The Great Anomaly: Homebuilder Stocks Go Boom While Lumber Futures Go Bust

Lumber has turned sharply lower despite Fed rate cut excitement

Highlights

• Lumber has turned sharply lower despite Fed rate cut excitement

• Nonfarm payroll growth dips below key +1.0% level…

• … and consumers are increasingly pessimistic about finding a job

• Supply and demand pressures are both supporting our bullish uranium call

Key Takeaways

• Equity Investors Ignore Weak Forward Returns: The U.S. equity market continues to march higher as futures, once again, are in the green. While a CAPE multiple in excess of 38x has historically presaged negative S&P 500 returns on a one-year, three-year, five-year, and ten-year basis, today’s investor has been conditioned to eschew the traditional strategy of “buying low and selling high” to “buying high and buying higher.”