ONE-TWENTY TWO: Trading Financial Markets
Exploring the poetry in financial markets for students of money and economy since the year 2000.
Housing Market Intro and Summary A month ago, housing-related stocks managed to stabilize despite deteriorating data. Reality caught up in June with a fresh round of selling in the stocks of home builders. A surprising jump in new home sales provide some relief for an otherwise on-going din of negative housing news. The National Association … Read more
The reaction to the Q1 2022 earnings report from KB Home (KBH) symbolizes the skepticism that enshrouds housing-related stocks when the economic cycle turns against them. KBH management was almost as bullish as can be during the earnings conference call. Yet, sellers took KBH down the next day by 4.6%. Last week, KBH tested its … Read more
Housing Market Intro and Summary A hawkish Federal Reserve has changed the game for the housing market. At first, I thought the normalization in monetary policy would generate a “settling in” for the housing market. However with inventories tight, a scarcity in available labor, rising material costs, and a dysfunctional supply chain, higher rates may … Read more
Housing Market Intro and Summary The story of housing remained relatively steady for most of the year: low inventory, rising prices, strong demand, low interest rates, and the desire for more space, especially in the suburbs. In my last Housing Market Review, I explored the market as a nexus of economic recovery and inflation. In … Read more
Overall Assessment I am neutral on KB Home (KBH). The KB Home Q2 2021 earnings report delivered strong results. Management was bullish, confident and even raised guidance. Yet, investors sold off the stock to the tune of a 6.7% loss. Clearly expectations were riding high. For example, KBH was one of the first home builders … Read more