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Meta Platforms — The stock jumped 8% after the company announced it will lay off more than 11,000 employees. News Corp — Shares slid 5% after the company reported a slight miss on its fiscal first quarter earnings, compared to FactSet estimates. AMC Entertainment — Shares dropped 9.8% after the company reported another quarterly loss as operational costs increased. SeaWorld Entertainment — The stock fell 8% after the company reported weaker-than-expected earnings or $1.99 per share on revenue or $565 million. Roblox — Shares tumbled more than 15% after the company reported a bigger loss than expected for the third quarter.
Investors are more than happy when politicians bicker but don’t actually enact any new laws that may hurt corporate profits. If Republicans get the House, tax hikes are dead in the water,” said David Wagner, a portfolio manager with Aptus Capital Advisors. That’s because there are some areas of consensus for the White House and Republican lawmakers. Congress and the White House may spend more time bickering than trying to pass legislation. Ameriprise chief market strategist Anthony Saglimbene said on a conference call last week about the midterms that stocks have historically gone up after elections, no matter which party controls the White House and Congress.
Some companies that have yet to report third-quarter earnings could beat expectations next week, and outperform on the results. An online gaming company and a solar stock are among the notable names kicking off earnings next week. The video game company topped earnings earnings per share forecasts 88% of the time, according to Bespoke data. The software company exceeded expectations on earnings per share 97% of the time in prior reports. In the past, the home construction company surpassed earnings expectations 76% of the time, and has raised guidance 13% of the time.
There are two big hurdles for markets in the week ahead - another potentially hot consumer inflation report and the Congressional midterm elections. "100% of the time, the S & P 500 has been up 12 months after the midterm election." Midterm rallies Stocks tend to gain in the final months of midterm election years, and strategists have been expecting the market to move higher. CFRA Chief Market Strategist Sam Stovall said even when interest rates are climbing, the midterm election has been a catalyst for stocks. He examined market performance in other midterm election years when interest rates were going up.
Telsey downgrades Under Armour to market perform from outperform Telsey said it's concerned about too much inventory weighing on the stock. Bank of America downgrades Snap to neutral from buy Bank of America downgraded the stock after its "mixed" earnings report. " JPMorgan reiterates Apple as overweight JPMorgan said investors are too focused on iPhone growth heading into Apple earnings next week. Raymond James downgrades KB Home, Toll Brothers and PulteGroup to market perform from strong buy and D.R. Horton to outperform from strong buy and Lennar to market perform from outperform Raymond James downgraded several homebuilders due to rising mortgage rates.
Everything is on the table: from pitching adjustable rate mortgages to offering free pilates lessons and more. For example, in a 2-1 buydown scenario, the buyer's interest rate will be 2% below the contract rate during the first year. The adjustable rate mortgage makes a comebackThe use of adjustable rate mortgages (ARM) has also soared to a 14-year high, according to the Mortgage Bankers Association. With these types of loans, the interest rate shifts periodically depending on where benchmark mortgage rates stand. He said he expects to see mortgage rates fall in as soon as six months.
Horton, Lennar and other homebuilders as the housing market is due for a comeback, according to KeyBanc Capital Markets. Analyst Kenneth Zener double upgraded the homebuilding sector to overweight from underweight, saying history points to higher prices after declines this year, which came amid slowing demand and rising mortgage rates. The analyst pointed to data going back to 1963 showing that the relationship between homebuilders and the S & P 500 now offers relative risk to reward. Over the past 19 economic cycles, "Builders fell 41% (28% vs. the S & P) with those same cycles' recoveries offering 194% upside (up 141% vs. the S & P)," Zener wrote in a Friday note. "On balance, we see fundamental and rate pressure persisting, but positive relative performance, supporting our upgrades," Zener wrote.
Check out the companies making the biggest moves midday Monday:D.R. Horton, Lennar, PulteGroup — Homebuilder stocks moved higher on Monday after KeyBanc double upgraded the sector to overweight from underweight. Array Technologies — The solar stock jumped over 3% after Piper Sandler upgraded Array Technologies to overweight from neutral, saying the company has more upside ahead on an improved forward outlook. AutoZone — AutoZone shares fell more than 2% as traders pored over a mixed quarterly earnings report. Wix — Shares of Wix soared 11% after activist investor Starboard Value revealed a 9% stake in the web development platform company.
Oppenheimer reiterates Peloton as outperform Oppenheimer said it sees signs that Peloton's turnaround is starting to take hold. Bank of America reiterates Amazon as buy Bank of America noted that Amazon is poised to gain share, especially after FedEx's disappointing earnings report last week. JPMorgan reiterates Apple as overweight JPMorgan said in a note that demand remains "elevated" for Apple's latest iPhone models. Jefferies reiterates Bed Bath & Beyond as hold Jefferies said its analysis shows retailers such as Walmart and Target are key beneficiaries of Bed Bath & Beyond store closures. "After reviewing locations of upcoming Bed Bath store closures, we believe Walmart, Target, and Big Lots will be prime beneficiaries of sales transfer.
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