ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
Overall Assessment The stocks of home builders have had a banner year. The failure of the iShares Dow Jones Home Construction ETF (ITB) right at the climactic high of January, 2018 exposed a change in sentiment at an important juncture. So far, M.D.C Holdings (MDC) has suffered one of the most damaging changes in sentiment. MDC … Read more
The ETF Performance The 2019 seasonal trade for home builders was a dramatic one that departed from the typical script. The iShares US Home Construction (ITB) suffered greatly in the late 2018 sell-off. The housing market softened as one of the most notable features of the sell-off in the stock market. Several home builders made … Read more
Overall Assessment I want to be bullish on Century Communities (CCS). Century Communities sports a recession-level valuation and a strong top-line growth profile. The company’s business model is solidly planted in the entry-level and lower-priced homes that are prime drivers of the current housing market. However, a negative cash balance, negative earnings growth (over the … Read more
The Timing and the Stock Charts During the analyst conference call explaining the deal to buy William Lyon Homes (WLH), CEO Sheryl Palmer revealed that Taylor Morrison Home Company (TMHC) began buy-out talks several months ago. That was a time of rising optimism for home builders. The announcement of the deal came shortly after investors … Read more
The Pressure The optimism continues to build in financial markets over the prospect for finalizing the “Partial” or “Phase One” deal on the U.S. vs China Trade War. That optimism translates into slightly higher growth expectations which in turns translates into higher interest rates. Even the Fed Fund Futures stay below 50% odds for another … Read more