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…
The opposing sides of our market- and industry-neutral trade going long the S&P homebuilding index/short the S&P REITs index1 have both been on the receiving end of negative data in the last month. With respect to homebuilders,…
Neutral Despite rising rates, homebuilders remain highly optimistic about the prospects for the domestic housing market, with the homebuilder survey persistently pushing near decade-highs (second panel). The message from Q2 earnings…
The long S&P homebuilding/short S&P REITs pair trade is off to a flying start. Already, this market- and industry-neutral trade has generated alpha for our portfolio to the tune of 7% since the early-July inception.1 There is a…
Neutral In yesterday's Weekly Report, we pulled the trigger on our upgrade watch for the niche S&P homebuilding index,1 monetizing our 24% relative gains since the late-November 2017 inception. Three main reasons underpin our…
Highlights Portfolio Strategy A near-term pullback in U.S. Treasury yields, still robust housing fundamentals and compelling valuations that reflect most, if not all, of the bad homebuilding news and offset thorny input cost inflation…
Underweight - Upgrade Alert Homebuilders took another beating this week, and it seems as if they cannot catch a break. While the latest NAHB sentiment survey reflected homebuilder optimism, survey participants acknowledged that spiking…
Highlights Portfolio Strategy The reward/risk profile of air freight & logistics is extremely attractive. Synchronized global growth, the capex upcycle, a falling dollar and secular advance in e-commerce compel us to add this…
Risk management is important in tumultuous times. Our long held strategy of how to navigate choppy waters during a tactical correction has been to book gains in pair trades and thus de-risk the portfolio, and institute trailing stops to…