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Afternoon Note

Timber

By Charles Payne, CEO & Principal Analyst
2/18/2021 1:10 PM

It’s a down day for the major indices, which turned lower after the initial jobless claims came out.  Last week, unemployment claims increased to 861,000 from 848,000, and higher than the 773,000 estimate. This is the highest level in a month and has risen in the past two weeks.

In addition, 516,000 have filed for Pandemic Unemployment Assistance.  The silver lining is that continuing claims declined by 64,000 to 4.5 million. 

Disappointing earnings and guidance from Walmart (WMT) are also adding pressure to the market. It is not just stocks that are down, so is oil, treasury yields, and even Bitcoin. But the selling has been orderly.  

Nasdaq is the worst performing again, down 1.2% as Technology continues to lag, especially large cap tech.  Ten of the 11 S&P 500 sectors are down.  Utilities, often viewed as a safe haven, is the only sector in the green today.

S&P 500 Index

 

-1.02%

Communication Services XLC

 

-1.11%

Consumer Discretionary XLY

 

-0.67%

Consumer Staples XLP

 

-0.27%

Energy XLE

 

-1.74%

Financials XLF

 

-1.33%

Health Care XLV

 

-0.67%

Industrials XLI

 

-1.16%

Materials XLB

 

-0.65%

Real Estate XLRE

 

-0.26%

Technology XLK

 

-1.54%

Utilities XLU

+0.67%

 

Breadth is decidedly negative as is the down volume.

Market Breadth

NYSE

NASDAQ

Advancing

799

915

Declining

2,391

3,041

52 Week High

68

102

52 Week Low

9

14

Up Volume

515.07M

1.28B

Down Volume

1.94B

2.40B

As discussions on inflation heat up, take a look at lumber.  It hit a record high today of $1,004.90 per 1,000 board feet, doubling in  just 3 months.  This increase in price weighed on much needed single- family homes, which fell 12% in January from December.

Robert Dietz, Chief Economist at the National Association of Home Builders, stated, “Builders report concerns over increasing lumber and other construction costs and delays in obtaining building materials,”. “Rising interest rates will also erode housing affordability in 2021, as inventories of existing homes remain low.”

Building permits are up however, increasing 10.4% from the prior month to 1,881,000 units, the largest increase since May 2006. The real increase was in multi-family, 5 units or more, which rose 28%.

On Capitol Hill, the GameStop circus is currently underway.  

 


Comments
What do you think of investing (gambling?) a very small amount of money in a SPAC, like Atlas Credit Investment Corporation (ACIC)?

David Lee on 2/18/2021 1:33:26 PM
Investing is not gambling...but lack of discipline and approach and buying and selling on whims, and refusal to do homework move it closer to a day at the races.  CP

Charles Payne on 2/18/2021 1:46:04 PM
Open up this country and put kids back in school and unemployment claims will begin to decline. State need take their lead from Florida!!

Harold Hawkins on 2/18/2021 2:20:48 PM
This country just voted to give away their freedom.

Myron Pederson on 2/18/2021 2:37:28 PM
AMEN TO THAT. KIDS NEED TO BE IN SCHOOL NOT ON BLACK OUT SCREENS PRETENDING TO BE LISTENING TO A TEACHER'S INSTUCTIONS

KAREN VELASQUEZ on 2/18/2021 2:44:21 PM
Now that 28,000,000 Texans have demonstrated the need for a generator in a growing green power grid, would you have a recommendation for a company dealing in generators. I think 300,000,000 more Americans could be effected if the present administration gets its way.

Davi on 2/18/2021 3:15:46 PM
I agree with Harold Hawkins. The states need to move with it and get it done. It's obvious the administration is in no hurry.

Jim Palmer

Jim Palmer on 2/18/2021 3:32:19 PM
 

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