The Zacks Analyst Blog Highlights: DHI, PHM, BLD, FND And CNR
Zacks Investment Research | Mar 17, 2020 11:47PM ET
For Immediate Release
Chicago, IL – March 18, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include D.R. Horton, Inc. (NYSE:DHI) , PulteGroup, Inc. (NYSE:PHM) , TopBuild Corp. (NYSE:BLD) , Floor & Decor Holdings, Inc. (NYSE:FND) and Cornerstone Building Brands, Inc. (NYSE:CNR) .
Here are highlights from Tuesday’s Analyst Blog:
Coronavirus Make Housing Stocks a Must Buy: 5 Choices
The novel coronavirus has been officially declared a pandemic by the World Health Organization. It has claimed more than 6,000 lives worldwide, and has impacted corporate profit margins and global economic growth.
In fact, policymakers are now struggling to contain the spread of the deadly virus and eventually its impact on the economy. Policy makers unanimously agreed to trim benchmark federal funds rate a full percentage point to a range of zero to 0.25%, where it had been for several years following the 2008 financial crisis. Earlier this month, in a rare inter-meeting move, the Fed trimmed its benchmark interest rate by half a percentage point to a range of 1-1.25%.
The Fed’s surprise rate cuts did little to improve sentiments. After all, Fed’s emergency rate cuts suggested that the impact of the outbreak on the economy is much worse than what was estimated by market pundits. Moreover, a rate cut lowers borrowing costs. But in the case of the coronavirus outbreak, the bigger problem lies with demand contraction due to travel restrictions as well as supply disruptions. Now, such issues can’t be tackled just by rate cuts.
But as the coronavirus outbreak continues to wipe out money from the U.S. stock market, investors have started to focus on safe havens. In fact, the virus scare has now fueled demand for U.S. debt, which in turn pulled Treasury yields to new record lows.
The yield on the 10-year Treasury note dropped 22.4 basis points to 0.722% on Mar 16, its biggest one-day drop since March 2009. While the two-year note rate dropped 12.4 basis points to 0.360%, the 30-year bond yield declined 2.2 basis points to 1.319%.
Having said that, mortgage rates are most likely to go down as they generally follow the direction of the yield on the 10-year Treasury note in the United States. And lower mortgage rates will certainly boost homebuying.
Notably, millennials are anticipated to propel the housing market this year. Most of these individuals will turn 30 this year and consider buying their first home. In fact, millennials are expected to take half of all mortgages this year, surpassing both Generation X and Baby Boomers, per Zacks Investment Research
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