Housing Starts, Building Permits Good, Not Great
Friday, July 17, 2020
Ahead of Friday’s opening bell, we see data reported on June Housing Starts and Building Permits. Results were good, but not great — coming in higher than the previous few months, but lower than analyst estimates. A headline of 1.186 million seasonally adjusted, annualized new starts was a tad below the 1.2 million expected, up 17.3% month over month. Permits — a forward indicator of future starts — came in at 1.241 million, +2.1% from the May read.
Both headline numbers were the best we’ve seen since March, before the pandemic crisis derailed industries across the board, including homebuilding. Even now the ramp-up has been difficult to get going: lack of supply in materials and land are keeping a fast rebound in the industry from taking hold. Multi-family units, in particular, were down — though this means single-family housing may be gaining traction.
The 30-year fixed mortgage rate just hit its lowest-ever level at sub-3%. If there’s ever been a better reason to jump into the housing market, or refinance one’s mortgage loan, it’s hard to imagine what it would be. Young adults appear to be more ready to purchase a home than they have been in the past; a sustained development with this demographic should do wonders for housing numbers in the months ahead.
Railway major Kansas City Southern KSU beat analyst estimates by 3 cents to $1.15 per share in its Q2 earnings report this morning. This keeps a decent string of earnings beats intact; the rail company’s last miss was in Q3 2018. Revenues of $547.9 million was a tad below expectations, but pretty much on-target. The stock is up slightly year-to-date, but still off its mid-February highs. For more on KSU’s earnings, click here.
BlackRock BLK knocked the cover off the ball (remember baseball?) in its Q2 report this morning, delivering $7.85 per share versus the $6.90 in the Zacks consensus, and up markedly from $6.41 per share in the year-ago quarter. Revenues of $3.65 billion came in nearly 2% above estimates, and bettered the $3.52 billion from Q2 2019. This continues the Q2 narrative that investment firms have had a better quarter than initially believed. For more on BLK’s earnings, click here.
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