Stocks opened the day in the red but then reversed higher and closed with a gain of 122 points to 24,001. Trading volume was much lower. It seems people are waiting for something but are not sure what it is. The gubment continues to be shut down and this might affect growth rate in the first quarter.
Miami based home builder Lennar posted 4th quarter earnings yesterday. Revenue for the quarter was up 71% compared to 2017’s 4th quarter. Earnings were above guru estimates while revenue was below estimates. CEO Richard “Buck Snort” Beckwitt said that housing markets are slowing but he feels this is just a pause because underlying economic fundamentals are strong and that the US is still in a housing deficit stemming from the 08 financial crisis. Buck snort noted that while sales were down 2%, deliveries were up 17% and the company had used its strong cash flow to pay down debt. He also noted that margins are getting squeezed thanks to limited approved building space, tight labor markets and trade driven raw material cost increases.
Retail stocks are all over the place today. Macy’s, Nordstrom and Kohl’s are getting crushed after reporting disappointing holiday sales numbers. Costco (“Costcos” as my late mother in law called it) and Target are reporting better than expected results. JCP Penny and Sears continue to wither away while Amazon is taking over the known universe. Microsoft announced it is teaming up with Kroger to help modernize the grocery store. Overall holiday sales, according to Mastercard, were up 5.1% beating estimates and making this the biggest increase in 6 years.