Homebuilder stocks rise on HW 30
Despite recent pressure, homebuilder stocks show hopeful future
The stock market finished the month of March on the up and up after a several big market moving days, including a drastic drop after this month’s Fed Chair Janet Yellen’s speech regarding the Federal Open Market Committee meeting.
But despite the news, the HW 30 finished the month up 0.7% and is up 0.6% year-to-date.
However, the positive news may not seep into homebuilder stocks.
According to Jay McCanless, Sterne Agee analyst, “Homebuilder stock prices are under pressure because of seasonal trading patterns and because February's national housing metrics (starts, resales, new home sales and pending sales) have not exceeded consensus estimates.”
In addition, “This year's brutal and unending winter has added a wrinkle of uncertainty for builders in weather-affected areas,” he added.
The good news: Sterne Agee’s positive group thesis is unchanged because the positive macroeconomic backdrop of low competitive supply, steady but unremarkable, demand, and growing jobs should eventually increase housing demand.
Tuesday morning the Census Bureau puts out the February construction spending report.