Toll Brothers reported an earnings miss this morning, reporting 0.03 vs. consensus estimates of 0.10. The housing sector is one of the most overvalued sectors in the U.S. stock market, for several reasons. Here are 3 brief points on why I’m bearish on TOL and U.S. homebuilders as a whole:
- Asian equity markets were almost all in the green, with Japan and Korea leading the way. The New Zealand central bank governor said he was “prepared to intervene to influence the kiwi,” another salvo in the currency wars.
- European markets opened flat, but are now down about 0.25%, in a quiet session. Angela Merkel of Germany said the Euro was in its “historical” range.
- SPX futures are down 0.1%, the dollar is generally higher, and Treasuries are flat. Commodities are broadly lower, led by precious metals.
- In addition to the housing data, PPI will also be released at 8:30 am EST. FOMC minutes will be released at 2:00 pm.