Equity Strategy: Shift Homebuilders to Underweight
- By John Tierney
- 4 min read
Summary
- We remain cautious on equities as 2Q earnings season nears the end.
- We have only one change this week – move homebuilders from marketweight to underweight. We view this as a tactical rather than fundamental move.
- There has been an astonishingly rapid increase in completed new homes available for sale, to 6.2 months’ supply in June. Even during the worst of the 2008-09 housing crash this measure only reached 4.7 months’ supply.
- Existing homes inventories remain near record lows, so homebuilders may be able to work off excess inventory fairly quickly.
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