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Housing starts up 1.9% in September, permits rise

Yahoo Finance's Emily McCormick joins The First Trade with Alexis Christoforous and Brian Sozzi to discuss September housing starts, P&G fiscal year 2021 first-quarter earnings report and Albertsons second-quarter earnings report.

Video Transcript

ALEXIS CHRISTOFORUS: It is down to the wire for Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi to get a stimulus deal done ahead of the election. Investors appear optimistic as they push stock futures higher. Here this morning, we see the market is snapping back after yesterday's late-day sell-off. We've got Dow futures up 120, NASDAQ futures climbing about 35, and S&P futures adding about 15 points.

The market also getting a boost this morning from some better-than-expected earnings from big name companies, including Procter and Gamble and Albertsons. And we got some encouraging news on the housing front. Yahoo Finance's Emily McCormick has been watching it all for us. And Emily, let's start with those housing starts numbers. What did they tell us?

EMILY MCCORMICK: Well, Alexis, taking a look at housing starts, we saw those rebound in September from August, but by a slightly smaller-than-expected margin. Those were up 1.9% month-on-month in September to an annualized rate of $1.42 million. Now, consensus economists had been looking for a gain of 3 and 1/2%.

But if you look within that headline, there was still some good news in this report. We saw that construction in September was led by a dramatic increase in demand for single family homes. That likely reflects the fact that people are moving out of major metropolitan areas. There's greater demand here for these single family units in the suburbs. So a little bit of a change there. We saw those starts for single units up 8 and 1/2% in September over August, and that accounted for nearly 80% of all housing starts for the month.

Now, I also want to take a look now at building permits. That was really also a standout in today's report. And we saw building permits, which are a proxy for future homebuilding, rise 5.2% month-on-month to a seasonally adjusted annualized rate of $1.55 million. A rise of just 3% had been expected. So again, a beat there are building permits, and a lot of demand that we're seeing on the start-side for those single family units. Alexis.

ALEXIS CHRISTOFORUS: All right, I want to get to those earnings reports we alluded to. Let's begin with the a supermarket chain Albertsons. It seems people still going out, stocking up on groceries during this pandemic, and that helped to boost the bottom line there.

EMILY MCCORMICK: Absolutely. And just taking a look at these Albertsons results, we saw same-store sales up 13.8%. So a massive double-digit percent increase on those identical store sales during the quarter. The company sees these rising by at least 15 and 1/2% for the full year. So it expects to see that growth actually continue and extend for the balance of 2020.

Now, we also saw digital sales rising here for Albertsons. We don't always think about the grocery chain necessarily being a big digital player here. But those e-commerce sales up 243% during the quarter. And we also saw that the company forecast earnings guidance that was better than expected. The company sees full-year adjusted EBITDA between $4.15 billion to $4.25 billion. That estimate on the Street was for $3 and 1/2 billion. Alexis and Brian.

BRIAN SOZZI: And Emily, I had to do a double take again on Proctor and Gamble earnings day sales up across the board. Even their grooming segment, which has been struggling because bros aren't out there shaving, that segment even did well.

EMILY MCCORMICK: That's right. And just looking specifically at that grooming segment, we did see organic sales there up 6%. That was an unexpected increase. The estimate had been for a decline of about 1%. But as you said, really strengthier across the board. We had that led by health organic sales. Those were up 12%. That includes products like Procter and Gamble's Crest toothpaste and other oral care, really, consumer products.

We saw fabric and home care organic sales up 14%. The estimate was for a rise of nearly 9%. So again, strengthier across the board. We saw overall organic revenue up 9% during the quarter. That estimate had been for a 4.7% increase. So Procter and Gamble, again, another beneficiary of the fact that people are still at home and still looking for these home products. Alexis and Brian.

ALEXIS CHRISTOFORUS: Yeah, the stock's getting a nice pop here in the futures market.