Back to top

Analyst Blog

Today’s New Home sales report will likely do little to distract the market from the unresolved ‘Fiscal Cliff’ issue. The earlier conciliatory statements aside, the two sides remain poles apart and have yet to tackle the nitty-gritty of what needs to form part of the final deal. Importantly, we are currently in the posturing and grandstanding stage of the ‘Cliff’ negotiations, heightening the market’s vulnerability to unfavorable headlines.

‘Fiscal Cliff’ aside, we get the New Home sales report for October a little later, with expectations of a modest decline from the previous month’s very strong level. September’s sales were the highest in quite a while, which had pushed inventories close to their lowest levels since 2005. Home construction has picked up, as evident from the Housing Starts in recent months.

This virtuous cycle in the housing sector has made homebuilder stocks like PulteGroup (PHM) and KB Home (KBH) among the best performers in the market. Many of us are reasonably expecting that housing will be a bigger contributor to GDP growth in the coming quarters, potentially offsetting weakness in export centric activities.

The favorable housing backdrop is likely a major contributor to the improving consumer confidence levels, as reflected in the monthly University of Michigan and Conference Board measures. Business confidence is not showing as much resilience, likely a function of the unresolved ‘Fiscal Cliff’ issue, though Tuesday’s Durable Goods orders reading was broadly positive.

In any case, the favorable consumer confidence level puts us on track for a positive holiday shopping season. All we need now is for the ‘Cliff’ to go away.

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UNITED THER… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%