Below is a chart and brief excerpt from today's Early Look written by Macro Analyst Christian Drake.
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’.