lumber markets continue to exhibit strength in pricing although price growth rates appear to be slowing down a bit. The Random Lengths Framing Lumber Composite Price finished at $512 which is a new all-time record cresting the $510 level set back in 1993. The index at this time last year was $407 showing that lumber prices are up over 25%. In Washington State the log shortage issue seems to be tied to a shortage of loggers while in Montana and the inland empire the log shortage is more related to a lack of timber sales.
The IEA noted that US energy production is set to rise for the next 5 years. While talking to a neighbor this weekend who is in the maritime industry he mentioned that all the big boats are moving away from legacy bunker fuel to cleaner natural gas which is now cheap with abundant supply. At the close the price of nat gas is at $2.70 per million BTUs while WTI crude oil was up 2.2% at $62.60.