ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
The last Housing Market Review covered data released in December, 2015. At the time, I saw the market coiling like a spring. Instead of springing forth, housing market stocks are in big retreat. Recession fears likely have a lot to do with the declines. The iShares US Home Construction ETF (ITB) is now down a … Read more
(This is an excerpt from an article I originally published on Seeking Alpha on January 19, 2016. Click here to read the entire piece.) A year ago, KB Home (KBH) reported Q4 2014 earnings that greatly disappointed financial markets. The stock lost 16% in the immediate aftermath. The stock took 5 months to recover only … Read more
(This is an excerpt from an article I originally published on Seeking Alpha on December 13, 2015. Click here to read the entire piece.) Almost a month ago, analysts from KBW described a seasonal trade on home builders. {snip} I took a slightly different perspective on this seasonality to make the pattern stand out and … Read more
In its Q3 2015 earnings report, TRI Pointe Group, Inc. (TPH) reported $97.0M in cash and cash equivalents. Thanks to real estate inventories, total assets come to $3.1B. Source: TRI Pointe Group, Inc. On January 27, 2016, TPH decided to put that balance sheet on the line by authorizing a buyback of $100M that is … Read more
When I decided to start writing a monthly summary of the status of the housing market, I had assumed that housing was going to remain in or settle into a general holding pattern. I assumed little was going to happen to the upside or the downside for a while. Under those conditions, it did not … Read more
At the end of 2015, I wrote about the critical tests facing LGI Homes (LGIH). After another strong monthly closing report, LGIH seems more likely to pass the test of financial performance in coming earnings reports, but the technical test remains in place. LGIH reported record results for a single month in December, 2015: 433 … Read more
The housing market is moving in slow motion. The recovery is in place but locked into low gear. Until conditions change materially, it makes sense to place my coverage of the overall housing market into a monthly cadence. The reporting loses a bit of timeliness, but it should gain more cohesiveness with more connected dots. … Read more
(This is an excerpt from an article I originally published on Seeking Alpha on December 29, 2015. Click here to read the entire piece.) In mid-September, I wrote “LGI Homes Is Now A Bit Hot To The Touch.” LGI Homes (LGIH) is down 18% since then. LGIH also hit an all-time high on December 1st … Read more
Single-family new home sales began the year with a bang. Sales for January and February soared year-over-year and continued the post-recession breakout that occurred in December, 2014. Sales have trickled downward ever since. Source: US. Bureau of the Census, New One Family Houses Sold: United States [HSN1F], retrieved from FRED, Federal Reserve Bank of St. … Read more
While I have been talking up warnings on the deterioration in the underlying technicals of the S&P 500 (SPY), I continue to like the relative performance of iShares US Home Construction (ITB). Source: FreeStockCharts.com ITB is up 9.2% for the year while the S&P 500 is essentially flat year-to-date with a 0.3% gain. One of … Read more