Housing Turnaround?

According to the Wall Street Journal, billionaire hedge-fund manager Eddie Lampert is placing a new bet on a recovery in the U.S. housing market. Lampert’s ESL Investments, which controls about $11.6 bln, has been picking up small positions in homebuilders Centex (CTX) and KB Home (KBH) valued at approximately $21 mln.

ESL also has a stake in mortgage origination and servicing company CIT Group (CIT) valued at around $35 mln. Also on the table is a bet on Home Depot (HD) with a stake valued at approximately $590 mln. For context in housing, see Professor Kevin Depew’s recent Five Things You Need To Know: Jump In Pending Home Sales Forecasts Jump in Pending Failures to Close.

From the Bull Pen: Bulls looking for a bounce in housing might find one in the DJ real estate ETF (IYR); tight sell-stops below the $65 level.

From the Bear Cave: Bears know the limits of the “ride along with the genius” trade and see Sherwin-Williams (SHW) making new lows. Near-term buy-stops can be set above $50.

Inflation eating at the BRICs?

According to Bloomberg, inflation may be eating away at even the world’s fastest-growing economies: the emerging markets. Just yesterday, India’s central bank announced an unexpected increase in the repurchase rate to 8% from 7.75%. The move is in lockstep with Brazil, where consumer prices jumped to a three-year high. Russia also increased its rate and last weekend China’s central bank increased its required reserve ratio. The “crackdown” suggests that the even the “BRIC” nations might be vulnerable to the effects of inflation as well as a global slowdown. See Todd’s column, Inflation, Inflation, Everywhere!

From the Bull Pen: As for the traditional hedges against inflation, is the gold ETF (GLD) a buy at its 200 DMA ($83.80)?

From the Bear Cave: Does the India Fund (IFN) have further room to fall? Bears can press the downside should the stock close below the $40 level.


For more ideas in real time throughout the trading day, check out Minyanville’s Buzz & Banter.


Quick Check Around the World

Asian trading closed in the red with the Hang Seng -1.30%, Nikkei -2.08%, Sensex +0.43%, Taiwan -3.39% and Shanghai -2.21%.

Glancing towards Europe, we find fields of green with the CAC +0.47%, DAX +0.50%, FTSE +0.79%

As of 8:50 AM EST, S&P futures are trading +9.30 points to 1344, and Nasdaq futures are higher +12.00 points to 1938.


A Look At Commodities

In commodities, crude oil is lower -2.39 to 133.97. Gold is down -14.50 to 865.20. Silver is lower -0.275 to 16.570, and copper is down -5.55 to 352.00.

The dollar index is higher +0.662 to 73.877.


On the Radar

Import Price Index (m/m): 2.3% vs. 2.5% cons.
Import Price Index (y/y): 17.8% vs. 17.2% cons.
Advance Retail Sales: 1.0% vs. 0.5% cons.
Retail Sales less autos:1.2% vs. 0.7% cons.
Initial Jobless Claims: 384 k vs. 370 k cons.
Continuing claims: 3139 k vs. 3118 k cons.

10:00 Business Inventories

See the full trading radar.


Good trading today!