I love it when the Power Gauge produces surprising results... And folks, that's exactly what we're seeing today. You see, one specific sector is hated in a high-interest-rate environment.
Get to Know the Top Subsector in the Power Gauge Today
By Marc Chaikin, founder, Chaikin Analytics
I love it when the Power Gauge produces surprising results...
And folks, that's exactly what we're seeing today.
You see, one specific sector is hated in a high-interest-rate environment. If you don't know it immediately, it'll be obvious as soon as I mention it...
Real estate.
After all, higher rates mean higher payments on property loans. And that leads to higher total costs over the lifetime of the loan.
That puts a huge damper on purchasing. And that's playing out in the housing market today.
Sales of new single-family homes peaked in August 2020. That was more than two and a half years ago. And today's number is roughly 34% below the peak.
Without question, rising rates are a headwind for the real estate sector.
Despite that, one subsector related to real estate is soaring right now. In fact...
It's the No. 1 subsector in the Power Gauge today.
This subsector has doubled the performance of the S&P 500 Index so far this year. And judging from the Power Gauge's "very bullish" rating, we can expect more gains ahead.
The world-renowned professor who called the 2008 and 2020 crashes months in advance says what's coming will impact 20x MORE money than the collapse of Silicon Valley Bank and First Republic Bank COMBINED. He also gave away the name and ticker of a popular stock he believes could go BANKRUPT this summer. Don't wait, click here for full details.
Over 1 million people around the world follow 50-year Wall Street veteran Marc Chaikin for his surprisingly accurate stock predictions. And he just gave them an urgent SELL ALERT for one of the most popular stocks in U.S. history. He says, "After years of breathtaking gains, this company's day in the sun is coming to an end. You must sell this stock – NOW!" Get the ticker here.
If you haven't guessed already, we're looking at the homebuilders subsector today.
We track that subsector in the Power Gauge through the SPDR S&P Homebuilders Fund (XHB). This exchange-traded fund ("ETF") holds mega homebuilders like PulteGroup (PHM), D.R. Horton (DHI), Lennar (LEN), and more.
Since the start of 2023, the ETF has more than doubled the performance of the S&P 500. It's up around 18% over that span, while the S&P 500 is up about 8%. Take a look...
Now, that might come as a surprise to some folks. But regular Chaikin PowerFeed readers know that my right-hand man and analyst Briton Hill wrote about this topic yesterday.
Put simply, high rates didn't wreck the housing market in the 1970s. And they're not wrecking it today.
In fact, by nearly all estimates, the U.S. housing market is still incredibly undersupplied...
Recent estimates indicate that the U.S. housing supply is around 6.5 million homes short. And even with a surge in multifamily and single-family buildings, we're still years away from closing that gap.
Now, 2008 might seem like a distant memory for most of us. But macroeconomic trends take a long time to unfold. And the U.S. spent years building too few homes in the wake of the housing crash and ensuing financial crisis.
So it's no surprise that homebuilders are soaring today. The fact is, a major amount of homes still need to be built. That means business will keep booming for these companies.
The Power Gauge sees that, too. It currently ranks XHB at the top of its list of subsectors...
XHB is "very bullish" today. And its Power Bar breakdown is firmly in the green zone...
You can see that the ETF currently holds 26 "bullish" or better stocks. And it doesn't have any "bearish" or worse holdings.
In other words, the Power Gauge sees continued potential for XHB in the coming months.
Since then, XHB has climbed roughly 6%. Meanwhile, the S&P 500 is only up about 1%.
The outperformance from homebuilders is clear. And the Power Gauge is "very bullish."
So if you haven't already, take a look at this top-performing subsector today.
Good investing,
Marc Chaikin
Market View
Major Indexes and Notable Sectors
# Hld: Bullish Neutral Bearish
Dow 30
+0.43%
10
18
2
S&P 500
+0.96%
151
257
90
Nasdaq
+1.86%
55
33
12
Small Caps
+0.62%
458
914
508
Bonds
-0.74%
Information Technology
+2.05%
39
25
0
— According to the Chaikin Power Bar, Small Cap stocks remain somewhat more Bearish than Large Cap stocks. Major indexes are mixed.
* * * *
Sector Tracker
Sector movement over the last 5 days
Information Technology
+4.23%
Communication
+3.49%
Discretionary
+2.51%
Financial
+2.19%
Industrials
+1.64%
Energy
+0.80%
Materials
+0.60%
Staples
-1.24%
Health Care
-1.26%
Real Estate
-2.03%
Utilities
-3.55%
* * * *
Industry Focus
Bank Services
6
35
53
Over the past 6 months, the Bank subsector (KBE) has underperformed the S&P 500 by -32.55%. Its Power Bar ratio, which measures future potential, is Very Weak, with more Bearish than Bullish stocks. It is currently ranked #18 of 21 subsectors and has moved down 1 slot over the past week.
Indicative Stocks
GBCI
Glacier Bancorp, Inc
BKU
BankUnited, Inc.
WSBC
WesBanco, Inc.
* * * *
Top Movers
Gainers
TTWO
+11.69%
BBWI
+10.73%
NFLX
+9.22%
SNPS
+8.65%
CPRT
+7.77%
Losers
TGT
-4.21%
MOH
-3.60%
NEM
-3.31%
PODD
-3.29%
ETSY
-2.74%
* * * *
Earnings Report
Reporting Today
Rating
Before Open
After Close
CTLT, DE
No earnings reporting today.
Earnings Surprises
WMT Walmart Inc.
Q1
$1.47
Beat by $0.15
AMAT Applied Materials, Inc.
Q2
$2.00
Beat by $0.17
ROST Ross Stores, Inc.
Q1
$1.09
Beat by $0.04
* * * *
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