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KB Homes Now More Inviting?


Earnings were lower, but housing outlook is positive.

Minyan Morning Memo

One to Watch: KB Home (KBH) is out with fiscal Q2 earnings before the bell showing a loss of $1.03 per share. The firm focuses on first time buyers and as such its results will reveal much about the state of starter homes, key to any real estate rebound. The company's CEO talked about signs of improvement in the housing market and expects some stabilization soon. Though the days of turning houses into ATMs are long gone its shares have been on a tear in recent months, and the overall sector skyrocketed yesterday on Lennar's (LEN) better than expected revenue. But buyer beware: an item in today's Journal doesn't exactly inspire confidence that the sector's woes are over.

What Just Happened: The DJIA gained for the first time in a week with retailers rising. The Fed Chairman got a grilling on Merrill's marriage with Bank of America (BAC). And after changes upon changes, things are more or less the same; BAC didn't budge and ended exactly as it started at $12.35.

What's Happening: Asia ended up overnight and Europe is in the black if unspectacular. Back to the futures here at home, ahead of economic data equities are indicating lower amid possible profit taking. Whether we get a bull run or a return of the bears trading desks are likely to be even more of a zoo than usual today, with workers wondering who let the dogs out? Oil is increasing on Nigerian jitters and both bonds and the Greenback are off.

What Will Happen: Summer Friday's are rarely frantic, but a battery of economic data today includes May personal income and spending at 8:30 AM Eastern. As American Express (AXP) was the Dow's biggest gainer yesterday, up 6.6%, perhaps American excess is alive and well even in an austere era. And at 10:00 AM we get this month's University Michigan Consumer Sentiment Index. Certainly the Buckeye state should be bucked up by breaking news that its emerged victorious in a bid to build General Motors' (GM) next-generation subcompact car.

Happenstance: It isn't often two iconic Americans pass away on the same day. Farewell Farah Fawcett, and may flights of Charlie's Angels sing thee to thy rest. If only Wall Street were as profitable as the poster that adorned every adolescent American male's bedroom wall back in our bicentennial year. Also, it's unheard of for Squawk Box to open an with ode to an entertainer, which was what happened on CNBC this mourning. Michael Jackson's antics were, in the words of his 1979 album, Off The Wall, but as a singer he sure knew what to say. Indeed there is no more apropos epitaph for Mr. Bernanke's week than this line from the pop king's first solo hit: "You feel you're not wanted anywhere." The song? Ben.
No positions in stocks mentioned.
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