{"id":12335,"date":"2018-10-22T16:14:02","date_gmt":"2018-10-22T21:14:02","guid":{"rendered":"http:\/\/leavittbrothers.com\/blog\/?p=12335"},"modified":"2018-10-22T16:14:02","modified_gmt":"2018-10-22T21:14:02","slug":"housing-stocks-warn-a-top-is-forming","status":"publish","type":"post","link":"https:\/\/blog.leavittbrothers.com\/?p=12335","title":{"rendered":"Housing Stocks Warn a Top is Forming"},"content":{"rendered":"

Per Sam Stovall, formerly of S&P Capital IQ, every recession since 1960 has been preceded by y\/y double-digit decline in housing starts. The average is -25%. The smallest (-10%) occurred ahead of the shallowest economic contraction while the biggest (-37%) occurred before deepest recession.<\/span>
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\n“Year-over-year” is a long time. It implies tops take time to form, but this doesn’t mean we can’t look for early warning signs.<\/span>
\nHere’s a rundown of the housing group, mostly in terms of the companies that make the various finishes of a house.<\/span>
\nMohawk (MHK) does flooring – carpet, ceramic tile, laminate, wood, stone, vinyl and rugs.<\/span>
\n\"\"
\nJeld-Wen (JELD) does interior and exterior doors and wood, vinyl and aluminum windows.<\/span>
\n\"\"
\nMasonite Worldwide (DOOR) makes interior and exterior doors.<\/span>
\n\"\"
\nSherwin Williams (SHW) does paint and other coating products.<\/span>
\n\"\"
\nScotts Miracle-Gro (SMG) does lawn and garden care.<\/span>
\n\"\"
\nFortune Brands Home & Security (FBHS) does cabinets, doors, windows, tool storage, garage organization and safety devices.<\/span>
\n\"\"
\nAmer Woodmark (AMWD) makes kitchen and bath cabinets.<\/span>
\n\"\"
\nHome Depot (HD) and Lowe’s (LOW) sell a wide range of building materials, home improvement products and lawn and garden products.<\/span>
\n\"\"
\n\"\"
\nXHB and ITB are residential construction ETFs.<\/span>
\n\"\"
\n\"\"
\nThese charts speak for themselves. There’s no question housing is weakening – there are headlines highlighting various metrics dropping in key markets almost every day. And if a negative wealth effect takes place and consumers pull back on their spending just a little bit, the economy, which is 70% consumption based, will take a hit.<\/span>
\nThese charts are our warnings signs. We don’t have to wait for a y\/y drop in housing starts to read what’s in the pipeline.<\/span>
\nA market top is forming. It’ll take some time – possibly well into 2019 – but it’s still forming, so have a plan in place to navigate it.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Per Sam Stovall, formerly of S&P Capital IQ, every recession since 1960 has been preceded by y\/y double-digit decline in housing starts. The average is -25%. The smallest (-10%) occurred ahead of the shallowest economic contraction while the biggest (-37%) occurred before deepest recession.<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[3],"tags":[],"_links":{"self":[{"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/posts\/12335"}],"collection":[{"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=12335"}],"version-history":[{"count":0,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=\/wp\/v2\/posts\/12335\/revisions"}],"wp:attachment":[{"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=12335"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=12335"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.leavittbrothers.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=12335"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}