iShares U.S. Home Construction ETF (BATS: ITB)

iShares U.S. Home Construction ETF (BATS:ITB), Quote.Headers.trade-ideas

iShares U.S. Home Construction ETF

Consumer Cyclical

Industrials

Basic Materials

The Fund seeks to track the investment results of the Dow Jones U.S. Select Home Construction Index; the Underlying Index, which measures the performance of the home construction sector of the U.S. equity market, as defined by S&P Dow Jones Indices LLC; the Index Provider or SPDJI.

D.R. Horton Inc - Common

Lennar Corp. Class A

Pultegroup Inc.

Nvr Inc Common Stock Usd 0.01

Sherwin Williams Co/The

Topbuild Corp

Lowes Cos., Inc.

Toll Brothers Inc

Home Depot Inc/The

Builders Firstsource Inc

iShares US Home Construction ETF

homebuilder shutter

Federal Reserve

Markets

ETFs

Real Estate

iShares Dow Jones US Homenstruction Index Fund

NAIL

Single-family housing starts last month came in at an annualized rate of 992,000 units, up 15.8% from a revised figure of 857,000 for July.

Single-Family Housing Starts Are Up As Mortgage Rates Decline, Fed Eyes Lower Rates

Mortgage Rate Fluctuations

Equities

Macro Economic Events

News

Economics

General

PowerShares Dynamicnsumer Discretionary Sector Portfolio

Over the next five years, the housing market will see slower price increases, eased inventory shortages, and renewed competition driven by lower rates and strong economic fundamentals

Rate Cuts Coming: Is It The Perfect Time For Homebuyers To Strike Big Deals?

Businessman,Pointing,At,Etf,(exchange,Traded,Funds).,Investment,Opportunities,In

Mid Cap

Sector ETFs

Small Cap

ARHS

BLDR

EGBN

NOVA

SEDG

These three ETFs rallied on Friday after Jerome Powell promised to &#34;adjust&#34; policy: regional banks, solar, and home builders.

Powell&#39;s Dovish Stance Ignites Rally In Stocks Craving Lower Borrowing Costs: 3 ETFs Positioned For Fed Rate Cuts

New construction on single-family homes in the U.S. <a href="https://www.benzinga.com/news/23/06/32926608/us-housing-starts-skyrocket-to-highest-level-since-2016-sign-of-strong-market-optimism-among-builder">jumped in August</a> as mortgage rates trend downward and the Federal Reserve is expected to cut rates on Wednesday for the first time in four years.
Single-family housing starts last month came in at an annualized rate of 992,000 units, up 15.8% from a revised figure of 857,000 for July, according to Commerce Department data released on Wednesday.
Starts for all privately-owned housing in August totaled an annualized rate of 1.356 million units, up 9.6% from the July revised estimate of 1.237 million and up 3.9% from the August 2023 rate of 1.305 million.
Single-family housing completions reached an annualized rate of 1.029 million in August, registering a 5.6% decline from July&#8217;s revised rate of 1.09 million.
Completions for all privately-owned homes in August were at a seasonally adjusted annual rate of 1.788 million, up 9.2% from the July revised estimate of 1.637 million and 30.2% above the July 2023 rate of 1.373 million.
Read Also: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/03/37845734/housing-starts-rebound-lift-homebuilder-stocks-sign-of-economic-resilience">Housing Starts Rebound, Lift Homebuilder Stocks: Sign Of Economic Resilience</a>
Building permits also rose last month, Commerce Department data showed.
Single-family authorizations in August were at a rate of 967,000, up 2.8% from the revised July figure of 941,000.
Privately-owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 1,475,000. That&#8217;s up 4.9% from the July revised rate of 1.406 million but below the August 2023 rate of 1.578 million.
The average rate for <a href="https://www.benzinga.com/news/24/09/40921345/mortgage-rates-drop-to-2-year-low-refinancing-hits-fastest-pace-since-2022-rocket-lendingtree-among">30-year mortgages</a> fell 14 basis points in the week ended Sept. 13 to 6.15%, marking the lowest rate since September 2022, according to the Mortgage Bankers Association.
The Federal Reserve is <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/09/40921827/fed-decision-is-here-5-things-investors-need-to-know-ahead-of-wednesdays-pivotal-in">expected to lower</a> its key interest rate ranging from 5% to 5.25% on Wednesday by either 25 or 50 basis points, signifying its first rate decline in four years.
Price Action: Homebuilders slid into Wednesday&#8217;s mid-day trading.
<ul>
<li>D.R. Horton, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DHI#NYSE">DHI</a>) slipped 0.86% to $193.67 </li>
<li>Pulte Group (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PHM#NYSE">PHM</a>) declined 0.41% to $139.88</li>
<li>NVR, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NVR#NYSE">NVR</a>) went down 0.34% to $9,542.99</li>
</ul>
Exchange-traded funds that hold homebuilder stocks showed gains and losses.
<ul>
<li>IShares U.S. Home Construction ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/ITB#BATS">ITB</a>) declined 0.57%</li>
<li>Direxion Daily Homebuilders &amp; Supplies Bull 3X Shares (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NAIL#NYSE">NAIL</a>) fell 1.8%</li>
<li>Pacer US Cash Cows Growth ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BUL#NYSE">BUL</a>) gained 0.2%</li>
</ul>
Read Now:
<ul>
<li>&#8216;<a href="https://www.benzinga.com/real-estate/24/08/40666981/the-time-has-come-to-adjust-cheaper-mortgage-rates-could-be-just-weeks-away-but-it-all-hinges-on-thi">The Time Has Come to Adjust&#8217; — Cheaper Mortgage Rates Could Be Just Weeks Away, But It All Hinges On This Data</a></li>
</ul>
Image: Shutterstock

The U.S. housing market has been tumultuous <a target="_blank" href="https://www.benzinga.com/economics/24/08/40259694/housing-inches-toward-buyers-market-as-mortgage-rates-fall-but-with-one-caveat-report" rel="noreferrer noopener">due to persistent interest rate hikes</a>.
However, an upward revision of<a href="https://www.benzinga.com/news/large-cap/24/08/40639345/traders-scale-back-bets-on-50-basis-point-september-rate-cut-ahead-of-fridays-key-fed-inflation-ga"> U.S. gross domestic product growth</a> in the second quarter has led speculators to reconsider their bets on a substantial 50-basis-point&nbsp;<a href="https://www.benzinga.com/markets/equities/24/08/40627044/us-dollar-oil-prices-tech-stocks-rise-as-gdp-roars-by-3-in-q2-bonds-yen-slip-as-bets-for-large-r" target="_blank" rel="noreferrer noopener">rate cut next month.</a>
With mortgage rates expected to decrease, experts advise homebuyers to act swiftly to secure the best deals before the opportunity closes.
Looking ahead, several dynamic trends are set to shape the housing market.
According to a <a href="https://www.noradarealestate.com/blog/housing-market-forecast-for-next-5-years/" target="_blank" rel="noreferrer noopener">note</a> by Norada Real Estate Investments, the market will remain strong over the next five years, though it will experience some dramatic shifts. Home prices are projected to continue rising, but at a slower pace than in recent years, offering a more gradual increase. While the supply of homes is expected to grow, addressing the previous shortage should ease the inventory crunch that has driven prices up.
Also Read: <a target="_blank" href="https://www.benzinga.com/news/24/08/40230627/a-ton-of-landlords-are-about-to-raise-rents-this-year" rel="noreferrer noopener">A Ton Of Landlords Are About To Raise Rents This Year</a>
Despite the Federal Reserve&#8217;s past rate hikes raising borrowing costs and dampening buyer enthusiasm, a gradual rate decline could rekindle demand and revitalize the market.
However, competition will remain fierce due to robust job growth, population expansion, and limited land availability.
<h3 class="wp-block-heading">2024 Forecast</h3>
The U.S. housing market is anticipated to slow, with home prices either stabilizing or seeing a slight decline. Zillow&#8217;s latest forecast for 2024 projects a 1.8% national increase in home values, indicating a period of market stability, Norada Real Estate Investments added.
Stock Opportunities
As home prices are expected to remain stable or increase modestly, homebuilders are likely to benefit from sustained demand and favorable conditions. This stability should support their revenue growth through ongoing construction and sales.
According to a June report by the<a href="https://www.nahb.org/blog/2024/06/pro-builder-housing-giants"> National Association of Home Builders</a>, the top three homebuilders by revenue, closings, and home types are:
<ul>
<li>D.R. Horton, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DHI#NYSE">DHI</a>): DHI stock has surged over 58% in the past year. Wells Fargo recently raised its <a href="https://www.benzinga.com/quote/DHI/analyst-ratings" target="_blank" rel="noreferrer noopener">price forecast </a>to $220 from $210 while maintaining an Overweight rating. Investors can consider the iShares U.S. Home Construction ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/ITB#BATS">ITB</a>) for exposure.</li>
<li>Lennar Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LEN#NYSE">LEN</a>): LEN stock has risen more than 52% in the past year. Wells Fargo increased its price forecast to $195 from $185, also maintaining an <a href="https://www.benzinga.com/quote/LEN/analyst-ratings" target="_blank" rel="noreferrer noopener">Overweight </a>rating. The AdvisorShares Gerber Kawasaki ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GK#NYSE">GK</a>) offers a way to invest in Lennar.</li>
<li>Toll Brothers, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TOL#NYSE">TOL</a>): TOL stock has jumped over 75% in the past year. Wedbush raised its<a href="https://www.benzinga.com/quote/TOL/analyst-ratings" target="_blank" rel="noreferrer noopener"> price forecast</a> to $148 from $120, keeping a Neutral rating. The Invesco Dorsey Wright Consumer Cyclicals Momentum ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PEZ#NASDAQ">PEZ</a>) provides investment exposure.</li>
</ul>
Overall, the U.S. housing market is poised for stability this year, with modest price increases and benefits for homebuilders. Prices are projected to rise 3-5% annually through 2029, while mortgage rates are expected to stabilize above pre-pandemic levels, Norada reported. This evolving landscape, marked by a shift towards suburban and rural demand and technological advancements, will require buyers and investors to remain informed and adaptable, the report added.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Read Next:
<ul>
<li><a href="https://www.benzinga.com/news/24/08/40649198/housing-market-in-biggest-bubble-of-all-time-warns-reventure-ceo-this-situation-is-not-sustainable" target="_blank" rel="noreferrer noopener">Housing Market In &#8216;Biggest Bubble Of All Time,&#8217; Warns Reventure CEO: &#8216;This Situation Is Not Sustainable&#8217;</a></li>
</ul>

Certain exchange-traded funds, or ETFs, experienced a significant surge following Fed Chair Jerome Powell&#8217;s speech at <a href="https://www.benzinga.com/etfs/sector-etfs/24/08/40529209/jerome-powell-time-has-come-for-interest-rate-cuts-cooling-in-labor-market-unmistakable">the Jackson Hole Symposium</a>.
&#8220;The time has come for policy to adjust,&#8221; Powell said in a speech. 
The reassuring statement regarding upcoming rate cuts sparked a strong rally in the most interest rate-sensitive corners of the stock <a href="https://www.benzinga.com/markets/equities/24/08/40530908/powells-rate-cut-signal-triggers-small-cap-rally-gold-makes-record-highs-dollar-tumbles-7-etfs-o">market during Friday&#8217;s session.</a> Here&#8217;s a look at three of the top-performing industry ETFs on Friday: regional banks, solar, and home builders.
See Also: <a href="https://www.benzinga.com/news/24/08/40532443/strong-economy-doesnt-justify-4-rate-cuts-this-year-how-about-3-what-experts-are-saying">Strong Economy Doesn&#8217;t &#8216;Justify&#8217; 4 Rate Cuts This Year: How About 3? What Experts Are Saying</a>
<h2 class="wp-block-heading">1) Regional Banks</h2>
The SPDR S&amp;P Regional Banking ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KRE#NYSE">KRE</a>) surged 5% by 3:00 p.m. ET, setting up for its strongest session since December 2023. 
Notably, all 141 of its constituents posted gains, underscoring a broad-based rally across the regional banking industry. 
Eagle Bancorp, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EGBN#NYSE">EGBN</a>), United Community Banks Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UCB#NYSE">UCB</a>) and Valley National Bancorp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VLY#NYSE">VLY</a>) were the strongest performers, up 10.6%, 9.6% and 8.7%, respectively.
Regional banks benefit from lower interest rates mainly because borrowing costs go down, resulting in higher loan demand among customers.
Additionally, U.S. regional banks can find a relief from decreased stress on their non-performing exposures, especially in commercial real estate, as reduced borrowing costs can encourage those firms to refinance their debt or invest in their businesses, thereby improving their ability to meet financial obligations.
<h2 class="wp-block-heading">2) Solar </h2>
The Invesco Solar ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TAN#NYSE">TAN</a>) soared 4.6% on Friday, marking its best session since late May 2024. 
Top gainers were Sunnova Energy International Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NOVA#NASDAQ">NOVA</a>) and SolarEdge Technologies Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SEDG#NASDAQ">SEDG</a>) up 13.7% and 12.5%, respectively. 
Solar companies often require substantial upfront capital to finance the development and installation of solar projects. Lower interest rates reduce the cost of borrowing, making it cheaper for these companies to fund their projects.
<h2 class="wp-block-heading">3) Home Builders</h2>
The iShares Home Construction ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ITB#NYSE">ITB</a>) gained 3.8%, on track to close Friday&#8217;s session at fresh record highs. 
Top-performing names within this industry included Builders FirstSource, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BLDR#NYSE">BLDR</a>), Dream Finders Homes, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DFH#NYSE">DFH</a>) and Arhaus, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ARHS#NYSE">ARHS</a>), all screening gains above 7%. 
Increased housing demand due to more affordable mortgage rates and lower financing costs represent tailwinds for the home construction business. 
<h2 class="wp-block-heading">Chart: Regional Banks, Solar Energy, Home Builders Rally</h2>
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="459" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/23150757/image-234-1024x459.png" alt="" class="wp-image-511618" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/23150757/image-234-1024x459.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/23150757/image-234-300x135.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/23150757/image-234-768x344.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/23150757/image-234-1536x689.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/23150757/image-234.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Image: <a href="https://bzresearch.myclickfunnels.com/benzinga-pro-content-webinar-registration/?utm_source=BZprocontent082324&amp;t=be2bearmibe3na1">Benzinga Pro</a></figcaption></figure>
The market interpreted Powell&#8217;s remarks as a green light for the first interest rate cut at the imminent September Open Market Committee meeting. However, Powell provided no indications regarding the size of the cut or the future trajectory of interest rates.
Powell paved the way for a turnaround in companies most negatively impacted by the recent surge in interest rates. Markets had already fully priced in a September rate cut and over 85 basis points of cuts by year-end.
&#8220;Fed Chair Jerome Powell was dovish in his Jackson Hole&nbsp;speech&nbsp;today. He didn&#8217;t hedge. He didn&#8217;t push back against market expectations of several rate cuts ahead as we anticipated he might,&#8221; Ed Yardeni, president at Yardeni Research, commented. 
&#8220;Fed Chair Powell took a dovish tone at Jackson Hole, sounding more preemptive on the labor market and locking in a September cut,&#8221; Bank of America economist Aditya Bhave&nbsp;stated. 
Powell &#8220;struck a dovish tone on the labor market and more firmly emphasized that the Fed's tolerance for labor market cooling had reached its limits and any further weakening would be unwelcome," Goldman Sachs economist Jan Hatzius stated. 
Don&#8217;t miss the opportunity to dominate in a volatile market at the <a href="https://www.benzinga.com/events/small-cap/global-small-cap-conference-2024/" target="_blank" rel="noreferrer noopener">Benzinga SmallCAP Conference</a> on Oct. 9-10 at the Chicago Marriott Downtown Magnificent Mile. Get exclusive access to CEO presentations, 1:1 meetings with investors, and valuable insights from top financial experts. Whether you&#8217;re a trader, entrepreneur, or investor, this event offers unparalleled opportunities to grow your portfolio and network with industry leaders. Secure your spot and get your tickets today!
Read now: 
<ul>
<li><a href="https://www.benzinga.com/government/24/08/40532173/powell-removes-any-uncertainty-around-september-rate-cuts-in-jackson-hole-speech-economists">Powell Removes &#8216;Any Uncertainty&#8217; Around September Rate Cuts In Jackson Hole Speech: Economists</a></li>
</ul>

Powell's Dovish Stance Ignites Rally In Stocks Craving Lower Borrowing Costs: 3 ETFs Positioned For Fed Rate Cuts

Jerome Powell's interest rate remarks Friday ignited a rally in stocks, bonds, and commodities, while the U.S. dollar plunged as traders solidified their bets on <a href="https://www.benzinga.com/topic/interest-rates">rate cuts</a>.
Financial markets responded positively to Fed chair Powell&#8217;s remarks at the Jackson Hole symposium, where he said the &#8216;&#8221;time has come <a href="https://www.benzinga.com/etfs/sector-etfs/24/08/40529209/jerome-powell-time-has-come-for-interest-rate-cuts-cooling-in-labor-market-unmistakable">for policy to adjust.&#8221;</a>
The Fed chair said he is more confident the economy is on a sustainable path back to the 2% inflation target, allowing the Fed to finally shift its focus to labor market conditions.
&#8220;We do not seek or welcome further cooling in labor market conditions,&#8221; he said, adding the Fed has &#8220;ample room to respond&#8221; by adjusting its policy should further weakening in labor market conditions occur.
<h3 class="wp-block-heading">7 Key ETFs React To Powell&#8217;s Jackson Hole Speech</h3>
A greenback gauge, as tracked by the Invesco DB USD Index Bullish Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UUP#NYSE">UUP</a>), tumbled by 0.7% at 11 a.m. ET., extending its weekly decline to 1.4% — the worst performance it has recorded this year.
Driven by expectations of lower interest rates and a weakening dollar, gold prices surged to a new all-time high of $2,530 per ounce following the speech, with the SPDR Gold Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>) climbing by 1.1%. 
Wall Street initially rallied before paring back some gains as traders assess the economic outlook.
Small caps, instead, substantially outperformed large-cap indices. The iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>) soared 2.9%, on track for its strongest session since July 16. 
Within sectors, real estate stocks rallied, with the Vanguard Real Estate ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VNQ#NYSE">VNQ</a>) up 1.8%, hitting the highest levels since September 2022. 
Interest-rate sensitive industries saw significant gains following Powell&#8217;s remarks, with homebuilders, regional banks and miners leading the market.
The SPDR S&amp;P Regional Banking ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KRE#NYSE">KRE</a>) jumped 4.6%, while the iShares U.S. Home Construction ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ITB#NYSE">ITB</a>) climbed 3.2%, and the SPDR S&amp;P Metals &amp; Mining ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XME#NYSE">XME</a>) advanced 1.7%.
Don't miss the opportunity to dominate in a volatile market at the <a href="https://www.benzinga.com/events/small-cap/global-small-cap-conference-2024/">Benzinga SmallCAP Conference </a>Oct. 9-10 at the Chicago Marriott Downtown Magnificent Mile. 
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="440" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/23110937/image-232-1024x440.png" alt="" class="wp-image-511163" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/23110937/image-232-1024x440.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/23110937/image-232-300x129.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/23110937/image-232-768x330.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/23110937/image-232-1536x660.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/08/23110937/image-232.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
Read Next:
<ul>
<li><a href="https://www.benzinga.com/government/24/08/40529572/financial-crime-weekly-health-care-provider-to-pay-3-85m-for-medicare-scheme-co-conspirators-to-pay">Financial Crime Weekly: Health Care Provider To Pay $3.85M For Medicare Scheme, Co-Conspirators To Pay $70M For Vitol Bribery Scheme</a></li>
</ul>
Jerome Powell and Wall Street illustration. Photo: Federalreserve/Flickr Photo: Bylolo/Unsplash

Broad U.S. Equity ETFs

Commodities

Econ #s

Movers

Tech

PowerShares DB US Dollar Index Bullish Fund

Powell's Rate Cut Signal Triggers Small-Cap Rally, Gold Makes Record Highs, Dollar Tumbles: 7 ETFs On The Move

Toll Brothers, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TOL#NYSE">TOL</a>) CEO Douglas Yearley is expecting the demand for luxury homes <a href="https://www.benzinga.com/news/24/08/40489889/whats-going-on-with-toll-brothers-stock-wednesday">to remain robust</a> into 2025 after his high-end construction company posted solid third-quarter results on Tuesday.
&#8220;With mortgage rates at their lowest point in a year and trending lower, favorable demographics and continuing balance in the supply and demand of homes for sale, we are optimistic that demand for new homes will remain solid through the end of fiscal &#8217;24 and into 2025,&#8221; he said on Wednesday during a conference call with analysts.
He noted that demand was &#8220;uneven&#8221; throughout the quarter as May had a strong start that slowed in June, while July saw the highest demand, particularly in the latter half of the month.
&#8220;We are encouraged by demand trends we are seeing across the country and also across our buyer segments,&#8221; he said.
Demand was especially strong in the states of California, New Jersey, Pennsylvania, South Carolina and in the urban areas of Atlanta, Boise, Las Vegas and Metro D.C., he said.
Toll Brothers posted adjusted EPS of $3.60 that exceeded Wall Street consensus of $3.31 and $2.73 billion in revenue that beat the analyst estimate of $2.71 billion.
Read Also: <a href="https://www.benzinga.com/trading-ideas/previews/24/08/40447261/toll-brothers-q3-earnings-preview-will-kamala-harris-3-million-homes-plan-boost-homebuilde">Toll Brothers Q3 Earnings Preview: Will Kamala Harris&#8217; 3 Million Homes Plan Boost Homebuilder Stocks?</a>
But RBC Capital Markets pointed out that Toll Brothers&#8217; 11% rise in home orders to 2,490 units from a year ago fell well short of its expectation for a 26% jump in orders and Wall Street&#8217;s forecast of a 27% increase in orders. Meanwhile, the company&#8217;s gross margin of 27.6% beat RBC&#8217;s forecast of 26.4% and Street consensus of 26.3%.
&#8220;Net, the miss on orders and beat on GM% were both wider than expected,&#8221; analyst Mike Dahl wrote in a note.
Wedbush Securities noted that Toll Brothers&#8217; orders rose by double-digit percentages in the Midatlantic, South and Mountain regions but fell by single-digit percentages in the North and Pacific regions.
It also pointed out that Toll Brothers&#8217; sales absorption rate, which is the ratio of homes sold to homes available in a market during a period, of 2.1 homes per month was below Wedbush&#8217;s forecast of 2.3 homes per month.
&#8220;We expect absorption to decline to 1.9 orders/month in F4Q24 due to normal seasonality,&#8221; analyst Jay McCanless wrote in a note.
Price Action: Toll Brothers gained 5.62%, to close at $141.03 on Wednesday, along with gains across ETFs in the sector.
<ul>
<li>Invesco Dorsey Wright Consumer Cyclicals Momentum ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PEZ#NASDAQ">PEZ</a>) rose 2.33%.</li>
<li>IShares U.S. Home Construction ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/ITB#BATS">ITB</a>) went up 2.6%.</li>
<li>IShares Focused Value Factor ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FOVL#NYSE">FOVL</a>) gained 0.52%.</li>
<li>Themes US Small Cap Cash Flow Champions ETF (NASDFAQ: SMCF) edged up 0.64%.</li>
<li>SPDR S&amp;P Homebuilders ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XHB#NYSE">XHB</a>) rose 2.9%.</li>
</ul>
Read Now: 
<ul>
<li><a href="https://www.benzinga.com/news/earnings/24/08/40464067/toll-brothers-likely-to-report-lower-q3-earnings-these-most-accurate-analysts-revise-forecasts-ahea">Toll Brothers Likely To Report Lower Q3 Earnings; These Most Accurate Analysts Revise Forecasts Ahead Of Earnings Call</a></li>
</ul>
Image created using artificial intelligence via Midjourney.

Analyst Color

Analyst Ratings

FOVL

SMCF

Demand For High-End Homes 'Will Remain Solid' Into Next Year, Says Toll Brothers CEO

Homebuilder stocks surged to record highs on Friday, driven by a positive inflation report that cemented expectations for interest <a href="https://www.benzinga.com/topic/interest-rates">rate cuts in September.</a>
The Personal Consumption Expenditure (PCE) price index — commonly referred to as the Fed&#8217;s favorite inflation measure — fell from 2.6% year-on-year to 2.5% in <a href="https://www.benzinga.com/economics/macro-economic-events/24/07/39983210/feds-preferred-inflation-measure-shows-mixed-readings-personal-income-spending-fa">June 2024, matching expectations. </a>
The iShares U.S. Home Construction ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ITB#NYSE">ITB</a>), a key basket tracking U.S. homebuilder equity performances, jumped 3.8%, marking its third consecutive week of gains. 
Chart: U.S. Home Construction ETF Reaches Record Highs
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="441" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/26102927/image-50-1024x441.png" alt="" class="wp-image-459652" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/26102927/image-50-1024x441.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/26102927/image-50-300x129.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/26102927/image-50-768x330.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/26102927/image-50-1536x661.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/26102927/image-50.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Image:<a href="http://www.benzinga.com/pro/register/?utm_source=BZprocontent072624&amp;t=be2bearmibe3na1"> Benzinga Pro </a></figcaption></figure>
Over the past three weeks, U.S. homebuilder stocks have surged by more than 20%, spurred by the anticipation of lower interest rates benefiting rate-sensitive sectors like home construction.
Market participants are now fully pricing in a Federal Reserve rate cut in September, with expectations for at least one more reduction by December 2024. 
&#8220;Homebuilders are trading at the high-end of the&nbsp;historical&nbsp;valuation&nbsp;range, which we think is justified by higher return-on-equity (ROE). On average, we forecast 22% return-on-equity compared to the 2019 level of 20%,&#8221; Bank of America analyst Rafe Jadrosich wrote in a recent report. 
Historically, similar valuation levels in 2018 and 2021 led to sharp pullbacks as the Fed raised rates, Bank of America highlighted. However, the investment bank believes the scenario is different in the second half of 2024, with the Fed likely to begin cutting rates.
On Friday, Bank of America double-upgraded Mohawk Industries, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MHK#NYSE">MHK</a>) from Underperform to Buy and raised their price target from $120 to $177, following better-than-expected Q2 2024 earnings.
<h3 class="wp-block-heading">Top-Performing Homebuilder Stocks In July 2024</h3>
The top ten best-performing stocks in the U.S. Home Construction ETF this month are:
<figure class="wp-block-table is-style-stripes"> 
<table>
<tbody>
<tr>
<td>Name</td>
<td>Price Chg. % (MTD)</td>
</tr>
<tr>
<td>Mohawk Industries, Inc.</td>
<td>37.16%</td>
</tr>
<tr>
<td>M/l Homes, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MHO#NYSE">MHO</a>)</td>
<td>35.92%</td>
</tr>
<tr>
<td>Green Brick Partners, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GRBK#NYSE">GRBK</a>)</td>
<td>31.50%</td>
</tr>
<tr>
<td>American Woodmark Corporation (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMWD#NASDAQ">AMWD</a>)</td>
<td>28.44%</td>
</tr>
<tr>
<td>Dream Finders Homes, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DFH#NYSE">DFH</a>)</td>
<td>27.42%</td>
</tr>
<tr>
<td>JELD-WEN Holding, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/JELD#NYSE">JELD</a>)</td>
<td>26.80%</td>
</tr>
<tr>
<td>Installed Building Products, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IBP#NYSE">IBP</a>)</td>
<td>26.65%</td>
</tr>
<tr>
<td>D.R. Horton, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DHI#NYSE">DHI</a>)</td>
<td>26.29%</td>
</tr>
<tr>
<td>Tri Pointe Homes, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TPH#NYSE">TPH</a>)</td>
<td>26.26%</td>
</tr>
<tr>
<td>Century Communities, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CCS#NYSE">CCS</a>)</td>
<td>26.05%</td>
</tr>
</tbody>
</table>
<figcaption class="wp-element-caption">As of July 26, 2024</figcaption></figure>
<h3 class="wp-block-heading">Latest Mortgage Rates, Housing Market Data</h3>
The Mortgage Bankers Association recently reported that the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $766,550 or less dropped by 5 basis points to 6.62% for the week<a href="https://www.benzinga.com/news/large-cap/24/07/39931211/mortgage-rates-hit-lowest-point-since-february-as-investors-anticipate-fed-rate-cuts"> ending July 19, 2024.</a>
Despite the easing in borrowing costs, other housing market indicators remain bleak. 
Homebuilder confidence dipped to 42 in July, its lowest reading year-to-date, according to Bank of America.
 Jeffrey Roach, chief economist for LPL Financial, commented on the situation, stating, &#8220;The low supply of homes and high interest rates have depressed affordability to near-term lows.&#8221;
The National Association of Realtors reported a significant 5.4% decline in existing home sales for June, marking the worst monthly drop since 2022. 
Additionally, the U.S. Census Bureau revealed that new single-family home sales fell 0.6% month-over-month to a seasonally adjusted annual rate of 617,000 in June 2024, the lowest in seven months and below forecasts of 640,000, as high prices continued to affect affordability. 
The median sales price of existing homes rose 4.1% year-over-year, setting a new record high.
Now Read:
<ul>
<li><a href="https://www.benzinga.com/markets/equities/24/07/39970069/investors-go-all-in-on-small-caps-pour-over-6-billion-into-russell-2000-etf-this-month-they-will">Investors Go All In On Small Caps, Pour Over $6 Billion Into Russell 2000 ETF This Month: They &#8216;Will Return To Larger-Cap Alternatives,&#8217; Veteran Analyst Says</a></li>
</ul>

Large Cap

REIT

AMWD

GRBK

JELD

Homebuilder Stocks Rally To Record Highs On Rate-Cut Frenzy But Housing Sales Still Struggle

PulteGroup, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PHM#NYSE">PHM</a>) shares are trading higher after the company reported&nbsp;<a target="_blank" href="https://www.benzinga.com/pressreleases/24/07/b39901324/pultegroup-reports-second-quarter-2024-financial-results" rel="noreferrer noopener">second-quarter&nbsp;FY24&nbsp;results</a>.
Revenue stood at&nbsp;$4.60 billion, beating the consensus of&nbsp;$4.491 billion.
Reported home sale revenues rose&nbsp;10%&nbsp;Y/Y to&nbsp;$4.4 billion, with higher revenues reflecting an&nbsp;8%&nbsp;Y/Y increase in closings to 8,097 homes and a 2%&nbsp;Y/Y rise in average sales price to $549,000.
The gross margin for home sales stood at&nbsp;29.9%, increasing by 30 basis points Y/Y, in the quarter.
Net new orders fell to 7,649 from 7,947 homes last year. However, the dollar value of net new orders rose 2% year-over-year to $4.4 billion in the second quarter.
GAAP EPS of&nbsp;3.83&nbsp;beat the&nbsp;<a target="_blank" href="https://www.benzinga.com/calendars/earnings" rel="noreferrer noopener">consensus of&nbsp;$3.26</a>.
At the end of the second quarter, the company&#8217;s backlog was 12,982 homes, valued at $8.1 billion. The company ended the year with&nbsp;$1.4 billion&nbsp;of cash and a debt-to-capital ratio of&nbsp;12.8%.
During the quarter, the company repurchased 2.8 million of its common shares for&nbsp;$314 million, or an average price of&nbsp;$113.79&nbsp;per share.
Ryan Marshall, PulteGroup President and CEO, said, &#8220;While interest rate movements can impact short-term homebuying demand, long-term market dynamics continue to benefit from a structural shortage of homes caused by years of underbuilding.&#8221;
&#8220;As demonstrated by our 27.1% return on equity for the past 12 months, we continue to successfully navigate these conditions by actively managing sales price, pace and starts on a community-by-community basis with the goal of realizing high returns on invested capital and equity over time.&#8221;
Yesterday, the company disclosed that Bob O&#8217;Shaughnessy, Executive Vice President, and Chief Financial Officer, plans to <a target="_blank" href="https://www.benzinga.com/pressreleases/24/07/b39880849/pultegroup-cfo-bob-oshaughnessy-announces-plan-to-retire-in-2025" rel="noreferrer noopener">retire at the end of 2025</a>.
PulteGroup has appointed Jim Ossowski, currently Senior Vice President of Finance, as the replacement.
Investors can gain exposure to the stock via&nbsp;IShares U.S. Home Construction ETF&nbsp;(BATS:<a class="ticker" href="https://www.benzinga.com/stock/ITB#BATS">ITB</a>) and&nbsp;Invesco Building &amp; Construction ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PKB#NYSE">PKB</a>).
Price Action: PHM shares were up&nbsp;2.61%&nbsp;at&nbsp;$128.92 premarket&nbsp;at last check Tuesday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo via Midjourney

Earnings

PowerShares ETF Trust Dynamic Building &nstruction Portfolio

Home Construction Company PulteGroup's Q2 Revenue and Earnings Soar Despite Rising Interest Rates: Details

Wall Street is currently witnessing the &quot;Great Rotation&quot; with investors shunning hot technology stocks in favor of smaller companies and other sectors. The combination of the Trump trade resurgence and the growing expectations of the Fed cutting rates in September has led to the rotation in the market.
The Dow Jones Industrial Average, which was underperforming, has gained 2.3% over the past week, outperforming the S&amp;P 500 and the Nasdaq Composite Index, which shed nearly 0.7% and 2.2%, respectively. The Russell 2000 small-cap index has risen 3.4% in a week. Value investing is also being favored by investors as it involves buying stocks or other financial assets that are believed to be undervalued or trading below their intrinsic worth.
Chances of Donald Trump winning in November have risen steadily in recent weeks. Trump favors higher tariffs, particularly on imports from China, that could potentially hurt semiconductor stocks. Technology names, which powered the bull market this year, have lost their sheen lately.
Trump prefers more deregulation, which will benefit the health insurance, energy and financial industries as well as small-cap companies. Proposed extensions of corporate and personal tax cuts could increase budget deficits and result in higher government borrowing. Consequently, longer-dated bond yields have surged lately, steepening the yield curve.
Inflation in the United States cooled in June to the slowest pace since 2021, spiking the bets for rate cuts as soon as possible. Fed Chairman Jerome Powell&#39;s latest comment that the Fed wouldn&#39;t wait for inflation to get to its 2% target before it began cutting rates also lent support to the rate cut bets. According to the CME FedWatch tool, traders now see a 100% chance of the Fed lowering rates in September.
Pint-sized companies have a higher level of debt, and lower rates generally lead to reduced borrowing costs. This helps small businesses to expand their operations more easily and results in increased profitability. A rate cut after two years of tightening would be a big relief for banks, which have been struggling with the impact of high rates on their profits and their borrowers. While lower rates can compress net interest margins for banks, it will encourage lending and potentially lead to increased consumer and business loan activity.
High-dividend-yield sectors such as utilities and real estate will be the biggest beneficiaries of rate cuts, given their sensitivity to interest rates. This is especially true as these offer higher returns due to their outsized yields. In real estate, lower rates can boost housing market activity by making mortgages more affordable.
Given the great rotation, some ETFs, which were depressed this year, have started to gain momentum and hit new 52-week highs in the latest trading session. We have highlighted them in detail below:
Invesco S&amp;P SmallCap 600 Pure Value ETF (ARCA:RZV) &ndash; 52-Week High: $110.00
Invesco S&amp;P SmallCap 600 Pure Value ETF offers exposure to the stocks of companies that exhibit strong value characteristics by tracking the S&amp;P SmallCap 600 Pure Value Index. It holds 143 stocks in its basket, with key holdings in financials, consumer discretionary and industrials sectors.
Invesco S&amp;P SmallCap 600 Pure Value ETF has AUM of $254.6 million and trades in an average daily volume of 12,000 shares. It charges 35 bps in annual fees and has a Zacks ETF Rank #3 (Hold).
Financial Select Sector SPDR Fund (ARCA:XLF) &ndash; 52-Week High: $44.11
Financial Select Sector SPDR Fund ETF seeks to provide exposure to 71 companies in diversified financial services, insurance, banks, capital markets, mortgage real estate investment trusts, consumer finance, and thrifts and mortgage finance industries. It follows the Financial Select Sector Index, charging investors 9 bps in fees per year.
Financial Select Sector SPDR Fund is an ultra-popular ETF with AUM of $43 billion and trades in an average daily volume of 34 million shares. It carries a Zacks ETF Rank #1 (Strong Buy).
iShares U.S. Home Construction ETF (BATS: <a class="ticker" href="https://www.benzinga.com/stock/itb#BATS">ITB</a>) &ndash; 52-Week High: $118.66
iShares U.S. Home Construction ETF provides exposure to U.S. companies that manufacture residential homes by tracking the Dow Jones U.S. Select Home Construction Index.
With an AUM of $2.8 billion, iShares U.S. Home Construction ETF holds a basket of 44 stocks, with a heavy concentration on the top two firms. The product charges 40 bps in annual fees and trades in a heavy volume of around 2 million shares a day, on average. iShares U.S. Home Construction ETF has a Zacks ETF Rank #3.
iShares U.S. Real Estate ETF (ARCA:IYR) &ndash; 52-Week High: $94.88
iShares U.S. Real Estate ETF offers exposure to the country&#39;s real estate companies and REITs, which invest in real estate directly and trade like stocks. It follows the Dow Jones U.S. Real Estate Capped Index. iShares U.S. Real Estate ETF holds a basket of 71 securities with key holdings in telecom tower REITs, industrial REITs and retail REITs. It has amassed $3.4 billion in its asset base while trading in a heavy volume of 4.2 million shares a day on average.
iShares U.S. Real Estate ETF charges 40 bps in annual fees and has a Zacks ETF Rank #3.
Vanguard Mega Cap Value ETF (ARCA:MGV) &ndash; 52-Week High: $124.31
Vanguard Mega Cap Value ETF follows the CRSP US Mega Cap Value Index, which measures the performance of the largest value stocks in the U.S. market. It holds 134 stocks in its basket, with key holdings in financials, healthcare, industrials and technology sectors.
Vanguard Mid-Cap Value ETF has amassed $8 billion and trades in an average daily volume of 170,000 shares. It charges 7 bps in fees per year and has a Zacks ETF Rank #1 with a Medium risk outlook.
<a href="https://www.zacks.com/stock/news/2305429/5-etfs-making-the-most-of-the-great-market-rotation?cid=CS-BENZ-FT-etf_news_and_commentary-2305429">To read this article on Zacks.com click here.</a>

Events

Trading Ideas

iShares Trust Dow Jones US Real Estate Fund Index

Rydex ETF Trust S&P Smallcap 600 Pure Value ETF

5 ETFs Making the Most of the Great Market Rotation

D.R. Horton, Inc.&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DHI#NYSE">DHI</a>) shares are trading higher after the company reported&nbsp;<a target="_blank" href="https://benzinga.com/pressreleases/24/07/b39833823/d-r-horton-inc-americas-builder-reports-fiscal-2024-third-quarter-earnings-and-declares-quarterly-" rel="noreferrer noopener">third-quarter&nbsp;FY24 results</a>.
Sales grew&nbsp;2%&nbsp;Y/Y to&nbsp;$10.0 billion, beating the consensus of&nbsp;$9.77 billion. Net sales orders increased 1% Y/Y to 23,001 homes and&nbsp;were flat in value at $8.7 billion.
Homes closed in the quarter increased 5% Y/Y to 24,155 homes and 6% in value to $9.2 billion.
Sales order backlog of homes under contract as of June 30, 2024, decreased&nbsp;12%&nbsp;to 16,792 homes and&nbsp;12%&nbsp;in value to&nbsp;$6.6 billion.
D.R. Horton had 42,600 homes in inventory, of which 26,200 were unsold as of June-end.
EPS was&nbsp;$4.10&nbsp;(+5%&nbsp;Y/Y),&nbsp;<a target="_blank" href="https://www.benzinga.com/calendars/earnings" rel="noreferrer noopener">beating the consensus of&nbsp;$3.78.</a>
Return on equity (ROE) was&nbsp;21.5%&nbsp;for the trailing twelve months ended June 30, 2024, and homebuilding return on inventory (ROI) was&nbsp;29.5%.
The company&#8217;s net cash used in operations for the nine months totaled&nbsp;$228.2&nbsp;million. Consolidated cash balance was&nbsp;$3.0 billion, and available capacity on its credit facilities was&nbsp;$2.8 billion, for a total liquidity of&nbsp;$5.8 billion.
Buyback: D.R. Horton repurchased 3.0 million shares of common stock for&nbsp;$441.4 million&nbsp;during the quarter. The company&#8217;s remaining stock repurchase authorization on June 30 was&nbsp;$459.7 million.
In July 2024, the Board of Directors authorized a new stock repurchase program of up to $4.0 billion, replacing the previous authorization. This new authorization has no expiration date.
Dividend: Subsequent to quarter end, D.R. Horton declared a quarterly dividend per share of $0.30, payable on August 8 to stockholders of record on August 1.
FY24 Outlook: D.R. Horton revised&nbsp;the outlook&nbsp;for revenue to&nbsp;$36.8 billion-$37.2 billion (from $36.7 billion&nbsp;to&nbsp;$37.7 billion) vs. the&nbsp;<a target="_blank" href="https://www.benzinga.com/calendars/guidance" rel="noreferrer noopener">consensus of&nbsp;$36.972 billion</a>.
It now expects homes closed to be 90,000 to 90,500 (prior view<a target="_blank" href="https://www.benzinga.com//node/38315651" rel="noreferrer noopener"> 89,000 to 91,000 homes</a>).
DHI reiterated cash provided by operations&nbsp;guidance&nbsp;of around&nbsp;$3.0 billion&nbsp;and currently expects share repurchases of ~$1.8 billion.
David Auld, Executive Chairman, said, &#8220;Although inflation and mortgage interest rates remain elevated, the supply of both new and existing homes at affordable price points is still limited, and demographics supporting housing demand continue to be favorable.&#8221;
Investors can gain exposure to the stock via&nbsp;IShares U.S. Home Construction ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/ITB#BATS">ITB</a>) and&nbsp;SMI 3Fourteen Full-Cycle Trend ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/FCTE#NASDAQ">FCTE</a>).
Price Action: DHI shares are up 6.2% at $167.15 at the last check Thursday.
Image via Shutterstock

Guidance

Dividends

Buybacks

FCTE

Builder D.R. Horton Beats On Q3 Earnings, Authorizes $4B Stock Buyback, Tightens FY24 Home Sales Forecast & More

As <a href="https://www.benzinga.com//node/39583371">cities in the U.S. continue to break their historical heat records</a>, workers, lawmakers and businesses across the country are launching a debate: should the state grant protections for workers in extreme heat conditions?
Most of the country has been under heat alerts since rising temperatures began breaking comfortable levels in early July.
On Tuesday, meteorologists began warning people living in Midwestern and East Coast states. An upcoming heat wave is expected to break records in many cities, putting 140 million Americans under heat alert.
Earlier this month, at least 50 cities saw their historical heat records broken by a heat wave that affected most of the Southwest. Palm Springs, California and Las Vegas reached 124 and 120 degrees Fahrenheit, respectively, <a href="https://www.usatoday.com/story/news/weather/2024/07/11/temperature-records-heat-wave-west/74372547007/">USA Today </a>reported.
Many cities and localities in the East Coast are expected to surpass their historical average highs on this week.
The trend is global, with the last 13 months marking the highest temperatures on record for that month, according to official EU data from the Copernicus Programme.
The upcoming heat wave in the U.S. is expected to be dangerously lethal. At least 28 people have died this summer due to extreme heat events, according to a <a href="https://www.washingtonpost.com/climate-environment/2024/07/10/heat-wave-us-death-toll/">report</a> by the Washington Post.
<h3 class="wp-block-heading">Should Workers Have Federal, State Protections For Heat Risk?</h3>
Rising temperatures across the globe are forcing people to change their living habits, including how many hours of the day they can spend outside without air conditioning.
This has serious consequences for work, especially in sectors that require workers to be exposed to high temperatures under the sun for an extended period of time.
These encompass delivery and postal workers, the construction and agriculture sectors as well as those working in infrastructure repairs and gardening in urban environments, among others.
Read Also: <a href="https://www.benzinga.com//node/39799850">5 Things You Might Not Know About J.D. Vance: &#8216;Hillbilly Elegy&#8217; Author, Bitcoin Holder, First Millennial VP Pick And More</a>
Health risks for workers include "heat exhaustion and heat stroke, occupational injuries from high heat exposure such as burns or falls from dizziness, and exacerbation of preexisting conditions such as asthma, kidney disease, or heart disease," according to reports by the Center for Disease Control and the Occupational Safety and Health Administration (OSHA).
Earlier this month, the Biden administration proposed a new rule that, for the first time, could introduce protections for workers exposed to health risks due to rising heat levels, whether outdoors or indoors.
The proposal comes from OSHA, and outlines actions that employers should take to protect their employees from heat risks. If finalized, the rule could add protections for 35 million employees nationwide.
"The purpose of this rule is simple. It is to significantly reduce the number of work-related deaths, injuries and illnesses suffered by workers who are exposed to excessive heat and exposed to these risks while simply doing their jobs," an administration official told reporters on a press call, <a href="https://www.washingtonpost.com/climate-environment/2024/07/02/osha-workers-extreme-heat-protections/">according</a> to the Post.
The rule would introduce actions that employers must fulfill if the weather passes two specific temperature marks. Above 80 degrees Fahrenheit, employers must offer drinking water and break areas, as well as plan out the work schedule in an incremental rhythm for the bodies of workers to adapt to the heat.
At 90 degrees, employees must be monitored for signs of heat illness and take mandatory 15-minute breaks every two hours.
No federal heat protection law is in place, and only five states exercise worker safety precautions: California, Colorado, Minnesota, Oregon and Washington.
The timeline for OSHA's proposal would make it final by 2026. Its rollout will largely <a href="https://www.benzinga.com/general/politics/24/07/39780356/trumps-2024-election-betting-odds-hit-record-high-after-assassination-attempt-payouts-for-ex-pre">depend on who wins the U.S. presidency in November</a>. A victory for Donald Trump would likely threaten its existence.
High-profile Republicans have voiced opposition to worker protections for heat risk. Republicans have traditionally stood against policies related to climate change that are liable to impact businesses or industries.
In Florida, where some of the highest temperatures in the country have registered in recent years, Gov. Ron DeSantis, a Republican, recently signed a piece of legislation barring local governments from raising protections for workers exposed to heat.
Texas had passed a similar bill the previous year, which was dubbed the "Death Star law." The bill was ruled unconstitutional by a judge, after Houston, El Paso and San Antonio presented lawsuits against it.
<h3 class="wp-block-heading">Industry Impacts</h3>
Progressive voices like the Center for American Progress have written that exposing workers to heat risk can have bad consequences for the economy, including "lost worker productivity, increased health care costs and worker compensation claims, and threats to workers' financial stability from missing work."
For conservatives, adding protections for workers can reduce productivity for businesses and lead to a loss in competitiveness.
Business groups lobbying against the OSHA rule argue that trigger temperatures proposed by the rule should not be set as a blanket policy nationwide, as workers from different parts of the country have different tolerance thresholds for heat.
For workers in Florida, "an 80-degree threshold for them isn't going to be considered hot," said Prianka Sharma, vice president and counsel for regulatory affairs for The American Road &amp; Transportation Builders Association.
Multiple ETFs follow industries that can be affected by changes in policy around heat risk.
iShares US Home Construction ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/ITB#BATS">ITB</a>) is the largest ETF by total assets following the construction industry. It's followed by SPDR S&amp;P Homebuilders ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XHB#NYSE">XHB</a>) and the Invesco Building &amp; Construction ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PKB#NYSE">PKB</a>).
Agriculture is another major sector that affected by the heat issue. The Invesco DB Agriculture Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DBA#NYSE">DBA</a>) leads the list by total assets, with Teucrium Wheat Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/WEAT#NYSE">WEAT</a>) and First Trust Alternative Absolute Return Strat ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/FAAR#NASDAQ">FAAR</a>) next.
Now Read:&nbsp;
<ul>
<li><a href="https://www.benzinga.com//node/39794934">3 Under-the-Radar Clean Energy Stocks With Upside Potential, Regardless Of Who&#8217;s In The White House</a></li>
</ul>
Shutterstock image.

Politics

First Trust Alternative Absolute Return Strategy ETF

FAAR

WEAT

Scorching Heat Breaks Records, But 2024 Election Outcome May Hold Worker Protections Hostage

Inflation in the United States cooled down in June for the third consecutive month. The Consumer Price Index rose just 3% year over year last month, down from an annual growth of 3.3% in May. On a monthly basis, the index declined 0.1% from May&#39;s flat reading. This marked the first monthly drop in inflation since 2020 and the slowest annual price gain since March 2021.
The so-called core inflation, which strips out volatile components such as food and energy prices, rose only 0.1% over the prior month, the lowest monthly core reading since August 2021, and 3.3% from the year-ago month. Both numbers are down from May&#39;s reading of 0.2% monthly growth and 3.4% annual growth.
Following the encouraging inflation data, markets priced in a roughly 89% chance that the Fed will begin to cut rates at its September meeting, up from 75% a day prior, according to data from the CME Group. This has deepened the market&#39;s confidence that the Fed would begin cutting interest rates in September, leading to a sector rotation from the hot technology sector to the laggards that could benefit from falling rates like industrials and small caps.
In particular, the small-cap Russell 2000, which has significantly lagged this year, jumped 3.4% to a more than three-month high. The S&amp;P 500 real Estate index jumped 2.8%, trimming its year-to-date losses to 1%. As such, ETFs from some beaten-down corners of the market saw smooth trading following the inflation data. These include iShares U.S. Home Construction ETF (BATS: <a class="ticker" href="https://www.benzinga.com/stock/itb#BATS">ITB</a>), Invesco WilderHill Clean Energy ETF (ARCA:PBW), Virtus LifeSci Biotech Clinical Trials ETF (ARCA:BBC), iShares Micro-Cap ETF (ARCA:IWC) and SPDR S&amp;P Regional Banking ETF (ARCA:KRE).
<h3>Why Sector Rotation?</h3>
Small-cap stocks surged amid expectations that rate cuts would improve conditions for these companies. This is especially true as lower rates will lead to reduced borrowing costs, which help businesses expand their operations more easily, resulting in increased profitability. Many small and mid-caps companies have more floating debt than their larger counterparts.
High-dividend-yield sectors such as utilities and real estate will be the biggest beneficiaries of the rate cuts, given their sensitivity to interest rates. This is especially true as these offer higher returns due to their outsized yields. In real estate, lower rates can boost housing market activity by making mortgages more affordable. Additionally, securities in capital-intensive sectors like telecom will also benefit from lower rates. Businesses will also face lower loan rates over time.
Lower rates will also have a positive impact on consumer discretionary and financial services. Reduced borrowing costs can lead to increased consumer spending for consumer discretionary sectors. In the financial sector, while lower rates can compress net interest margins for banks, they can also encourage lending and potentially lead to increased consumer and business loan activity.
<h3>ETFs in Focus</h3>
iShares U.S. Home Construction ETF &ndash; Up 6.2%
iShares U.S. Home Construction ETF provides exposure to U.S. companies that manufacture residential homes by tracking the Dow Jones U.S. Select Home Construction Index.
With an AUM of $2.5 billion, iShares U.S. Home Construction ETF holds a basket of 44 stocks, with a heavy concentration on the top two firms. The product charges 40 bps in annual fees and trades in a heavy volume of around 2 million shares a day, on average. iShares U.S. Home Construction ETF has a Zacks ETF Rank #3 (Hold) with a High risk outlook.
Invesco WilderHill Clean Energy ETF &ndash; Up 5.8%
Invesco WilderHill Clean Energy ETF offers exposure to companies that are publicly traded in the United States and engaged in the business of advancement of cleaner energy and conservation. It follows the WilderHill Clean Energy Index and holds 71 stocks in its basket.
Invesco WilderHill Clean Energy ETF has amassed $296.2 million in its asset base and trades in a solid volume of around 383,000 shares a day. It charges investors 66 bps in fees per year.
Virtus LifeSci Biotech Clinical Trials ETF &ndash; Up 5.4%
Virtus LifeSci Biotech Clinical Trials ETF offers exposure to companies with promising drugs in clinical human trials that have not yet been approved by the FDA or gone into production. It follows the LifeSci Biotechnology Clinical Trials Index and holds 104 securities in its basket, with none accounting for more than 2.9% share.
Virtus LifeSci Biotech Clinical Trials ETF amassed $10.5 million in its asset base and charges 79 bps in fees per year from its investors. It trades in an average daily volume of 4,000 shares and carries a Zacks ETF Rank #2 (Buy) with a High risk outlook.
iShares Micro-Cap ETF &ndash; Up 4.9%
iShares Micro-Cap ETF offers exposure to very small public U.S. companies by tracking the Russell Microcap Index. It holds a large basket of 1,476 stocks with each accounting for no more than 0.5% of assets. IWC has key holdings in healthcare, financials, industrials and information technology with double-digit exposure each.
iShares Micro-Cap ETF has amassed $788.3 million in its asset base and trades in a volume of 27,000 shares a day on average. It has a Zacks ETF Rank #3 with a High risk outlook.
SPDR S&amp;P Regional Banking ETF &ndash; Up 4.2%
SPDR S&amp;P Regional Banking ETF provides exposure to the regional banks segment by tracking the S&amp;P Regional Banks Select Industry Index. It holds 141 stocks in its basket, with each accounting for no more than 2.4% of the assets.
SPDR S&amp;P Regional Banking ETF has AUM of $2.4 billion and charges 35 bps in annual fees. It trades in an average daily volume of 12 million shares and has a Zacks Rank #4 (Sell) with a High risk outlook.
<a href="https://www.zacks.com/stock/news/2300847/inflation-cools-in-june-triggers-spike-in-laggard-etfs?cid=CS-BENZ-FT-etf_news_and_commentary-2300847">To read this article on Zacks.com click here.</a>

PowerShares Exchange Traded Fund Trust WilderHill Clean Energy Portfolio

Inflation Cools in June, Triggers Spike in Laggard ETFs

What is the key to bringing home sale volume up and home prices down? America&#8217;s current problem is insufficient supply, according to a new report outlining trends in the <a href="https://www.benzinga.com/topic/housing-market">U.S. housing market</a>.
The Data: Freddie Mac&#8217;s May macroeconomic <a href="https://www.freddiemac.com/research/forecast/20240516-economic-growth-moderated-start-year?utm_source=www.resiclubanalytics.com&amp;utm_medium=referral&amp;utm_campaign=u-s-housing-market-is-1-5-million-housing-units-below-a-balanced-market-finds-freddie-mac">report</a> examined key trends in the housing and mortgage market.
While 2024&#8217;s <a href="https://www.benzinga.com/top-stories/24/06/39391685/fed-members-cool-on-raising-interest-rates-these-conditions-could-take-months-and-more-likely-quarte">higher-for-longer interest rate</a> environment remains the most obvious obstacle to lowering home prices, the report emphasized supply as a means to restore the market to balance.
According to the report, vacancy rates—a very low 0.8% for housing and 6.6% for renters—must be restored in line with historical averages to make a dent in housing prices. In the first quarter of 2024, the total number of for-sale and for-rent units was 1.5 million below the balanced supply.
Why it Matters: Home prices have reached record levels in 2024. In June, the median sale price of a U.S. home hit an&nbsp;<a href="https://www.benzinga.com/real-estate/24/06/39337282/u-s-home-prices-hit-record-high-as-mortgage-rates-start-to-decline">all-time high</a>&nbsp;of $394,000. The median price for renting has <a href="https://www.benzinga.com/real-estate/23/06/32719718/despite-high-rental-rates-americans-are-putting-off-home-buying-in-record-numbers">also risen steadily</a> in recent months, albeit showing some signs of slowing. 
The rising price of homes has made the American dream of owning a home unsustainable for many Americans, especially members of Generation Z.
Increasing the U.S. housing supply is a logical solution to bringing housing prices down and making shelter affordable for most Americans.
Market Implications: Companies involved in residential construction stand to benefit if there&#8217;s a push to increase housing supply. These include major homebuilders such as D.R. Horton Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DHI#NYSE">DHI</a>), Lennar Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LEN#NYSE">LEN</a>) and PulteGroup, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PHM#NYSE">PHM</a>). Increased demand for new housing units could drive up their revenues.
The iShares U.S. Home Construction ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/ITB#BATS">ITB</a>) and the SPDR S&amp;P Homebuilders ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XHB#NYSE">XHB</a>) are among the largest exchange-traded funds tracking the home construction sector. The iShares U.S. Basic Materials ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IYM#NYSE">IYM</a>) tracks materials, some of which are used in construction.
Read Next:
<ul>
<li> <a href="https://www.benzinga.com/markets/cryptocurrency/24/06/39462050/draftkings-offers-10k-prediction-pool-for-trump-biden-presidential-debate-11-questions-abo">DraftKings Offers $10K Prediction Pool For Trump, Biden Presidential Debate: 11 Questions About Immigration, Inflation, Putin And More</a></li>
</ul>
Image generated using artificial intelligence via Midjourney.

iShares Trust Dow Jones US Basic Materials Sector Index Fund

US Needs 1.5 Million More Homes To Tame Record Prices

President Joe Biden is expected to sign an executive order on Tuesday to temporarily close the U.S.-Mexico border to migrants when it exceeds a certain threshold, suspending <a href="https://www.benzinga.com/topic/immigration">long-standing asylum protections</a>.
What Happened: According <a href="https://www.nytimes.com/2024/06/03/us/politics/biden-immigration-asylum-order.html?smid=fb-nytimes&amp;smtyp=cur">to</a> the New York Times, a Biden-signed executive order on this issue marks a significant policy shift.
News sources reported two different ranges of thresholds: The New York Times stated via sources it could be an average of 5,000 border crossings in a week, or 8,500 in a single day.
AP <a href="https://apnews.com/article/biden-immigration-executive-order-asylum-border-7cd0b0f28e298036ad1fc6b0c78961e1">cites</a> that the executive order &#8220;would shut down asylum requests&nbsp;to the U.S.-Mexico border once the number of daily encounters hits 2,500 between ports of entry, with the border reopening once that number declines to 1,500, according to several people familiar with the discussions.&#8221; 
<a href="https://www.benzinga.com/news/24/02/37061857/trump-will-be-held-accountable-every-day-between-now-and-november-for-sabotaging-border-deal-says-bi">Earlier this year</a>, former President Donald Trump <a href="https://www.benzinga.com/news/24/02/37049493/trump-takes-credit-for-collapse-of-bipartisan-border-deal-i-think-we-killed-it-its-dead">took credit</a> for Republican Senators voting against bipartisan border legislation, arguing that its passage would be a political win for Biden.
Since then, thousands of migrants continued to cross the border daily. 
Biden&#8217;s latest effort marks the most restrictive border policy by any modern Democrat. It&#8217;s also reminiscent of a 2018 attempt by Trump, which faced harsh criticism and legal challenges.
Biden faces immense pressure to address illegal migration, <a href="https://www.benzinga.com/general/politics/24/02/36970427/crisis-of-illegal-immigration-new-survey-shows-record-number-of-voters-cry-major-issue-but-who-g">a key voter concern</a>. Polls indicate increasing support for stricter border measures among Democrats. 
The order allows border officials to deny asylum claims and swiftly turn away migrants if crossings exceed a set threshold. 
See Also: <a href="https://www.benzinga.com/news/24/04/38488525/elon-musk-advocates-for-easier-and-simplified-legal-immigration-process-amid-migrant-influx">Elon Musk Advocates For &#8216;Easier And Simplified&#8217; Legal Immigration Process Amid Migrant Influx</a>
Why It Matters: Sunday reportedly saw over 3,500 migrant apprehensions at the border. 
Immigration is among the major issues concerning voters in the <a href="https://www.benzinga.com/topic/2024-presidential-election">upcoming 2024 presidential election</a>.
Republicans and Democrats both face criticism for not taking action. But when the GOP hindered <a href="https://www.benzinga.com/government/24/02/36940752/migrant-legislation-to-reach-senate-vote-this-week-whats-at-stake-with-the-new-border-deal">additional border enforcement</a> this year for Trump&#8217;s sake, it marked a significant policy shift between the parties. 
For example, in 2019 Biden ran on a platform that criticized then-President Trump&#8217;s asylum policies. Biden asserted that asylum seekers should present their cases within the U.S. 
This new order demonstrates a significant departure from that stance.
ETFs To Watch: according to&nbsp;<a href="https://benzinga.grsm.io/lxquj26b2sag" target="_blank" rel="noreferrer noopener">Benzinga Pro data</a>, there are several exchange-traded funds (ETFs) to follow as this news unfolds. They include:
<ul>
<li>iShares U.S. Home Construction ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/ITB#BATS">ITB</a>)</li>
<li>iShares U.S. Health Care Providers ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IHF#NYSE">IHF</a>)</li>
<li>iShares Global Infrastructure ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/IGF#NASDAQ">IGF</a>)</li>
<li>and iShares TIPS Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TIP#NYSE">TIP</a>)</li>
</ul>
Now Read: <a href="https://www.benzinga.com/general/politics/24/03/37499660/jon-stewart-mocks-donald-trump-for-new-immigration-crisis-phrasing-hannibal-lecter-comparisons">Jon Stewart Mocks Donald Trump For New Immigration Crisis Phrasing, Hannibal Lecter Comparisons</a>
Disclaimer:&nbsp;This content was partially produced with the help of&nbsp;<a href="https://www.benzinga.com/author/benzinga-neuro" target="_blank" rel="noreferrer noopener">Benzinga Neuro</a>. Benzinga editors reviewed and published the article.
Photo: Shutterstock

Government

Latin America

Regulations

iShares S&P Global Infrastructure Index Fund

iShares Dow Jones US Health Care Provides Index Fund

Biden To Sign Executive Order To Limit Asylum Seekers Crossing US-Mexico Border: Report

Major U.S. equity indexes ended Thursday&#8217;s session on a weaker note as investors reconsidered the economic outlook in light of the latest <a href="https://www.benzinga.com/calendars/economic">batch of contrasting data.</a>
Both the S&amp;P 500 and the Nasdaq 100 fell by 0.2%, closing at 5,297 points and 18,557 points, respectively. 
The Dow Jones Industrial Average, which surpassed the 40,000 mark during morning trading, closed 0.1% lower at 39,869.
Thursday&#8217;s economic data revealed a decline in initial jobless claims and higher-than-expected import and export prices, with the latter reigniting some anxiety about inflation. Housing starts and building permits were disappointing, and industrial production stalled.
Federal Reserve Bank of Cleveland President Loretta Mester stated on Thursday that it will take longer to be confident that inflation is moving toward 2% and emphasized the need for continued restrictive policies. She welcomed the latest inflation data as a sign of cooling price pressures but warned that the U.S. fiscal path is unsustainable and must be brought under control.
Treasury yields closed higher across the board, with the rate-sensitive two-year yield surging by 7 basis points to 4.80%, snapping a three-day streak of declines.
<h3 class="wp-block-heading">Is Bad News Still Good News?</h3>
Veteran investor Ed Yardeni explained that both good and bad news are working as a positive catalyst for the stock market. Yardeni noted that stocks positively reacted to the weaker-than-expected economic indicators, which led to a decline in the 10-year U.S. Treasury bond yield from its recent peak.
For example, the market welcomed the ISM manufacturing index dropping below 50 and flat retail sales data in April, despite these indicators suggesting slowing economic momentum.
Offering a contrarian view, Arnim Holzer, global macro strategist at Easterly EAB Risk Solutions, argued, &#8220;The ‘bad news is good news' narrative should not be this bullish.&#8221; He cautioned that the market&#8217;s risk stance is complacent, evidenced by the low level of the VIX.
Holzer also warned that the high and positive correlation between bonds and stocks poses a significant risk to overall portfolio performance.
<h3 class="wp-block-heading">Thursday&#8217;s Movers In Sectors And Stocks</h3>
Sector-wise, consumer staples was the only sector recording gains on Thursday, with the Consumer Staples&nbsp;Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLP#NYSE">XLP</a>) up 1.4%. 
Walmart Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/WMT#NYSE">WMT</a>) rallied 6.5% amid stronger-than-expected earnings, contributing to nearly half of the daily performance of the overall consumer staples sector. 
Materials, as tracked by the Materials Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLB#NYSE">XLB</a>), were the laggards, down 0.7%. Martin Marietta Materials, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MLM#NYSE">MLM</a>), Vulcan Materials Company (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VMC#NYSE">VMC</a>) and Freeport-McMoRan Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FCX#NYSE">FCX</a>) were the sector&#8217;s weakest performers, down 5%, 3.9% and 2.8%, respectively. 
Industry-wise, homebuilders fell heavily amid worse-than-expected housing starts and building permits data, with the iShares U.S. Home Construction ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ITB#NYSE">ITB</a>) falling 3.1%, on its worst day in more than a month. 
D.R. Horton Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DHI#NYSE">DHI</a>) and Lennar Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LEN#NYSE">LEN</a>) were notable fallers among the sector&#8217;s heavyweights, with declines of 4.2% and 3.3%, respectively. 
Telecom stocks, as tracked by the SPDR S&amp;P Telecom ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XTL#NYSE">XTL</a>), closed in the green, up 1.6%, marking their sixth straight session of gains. Notable gainers were AST SpaceMobile, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ASTS#NASDAQ">ASTS</a>), up 68.4%, and Extreme Networks, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/EXTR#NASDAQ">EXTR</a>). 
Now Read: <a href="https://www.benzinga.com/markets/asia/24/05/38878116/big-short-investor-michael-burry-bets-heavy-on-gold-renewable-energy-stocks-exits-amazon-alphabet">&#8216;Big Short&#8217; Investor Michael Burry Bets Heavy On Gold, Renewable Energy Stocks, Exits Amazon, Alphabet</a>
Image: Pixabay

Macro Notification

Market Summary

Bonds

Treasuries

ASTS

EXTR

Major Indexes Close In The Red, Dow Falls Below 40,000 As Investors Make U-Turn On Economic Outlook

SPDR Dow Jones Industrial Average ETF Trust

MSOS

Benzinga Closing Bell Market Summary: Dow Reaches 40,000, Justice Department Takes Next Steps To Reclassify Marijuana, Walmart Reports Strong Earnings, Homebuilders Drop On Weaker-Than-Expected Housing Starts

The S&amp;P 500 and the Nasdaq 100 indices rose to fresh record highs during morning trading on Wednesday following a broadly in-line inflation report and cooler-than-expected retail sales data for April, as traders <a href="https://www.benzinga.com/markets/equities/24/05/38842603/us-inflation-falls-as-expected-in-april-bolsters-fed-rate-cut-bets">increased their rate cut bets</a>.
Inflation calculated on the Consumer Price Index (CPI) basket came in at 3.4% year-on-year in April 2024, matching estimates and snapping a streak of three consecutive months of hotter-than-expected readings.
Market-implied probabilities on the Federal Reserve enacting a rate cut as early as September 2024 rose to over 70%, according to CME Group&#8217;s FedWatch Tool. Cumulatively, traders are now fully pricing in two rate cuts of 25 basis points by year end.
The rate-sensitive 2-year Treasury yields tumbled to 4.75%, down by 7 basis points, marking a notable break below its 200-day moving average.
The U.S. dollar fell across the board vis-à-vis other major currencies, with the greenback losing as much as 1% against the low-yielding Japanese yen.
Among sectors, both tech and real estate rallied the most, given their high sensitivity to interest rates. Top industry performers were homebuilders, as tracked by the iShares U.S. Home Construction ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ITB#NYSE">ITB</a>), up 3.2%. Chipmakers, as tracked by the VanEck Semiconductor ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SMH#NYSE">SMH</a>) followed suit, up 2.2%. 
Small caps, as tracked by the iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>), also rallied, up by 1%.
Meme-tied stocks, such as AMC Entertainment Holdings Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AMC#NYSE">AMC</a>) and GameStop Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GME#NYSE">GME</a>), plummeted 23% and 31%, respectively. Wednesday&#8217;s negative price actions caused the two stocks to retrace more than half of the wild bullish trend that began on Monday.
In the commodities space, precious metals soared with gold and silver up 1.3% and 3%, respectively. Crude softened 0.3%. 
Among cryptocurrencies, Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>) marked a 5.5% gain. 
<h3 class="wp-block-heading">Wednesday&#8217;s Performance In Major US Indices, ETFs</h3>
<figure class="wp-block-table is-style-stripes"> 
<table>
<tbody>
<tr>
<td>Major Indices</td>
<td>Price</td>
<td>1-day %chg</td>
</tr>
<tr>
<td>Russell 2000</td>
<td>2,105.02</td>
<td>1.0%</td>
</tr>
<tr>
<td>Nasdaq 100</td>
<td>18,496.99</td>
<td>1.0%</td>
</tr>
<tr>
<td>S&amp;P 500</td>
<td>5,289.66</td>
<td>0.8%</td>
</tr>
<tr>
<td>Dow Jones</td>
<td>39,746.97</td>
<td>0.5%</td>
</tr>
</tbody>
</table>
<figcaption class="wp-element-caption">Updated at 12:33 p.m. EDT </figcaption></figure>
The&nbsp;SPDR S&amp;P 500 ETF Trust&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) roared 0.9% to $528.94, the&nbsp;SPDR Dow Jones Industrial Average (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DIA#NYSE">DIA</a>) was 0.6% up to $398.24 and the tech-heavy&nbsp;Invesco QQQ Trust&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>) was up 1.2% to $451.04, according to&nbsp;<a href="https://pro.benzinga.com/dashboard">Benzinga Pro data</a>.&nbsp;
Sector-wise, the Technology Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLK#NYSE">XLK</a>) and the Real Estate Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLRE#NYSE">XLRE</a>) outperformed, both up by 1.8%. The Energy Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>) was the only one trading in the red, down 0.1%.
<h3 class="wp-block-heading">Wednesday&#8217;s Stock Movers</h3>
<ul>
<li>Bitcoin-linked Super Micro Computer Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SMCI#NASDAQ">SMCI</a>) rallied over 10%, after boasting a 5% surge on Tuesday. </li>
<li>Hertz Global Holdings Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/HTZ#NASDAQ">HTZ</a>) tanked nearly 10% after reports that the car-hire company could face liquidity challenges as early as next year. </li>
<li>Major EV players sold off substantially amid rumors China is contemplating a reaction to a U.S. tariffs increase. Both Rivian Automotive Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/RIVN#NASDAQ">RIVN</a>) and NIO Group Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NIO#NYSE">NIO</a>) tumbled 9%, Lucid Group Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/LCID#NASDAQ">LCID</a>) plummeted 8%, XPeng Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XPEV#NYSE">XPEV</a>) fell 4%, and Tesla Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TSLA#NASDAQ">TSLA</a>) dropped by 1.3%.</li>
<li>Exxon Mobil Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XOM#NYSE">XOM</a>) inched 0.5% higher, after Morgan Stanley updated its rating assessment to Overweight. </li>
<li>Petco Health &amp; Fitness Company Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/WOOF#NASDAQ">WOOF</a>) rallied over 20% after the company introduced &nbsp;Glenn Murphy as executive chairman of its board, who formerly worked for Lululemon Athletica Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/LULU#NASDAQ">LULU</a>) and Gap Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GPS#NYSE">GPS</a>)</li>
</ul>
Read now: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/05/38850154/economists-react-to-inflation-retail-sales-the-soft-landing-narrative-is-still-a-po">Economists React To Inflation, Retail Sales: &#8216;The Soft Landing Narrative Is Still A Possibility But Not A Guarantee&#8217;</a>
Image generated using artificial intelligence via Midjourney.

Coverage of Bitcoin, Etherum, Ripple and all the latest digital currencies.

Cryptocurrency

Specialty ETFs

Upgrades

New ETFs

Currency ETFs

$BTC

LCID

LULU

RIVN

SMCI

TSLA

WOOF

XLRE

XPEV

Wall Street Jumps To All-Time Highs On Soft Inflation, Bond Yields Tumble, Bitcoin Soars, Meme Stocks Face Carnage: What's Driving Markets Wednesday?

As April comes to a close, it&#8217;s time to compile the rankings for the top-performing sector and industry exchange-traded <a href="https://www.benzinga.com/etfs">funds of the month.</a>
Taking a broader look at the stock market, the S&amp;P 500 Index, represented by the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>), finished April on a downturn, declining by approximately 3%. This marks the end of a five-month streak of gains.
Similarly, the tech-heavy Nasdaq 100, tracked by the Invesco QQQ Trust (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>), experienced a 3.5% decline.
Among large-cap indices, blue-chip stocks showed slight underperformance, with the SPDR Dow Jones Industrial Average ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DIA#NYSE">DIA</a>) slipping by 4.5%.
Small-cap stocks, represented by the iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>), plummeted by over 6%, marking their worst performance since October 2023.
Overall, it has been a challenging month for the stock market, primarily due to inflation surprises surpassing expectations. This has led to a recalibration of market expectations regarding potential Federal Reserve rate cuts.
Additionally, complex global geopolitical tensions have emerged, notably between Israel and Iran, alongside the ongoing issue in the Gaza Strip.
May is anticipated to start with a crucial event as investors await the Federal Reserve Open Market Committee <a href="https://www.benzinga.com/general/macro-notification/24/04/38526201/is-hawkish-shift-on-inflation-imminent-wall-street-analysts-traders-brace-for-fed-impa">(FOMC) meeting on Wednesday. </a>
While no interest rate changes are expected, all eyes will be on Fed Chair Jerome Powell&#8216;s remarks to assess the Fed&#8217;s stance in response to recent inflation surprises.
Read also: <a href="https://www.benzinga.com/general/macro-notification/24/04/38491988/federal-reserve-meeting-preview-high-interest-rates-need-more-time-to-work-bank-of-ame">Federal Reserve Meeting Preview: High Interest Rates &#8216;Need More Time To Work,&#8217; Bank of America Says</a>
<h2 class="wp-block-heading">Performance Of Sector ETFs In April 2024</h2>
At the sector level, only the utilities sector managed to avoid losses for the month, rising by 2.1%.
The largest stock contributors to the utilities&#8217; performance in April are NextEra Energy, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NEE#NYSE">NEE</a>), The Southern Company (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SO#NYSE">SO</a>), Dominion Energy, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/D#NYSE">D</a>) and NRG Energy (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NRG#NYSE">NRG</a>) which showed monthly gains between 4% and 8%. 
Energy stocks remained broadly stable, while the other nine S&amp;P 500&#8217;s sectors showcased losses.
Real estate experienced the worst performance, down by over 7%, dragged down by its high sensitivity to interest rates, as Treasury yields increase across the board during the month. 
Following real estate, the technology and healthcare sectors also showed poor performance in April.
<h4 class="wp-block-heading">April&#8217;s Best And Worst Sector ETFs: Utilities Lead, Real Estate Lags</h4>
<figure class="wp-block-table is-style-stripes"> 
<table>
<thead>
<tr>
<th>Sector</th>
<th>April 2024 performance</th>
</tr>
</thead>
<tbody>
<tr>
<td>Utilities Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLU#NYSE">XLU</a>)</td>
<td>2.06%</td>
</tr>
<tr>
<td>Energy&nbsp;Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLE#NYSE">XLE</a>)</td>
<td>0.01%</td>
</tr>
<tr>
<td>Consumer Staples&nbsp;Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLP#NYSE">XLP</a>)</td>
<td>-1.11%</td>
</tr>
<tr>
<td>Industrials&nbsp;Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLI#NYSE">XLI</a>)</td>
<td>-3.23%</td>
</tr>
<tr>
<td>Consumer Discretionary&nbsp;Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLY#NYSE">XLY</a>)</td>
<td>-3.68%</td>
</tr>
<tr>
<td>Financial Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLF#NYSE">XLF</a>)</td>
<td>-3.85%</td>
</tr>
<tr>
<td>Materials&nbsp;Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLB#NYSE">XLB</a>)</td>
<td>-4.13%</td>
</tr>
<tr>
<td>Communication Services Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLC#NYSE">XLC</a>)</td>
<td>-4.24%</td>
</tr>
<tr>
<td>Technology Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLK#NYSE">XLK</a>)</td>
<td>-4.78%</td>
</tr>
<tr>
<td>Health Care&nbsp;Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLV#NYSE">XLV</a>)</td>
<td>-4.85%</td>
</tr>
<tr>
<td>Real Estate&nbsp;Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLRE#NYSE">XLRE</a>)</td>
<td>-7.83%</td>
</tr>
</tbody>
</table>
<figcaption class="wp-element-caption">Data as of Apr. 30, 2024 2:50 p.m. EDT</figcaption></figure>
<h2 class="wp-block-heading">Performance Of Industry ETFs In April 2024</h2>
Based on the industry ETF list provided by BlackRock Inc.&#8217;s (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BLK#NYSE">BLK</a>) iShares, only five out of the 25 industries managed to report gains in April. Among them, miners did well across the board, with silver, copper, and gold mining stocks reporting robust gains. 
Standout contributors to the mining industry&#8217;s outperformance in April were Pan American Silver Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PAAS#NYSE">PAAS</a>), up over 20%, Newmont Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NEM#NYSE">NEM</a>), up 14%, Anglo American plc (OTCPK: AAUKF), up over 40%
Energy producers also managed to end the month in the green.
On the bottom side of the industry rankings, homebuilders, transportation, biotech stocks, digital infrastructure and real estate all report losses between 7% and 9.6% in April.
<figure class="wp-block-table is-style-stripes"> 
<table>
<thead>
<tr>
<th>ETF Name</th>
<th>Performance</th>
</tr>
</thead>
<tbody>
<tr>
<td>iShares MSCI Global Silver and Metals Miners ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SLVP#NYSE">SLVP</a>)</td>
<td>12.11%</td>
</tr>
<tr>
<td>iShares Copper and Metals Mining ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/COPX#NYSE">COPX</a>)</td>
<td>9.50%</td>
</tr>
<tr>
<td>iShares MSCI Global Gold Miners ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RING#NYSE">RING</a>)</td>
<td>5.93%</td>
</tr>
<tr>
<td>iShares MSCI Global Metals &amp; Mining Producers ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PICK#NYSE">PICK</a>)</td>
<td>2.81%</td>
</tr>
<tr>
<td>iShares MSCI Global Energy Producers ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FILL#NYSE">FILL</a>)</td>
<td>2.46%</td>
</tr>
<tr>
<td>iShares U.S. Aerospace &amp; Defense ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ITA#NYSE">ITA</a>)</td>
<td>-1.16%</td>
</tr>
<tr>
<td>iShares U.S. Oil &amp; Gas Exploration &amp; Production ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IEO#NYSE">IEO</a>)</td>
<td>-1.37%</td>
</tr>
<tr>
<td>iShares Residential and Multisector Real Estate ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/REZ#NYSE">REZ</a>)</td>
<td>-1.66%</td>
</tr>
<tr>
<td>iShares Lithium Miners and Producers ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ILIT#NYSE">ILIT</a>)</td>
<td>-3.30%</td>
</tr>
<tr>
<td>iShares U.S. Broker-Dealers &amp; Securities Exchange ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IAI#NYSE">IAI</a>)</td>
<td>-3.74%</td>
</tr>
<tr>
<td>iShares U.S. Financial Services ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IYG#NYSE">IYG</a>)</td>
<td>-3.88%</td>
</tr>
<tr>
<td>iShares Expanded Tech Sector ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IGM#NYSE">IGM</a>)</td>
<td>-4.37%</td>
</tr>
<tr>
<td>iShares Semiconductor ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SOXX#NYSE">SOXX</a>)</td>
<td>-4.40%</td>
</tr>
<tr>
<td>iShares U.S. Healthcare Providers ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IHF#NYSE">IHF</a>)</td>
<td>-4.79%</td>
</tr>
<tr>
<td>iShares U.S. Insurance ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IAK#NYSE">IAK</a>)</td>
<td>-4.85%</td>
</tr>
<tr>
<td>iShares U.S. Regional Banks ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IAT#NYSE">IAT</a>)</td>
<td>-5.11%</td>
</tr>
<tr>
<td>iShares U.S. Pharmaceuticals ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IHE#NYSE">IHE</a>)</td>
<td>-5.38%</td>
</tr>
<tr>
<td>iShares U.S. Oil Equipment &amp; Services ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IEZ#NYSE">IEZ</a>)</td>
<td>-5.45%</td>
</tr>
<tr>
<td>iShares Mortgage Real Estate ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/REM#NYSE">REM</a>)</td>
<td>-5.57%</td>
</tr>
<tr>
<td>iShares U.S. Medical Devices ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IHI#NYSE">IHI</a>)</td>
<td>-5.75%</td>
</tr>
<tr>
<td>iShares Global Timber &amp; Forestry ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/WOOD#NYSE">WOOD</a>)</td>
<td>-6.20%</td>
</tr>
<tr>
<td>iShares Expanded Tech-Software Sector ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IGV#NYSE">IGV</a>)</td>
<td>-6.76%</td>
</tr>
<tr>
<td>iShares U.S. Digital Infrastructure and Real Estate ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IDGT#NYSE">IDGT</a>)</td>
<td>-7.12%</td>
</tr>
<tr>
<td>iShares Biotechnology ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IBB#NYSE">IBB</a>)</td>
<td>-7.23%</td>
</tr>
<tr>
<td>iShares U.S. Transportation ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IYT#NYSE">IYT</a>)</td>
<td>-8.34%</td>
</tr>
<tr>
<td>iShares U.S. Home Construction ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ITB#NYSE">ITB</a>)</td>
<td>-9.60%</td>
</tr>
</tbody>
</table>
<figcaption class="wp-element-caption">Data as of Apr. 30, 2024 3:15 p.m. EDT</figcaption></figure>
Now read: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/04/38497224/ai-data-centers-drive-electricity-demand-goldman-sachs-picks-16-stocks-to-play-the-">AI Data Centers Drive Electricity Demand: Goldman Sachs Picks 16 Stocks To Play The Trend</a>
Image generated using artificial intelligence via Midjourney.

Biotech

Health Care

AAUKF

COPX

FILL

iShares Dow Jones US Broker Dealers Index Fund

iShares Dow Jones US Insurance Index Fund

iShares Dow Jones US Regional Banks Index Fund

iShares U.S. Digital Infrastructure and Real Estate ETF

IDGT

iShares Dow Jones US Oil & Gas Exploration & Production Index Fund

iShares Dow Jones US Oil Equipment & Services Index Fund

iShares Dow Jones US Pharmaceuticals Index Fund

iShares Dow Jones US Medical Devices Index Fund

ILIT

iShares Dow Jones US Aerospace & Defense Index Fund

iShares Trust Dow Jones US Financial Services Index Fund

iShares Dow Jones Transportation Average Index Fund

PAAS

PICK

iShares FTSE NAREIT Mortgage PLUS Capped Index Fund

iShares FTSE NAREIT Residential PLUS Capped Index Fund

RING

SLVP

iShares PHLX SOX Semiconductor Sector Index Fund

SOXX

iShares S&P Global Timber & Forestry Index Fund

WOOD

Select Sector SPDR-Consumer Discretionary

April Showers On Wall Street:  Miners, Utilities Emerge As Bright Spots In Gloomy Market

PulteGroup, Inc.&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PHM#NYSE">PHM</a>) shares are trading higher after the company reported&nbsp;<a target="_blank" href="https://www.benzinga.com/pressreleases/24/04/b38374279/pultegroup-inc-reports-first-quarter-2024-financial-results" rel="noreferrer noopener">first-quarter FY24&nbsp;results</a>.
Revenue stood at $3.95 billion, beating the consensus of $3.58 billion.
Reported home sale revenues rose 10% Y/Y to $3.8 billion, with higher revenues reflecting an 11% increase in closings to 7,095 homes, partly offset by a 1% Y/Y drop in average sales price to $538,000.
The gross margin for home sales stood at&nbsp;29.6%, increasing by 50 basis points Y/Y, benefiting from ongoing strength in homebuyer demand and a favorable geographic mix of homes.
Net new orders increased 14% Y/Y to 8,379 homes. The cancellation rate dropped to 10% of the backlog at the start of the period, a decrease from 13% in the first quarter of the previous year.
GAAP EPS rose 32% Y/Y to $3.10. Adjusted EPS of $2.87 beat the&nbsp;<a target="_blank" href="https://www.benzinga.com/calendars/earnings" rel="noreferrer noopener">consensus of $2.36</a>.
PulteGroup&#8217;s&nbsp;quarter-end backlog was 13,430 homes, valued at $8.2 billion. The company ended the year with $1.8 billion of cash and a debt-to-capital ratio of&nbsp;15.4%.&nbsp;
During the quarter, the company repurchased 2.3 million of its common shares for $246 million, or an average price of $106.73 per share.
&#8220;Given PulteGroup&#8217;s broad operating platform and deep product portfolio, along with the powerful incentive programs we can offer to help improve the overall affordability equation, we are well positioned to expand our market share while helping to provide much needed new housing stock.&#8221; said Ryan Marshall, PulteGroup President and CEO.
Investors can gain exposure to the stock via IShares U.S. Home Construction ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/ITB#BATS">ITB</a>) and Invesco Building &amp; Construction ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PKB#NYSE">PKB</a>). 
Price Action: PHM shares were up 3.9% at $112.14 at last check Tuesday.
Photo: Shutterstock

Why Homebuilder PulteGroup Shares Are Higher Today

D.R. Horton, Inc.&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DHI#NYSE">DHI</a>) shares are trading higher after the company reported better-than-expected second-quarter FY24 financial results and&nbsp;<a target="_blank" href="https://www.benzinga.com/pressreleases/24/04/b38309418/d-r-horton-inc-americas-builder-reports-fiscal-2024-second-quarter-earnings-and-declares-quarterly" rel="noreferrer noopener">issued guidance above estimates</a>.
Sales grew 14% Y/Y to $9.1 billion, beating the consensus of $8.3 billion. Net sales orders increased 14% Y/Y to 26,456 homes and 17% in value to $10.1 billion.
Homes closed in the quarter increased 15% Y/Y to 22,548 homes and 14% Y/Y in value to $8.5 billion.&nbsp;
EPS was $3.52 (+29% Y/Y),&nbsp;<a target="_blank" href="https://www.benzinga.com/calendars/earnings" rel="noreferrer noopener">beating the consensus of $3.06.</a>
Sales order backlog of homes under contract as of March 31, 2024, decreased 7% to 17,873 homes and 5% in value to $7.0 billion.
D.R. Horton had 45,000 homes in inventory, of which 27,600 were unsold as of March 31, 2024.
Return on equity (ROE) was 22.2% for trailing twelve months ended March 31, 2024, and homebuilding return on inventory (ROI) was 29.9%.
The company's net cash used in operations for the six-months totaled $(470.1) million, compared to the operating cash flow of $1.47 billion a year ago.
Consolidated cash balance was $3.1 billion, and available capacity on its credit facilities was $2.6 billion, for a total liquidity of $5.7 billion.
D.R. Horton repurchased 2.7 million shares of common stock for $402.2 million during the quarter. The company's remaining stock repurchase authorization on March 31, 2024, was $800.5 million.
Dividend: D.R. Horton declared a quarterly cash dividend of $0.30 per common share, payable on May 9, 2024, to stockholders of record on May 2, 2024.
Outlook: D.R. Horton updates FY24 outlook for revenue to $36.7 billion to $37.7 billion (prior view $36 billion-$37.3 billion) vs. the&nbsp;<a target="_blank" href="https://www.benzinga.com/calendars/guidance" rel="noreferrer noopener">consensus of $36.32 billion</a>.
It now expects Homes closed to be 89,000 homes to 91,000 homes (prior view 87,000 homes-90,000 homes).
DHI reiterated cash provided by operations guidance of around $3 billion and currently expects share repurchases of ~$1.6 billion.
&nbsp;Investors can gain exposure to the stock via&nbsp;IShares U.S. Home Construction ETF&nbsp;(BATS:<a class="ticker" href="https://www.benzinga.com/stock/ITB#BATS">ITB</a>) and&nbsp;Invesco Building &amp; Construction ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PKB#NYSE">PKB</a>).
Also Read:&nbsp;<a target="_blank" href="https://www.benzinga.com/markets/equities/24/03/37855254/are-you-a-housing-market-lock-in-high-mortgage-rates-result-in-people-not-living-in-homes-they-w" rel="noreferrer noopener">Are You A Housing Market Lock-In? High Mortgage Rates Result In &#8216;People Not Living In Homes They Would Prefer&#8217;</a>
Price Action: DHI shares are up 2.65% at $149.60 on the last check Thursday.
Photo via Shutterstock

Why Builder D.R. Horton Shares Are Surging Today

New housing projects initiated by homebuilders in February exceeded expectations, reversing the downward trend seen in January due<a href="https://www.benzinga.com/real-estate"> to severe winter storms.</a>
Housing starts soared by 10.7% month-on-month in February to an annualized rate of 1.521 million, beating forecasts of 1.425 million. Much of the gain was seen in single family housing starts.
In January, poor weather hampered builders breaking ground on new projects and just 1.374 million housing starts were seen that month, down 12.3% from the previous month.
Meanwhile, building permits, which are seen as an indicator of future building activity, rose by 1.9% in February to 1.518 million.
<h2 class="wp-block-heading">Affordability Issues In Housing Market</h2>
While high interest rates continue to pose affordability issues in the housing market, the average rate for a 30-year mortgage has eased over the past three weeks, standing at 6.74% as of March 14.
Sales of new homes have begun to creep higher, but remain down at the levels seen in the spring and early summer of 2023. In January 661,000 new homes were sold, missing forecasts of 680,000. The consensus forecast for February sales is 673,000.
&#8220;Demand for new homes is&nbsp;holding up despite still-high mortgage rates, largely due to a shortage of existing homes for sale. Few&nbsp;existing homeowners want to move, as most locked-in very low mortgage rates during the pandemic,&#8221; said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
But housebuilders shares have flagged in recent days under the strain of a market where persistent high interest rates and affordability remains the biggest risk in terms of sales.
While demand remains robust and supply short, average house prices will remain close to historic highs.
The average house price in the U.S. currently stands at around $492,000. This is down from the $552,600 record seen in the fourth quarter of 2022, but still high by historical standards.
Also Read: <a href="https://www.benzinga.com/government/24/03/37698819/retail-sales-climb-in-february-as-consumer-activity-picks-up-but-miss-expectations">Retail Sales Climb In February As Consumer Activity Picks Up, But Miss Expectations: &#8216;The Economy Is Slowing&#8217;</a>
<h2 class="wp-block-heading">Market Reactions</h2>
Since the beginning of 2023, the iShares U.S. Home Construction ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ITB#NYSE">ITB</a>), an exchange traded fund that tracks the aggregate prices of U.S. homebuilders, has gained 78%. However, since the start of March it is down 1.6%.
<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="750" height="650" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/19102719/newplot-2024-03-19T142708.556.png" alt="" class="wp-image-257493" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/19102719/newplot-2024-03-19T142708.556.png 750w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/19102719/newplot-2024-03-19T142708.556-300x260.png 300w" sizes="(max-width: 750px) 100vw, 750px" /></figure>
Among the top stocks in the ITB, D.R. Horton Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DHE#NYSE">DHE</a>), the country&#8217;s biggest homebuilder, is flat over the year after its <a href="https://www.benzinga.com/news/earnings/24/01/36740128/why-builder-d-r-horton-shares-are-diving-today">quarterly results</a> disappointed, while Lennar Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LEN#NYSE">LEN</a>) remains 5% higher year-to-date, despite a sharp drop last week after <a href="https://www.benzinga.com/news/earnings/24/03/37598354/warren-buffetts-bet-on-lennar-will-the-homebuilding-giants-earnings-report-validate-the-investment">missing</a> revenue estimates.
Jeffrey Roach, chief economist for LPL Financial, said: &#8220;Investors should know that demand for new homes remains fairly stable despite high borrowing costs. Markets have rewarded investors aware of the opportunities in housing-related sectors.&#8221;
Now Read: <a href="https://www.benzinga.com/news/earnings/24/03/37598354/warren-buffetts-bet-on-lennar-will-the-homebuilding-giants-earnings-report-validate-the-investment">Warren Buffett&#8217;s Bet On Lennar: Will The Homebuilding Giant&#8217;s Earnings Report Validate The Investment?</a>
Image created using artificial intelligence with Midjourney.

Housing Starts Rebound, Lift Homebuilder Stocks: Sign Of Economic Resilience

Last week, I thought for sure that the market would need more time near the recent lows before it could move higher. However, prices are now pushing up towards all-time highs once again.

Prices Pushing Up Again

Weekly Market Pulse: What Will The Fed Do?

Homebuilders are seeing an uptick, here are the best performing - JPM

Housing demand must strengthen to justify high homebuilder values: BofA

Mortgage rates continue to decline reviving purchase, refinance demand

Latest Memo From Howard Marks: Shall We Repeal The Laws Of Economics?

No serious attempt to close the bullish gap yesterday, and triple witching ahead today into reasonably good S&P 500 market breadth.

Gold, Silver Or Equities

U.S. Equity Market Betas - Why They Matter And How They Are Changing

The SPX index hit a new all-time high on Thursday, but it then closed well off its high. The breakout wasn't the best, and combined with the nervousness about the election, I think the market will continue to be difficult until the end of October.

A Difficult Market Until October

It‘s one more day of digesting not just the 50bp cut catching most off guard, but also about the rate cut path (full dot plot till end of 2025) ahead.

Get Our Top Trade Ideas Delivered Daily - 65% Off Now

Get Our Top Trade Ideas Delivered Daily - 65% Off Now

Comments

iShares U.S. Home Construction ETF

Overview

iShares U.S. Home Construction ETF (BATS:ITB), Quote.Headers.trade-ideas