Sunday, July 15, 2012

Sector Performance Update for Week of 7/9/2012

After a significant upswing in the market on Friday, S&P 500 inched up a bit for the week, approx. 0.16%.

Given the consistently lowered earnings estimates by the analysts, the bar is certainly set very low for companies to beat.  For the time being, earnings will likely get the most coverage, but we think the macro concerns will be back on the front pages very soon.

Lastly, we note that the homebuilders index (XHB - S&P Homebuilders ETF) has spiked up 26%+ YTD.  Although management teams of many companies within this space have tried to keep expectations low, the market is certainly expecting the numbers to show more than a mere modest recovery.  Any slight miss in the upcoming week's housing figures (housing starts, building permits, and existing home sales) could send the homebuilders index and its components down at least for the short term.  Of the top ten holdings of XHB, NVR Inc. (NVR), is the only homebuilder reporting earnings next week (7/16).  Most of the other ones are reporting Q2 numbers during week of 7/23.

Sector performance update for week of 7/9/2012 is provided below.  We will post our thoughts on and expectations of a few soon to be released economic indicators by the end of this weekend.  By the way, the Knicks picking up Raymond Felton and possibly letting go of Jeremy Lin, is, in our opinion, a pretty good move. 

No comments:

Post a Comment