On Friday October 14th, at 12:30 EDT we’re going to a deep dive into the home furnishing and home improvement retail space. Housing is in an unprecedented position. Mortgage rates are rising at their fastest pace ever, and the impact is happening in real time. The FHFA M/M SAAR change has seen a sequential change over 3 months that took about a year and a half in the '07/'08 housing collapse. And that data set reflects the housing condition of a few months back, while rates since then have continued to rise. As our Hedgeye Housing/Macro Analyst Josh Steiner phrased it “I don’t think people realize how quickly the housing market is getting steamrolled here” by Fed policy and the rates move. It’s hard to predict what the impact will be across the housing related retail space over the coming 12 months, but it’s most likely bearish. We’ll feature the high level outlook of our Hedgeye Housing Team and a brief state of the US housing market. We plan to dive into historical data for both the “soft” side of home and home improvement retail to contextualize the risk around these segments of consumer in the coming quarters. We’re doing a consumer survey to carve up the demand risks and opportunities across different consumer demographics like age and income. Then, as always, we’ll translate it into the stocks flagging those we think are the best TREND and TAIL longs and shorts right now, while also highlighting our work on the ‘shopping list’ of quality, defendable assets we’ll likely be looking to add on the Long side on the eventual housing rebound, which is likely still at least 6 months out.
Relevant tickers include HD, LOW, FND, RH, WSM, ARHS, ETD, HOFT, KIRK, LOVE, HVT, TCS, W, LL, TSCO, OSTK, and BBBY.
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