This is kind of funny. The drop is due to the meltdown in residential construction. Residential construction contributed a -17% to the number. The others were positive. Your surprise at the low number mirrors the surprise of many pundits just about every time a residential housing metric is released. They are always surprised that it is as bad as it is. These are the same pundits that told us the bottom was in the housing market and the bad news was already build into the stock price. They were just plain wrong.
The real question is to what degree the housing meltdown will affect the rest of the economy. Obviously it has had a negative effect on lumber, furniture, home supplies, even Catepiller and Ingersol Rand. I listened to Pultes conference call yesterday and it was abysmal. They have laid off 1400 white collar workers, they are losing money on land options, sales have plummeted, the price of houses is taking a dive - for any other business the stock would have tanked long ago. But HB stocks have actually gone up. I have to confess I don't understand the stock markets reaction to such a dismal landscape.
This number could be misleading if the impact of housing is minimal.
But again, I can't make that call. It is too complicated.
wonder if this means the party of easy money is over, back to the grind like the summer was...i have made a nice run recently but anyone in this market could have done that in the past month.....i noted in the conference call with southern company utilities earnings are being hurt some by the syn-fuels tax credit elimination....all the utes went down some from that news...yesterday the news came out that bmy lost money due to generic drugs so i sold bme while i was up....it dropped during the day but came back to where i sold it at by the end of the day....yea i am easily shaken on these news...i feel utes will move back for an opprtunity to buy more....reits have made such an up move recently i worry i may be too late....sold my mpw this morning cause it was heading south before the conference call...i hate to think of myself as being a pig.....