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Home has never been more important for Americans, and it’s showing up in the numbers. The National Association of Home Builders’ August housing index came in at 78, ahead of an expected 74, and up from 72 a month ago. The index tracks expectations for single-family home sales over the next six months. The reading matched the highest level in the index’s 35 years, a result, says NAHB Chief Economist Robert Dietz, of low interest rates and a “noticeable suburban shift” during the pandemic.
More good news came from housing starts, which were up 23% in July to a seasonally adjusted 1.5 million. It’s the best month-over-month improvement since October 2016. The
SPDR S&P Homebuilders
exchange-traded fund is up 38% over the past month, versus a 15% gain for the
Housing is also boosting other parts of the markets, including home-improvement chain
whose shares are up 30% this year. Revenue jumped 23% in the second quarter to $38.1 billion, easily beating Wall Street’s forecast of $34.5 billion. Earnings also blew past estimates. However, Home Depot shares slipped 1.1% after the company said that it couldn’t predict how long the boom will last.
stock has followed a trajectory similar to Home Depot’s. It’s up 32% in 2020. But investors’ muted reaction to Home Depot’s earnings was a warning to Lowe’s. As it turned out, Lowe’s earned $2.83 billion, or $3.74 a share, up from $2.14 a year earlier, on revenue that jumped 30%, to $27.3 billion. The stock rose 0.3% after the earnings call.
Tech on Top Again
The S&P 500 hit a record high, fueled by tech stocks—
market valued passed $2 trillion—and a housing revival.
posted strong earnings. Jobless claims rose, to 1.1 million. On the week, the
industrials ended nearly where they began, at 27,930.33; the S&P 500 edged up 0.7%, to 3397.16; and the
rose 2.7%, to 11311.80.
After fierce blowback, Postmaster General Louis DeJoy said that some operational changes at the Postal Service, which had caused delivery delays and fears of problems with mail-in voting, would be suspended until after the election. Congress demanded specifics, 20 states prepared lawsuits, and critics called for his head. DeJoy promised that ballots would be prioritized.
New Covid-19 cases ticked down (as did testing) as U.S. Covid-related deaths neared 175,000. Republicans offered a new relief proposal this week, but talks stalled. Schools scrambled to open amid considerable confusion. Several universities, after being hit with an outbreak, abruptly suspended in-person classes and sent students home.
The Democratic Case
The Democrats broadcast an all-virtual nominating convention that previewed their case for former Vice President Joe Biden as president, and their case against President Trump. The four-night show featured a range of Democratic speakers—and a few Republicans. This coming week: The GOP gets its chance, also virtual.
The Wall Street Journal reported a Justice Department split over the timing of an antitrust suit against Alphabet’s Google. Attorney General William Barr appeared to be pressing for a suit by summer’s end; staffers say they’re not ready. The case, the result of a yearlong investigation, appears to be focused on search and advertising.
Ride Hailers’ Appeal
An appeals court gave a last-minute reprieve to Uber Technologies and Lyft, staying a lower court order that it treat its drivers as full-time employees. The pair had threatened to shut down their California ride-hailing services rather than obey the order. The companies are hoping a November moratorium will exempt them from a California law on so-called gig workers known as AB-5.
Annals of Deal-Making
to buy the U.S. arm of TikTok…Berkshire Hathaway disclosed a $565 million stake in
…Stock-trading app Robinhood’s value rose to $11.2 billion after D1 Capital Partners led a $200 million funding round…Johnson & Johnson said it would buy
for $6.5 billon and
for $3.7 billion…Airbnb filed confidentially for an initial public offering.
Write to Alex Eule at [email protected]