Friday, April 16, 2010

Housing Starts/Financials- 04.16.10

Via Bloomberg:

Housing in March strengthened from snow bound February-with permits pointing toward even better improvement than starts. Housing starts in March rebounded 1.6 percent after a snow storm damped 1.1 percent rise in February. The February number was revised up from an original estimate of a 5.9 percent drop. The March annualized pace of 0.626 million units came in above analysts' projection for 0.605 million units and was up 20.2 percent on a year-ago basis. The boost in March was led by an 18.8 percent jump in multifamily starts, following a 21.6 percent fall in February. The single-family component edged down 0.9 percent after a 5.7 percent boost the month before.

The impact of weather on February's numbers clearly was seen again in March as the latest surge was entirely from a rebound in the South which was battered by snow storms the prior month. By region, the March boost in starts was led by an 18.2 percent rebound in the South after an 11.8 percent drop the month before. For the latest month, declines were seen in the Midwest, down 28.4 percent; the Northeast, down 8.3 percent; and the West, down 2.1 percent.

Permits were even more positive, jumping 7.5 percent, following a 2.4 percent advance in February. The March pace of 0.685 million units annualized was up 34.1 percent on a year-ago basis.

Today's numbers indicate that housing is not slipping back into recession although this sector is still getting support from homebuyer tax credits that are about to expire. On the news bond yields firmed slightly and equity futures nudged up.

This report is dull. The big news in the markets today was earnings (BAC and GE) and SEC probes. BAC reported $3.18 B worth of Net Income or $0.28/share on $31.97 B of revenue, down 11% QoQ. The XLF was off -3.77% with Citi getting crushed, down -4.57%. Also, BAC was off -5.39% to finish at $18.43/common share.

Over the weekend, I have a massive accounting project to work on (M&A accounting- equity method). I will try to update the blog if I have any time. Today the markets definitely caught some traders with their pants around their ankles. Take the weekend to reevaluate positions and/or strategies going forward.

Patrick M. Ambrus
Managing Partner
Analyze Capital LLC

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