U.S real estate, homebuilder shares gain after cooling CPI data

LGI Homes

11/07/2024 15:28

** Rate-sensitive real estate, homebuilder shares jump after
cooler-than-expected inflation data
    ** Benchmark U.S. Treasury 10-year yield  US10YT=RR  tumbles
to 4.18%, a 4-mth low, after surprise fall in U.S. consumer
prices in June
    ** S&P 500 real estate index  .SPLRCR  surges 2.7% and
tracking biggest daily advance in 2024 
    ** Sector's top winners include BXP  BXP.N  (formerly Boston
Properties) 5%, SBA Communications  SBAC.O  ~5%, American Tower
 AMT.N  4%, Alexandria Real Estate   ARE.N  4%, CBRE Group
 CBRE.N  4%, Public Storage  PSA.N  2.5%
    ** In turn, declining rates would also lower mortgage rates,
aiding homebuilders
    ** PHLX Housing Index  .HGX  surges ~4% and on course for
best day since mid-Dec: among leading gainers are LGI Homes
 LGIH.O  9%, Meritage Homes  MTH.N  6.5%, KB Home  KBH.N  6%,   
 Walker & Dunlop  WD.N  4% and PennyMac Financial Services
 PSFI.N  ~4%
    ** Builders FirstSource  BLDR.N  among top performers, up
~6%, in S&P 500  .SPX , which is off 0.3% early Thurs: Other
housing firms Lennar  LEN.N , Pultegroup  PHM.N  and DR Horton
all up ~4%
    ** With moves on the session, SPLRCR down ~1% YTD, while HGX
up 4.7% and SPX up ~18%

 (Lance Tupper is a Reuters market analyst. The views expressed
are his own)
 ((lance.tupper@thomsonreuters.com
lance.tupper@tr.com 1-646-279-6380))