Homebuilders Crater After JPMorgan Downgrade, Home Sales Miss
(Bloomberg) -- While the S&P 500 Index sets records, American homebuilders are being left behind.
The S&P Supercomposite Homebuilding Index retreated 0.9 percent at 11:13 a.m. in New York, widening its weekly loss to 3.3 percent, the most in eight weeks. By contrast, the S&P 500 Index jumped as much as 0.4 percent to surpass an all-time high set the day before.
Sentiment for the sector that’s lost 26 percent from its 10-year high in January soured further after Michael Rehaut, an analyst at JPMorgan Chase & Co., cut his ratings on five builders and said the housing recovery is likely to stay “fairly tepid” in 2019. The downgrades come a day after August existing home sales missed estimates as buyers balk at higher prices and leave more inventory on the market for the first time in three years.
All but two of the 15 members of the homebuilding index traded lower Friday, paced by MDC Holdings Inc., Meritage Homes Corp. and Tri Pointe Group Inc. The weakness adds credence to last week’s bearish call from Zelman & Associates. The next key test for the group will be earnings from KB Home on Sept. 25.
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