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Home and Lumber prices can send important messages to how the economy is doing. The chart above looks at Lumber prices over the past 11-years.

So far this year, Lumber and the DJ Home Construction index is diverging against the broad market. This chart highlights that Lumber is now down over 40% from its peak earlier this year.

Below compares the performance of the S&P to the DJ Home Construction index this year:

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Investors might want to keep a close eye on Lumber and the Home construction index going forward, due to weakness in this sector could be sending an important message about the macro picture going forward.