Seeking Alpha

Industrials and homebuilders lead market decline

  • The two worst-performing sectors on a down day are industrials (XLI -1.4%) and homebuilders (XHB -1.5%), (ITB -1.9%).
  • Industrials are taking a hit after Joy Global (JOY -6.3%) missed earnings estimates and provided disappointing guidance. "With a limited number of projects that can book in time to help 2014, we continue to see both the need and opportunity to lower the cost base in our business," says the company. Caterpillar (CAT -1.2%).
  • Homebuilders continue to digest Toll Brothers' (TOL -1.8%"leveling in demand" comments from yesterday's earnings results - in the 19 weeks since August 1, business has been flat vs. last year, and in the first 5 weeks of FQ1 (beginning Nov. 1) business has also been flat from 2012 (though Hurricane Sandy makes a tricky comparison).
  • CEO Doug Yearley on the earnings call (transcript): "There's just not a lot of action [this time of year]. We still feel like pent-up demand is building, demographics are on our side, affordability is in place, and we are cautiously optimistic about the spring season, which begins the end of January."
  • Lennar (LEN -2.3%), D. R. Horton (DHI -3%), KB Home (KBH -3.1%), Hovnanian (HOV -3.3%)
Comments (1)
  • Aw nuthin - just enjoying seeing people led around by analysts via a barbed hook in the nose. If working the market is all about one particular company's movement today and total disregard for the specific scenarios of a period 365.25 days earlier which easily distort the real factors by which I should be evaluating ownership, maybe I should be playing stretch with a 6" switchblade in the mud at $5 a toss.

     

    Sure HOV is down 3.3%. So those who pay stocks like championship tennis should be jumping out. The teller her is HOV having used the entire period of the "recession" in preparation for housing recover; and the timing is really in the hands of the FED.

     

    My friend Paul - a top notch realtor -with a professional army - tells me the market is fickle; the state of the holiday 2013 economy is not sending the proper signals: Too may options - No intutitive direction - therefore less reason to act now. Wait a few months. Wait till a few indicators cross paths and we'll long cycle businesses begin filling demand fueled by real money which is not recklessly leveraged. Uhhh - History?
    11 Dec 2013, 05:49 PM Reply Like
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