For Immediate Release
Chicago, IL – March 16, 2010 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: D.R. Horton (DHI), Masco (MAS), Fortune Brands (FO), Weyerhaeuser (WY) and Black & Decker (BDK).
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Here are highlights from Monday’s Analyst Blog:
Home Builders Index Drops
Non-residential construction is not likely to pick up the slack, since not only does the country have too many houses relative to demand, but judging by the vacancy rates, we also have far too many strip malls, hotels and office towers. A “Cash for Caulkers” program is a good idea since it would allow these people to use their current skill sets without adding to the inventory overhang. It would also increase the country’s overall energy efficiency, thus helping on the trade deficit front, as well as reducing carbon emissions.
It would sure beat just paying construction workers unemployment benefits, and it would not push people into destitution the way that cutting off unemployment benefits would (especially when there are not a lot of jobs available that would make use of those skills). However, even a major problem would only put a dent in the problem.
The firms that are most immediately affected are of course the big homebuilders like D.R. Horton (DHI). However, the effects filter much further through the economy since it takes a lot of economic activity to build a home.
Fewer new homes being built also means less demand from cabinets and faucets from Masco (MAS) and Fortune Brands (FO). It means less demand for wood from Weyerhaeuser (WY). It means lower tool sales for Black & Decker (BDK). Lower employment means lower economic activity across the board for retailers and for the makers of everything the retailers sell.
Housing is in a sense the ultimate durable good. Demand for durable goods can be pulled forward or pushed back depending on the overall economy. During the early years of this decade, we pulled forward an enormous amount of demand for housing. Just look at how far above previous levels housing starts rose during the last expansion.
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