Transcript for DR Horton Soaring to New Highs this Week
It's. I'm dad I put in new York and as a financial markets are coming to a close must report this Friday January night this story stock. DR important thing home builder hopping on Wall Street today hitting a new 52 week high. Giving a lift to the company this week President Obama revealing his plan to boost the housing market by announcing the FHA will cut premiums for certain loans which. Could cut annual mortgage payments by nearly a thousand dollars so explain why homebuilders like DR Horton could begin in let's start the year. Wanna bringing JC corrects an equally capital chasing things around focus Alyssa is obviously is the largest homebuilders today I'm assuming would have the most to gain from this. I let homebuilders as a group com you know I know the announcement just came out this week but as usual price has led that news announcement home builders as a group have been up 25%. Just in the last couple months in anticipation. All of that news announcement in fact DR Horton was up. 36% in that same time financial outperforming the entire group in anticipation of that's what's your point I'm sure arm it looks like they are the ones written her. Incidentally I mean how house in general and it's a good start right here to the month and we expect it to continue want to month January possibly in the first quarter I think so on which is a really interesting story last year one of the best performers was the real estate investment trust right. So these are very high yielding securities and in the low interest rate environment agers it's got destroyed last year so. Fixed income investors that we're looking to the good for yield could get in the bond market had to go to the stock market nor did it to get back so the reads actually performed twice as well as the S&P 500 last year so now we're seeing rotation to reach are still outperforming but now it's actually going into the home construction companies but Cole Brothers DR Horton. Men are as well Pulte Homes are all doing very well so I think that's here to stay cutting funding to extort from reports I guess at this and you've got a fair amount of confidence and you be pretty bullish than on housing in general. Yeah I think so. You know I've yet today we look at liquid markets so you know would be able to speak on behalf of you know buying residential real estate you know you know in a traditional form but. Frauds as market participants from fund managers. You know we wanna be in those homebuilders absolutely I think they're going to be great for court there's a home construction ETF ITV. Do you like that right now I do I am ITB is the one that's provided by iShares. Com it's very concentrated in back to the top forty and 40% of the entire portfolio is those mornings I mention told Brothers and our poultry and DR Horton so that's 40% of the entire portfolio I'd like that bomb on its own as well as relative to the S&P 500 as well. But there's another one acts each BE which is provided by spider. And that was much more diversified so. It the top holdings actually just three and a half percent and is not even home builder its Lumber Liquidators which is specialty realtor retailers no means that whirlpool and things like that are also big component so there are you different ways to take advantage of this based on using those who eat yet. But they both are great. Let's talk a little register accuses Britain of her with cigars I ask her about the Fed's interest rates and the amount of impact we think going into this and this year 2015. Is it going to be as strong of a forces what it was slash. Years bars housing markets KO. I think so I think interest rates are gonna stay down you know we you know we don't listen to economists and we don't really we ignore mostly economic data we like to see how the market itself reacts to wallop back. And the Fed fund futures market has been dead on. They nailed that trade last year suggesting rates were gonna go down all year and they're still calling us the exact same thing so. Worse still in the camp that the Fed doesn't do anything this year and waits to at least 116 to start raising rates. Our look at when and that we can give way to go to the weekend as well I think so JC presently of a capital thanks much appreciated as always the you have been watching this story stock stay with abcnews.com for latest headlines I'm down learning York.
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