Markets showed some strength today after several positive earnings reports coupled with more White House policy initiatives which sparked a surge in steel, housing, material and construction stocks. At the close the Dow gained 115 points to 19,915. Trading volume surged from prior day levels and IBD has markets in “rally mode”.
Home builder stocks were strong today after DR Horton announced numbers which beat both top and bottom line estimates. Earnings were up 31% while Revenue was up 19.7%. The number of homes closed during the quarter were up 17% and the company said it sees gross margins of 20% in the current housing market and reaffirmed its 2017 guidance. The report showed that tight supplies of homes is good for home builders.
The National Association of realtors reported that existing home sales fell 2.8% in December to a seasonally adjusted annual pace of 5.49 million which was slightly below expectations. NAR blamed the miss on higher prices and tight supplies as the inventory of existing homes for sale dropped 10.8% to 1.65 million which is the lowest reading since the inception of this particular data track back in 1999. One local realtor here in Seattle told me demand is so high in our area that new developments north of Seattle, while they are permitted, are sold out even though homes will not be completed for another 18 months or so.
Gold prices fell about $6 an ounce and WTI crude oil was up six tenths of a percent at $53 per barrel. Natural gas prices were up 1.7% as well.