PowerShares Dynamic Building & Construction Portfolio ETFNYSEARCA
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  • Tue, Nov. 15, 7:45 PM
    • The big gains in infrastructure stocks in anticipation of government spending on roads and bridges in a new Trump administration have some analysts warning that the rally is "getting long in the tooth."
    • Among relevant companies up at least 12% since last Tuesday's election: PWR, FLR, VMC, JEC, MLM, KBR, ACM, SUM, EXP.
    • One former infrastructure bull, Daniel Clifton of Strategas Research, thinks lofty expectations are now priced into the group, adding that the belief that fiscal conservatives in Congress who have long opposed increasing the deficit would suddenly pass a trillion dollars in spending has become too optimistic.
    • Clifton also says Trump’s infrastructure plan in its current form relies entirely on private financing and “has little to do with the actual stocks that are rallying.”
    • Greg Valliere, chief global strategist at Horizon Investments, reminds that "Washington moves slowly on huge projects like this, and there’s a lag time on the economic response."
    | Tue, Nov. 15, 7:45 PM | 14 Comments
  • Sun, Jul. 3, 2:30 PM
    • via Morgan Stanley:
    • "The bottom line is that Brexit is ultimately a political crisis and one that is not likely to be resolved in a hurry. There will be many twists and turns in the path to ultimate resolution.
    • "There may yet be circumstances that give rise to bigger systemically risky events. For now, we don't think we are quite there and we feel that the current architecture of the global financial system is more resilient than it used to be when the last big storm hit us.
    • "That said, caution is clearly warranted. The global economy was not in great shape pre-Brexit and is now worse. There is likely to be more downside to come, particularly in European equities and in GBP.
    • "We see US assets across the spectrum - stocks, FX, credit and government bonds - as relative safe havens, and parts of securitized products, particularly US resi credit and broad exposure to US housing, as being relatively insulated."
    | Sun, Jul. 3, 2:30 PM | 6 Comments
  • Sep. 3, 2015, 3:12 PM
    • How bad a year has it been for multi-industry stocks? Year-to-date underperformance relative to the S&P 500 is among the poorest in a decade and has gotten worse in recent weeks, say Goldman analyst Joe Ritchie and team. The negative news is no secret: Broad industrial de-stock, softening oil capex, the strong dollar, and the troubles in China. Because of this, the team remains Neutral on the beaten-up sector, but does have a few names investors should steer clear of:
    • With de-stock keeping U.S. industrial growth in a "headlock," the implications are particularly negative for Sell-rated Emerson Electric (NYSE:EMR), WW Grainger (NYSE:GWW), and Neutral-rated Parker-Hannifin (NYSE:PH) and Rockwell Automation (NYSE:ROK).
    • With oil capex going from bad to worse, and oil lower for longer, the Street is underestimating the impact of price declines for Dover (NYSE:DOV), Emerson, and Flowserve (NYSE:FLS). On the flip side, lower input costs should be a boon to Buy-rated Illinois Tool Works (NYSE:ITW) and Neutral-rated 3M (NYSE:MMM).
    • The weaker China backdrop is most negative for Emerson, and Neutral-rated Eaton (NYSE:ETN) and Colfax (NYSE:CFX). Though Buy-rated Honeywell (NYSE:HON) and ITT Corp (NYSE:ITT) have exposure, growth is more insulated due to their market share gains.
    • Source: Barron's Ben Levinsohn
    | Sep. 3, 2015, 3:12 PM | 11 Comments
  • Jun. 23, 2015, 11:54 AM
    • Alongside today's launch of triple-levered bull and bear biotech ETFs, ProShares also serves up the double-levered Ultra Homebuilders & Supplies ETF (HBU) and the UlraShort Homebuilder & Supplies ETF (HBZ), along with the Ultra Oil & Gas Exploration & Production ETF (UOP), and the UltraShort Oil & Gas Exploration & Production ETF (SOP).
    | Jun. 23, 2015, 11:54 AM | 1 Comment
  • Aug. 18, 2014, 4:07 PM
    • In its August forecast, Fannie Mae expects 2014 construction starts to hit 642K, down about 8% from the July prognostication. The outlook for single-family home sales is cut 11% to 431K.
    • 2015 bounce? Not so fast, says Fannie's chief economist Doug Duncan. While 2015 will be stronger than 2013 and 2014, it won't be the "breakout year" some are expecting.
    • Previously: Homebuilder confidence at highest since January
    • ETFs: XHB, ITB, PKB
    | Aug. 18, 2014, 4:07 PM
  • Jun. 10, 2014, 5:09 PM
    • One of the more remarkable charts in his slide deck, says Jeff Gundlach in a presentation titled "Penny For Your Thoughts, is a graph (slide 36) of the homebuilding stocks vs. the price of lumber. The homebuilders are hanging in there even as the lumber tumbles sharply.
    • While making it clear, he's not expecting any sort of housing collapse, Gundlach expects home prices to stop going up and the demand for homes to be quite a bit less than what many are expecting.
    • Webcast
    • ETFs: XHB, ITB, PKB
    | Jun. 10, 2014, 5:09 PM
  • Jun. 9, 2014, 12:58 PM
    • Those who say it is a good time to sell a house increased to 43%, a new all-time high, says Fannie Mae (FNMA -0.4%) in its May National Housing Survey. Those who say it's a good time to buy dipped a bit to 68%.
    • "Consumers’ lukewarm income expectations and reticence about the economy seem to be holding back housing demand," says Fannie chief economist Doug Duncan. "This year’s spring and summer home buying season has gotten off to a slow start, even as mortgage rates have trended lower over the past two months ... The rebound in home sales will likely be too modest to pull sales for all of 2014 ahead of last year."
    • Speaking to Duncan's remarks: Those who say their household income is significantly higher than a year ago fell four points to 21%.
    • Homebuilder ETFs: XHB, ITB, PKB
    | Jun. 9, 2014, 12:58 PM | 9 Comments
  • May 29, 2014, 10:09 AM
    • The Spring housing bounce hasn't quite arrived as Pending Home Sales only edged higher in April, the 0.4% gain falling short of estimates of 1%. On a Y/Y basis, the Pending Home Sales Index of 97.8 is lower by 9.2%.
    • Up nicely in opening action, the ITB gives back some of those gains, now ahead by 0.3%.
    • Full report
    • Other ETFs: XHB, PKB
    • Previously: Pending Home Sales rises 0.4%
    | May 29, 2014, 10:09 AM | 6 Comments
  • May 28, 2014, 3:01 PM
    • Jay McCanless and Annie Worthman at Sterne Agee say without the benefit of a lower tax rate other non-operating boosts, Toll Brothers (TOL +2.1%) would have missed the team's EPS estimate of $0.31 per share. They continue to rate the stock an Underperform with $28 price target.
    • The bullish team at MKM Partners note Toll "essentially raised" guidance by boosting the low end of its average expected sale price this year to $690K from $675K. "Given the company’s long build cycle, we suspect that the higher guidance is likely more of a statement on the anticipated mix of closings rather than a signal that prices are being raised more aggressively."
    • Amid the big gain by Toll and sharply lower interest rates, some other builders: Hovnanian (HOV +1.7%), Beazer Homes (BZH +1.4%), KB Home (KBH +0.8%), Lennar (LEN +0.2%), PulteGroup (PHM), D.R. Horton (DHI +1.2%).
    • ETFs: XHB, ITB, PKB
    • Previously: High home prices boost Toll results
    • Previously: Toll Brothers beats by $0.09, beats on revenue
    | May 28, 2014, 3:01 PM | 1 Comment
  • May 22, 2014, 10:20 AM
    • April marks the first gain in existing home sales this year, according to the NAR, with the seasonally-adjusted annualized rate rising 1.3% to 4.65M. On a year-over-year basis existing home sales are down 6.8%, and the group's Lawrence Yun allows that annual home sales in 2014 will be lower than last year.
    • Housing inventory of 2.29M homes gained 16% in April and represents a 5.9 month supply at the current sales pace, up from 5.1 months in March.
    • The median price of $201,700 is up 5.2% Y/Y.
    • First-time buyers represent just 29% of all buyers (the same as a year ago), and all-cash sales made up 32% of all transactions (also flat Y/Y).
    • Regions: Northeast down 6.3% Y/Y to 600K, Midwest down 9.6% to 1.03M, South -3.5% to 1.94M, West -10% to 1.08M
    • Full report
    • ETFs: XHB, ITB, PKB
    | May 22, 2014, 10:20 AM | 9 Comments
  • May 16, 2014, 8:46 AM
    • Overall housing starts of 1.072M were 13.2% higher than March's revised level of 947K and 26.4% above the one year ago level. Single-family starts of 649K edged up from March's level of 644K. Multi-family starts of 413K accounted for 39% of all starts - the highest level in about 40 years.
    • Overall building permits of 1.08M grew 8% from March and were 3.8% higher than a year ago. Single-family permits of 602K were essentially unchanged from March's 600K. Multi-family permits were 453K.
    • Full report
    • The 10-year Treasury yield briefly jumped a couple of basis points on the print, but is back to unchanged on the session at 2.50%.
    • ETFs: XHB, ITB, PKB
    • Previously: Housing Starts
    | May 16, 2014, 8:46 AM | 5 Comments
  • May 8, 2014, 10:11 AM
    • The average rate for a 30-year fixed-rate mortgage drops to 4.21%, the lowest rate since November and down from 4.29% a week ago, according to Freddie Mac's latest weekly report.
    • The average rate for the 15-year fixed-rate mortgage falls to 3.32% from 3.38% in the prior week.
    • A year ago, the respective 30- and 15-year rates were 3.42% and 2.61%.
    • "Mortgage rates continued moving down following the decline in 10-year Treasury yields after a dismal report on real GDP growth in the first quarter," according to Freddie chief economist Frank Nothaft.
    • ETFs: XHB, ITB, PKB
    | May 8, 2014, 10:11 AM
  • May 5, 2014, 12:57 PM
    • "Single-family housing is over-believed and overrated," says Jeff Gundlach at the Ira Sohn Conference. What strength there is or was in housing, he says, came from all-cash transactions (much of it institutional money). "This is not exactly indicative of the organic growth in the market from a real buyer’s perspective.”
    • New homes sales: "Remarkably weak ... flat on their back just as they were at the depths of the recession."
    • Affordability: If it's so great, why did last year's interest rate rise hit sales in such a large way?
    • Wind down of the GSEs: Who knows how this plays out, but it's almost certainly going to result in higher mortgage rates.
    • "The kids are not alright," he says, and the exit of first-time home buyers is a secular trend thanks to high unemployment and high student debt levels. "Young people were shocked and scarred by the financial crisis ... [renting is] massively  more appealing."
    • Related ETFs: XHB, ITB, PKB
    • Earlier Sohn coverage
    | May 5, 2014, 12:57 PM | 8 Comments
  • Jan. 21, 2014, 1:34 PM
    • Both the iShares U.S. Home Construction ETF (ITB -0.4%) and the SPDR S&P Homebuilders ETF (XHB -0.2%) have plenty of liquidity and reasonable expenses, but differ in their definition of "homebuilding."
    • The ITB tracks companies making the materials for homes as well as those who build them - 65% in homebuilders and 15% on materials companies. Lennar and Toll Brothers top the holdings, each with more than 9% of AUM.
    • The XHB, on the other hand, has just 50% combined in homebuilders and materials companies, with 20% in retailers like Bed Bath & Beyond, Pier 1, and Lowe's. Another 15% is in furnishing companies like La-Z-Boy and Whirlpool.
    • Another difference; XHB is equal-weighted, meaning more exposure to small and mid-cap stocks. The market-weighted ITB's top 10 holdings make up 63% of its portfolio.
    • Loosely correlated might best describe the returns of the two. The XHB was up 25% in 2013 vs. 18% for ITB, while the ITB's 75% gain in 2012 came against 53% for XHB.
    • The PKB is another homebuilder ETF offering.
    | Jan. 21, 2014, 1:34 PM
  • Jan. 2, 2014, 11:09 AM
    • Despite concerns about interest rates continuing to rise, Sterne Agee's Jay McCanless says there will be more, not less mortgage financing available (makes sense as suppliers generally offer more product when prices rise). The timing, however, is uncertain, and McCanless is cautious about housing demand in Q1, but bullish for the full year - he expects 2014 order growth of 16.4%, 230 basis points higher than consensus.
    • What about the more rigid QM (qualified mortgage) rules? Originators are already - on average - underwriting to tighter standards than the new rules set for release by the CFPB on January 10, says McCanless.
    • He thinks D.R. Horton (DHI -2.4%) is particularly well-positioned to take advantage. "We believe the lack of open communities has hindered sales and unit order growth for several builders during 2013, and we estimate community count growth could resolve some of these issues."
    • Related ETFs: XHB, ITB, PKB
    | Jan. 2, 2014, 11:09 AM
  • Nov. 20, 2013, 10:13 AM
    • Existing home sales of a seasonally adjusted 5.12M fell 3.2% in October (roughly inline), but are 6% higher than a year ago. The national median existing home price of $199,500 is up 12.8% from a year ago. Distressed sales accounted for 14% of total sales vs. 25% a year ago.
    • Total inventory fell 1.8% Y/Y to 2.13M homes, a 5-month supply vs. 5.2 months last year. The median time on the market of 54 days is up from 50 in September and down from 71 in October 2012.
    • Larry Yun: "The erosion in buying power is dampening home sales ... Moreover, low inventory is holding back sales while at the same time pushing up home prices in most of the country. More new home construction is needed to help relieve the inventory pressure and moderate price gains.”
    • Full report
    • Homebuilder and Residential REIT ETFs: XHB, ITB, REZ, RTL, PKB
    | Nov. 20, 2013, 10:13 AM
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