text: The price of lumber is beginning to fall to territory much closer to prices seen in 2020. The high for lumber per thousand board feet was $1,544.50 in May of 2021. January of 2022 saw prices peak at $1,329, and lumber prices are now at less than $600 per thousand board feet. While there is a shortage of lumber, the increased prices of homes come largely from the shortage of completed homes in the United States overall, which Moody’s Analytics estimates are 1.5 million homes. The overwhelming majority of homes built in the United States are wood-framed. Experts from the National Association of Home Builders (NAHB) are beginning to forecast that the housing market will shift downward, a good thing for those looking to buy. If the United States can receive order fulfillments from the already Canadian-dependent lumber sector, consumers will likely begin to feel the prices of lumber coming down. (AC: Due to a sharp increase in mortgage rates, homes are still becoming less affordable. Cash buyers will continue to be the only real winners in this lumberyard scenario until interest rates return to levels seen earlier this year or home prices fall so drastically that first-time home buyers can afford them again. As of June 2nd, the average 30-year fixed-rate mortgage was 5.09%, up from 3.11% at the beginning of this year and slightly under its peak earlier last month of 5.3%. – T.W.)Trading revenue climbsBank of America reports that trading revenues may increase up to 15% by the end of the second quarter if more traders begin participating in volatile markets. This would increase the number of trades being placed and therefore commissions taken off of each trade as well as bid/ask spread profits. JPMorgan predicts that trading revenue may increase up to 20% during Q2 as momentum from Q1 carries over. (AC: An increase in trading revenues indicates that Americans may be starting to shift sentiment toward markets in a positive way. It remains unclear whether this increase in trading activity and recovery in prices will fuel another speculative trading leg, increase company valuations to even higher levels, or displace fears of a recession in the near term. As shown in last week’s report, according to the Buffet indicator, markets remain “significantly overvalued,” so this increase in trading activity may work in larger firms’ favor as retail investors begin to lose money if they start trading too late. – T.W.)— END REPORT