The pro's are punting a downturn.

The building materials companies are being heavily sold down. James Hardie, Boral, Pioneer. Hardie is the one I watch, it is US based now. The company's former strength in the chart is disappearing. To me it illustrates market professionals anticipating an economic downturn - at least in the building sector. Such market players are not often wrong, especially with interest rates as they are in the US at present, and with US stock valuations at stretched levels. I noticed also the following, in the Boral 1999 Annual Report, page 8:

"Progress report against short term initiatives;

Planning for a downturn
- In the US, one of the brick plants in Augusta, Georgia is being upgraded to produce solely commercial bricks. This will allow for the rationalisation of residential and commercial brick making facilities and provide more flexibility once a downturn eventuates in the United States.

- Closed a domestic masonry paving line in Western Australia.

- In Construction Materials, a new concrete plant at St Peters in NSW was commissioned, providing Boral with the ability to progressively shut down older high cost concrete batching plants as construction activity begins to weaken.

- The upgraded crushing plant at Dunmore, will facilitate the closure of nearby quarries as the construction market enters a downturn."

This as an unusual comment to find in a report. Despite Borals poor share price record lately, someone is doing their homework here I reckon.

Pacifica is the other company chart being sold off at present. Again their revenue is US based, in auto components. Watch developments here.