There weren’t any S&P 500 earnings reactions yesterday…
But we're seeing one of the most critical industry groups catch a major bid.
It’s been a rough stretch for the housing sector.
Higher mortgage rates, affordability pressures, and sluggish demand have weighed heavily on homebuilders all year.
As other cyclical sectors rallied, housing remained a clear laggard, offering investors little more than dead money.
But things are starting to turn.
XHB is at an inflection point 📈
The Homebuilders ETF is in the process of reclaiming its VWAP, which is tied to its all-time high. This is a critical level that has acted as resistance since early 2024.
The price is also reversing the damage of a massive top by reclaiming the neckline.
If this breakout sticks, it could mark a significant inflection point for one of the market’s most unloved industry groups.
Within this industry group, the earnings reactions from one stock have recently impressed us.
PulteGroup $PHM.
The stock has been rewarded for 9 of its last 11 earnings reports.
PHM is the 3rd largest homebuilder in the U.S. 👇
PulteGroup has a truly national footprint.
This broad operating platform provides exposure to regional strength and diversification against localized softness, an edge that many peers lack.
For example, Lennar $LEN is the 2nd largest homebuilder in the U.S., but they're massively overweight in areas like Florida. This has resulted in the stock being punished for 7 consecutive earnings reactions.
PHM is well diversified across price points 👇
PulteGroup is also diversified by price.
Its 2024 closings range from sub-$300K entry-level homes to premium offerings exceeding $750K.
This allows the company to flex with shifting demand and interest rate dynamics, whether driven by first-time buyers or move-up buyers.
These fundamental advantages have resulted in stronger technicals than its peers.
Here's the setup in PHM 👇
PulteGroup has been one of the few consistent winners in the group.
The stock has been rewarded for 2 consecutive earnings reports, and we think it'll make it 3 after their next earnings report on July 22.
Price is now pressing up against a key Fibonacci extension and VWAP level.
If PHM can hold above 110, we believe it'll continue to climb higher for the foreseeable future.
Thank you for reading.
- The Beat Report Team
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