KB Home (KBH)

They report Tuesday. He expects them to report lukewarm sales because mortgage rates are too high. This weakness in homebuilding is why the Fed should keep rate cuts on the table, despite oil causing higher prices. It's the worst homebuilding market in 40 years.

They report Wednesday and he expects the same result at Lennar which got hit hard today (gross margin pressure and stubbornly high mortgage rates). Homebuilding stocks won't see relief until the Fed says it is not worried about inflation and the Fed funds rate falls to 2-2.5%. Don't trade this.

It reports Monday. Is struggling with inflation/mortgage issues as rates remain high. Shares have plummeted from highs and he doesn't see a bottom, because shares were even lower in fall 2023 at $42. Bide your time and wait for a better moment.

They report Monday. They have a big presence in California, but no, they won't benefit from the Los Angeles fires; LA homes are more expensive than what KB deals in. Trump's draconian anti-immigration policy will hurt all the homebuilders by increasing wages and therefore costs.

They report Tuesday. Housing the linchpin of the economy and prices keep climbing. We need to hear if they will build more homes or keep the supply so tight that housing prices won't come down. The buildings are limiting supply to keep gross margins up and prices up, but it's terrible to fight inflation. Housing stocks have hung up because we have a housing shortage, but how long can this last when we see pushback on the prices of other items like dining out, apparel and airline tickets, all of which have risen dramatically in the last 5 years.