It’s Friday afternoon, and we’re sure your brains are melting from all the earnings and economic data this week. So let’s send you off into the weekend sunset with an under-the-radar chart. 🤫
That chart is of lumber futures.
Ah, yes, lumber. Remember when lumber futures were the talk of the town for a while there? 📰
Well, as with anything that sees massive price moves, those moves typically happen in both directions. And after falling 80% over the last two years, prices have been on an absolute tear, rising nearly 50% since early January. 😮
Whether or not this “revenge of the trees” will last remains to be seen. Some suggest the recent rally is simply a reversion to the mean (200-day moving average) before prices continue their decline. Others suggest that structural demand remains strong and that prices are likely to stay above their historical average. 🤷
Regardless, with the housing market remaining soft, higher lumber prices will become a concern for the economy again if they stabilize at pre-pandemic levels.
We haven’t seen many talking about this so far this January. But if the rally continues, you best bet this will be a household topic again very soon. ⌚👈