With the odds of a rate hike soaring to cycle highs amid seeming cognitive dissonance over the state of the US economy, the US equity market has held up relatively well. However, not everyone is excited about the prospect of higher interest rates as US homebuilder stocks have tumbled over 16% from their mid-summer highs.
Chart: Bloomberg
Now at 8-month lows, the fundamental problems facing builders are exacerbated by the formation of a “death cross” (where the 50-day moving-average crosses below the 200-day moving-average).
Chart: Bloomberg
When this happened in November/December of last year – as The Fed hiked rates – builders plunged 27%.
via http://www.zerohedge.com/news/2016-11-08/homebuilders-hit-8-month-lows-after-death-cross-strikes Tyler Durden