Editor's Note: Below is a chart and excerpt from today's Early Look written by U.S. Macro analyst Christian Drake.
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You do not want to be long Housing related equities during rate shock periods, period. When the magnitude of short-term changes in rates pushes above 2 Standard Deviations the inverse correlation between rates and housing equities pushes towards 1 and housing investing devolves into a single factor model (i.e. the trade is singularly about rates and broader fundamental considerations get sidelined). Builder Performance during historical Rate Shock periods is illustrated in the Chart of the |
