Dow declined 64, advancers ahead of decliners 4-3 & NAZ recovered 89 after recent weakness. The MLP index was steady at 190 & the REIT index is not posting a price. Junk bond funds fluctuated & Treasuries saw a little selling. Oil slid back in the 65s & gold was flat at 1867 after yesterday's big rise.
AMJ (Alerian MLP index tracking fund)
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US homebuilding fell more than expected in Apr, likely pulled down by soaring prices for lumber & other materials, but construction remains supported by an acute shortage of previously owned homes on the market. Housing starts tumbled 9.5% to a seasonally adjusted annual rate of 1.569M units last month, the Commerce Dept said. Data for Mar was revised lower to a rate of 1.733M units, still the highest level since 2006, from the previously reported 1.739M units. The forecast was for starts falling to a rate of 1.71M units. Starts surged 67.3% on a year-on-year basis in Apr. Groundbreaking activity dropped in the Midwest & the densely populated South, but rose in the Northeast & West. Demand for bigger & more expensive accommodations amid the COVID-19 pandemic, which has forced Ms of Americans to work from home & take classes remotely, has fueled a housing market boom. But the virus has disrupted labor supply at saw mills & ports, leading to shortages of lumber & other raw materials, boosting prices & threatening to sideline first-time homebuyers from the market. The inventory of previously owned homes is near record lows. Tariffs on steel imports are also adding to building costs. Lumber prices surged 89.7% on a year-on-year basis in Apr. A survey from the National Association of Home Builders (NAHB) yesterday showed confidence among single-family homebuilders holding steady in May. The NAHB noted that "some builders are slowing sales to manage their own supply chains." According to an Institute for Supply Management survey published early this month, businesses in the construction industry reported challenges finding & retaining skilled & unskilled workers, with some companies saying "we are not accepting all the work that we could if we had the labor." Permits for future homebuilding rose 0.3% to a rate of 1.76M units in Apr. They soared 60.9% compared to Apr 2020. Single-family homebuilding, the largest share of the housing market, dropped 13.4% to a rate of 1.087M units in Apr. It retreated further below the more than 14-year high scaled in Dec, a sign that builders could be holding back because of the more expensive materials. Building permits for single-family homes fell 3.8% to a rate of 1.149M units. Starts for the volatile multi-family segment rose 0.8% to a pace of 482K units. Building permits for multi-family housing projects accelerated 8.9% to a rate of 611K units.
US housing starts drop sharply; building permits rise modestly
Home Depot (HD), a Dow stock, reported a bigger-than-expected 31% jump in quarterly same-store sales, allaying concerns that the top US home improvement chain would see pandemic-fueled demand easing as vaccinations gather steam. The last 12 months have been a blockbuster period for HD as revenue & profit surged from stuck-at-home Americans investing more to upgrade their living spaces. The company also benefited from a
years-long focus on e-commerce, particularly in services such as "click
and collect" service. Same-store sales growth was expected to
slow in Q1 to 19.9% from 24.5% in the prior 3-month
period, as more Americans get inoculated, virus restrictions ease &
outdoor activities resume. The
company said Q1 same-store sales was the biggest increase in
recent history, but did not provide a forecast for the rest of the
year. Sky-rocketing prices of lumber, which made up nearly 9% of
total sales last year, are also expected to have boosted
sales in Q1. Overall net sales jumped 32.7% to $37.5B, beating estimates of $35B. EPS rose to $3.86 from $2.08 a year earlier. The forecast had expected EPS of
$3.08. The stock fell 1.87.
If you would like to learn more about HD, click on this link:
club.ino.com/trend/analysis/stock/HD?a_aid=CD3289&a_bid=6ae5b6f7
Home Depot posts blowout quarter as pandemic-fueled boom prolongs
Macy's (M) said that the huge sales gains it posted in Q1 aren't a fluke. “We
don’t see this as a short-term pop,” CEO Jeff Gennette said. “There are pent-up demand
opportunities ... that give us confidence for accelerated profitable
growth in 2021 and beyond.” Sales in Q1 grew to $4.7B from $3B a year earlier, helping it to turn a surprise profit & prompting it to raise its forecast for the year. The
company is lapping a period when its department stores were forced shut
due to lockdowns that were put in place to help curb the spread of
Covid-19. Sales tumbled a year ago, as shoppers put spending on apparel,
handbags & makeup on pause. Many of those categories are now coming back strong, Gennette said. “As
the weather warms up, and vaccines are more readily available,
customers are feeling increasingly confident to get dressed up and
venture outside,” Gennette added. “They’re also starting to attend events
again.” Sales of luggage have climbed as people get ready to
travel again. Proms & weddings are back on again, & sales of dresses
are rising week by week. At Bloomingdale's, sales of dressy sandals are
up year over year. And on the men's side, demand for tailored clothing
is spiking. But
Gennette also explained that demand in many of the categories that were
fueled by the pandemic hasn't slowed down, either. He cited home goods & pajamas as 2 examples of product categories that continue to grow. The stock went up a penny.
If you would like to learn more about Macy's, click on this link:
club.ino.com/trend/analysis/stock/M?a_aid=CD3289&a_bid=6ae5b6f7
Macy’s CEO says its robust sales gains aren’t a ‘short-term pop’
Dow Jones Industrials
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