Since the unprecedented crash of 2008, U.S. markets have struggled to make up lost ground. After five years, the economy has finally started to pick up steam – slowly, but surely. And as the economy continues to pick up its pace, many investors are returning to the corner of the market that was one of the primary sources of the 2008 financial crisis: housing. Across the board, housing stats have been on the rise in recent years, including home prices, housing starts, building permits, and construction. A closer look at the industry in recent months, however, reveals several red flags [for more commodity news and analysis subscribe to our free newsletter].
On Wednesday, Caterpillar (CAT)–one of the biggest manufacturers of construction and mining equipment–posted lower-than-expected quarterly results and cut its full year forecast. The bellwether cited weak demand from its mining customers, its most profitable product category, as the primary source of Caterpillar’s sour quarter. In 2014, Caterpillar estimates revenue will be essentially flat to +/-5% compared to 2013. For the year, the company now expects revenues to come in around $55 billion versus the previously forecasted $58 billion figure [for more commodity news and analysis subscribe to our free newsletter].
Week two of the government shutdown is here and politicians have offered little to no hope that a prompt resolution will be enacted prior to the much-feared October 17th debt-ceiling deadline. Although many speculate that the U.S. will avoid default even if the deadline is missed, it’s undeniable that such an event has the potential to trigger a much steeper correction on Wall Street, especially since major stock indexes are still up double-digits YTD [for more commodity futures news and analysis subscribe to our free newsletter].
2013′s second quarter earnings season was perhaps not what many analysts had expected, as companies across all sectors reported both hits and misses. In the commodity space, Alcoa had set the tone for the start of the season, beating estimates despite falling aluminum prices. And while other commodity stocks also managed to post better-than-expected results, some showed signs of weakness from this year’s commodity slump [for more commodity news and analysis subscribe to our free newsletter].
As we enter the trenches of earnings season, investors and analysts alike are taking cues from today’s leading companies on where the economy is headed. Thus far, it seems that the results have been a mixed bag, with a number of firms smashing their marks while others fell short. The attention for this week will remain fixated on individual reports to help give a deeper insight into how sustainable to current bull run truly is. Below, we outline some of the most prominent commodity firms slated to report earnings this week [for more commodity news and analysis subscribe to our free newsletter].
Copper has long been one of the most important and popular industrial metals in the world. With 3% per year production growth since 1900, approximately 16 million tons of the metal was produced in 2011, according to the International Copper Study Group. The metal’s wide use is attributable to its availability and recyclability, as well is its metallic properties that make copper an excellent conductor of heat and electricity, and antimicrobial and corrosion resistant [for more copper news and analysis subscribe to our free newsletter].
The bull train is surging full steam ahead on Wall Street with the S&P 500 Index reaching five-year highs while the Dow Jones Industrial Average continues its ascent into uncharted territory. Investors have had few reasons to take profits over the past week with Cyprus debt drama slowly fading away while economic data releases continue to support a bullish case; this week alone construction spending and factory orders data figures have trumped expectations, while key employment data is on tap for this Friday [for more market news and analysis subscribe to our free newsletter].
As the main culprit responsible for the credit crisis and resulting Great Recession, the U.S. housing market has spent much of the last few years in the doldrums. The combination of shaky mortgage loans, falling home values, and rising foreclosure rates really took a toll on the overall sector. Over the last few years, housing-related stocks have seen their share prices dwindle as a lack of available credit, and general deleveraging has prevented many from home ownership. However, recent data may support a turnaround is in the works for the all-important sector.
Homebuilders and other housing industry stocks have been strong performers in 2012 as low interest rates offset higher underwriting standards for home loans. The SPDR S&P Homebuilders ETF (XHB) rose more than 54% since the beginning of this year, while the iShares Dow Jones U.S. Home Construction ETF (ITB) is up more than 74% over the same period [for more housing news and analysis subscribe to our free newsletter].
Trading in the overall market was relatively normal yesterday; your average worry about the fiscal cliff and Europe snuck their way in, but there was nothing out of the ordinary. That is, until you looked at Freeport-McMoRan’s (FCX) stock for the day. This major copper and gold producer was absolutely slaughtered, as investors participated in one of the nastiest sell-offs we have seen in recent weeks. But the massive drop had nothing to do with the commodities they produce, but rather a questionable business move that left many scratching their heads [for more copper and gold news subscribe to our free newsletter].