Highlights Portfolio Strategy Higher interest rates, with the Federal Reserve tightening monetary policy three more times in the next seven months, will be the dominant theme next year. All four of our high-conviction underweight…
Neutral When we downgraded the S&P home improvement retail index (HIR) to neutral in September, the core of our thesis was that fixed residential investment as a percentage of GDP appeared to have peaked, up 50% from trough to the…
Neutral As we highlighted in yesterday’s Daily Insight, we are firmly housing market bulls. However, we are concerned that too much euphoria is priced into home improvement retail (HIR) equities. Three reasons underlie…
Highlights Portfolio Strategy The firming long-term housing demand backdrop, lumber price cost relief, steady new home prices and favorable new home sales expectations, all signal that it is time to buy homebuilders. On the flip side…
Overweight The S&P home improvement retail index (HIR) has historically benefitted from rebuilding efforts following costly hurricanes hitting the U.S. However, these spikes in relative performance largely track the earnings impact…
Overweight Consumer discretionary giant Home Depot has put together a string of solid earnings reports and outlook improvements that have served to keep the S&P home improvement retail index at its lofty levels for the past several…
Overweight It has paid handsomely to be overweight the S&P home improvement retail index over the past year. However, the last few months have seen a significant step upward in valuation (top panel), we think with good reason.…
U.S. home sales have been soaring, with new single-family homes reaching a 10-year high in September, driven by still-low financing costs and peaking consumer sentiment. This surging housing demand which includes temporary hurricane…
The National Association of Home Builders released their housing market index (HMI) which, while still high, took a step downward. Importantly, the softness in the HMI had already commenced earlier in the summer prior to the…
Overweight As the concern over hurricanes Harvey & Irma related catastrophes transitions to repair & rebuilding, it is worth examining the home improvement retail (HIR) space. HIR stocks have barely budged since the hurricanes…