Below is a chart and brief excerpt from today's Early Look written by Macro Analyst Christian Drake.
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Coming into 2019, Housing fundamentals were in raging dumpster fire formation, housing related equities had dramatically underperformed and Housing sentiment was completely washed out. But the Quad 4 outlook was for rates to fall and, absent outright recession, Quad 4 is positive for Housing performance with rates as the causal factor. Importantly, we weren’t making a recession call, our near-term outlook on the consumption side was “steady as she goes” and the 2H18 collapse would progressively become the comp. As far as macro-centric sector theses go, that’s about as simple as it gets. And contrary to investors’ inherent proclivity for sophistication, ‘simple’ is still not a synonym for ‘wrong’. |
