DIREXION DAILY HOMEBUILDERS & SUPPLIES ETF News

Naeem Aslam, chief market analyst at AvaTrade, said Fed tightening and China releasing stockpiles could weigh on the price of lumber.

Wall Street delivered a moderate performance last week.

The confluence of the strong economic cycle and what we expect will be a step up in capital investment spending suggests a portfolio focus on industrials. We believe favorable market structures exist

Kyle Little, chief operating officer of Sherwood Lumber, joins The Exchange to discuss the current state of the lumber shortage. The supply is rebounding after pandemic lows, he says.

There's now a glut of processed cheese swamping the market, sending prices as low as $1.31 per pound for a 500-pound barrel - the lowest since 2020.

Lumber supply is increasing, and demand for housing is high relative to available homes.

Lumber supply is increasing, and demand for housing remains high relative to available homes.

Ed Egilinsky of Direxion pointed to the tightening labor market, the raging wildfires, and the emerging delta variant as possible factors that will push lumber prices higher.

"A better-than-expected demand outlook would prompt an inventory rebuild and could spark a large move in pricing," BofA said.

Wall Street was overall upbeat last week. Though concerns about the spread of the Delta Variant of coronavirus worried investors, low rates boosted the demand for stock investments.

Lumber futures have jumped in recent days on mounting concerns that wildfires in Canada and the Western US will snarl production and supply chains.

As the price of lumber stabilizes, more volatility lies ahead, and three factors will keep the red-hot commodity in high demand.

Lumber's massive turnaround this year is just the start of a cyclical downturn for commodities. Lakshman Achuthan of Economic Cycle Research Institute explains.

By end of August and into September, the price of lumber could settle in a range between $350-$450 per thousand board feet, an analyst told Insider.

Commercial construction may be fueling demand this time around as the US economy makes its way to a full recovery, an analyst said.