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Lumber Slumps to Seven-month Lows As Housing Market Bears Brunt of Rate Hikes

Daniel

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Lumber futures have fallen to levels not seen since November, in a stark reversal from all-time highs set last year during the COVID-fueled homebuilding boom.

Chicago lumber futures (LB1:COM) for July delivery fell on Wednesday by the exchange maximum $49, or -7.5% to $604.50 per 1,000 board feet, extending this year’s slump to 46% and nearly two-thirds below the peak of $1,733 per $1,000 board feet from about a year ago.

ETFs: (NYSEARCA:XHB), (NASDAQ:WOOD), (CUT), (NAIL)

Potentially relevant tickers include (WY), (WFG), (LPX), (PCH), (RFP), (OTCPK:CFPZF), (OTCPK:IFSPF), (OTCPK:WFSTF)

“Lumber markets are probing for a floor,” Kevin Mason, managing director of ERA Forest Products Research, told Bloomberg, citing plunging home sales and higher interest rates, adding lumber prices may fall to $400 per 1,000 board feet in the next two months before producers curb production to remove excess supply.

Sales of newly built homes plunged 16.6% in April from March to the lowest level since April 2020, at the height of the COVID lockdowns in the U.S., and the biggest drop in nine years.

Lumber buyers have slowed orders and wood is piling up at mills, which are weighing on prices, pricing service Random Lengths said, according to The Wall Street Journal.

But barring a recession, Matthew Saunders of John Burns Real Estate Consulting told WSJ that he does not expect lumber prices to fall all the way back to pre-COVID levels, which rarely exceeded $500 per 1,000 board feet, due to the many problems in Canada’s western forests, where mills have struggled with fires, floods, high prices and hard-to-get timber.

Canfor (OTCPK:CFPZF) said last week that its Canadian sawmills have been operating at ~80% of production capacity since late March, and will continue reduced operating schedules due to ongoing global supply chain challenges.

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Original Article: seekingalpha.com

Business

Lumber Futures Rise As Canada Cuts Wood Production

Daniel

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adventtr/iStock via Getty Images

CBOT lumber futures rose (LB1:COM) for the third straight session on Wednesday to $601.80 per 1,000 board feet, the highest intraday price since July 22, as supply cuts from a top Canadian producer outweigh rising interest rates that are hurting housing markets.

West Fraser Timber (WFG) announced production cuts at two British Columbia sawmills, equivalent to 2.5% of its total North American capacity, and it is cutting plywood output at another facility.

Other potentially relevant tickers include (WY), (LPX), (PCH), (RFP), (OTCPK:CFPZF), (OTCPK:IFSPF), (OTCPK:WFSTF)

ETFs: (NYSEARCA:XHB), (NASDAQ:WOOD), (CUT), (NAIL)

U.S. builders obtain more than 25% of their lumber from Canada, which is the world’s largest exporter of softwood lumber.

This year’s surge in borrowing costs caused ~60K deals for home sales in the U.S. to fall through in June.

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Original Post: seekingalpha.com

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Business

CVS Health Tried to Acquire One Medical Before Amazon Eventually Did – Bloomberg

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Original Source: seekingalpha.com

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Business

Recipe Gone Wrong: Domino’s Calls It Quits in Italy

Daniel

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Mario Elias Munoz Valencia/iStock Editorial via Getty Images

Seven years after entering the Italian market, Domino’s (NYSE:DPZ) is closing up shop in the homeland of pizza. While the company had already stopped offering delivery from its website on July 29, the last of its 29 local branches just shuttered their doors. Social media is abuzz on the news, with some likening the situation to selling ice in the North Pole, or how the chain could compare their pizza to an authentic Napoletana.

History: Domino’s (DPZ) opened its first outlet in Milan in 2015, via a franchising agreement with a local business called ePizza SpA. At the time, it said it hoped to win over Italian palates with “purely Italian” ingredients like Prosciutto di Parma, Gorgonzola, Grana Padano and Mozzarella di bufala Campana. The biggest catch was a national home delivery model that could take on local artisanal shops and provide an alternative to Italy’s dining out culture.

Cracks in the plan first emerged during the pandemic, especially as delivery became essential during coronavirus lockdowns. Many of the “mom & pop” restaurants went online, allowing buyers to order quality products and gourmet items straight to their homes. As takeout and delivery models were adopted, increased competition was also seen from a rising number of online platforms like Deliveroo, Glovo or Just Eat Takeaway.com.

Go deeper: ePizza borrowed heavily for plans to open over 800 Italian stores through 2030, attempting to land a 2% stake of the national pizza market. As recently as April, it filed for protection from creditors, and while the motion was granted for an initial 90 days, there have been no further updates on the court process. According to the latest audited reports, ePizza had EUR10.6M of debt at the end of 2020, but has since been running out of cash and faltering on its debt obligations.

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Original Source: seekingalpha.com

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