Fiscal Cliff Fools Should Mind the Q3 GDP Report & Q4 Forecast

An upward revision in the third estimate of Q3 GDP should serve as a guide to U.S. legislators, not a comfort. This morning’s data showing real economic expansion of 3.3% represented a significant increase over the second reporting of 2.7% growth for the same quarter. It was also importantly higher than the 1.3% growth seen in Q2, and it exceeded the consensus economists’ view for plus 2.8%. The report offers Congress an important message and at just the right time for it, so hopefully legislators are paying attention. Because the fiscal cliff conflict, with global economic deterioration, has expectations for Q4 2012 significantly short of the result for Q3. It would seem in the interest of all that economic growth gain traction rather than being undermined just as it does.

The market, as measured by relative indexes, has seen a muted reaction to the positive news because of concerns about the future. We can see through the table below that stocks of all sorts reflect contained enthusiasm today on what would have otherwise driven shares much higher. Furthermore, our esteemed representatives in Washington D.C. should be interested in seeing investment capital flows that favor economic growth and so fuel it. Thus, the non-reaction of stocks to this news today is quite concerning to me, as it should be to you.

Index Tracking Security	Thursday Change Through 11:30 AM ET
SPDR S&P 500 (NYSE: SPY)	-0.05%
SPDR Dow Jones Industrials (NYSE: DIA)	-0.14%
PowerShares QQQ (Nasdaq: QQQ)	-0.42%
iShares Russell 2000 (NYSE: IWM)	+0.12%
Wilshire 5000 ETF (NYSE: WFVK)	Price Not Updated

The final reporting of Q3 GDP is based on more complete data, and so is more reliable than earlier versions of the estimate. The Bureau of Economic Analysis (BEA), which is responsible for reporting GDP, indicated that the general picture of the economy had not changed much since the prior reporting of Q3. However, two important aspects had been altered some.

The Real Personal Consumption Expenditures (PCE) data-point was hiked to show an improved growth rate of 1.6% in Q3, versus 1.5% in Q2. Considering the “real” aspect of this data, and that the price index was unchanged, we can enjoy the gain without concern about noise. American demand for goods drove the increase, though those were continued at discounters like Wal-Mart (NYSE: WMT) and Amazon.com (Nasdaq: AMZN). At the same time, real imports of goods and services declined 0.6% in Q3, contrasting with the 2.8% increase in Q2.

If U.S. legislators want to best support the economic expansion seen in the Q3 data, it would be wise to keep in place supports to consumer and business spending. That means income tax rates are best left as is, in my view, with perhaps some flexibility at the very top of the earner ladder. Still, with increased healthcare costs for many who fall in between the various measures of “the rich”, those at the lower end of the wealth perspective ($250K earners) are facing the prospect of a burdensome tax hike. We need to keep the load off them, and raise that tax increase threshold significantly higher. We can support revenue enhancement in a less than smothering manner.

The latest housing data, including today’s reported Existing Home Sales annual pace increase to 5.04 million, a 5.9% improvement over October’s pace, argues for continued support of real estate market incentives. So, taking those off the negotiating table completely would be wise in my view, since housing activity is still at relatively low levels. Homebuilder sentiment, just reported this week, is finally climbing to less than pathetic levels, but can be undermined easily because it is mostly built on hope and less on real buyer traffic. We need to keep incentives in place for the historically critical real estate market.

This article is not intended to discuss the entire fiscal cliff or budgetary issues, or to find places to cut costs or to raise revenues, but to reinforce the still relative need for fiscal policy programs geared to provide incentive and fuel for economic growth. Economists see fourth quarter GDP growth slipping to 1.4%, according to a Bloomberg survey conducted in December. As we know, several economists’ groups have warned that a complete failure to at least control the rate of descent from the fiscal cliff could drive the U.S. economy into recession. Further, I’ve warned that the delay in addressing the cliff has effectively stymied business investment and hampered the economy in Q4, and that is reflected in the consensus view for economic growth in Q4.

Legislators would do well to compare today’s reported GDP data with economists’ expectations in order to preserve this still vulnerable economy and to fuel capital investment in it. Congressmen should be noting today’s non-move in stocks, and gaining some understanding of what that says about business and investor confidence in their ability to correctly steer fiscal policy. Action is in order and overdue.

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

A Harsh Economic Reality

On Monday morning, as I watched the popular media pumping up the market on the prospect of a Greek debt buyback and economic data from China, I thought, gee that sounds fantastic. I almost bought into it, though it was before I had my first coffee of the day, a time when I’m relatively useless to the world. A few minutes later, with a sip of Joe and a glance at the latest ISM Manufacturing Index, and then while recalling the more recent stream of unemployment reports and the durable goods orders data of last week, I think I said out loud, “What are they smoking!?” Even putting fiscal cliff concern aside, the economic reality of today does not reflect something supportive of any sort of celebration.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Economic Reality

Back in mid-November, I warned readers of my column that the fiscal cliff posed more than just a threat post January 1st. I said that with each and every passing day, small businesses were withholding capital investment and were not hiring new employees. I suggested that businesses large and small were also more likely to consider labor force reductions given the new healthcare costs they were about to commit to with the President’s reelection. Whether right or wrong, and while I assure you I am in favor of health care for all, the cost issue is a new economic reality we’re going to need to adjust to. So I did my best to raise alarm about the current economic costs of fiscal cliff fear, versus the tendency of most to focus on the result of certain end of year actions or inactions. With a vulnerable economy continuing to lack support from international demand (mostly Europe), and with unemployment still elevated, I said recession was again threatening. I think any reasonable investor with a sense of the realities of Main Street today can concur with that view.

A few voices yesterday did direct attention to the importance of the ISM Manufacturing Survey result, but the information was mostly drowned out by noise at television media. Though, you should take note, because the stock market took notice yesterday. After a gap open higher on the hype of the day, the SPDR S&P 500 (NYSE: SPY) reflected economic reality as trading progressed, ending the day down a half of a percentage point. The Powershares QQQ (Nasdaq: QQQ) was down by a lesser fraction, but the SPDR Dow Jones Industrial Average (NYSE: DIA) was off 0.4% (after benefiting from a closing spike) due to its sensitivity to the industrial sector measured by ISM. In that regard, a closer inspection of stocks shows the Industrial Select Sector SPDR (NYSE: XLI) fell by a more significant 1.1%, and the iShares Dow Jones Basic Materials (NYSE: IYM) showed the sensitivity of basic material names to the data with its 1.6% decline on the day.

Chart by Yahoo Finance

Last week’s Durable Goods Goose-Egg concerned me, because of the details of the data, which we discussed in the linked to article here. So, ISM’s Manufacturing Survey for November, showing an index under 50.0 at 49.5 and therefore reflecting contraction, compounded on concerns. November marked a sharp drop from October’s read of 51.7, and it was off the economists’ consensus for a similar reading (51.7). November marked the fourth month in the last six showing contraction, though it followed two months of growth. Furthermore, the reading marked the lowest level in the index since July 2009, which you’ll recall was a really tough economic time. Add to this information the fact that the last several weeks of Initial Jobless Claims have measured near or above 400K (though certainly affected by Hurricane Sandy), and you have more than enough cause for concern.

Thus, I remind investors that the economic reality of today remains less than perfectly represented by media commentary and even by the rise of stocks in 2012. The earnings season just passed served as a wake-up call to that economic reality, but investors remain hopeful that a fiscal cliff compromise will serve as adequate support for stocks. Unfortunately for profit seekers in equities, hopeful valuations are regularly checked by economic realities in times like these. A meaningful fiscal cliff compromise might offer the market a holiday gift (I doubt it), but these realities will nonetheless persist and continue to weigh in 2013. Economic report coverage remains a key topic area for my column here, so econo-watchers may want to follow along.

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Seeing a Busy Black Friday

The latest weekly chain store sales data, reported Tuesday, were unimpressive in my estimation. However, I expect that bodes well for Black Friday shopping activity, and for certain retailers in particular.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Black Friday

Heading into Black Friday, the state of shopping activity has been weak if not meek even. Year-to-year rates of activity have been barely edging out inflation. The latest data out of the International Council of Shopping Centers (ICSC) had the year-to-year pace up 2.5% for the week ending November 17, but some of those gains were due to Hurricane Sandy and its aftermath, with blockbuster business occurring in Northeast located Home Depot (HD) and Lowe’s (LOW) stores. We recommended those names, especially Lowe’s (LOW), just after the storm’s passing. After a Nor’easter struck just a week later, storm shocked residents of the highly populated region have certainly continued to stock up on emergency goods from Wal-Mart (WMT) and other big box stores so as to better prepare for the next big one.

Redbook also reports on year-over-year sales rates weekly, and had the same period pegged at an inflation trailing pace of 1.8%. Indeed, when looking back past the storm skewed data, this is the result we find. American consumers have slowed their spending, and where they haven’t slowed it, they’ve shifted it to better value, or discount stores like Wal-Mart (WMT) and Costco (COST), deep discount stores like Dollar Tree (DLTR), and bargain pushing web retailers like Amazon.com (AMZN) and eBay (EBAY).

Some might interpret the dragging rates of recent sales as a bad omen for the holiday shopping season. However, the promotional period, and especially its high profile Black Friday, should draw enormous numbers of shoppers this year because of it. In fact, I believe the soft rates of sales leading into the season are a positive indicator of what will happen on Black Friday. Bargain seekers will be out in force to get the best deals on the gifts they are compelled to buy for relatives and friends sometime before December 25th; so it might as well be Black Friday. The drop-off of activity leading into the sales season may simply be indicative of shoppers waiting for their big bargain opportunity.

Discounters like Dollar Tree (DLTR) have outperformed most department stores and specialty retailers over the last several years, which has led some stalwarts like Macy’s (M) and J.C. Penney (JCP) to strike out on strategic initiatives to save share. The results have been mixed, without a doubt. The issues of retail have been the result of the condition of the economy, with such long lasting excessive unemployment rates and underemployment realities. I’ve suggested that recent increases in consumer confidence indices have been superficial and questionable, and I believe those will fade if the fiscal cliff solution is not satisfactory for most Americans. I expect the fiscal cliff issue has damaged the economy already, and continues to do so with each passing day without an effective resolution.

In conclusion, I suggest investors take the latest slow rates of chain store sales as indicative of a positive result for Black Friday retailers, as long as those retailers effectively promote attractive sales and deals. The failsafe sellers will be those iconic brands shoppers have come to know as the deal-makers, including your Wal-Marts, Costco’s, eBays and Amazons of the space.

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Congressional Leaders Offer Reassuring Fiscal Statements

A joint press conference that concluded just before noon, featuring Repre- sentatives John Boehner, Harry Reid, Nancy Pelosi and Mitch McConnell, offered hope that a fiscal cliff compromise might be accomplished. The conference was certainly geared toward appeasing populace and market concerns regarding Congressional intent in reaching a mutually acceptable agreement. Thus, stocks should be supported by the news at least heading into the close of trading Friday and possibly through next week, barring other catalysts.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Go Long Over the Short Short-Term

More than a hint of compromise was in the wind as the group congenially addressed the nation. House Speaker Boehner said that some revenues were on the table. House Minority Leader Nancy Pelosi said that some spending cuts were available. Democratic Party Senate Leader Harry Reid said the cornerstones of a deal were in place, and that they intended to close a deal rather than simply pass the buck forward. He added that the deal was a high priority focus, and that representatives were not going to wait until the last day of December, which was a concern of ours. He also noted that they might even work through a portion of the Thanksgiving Day recess, reflecting how important resolving the issue is to them. Finally, Senate Minority Leader McConnell concurred with the statements and closed, giving the public a sense of calm about the issue not previously existent.

Stocks, which had been down after heading into the press conference with low expectations, immediately broke above break-even ground. The SPDR S&P 500 (NYSE: SPY), which was down 5.1% from the election through Thursday November 15, was approaching a half point gain at noon, as was the SPDR Dow Jones Industrial Average (NYSE: DIA) and the PowerShares QQQ (Nasdaq: QQQ). Oil is benefiting from the news as well, with the United States Oil (NYSE: USO) security driving up over 1.3% at the hour of scribbling here. Even gold is benefiting from the clarity, and as pressure lessens from its sellers using capital to buy stocks viewed as too cheap. The SPDR Gold Shares (NYSE: GLD) has broken above break-even ground. I offer kudos to the congressional leaders for this expression, because if it is executed upon, it offers support to shares. It at least reverses the near-term downtrend, and so I advise investors to raise risk and remove hedges at least through next week, barring other factors.

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

A Perfect Storm Threatens Stocks

As if the fiscal cliff folly in Congress was not enough, now war looms in the Middle East as well? It’s reminiscent of Superstorm Sandy (which oh by the way was a catalyst for recession too) with the confluence of a deep dip in the jet stream on an arctic low pulling in a hurricane into our most populous region. Seriously, the perfect stock market storm seems to be forming over the New York Stock Exchange (NYSE: NYX) and NASDAQ (Nasdaq: NDAQ).

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Perfect Storm

Earlier this week, I warned that the fiscal cliff issue is doing damage to the economy right now, as it stifles business investment. I said that we should be pushing for a compromise to be reached as soon as possible, because economic risk is not restricted to 2013 – the issue is hurting our economy today. Still, based on the initial posturing of both Democratic and Republican leadership, it appears to me they’ll hold course right on up to the deadline, if not beyond it, even despite the ratings warning from Standard & Poor’s (of McGraw-Hill (NYSE: MHP)).

With the next elections two years away, and the presidency not up for grabs for another four years, I suppose our elected officials believe there’s a cushion for us to forget any fumble that might occur in Washington this year. The President seems assured by his reelection, and seems to believe the American people have given him a mandate. So, he’s more likely to hold firmly to his position this time around, and not cave on the tax issues at hand. Meanwhile, Republicans are certain that their base must have those tax breaks, or else they risk losing seats to Tea Party Republicans or fracturing their own party. This issue has been enough to sink the stock market since the election, with the SPDR S&P 500 (NYSE: SPY) off 5.1% since. The SPDR Dow Jones Industrial Average (NYSE: DIA) and PowerShares QQQ (Nasdaq: QQQ) are down 5.0% and 5.6%, respectively.

Today, though, we have even more to worry about. As if the impending Iranian conflict was not enough, now we have a serious scuffle playing out in Gaza that could spark into something much larger if the newly seated leader (read radical) in Egypt, the desperate despot in Syria, and the Iranian madman get itchy trigger fingers. Despite economic concerns on the fiscal cliff issue, this geopolitical tension has oil prices holding up. The iPath GSCI Crude Oil TR Index (NYSE: OIL) is down by a relatively modest 3.3% since the election, though the shares of petroleum bellwether ConocoPhillips (NYSE: COP) are off 6.2% since.

So take shelter folks. Continue to reduce beta exposure and hedge against overall market decline. Despite the drop in gold of late, I continue to favor it along with silver and other hedging instruments for the longer term. I would rather withhold from discussion for now another short-term hedging instrument, which I will discuss very shortly (so follow my column to keep informed). I’ll dedicate a specific article to this very important instrument in the very near future, but at this point I’m not ready to discuss it. You should consider hard assets, including real estate and gold, and also instruments like the SPDR Gold Trust (NYSE: GLD) and the iShares Silver Trust (NYSE: SLV). I believe the concerns about deflation are overdone, as they ignore the damage that I expect to be inflicted upon the world’s fiat currencies ahead. Until the next time, keep your head down and your exposure hedged.

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Is the Jobless Claims Surge on Sandy or Something More?

It happened! Jobless claims surged to over the psychological threshold of 400K. Some time back, we warned that one dreaded Thursday morning we would wake up to a stock market demise catalyzed by jobless claims over 400K. We even said that you might consider reducing risk on Wednesday afternoons as a hedge. Well, this report is not going to be the one to catalyze a slide, so you can contain your concern, though you still have plenty to worry about regarding the fiscal cliff right now. The reason this latest report shouldn’t overly concern investors is the media’s ready acceptance of a Hurricane Sandy impact, which very likely did affect filings in several ways. Since it will be difficult to pinpoint the impact, stocks should overlook the psychological break, at least for now. However, take note that the movement in the employment services companies this morning seems to indicate some market suspicion about the true driver of today’s reported surge in jobless claims.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Jobless Claims

Weekly Initial Jobless Claims surged by 78,000 to 439,000 in the week ending November 10, 2012, which was significantly more than the economists’ consensus for 376K. Still, Hurricane Sandy has added some significant noise to the data, as should be the case for economic reports across the board over the next month or two. A more reliable trend metric, the four-week moving average for weekly claims, increased by 11,750 in the reported period, to 383,750.

Insured unemployment edged up by a tenth of a percentage point to a 2.6% rate in the lagged November 3 ending period. The number of insured unemployed Americans increased by 171,000 in that same period, rising to 3.33 million. The number of Americans claiming benefits of some sort through all programs decreased by 100,423 in the period ending October 27, falling to 4.98 million. As we have noted in the past, there are of course two drivers of this trending decline. First, some Americans are finding work. However, many Americans are simply exhausting their allotted benefits and falling off the workforce radar.

Weekly jobless claims may very well rise legitimately above the 400K psychological threshold in 2013 for a variety of reasons. Still, the nation’s largest employers, including Wal-Mart (NYSE: WMT), Target (NYSE: TGT), McDonald’s (NYSE: MCD), Sears (Nasdaq: SHLD) and Kroger’s (NYSE: KR) are not likely to shed jobs anytime soon due to the necessities they provide at value. However, small businesses, which employ more Americans than any other sector of the economy, are likely losing confidence due to the fiscal cliff, and could very well cut workforce if their taxes rise.

For informational purposes, I always like to relay the state relative data for interested readers. The highest insured unemployment rates in the week ending October 27 were in Alaska (4.5), Puerto Rico (3.9), California (3.0), Oregon (3.0), Pennsylvania (3.0), Virgin Islands (2.9), Arkansas (2.7), Nevada (2.7), New Jersey (2.7), Illinois (2.6), New York (2.6), and North Carolina (2.6).

The largest increases in initial claims for the week ending November 3 were in Pennsylvania (+7,766), Ohio (+6,450), New Jersey (+5,675), Michigan (+2,373), and Connecticut (+1,783), while the largest decreases were in California (-8,149), New York (-2,241), Florida (-939), Georgia (-913), and Indiana (-603).

In closing, the shares of employment servicers are sensitive to this weekly report, and so the impact of the week’s change can best be read through their movement. The action in industry shares follows.

Company & Ticker	Thursday Morning Change
Robert Half (NYSE: RHI)	+0.15%
Korn Ferry (NYSE: KFY)	-0.51%
Monster Worldwide (NYSE: MWW)	-6.8%
Manpower (NYSE: MAN)	-1.5%
Kelly Services (Nasdaq: KELYA)	+0.15%
CTPartners Executive Search (NYSE: CTP)	-0.74%
On Assignment (Nasdaq: ASGN)	+1.3%

The wide variance in the movement of these shares is likely due to the noise in the weekly economic report discussed here, and also due to the dynamics of specific service providers. For instance, Kelly Services, a provider of mostly temporary workers, tends to move counter to the shares of executive search firms, some of which are listed here. This is because of the propensity of employers to choose between temporary and full-time workforce depending on their perspective of the economic outlook. I would say the stock action depicted here says investors are suspicious of how much impact Sandy has had to the week’s data and what is due to real ongoing economic issue. Only the weeks ahead and its less noisy data will give the market the answer it seeks today, so stay tuned as we cover it here.

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Mortgage Application Relief Post Sandy

The Mortgage Bankers Association (MBA) today reported that mortgage application volume increased substantially, but for what reason. Well, there appear to be two, one important economic driver and another extraordinary catalyst. Rates declined through the week ending November 9, offering an important driver for activity. However, the passing of Hurricane Sandy seems to have led to pent-up demand in the highly populated Northeast, which unraveled last week and skewed the data.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

The MBA’s Market Composite Index increased by 12.6% against the immediately preceding week. Growth had balanced support between refinancing activity and mortgage applications on the purchases of homes. The Purchase Index, which measures applications filed for home purchases, increased 11% against the prior week on a seasonally adjusted basis. The Refinance Index likewise rose, increasing by 13% in the reported period.

We can look to mortgage rate activity for a catalyst for refinancing, as effective rates decreased across the range of mortgage loan types. Conforming loan mortgage rates for 30-year fixed rate mortgages even set a new record, falling to 3.52% from 3.61% in the prior week. The average contracted rates for each type of mortgage loan balance follow below. However, in some cases the change was not substantial. There certainly seems to be another catalyst, as further evidenced by a change in trend. This was the first increase in the Refinance Index in 6 weeks.

Loan Type	Rate & Change
30-Yr. Conforming Balance	3.52% (down 9 Basis Points)
30-Yr. Jumbo Loan	3.83% (down 5 BPs)
30-Yr. FHA Sponsored	3.34% (down 3 BPs)
15-Yr. Fixed	2.88% (down 7 BPs)
5/1 ARMS	2.6% (down 1 BPs)

The other catalyst is clear, and it will be affecting economic data for a good time forward, as monthly reports begin to reach the wire for the relative period. It was Hurricane Sandy and the storm’s stifling of business activity. The seasonally adjusted Purchase Index improved by 11%, and the unadjusted measure rose by 8%, obviously adjusted for the storm. The MBA, in my observation, has been imperfect in its seasonal adjustments, and seems to have also understated the impact of the storm here.

On a year-over-year basis, the Purchase Index was 22% higher than the same week a year prior. Obviously, the housing market is healthier this year than last, and some of that improvement is reflected here, but we might look to data from weeks prior to see how the year-to-year difference differs. In this report from October 3rd, we see that in a period of rate driven gains, the year-to-year improvement in the Purchase Index was just +11% versus this week’s +22% increase. I think this comparison clearly exposes the Hurricane impact and imperfect adjustment for it.

As a result, we’ll need to temper our enthusiasm for the housing and banking industries that may have resulted from this report. You can see today’s morning changes in relative stocks here.

Relative Housing & Finance Stocks	Wednesday Morning Change
Financial Select Sector SPDR (NYSE: XLF)	+0.2%
SPDR S&P Homebuilders (NYSE: XHB)	+0.3%
Bank of America (NYSE: BAC)	+0.1%
Citigroup (NYSE: C)	+0.5%
J.P. Morgan Chase (NYSE: JPM)	+0.3%
Wells Fargo (NYSE: WFC)	+0.4%
PulteGroup (NYSE: PHM)	-1.6%
Toll Brothers (NYSE: TOL)	-0.8%
Hovnanian (NYSE: HOV)	-0.8%

We can see that while homebuilders are up generally, the shares of these three relative players are lower today, perhaps correcting for earlier gains or for other very relative reasons. The financial shares listed here are up modestly, despite ongoing fiscal cliff pressures but perhaps in correction to previous decrease. It’s hard to say what the impact of this data is, but, with regard to Sandy, I believe investors are realizing that while reconstruction efforts will be broad, the benefits will be widespread among independent construction companies and perhaps minimal to a handful of publicly traded builders. I reiterate my favor of building supply stores for investors seeking a storm play.

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.