Markets were a bit confused as to how to react to the U.S. inflation report that came out this morning.
At the end of the day the report was not too different than expected and markets ended the day virtually unchanged.
Toll Brothers was featured on BNN this morning. The Analyst views it as a buy based on its Backlog. It is destined to have a profitable 2023 based on that backlog. But the earnings will be lower than 2022 and contracted home sales could be way lower. So despite the stock being very cheap in relation to earnings and trading not much over book value and being well managed, I decided to sell some of my shares in Toll Brothers to hedge my bets and raise cash. Basically, I am very uncertain how the market is going to react to its earnings report next week. I still like the company long term.
After the close West Fraser Timber reported a loss in Q4. I’ve been surprised how well that stock price has held up in the face of lower timber prices and a reduced level of new home construction. The weak Q4 is not likely a surprise to the market but we shall see how the stock reacts tomorrow to this news.