Market Performance - The S&P 500 reached a record closing high of 6309, up from 6305 the previous day [1] - The Dow increased by 179 points (+0.40%), while the Nasdaq decreased by 81 points (-0.39%) [1] - The small-cap Russell 2000 led the major indexes with a gain of 17 points (+0.79%) [1] Homebuilders Sector - Homebuilders had a strong trading day, with D.R. Horton (DHI) and Pulte Home (PHM) exceeding earnings expectations [2] - DHI's gross margins were better than anticipated, leading to a share price increase of +16.8% [2] - Pulte reported an increase in new orders, resulting in an +11.8% rise in shares [2] - The iShares Home Construction ETF (ITB) advanced by +7.88% [2] Interest Rate Expectations - Improved market sentiment is linked to expectations of a potential decrease in interest rates by the Federal Reserve [3] - High interest rates have kept mortgage rates elevated, limiting entry-level homebuyers' market access [3] - Current expectations suggest that high mortgage rates may soon decline [3] Earnings Reports - Texas Instruments (TXN) reported Q2 earnings of $1.41 per share, exceeding the Zacks consensus by 9 cents, with revenues of $4.45 billion surpassing expectations of $4.31 billion [4] - Despite the strong quarterly performance, Texas Instruments shares fell by -7% in late trading [4] - Capital One Financial (COF) reported earnings of $5.48 per share, significantly above the anticipated $3.83, with revenues of $12.49 billion exceeding expectations of $12.22 billion [5] - Capital One's shares rose by +1.5% following the earnings announcement [5] Upcoming Economic Indicators - Existing Home Sales for June are projected to slightly decrease to 4.0 million seasonally adjusted, annualized units, marking a return to levels not seen since October of the previous year [6] - The Northeast region experienced the fastest growth in the previous report, with an increase of +4.2% [6] Anticipated Earnings Reports - A significant number of earnings reports are expected, including major companies such as Alphabet (GOOGL) and Tesla (TSLA), along with IBM, Chipotle, Southwest Airlines, ServiceNow, and Las Vegas Sands [7]

Market Sentiment and Positioning - Home builder stocks are known for rapid movements, requiring investors to be early to avoid significantly higher prices [2][3] - The recent surge is attributed to sentiment and fundamentals slowing their decline, rather than actual fundamental improvement [3] - Specialists were tactically positioned negatively, but a slight improvement in the environment led to a realization of undervaluation and potential for dramatic revaluation [6] Valuation and Fundamentals - Home builders are structurally undervalued, historically trading on book value, which is no longer appropriate [4] - Companies have improved fundamentals by becoming more land light, increasing sustainable profitability, and reducing leverage [4][5] - NVR, a builder in the space, trades at a PE multiple of 18 or higher, while many others recently traded at high single-digit PE multiples [7] Policy Impact - Removing capital gains taxes on home sales would incrementally help the higher end of the market due to existing tax shields of $250,000 for singles and $500,000 for married couples [10] - A return of consumer confidence, particularly among lower-end consumers, would be the biggest catalyst for a rebound in housing demand [11][12][13] - The current administration's actions have created instability and uncertainty, potentially hurting the housing market more than helping it [11]

Stock Performance - D.R Horton and PulteGroup shares experienced a rise following the release of their latest quarterly results [1] - The quarterly results of both homebuilders exceeded expectations [1]

LAS VEGAS, July 22, 2025 (GLOBE NEWSWIRE) -- Toll Brothers, Inc. (NYSE:TOL), the nation’s leading builder of luxury homes, today announced the grand opening of Raven Crest, a new community of luxury townhomes in Summerlin’s Kestrel Commons village in Las Vegas. Three new model homes are now open for tours at 11545 Hillrise Avenue in Las Vegas. Raven Crest features stunning architecture and spacious, modern floor plans, offering exceptional options such as multigenerational living suites and elevators. The c ...

Core Insights - PulteGroup Inc. reported better-than-expected second-quarter 2024 results, with adjusted earnings and total revenues exceeding the Zacks Consensus Estimate [1][3]. Financial Performance - Adjusted earnings were $3.03 per share, surpassing the Zacks Consensus Estimate of $2.92 by 3.8%, but down from $3.58 in the same quarter last year [3]. - Total revenues reached $4.4 billion, exceeding the consensus mark of $4.37 billion by 0.8%, but decreased 4.3% from $4.6 billion year-over-year [3]. Segment Analysis - Homebuilding segment revenues fell 4.1% year-over-year to $4.3 billion, with home sale revenues also down 4.1% to $4.27 billion [4]. - The number of homes closed decreased by 5.7% to 7,639 units, while the average selling price (ASP) of homes delivered increased by 1.8% to $559,000 [5]. - Net new home orders declined 7.4% year-over-year to 7,083 units, with the value of new orders down 10.8% to $3.89 billion [5][6]. Backlog and Margins - The backlog of homes yet to be closed was 10,779 units, down from 12,982 units a year ago, with potential housing revenues from the backlog decreasing to $6.84 billion from $8.11 billion [6]. - Home sales gross margin decreased by 290 basis points year-over-year to 27%, while SG&A expenses as a percentage of home sales revenues increased by 100 basis points to 9.1% [6]. Financial Services - Revenues from the Financial Services segment dropped 9.4% year-over-year to $101.2 million, with pretax income declining to $43 million from $63 million a year ago [7]. Cash Position - At the end of the second quarter, cash, cash equivalents, and restricted cash totaled $1.27 billion, down from $1.65 billion at the end of 2024 [8]. - Net cash provided by operating activities was $421.7 million, down from $657.3 million in the prior-year period [9]. Market Outlook - CEO Ryan Marshall highlighted challenges in the spring selling season due to high mortgage rates and economic uncertainty, but noted improved consumer sentiment during periods of rate declines [2].

Group 1 - PulteGroup, Inc. (NYSE: PHM) has underperformed over the past year, with a loss of approximately 7% in value due to a softening housing market impacted by high mortgage rates [1] - Investors received positive news recently, providing relief amidst the challenging market conditions [1]

Core Viewpoint - D.R. Horton, Inc. (DHI) reported better-than-expected third-quarter fiscal 2025 results, with earnings and total revenues exceeding Zacks Consensus Estimate but showing a decline year-over-year [1][5]. Financial Performance - Adjusted earnings were $3.36 per share, surpassing the Zacks Consensus Estimate of $2.90 by 15.9%, but down 18% from $4.10 a year ago [5][10]. - Total revenues reached $9.23 billion, a decrease of 7% year-over-year, yet exceeding analysts' expectations of $8.78 billion by 5.1% [6][10]. - The consolidated pre-tax profit margin was 14.7%, down from 18.1% a year ago [6]. Segment Performance - Homebuilding revenues were $8.58 billion, down 7% from the prior-year quarter, with home sales at $8.56 billion, a 7.3% decline year-over-year [7]. - Home closings decreased by 4% to 23,160 homes [7]. - Financial Services revenues fell 6% year-over-year to $227.8 million [9]. - The Rental business generated revenues of $380.7 million, down from $413.7 million a year ago [11]. Market Conditions - The housing market remains soft due to declining consumer confidence and affordability concerns, impacting home closings and average selling prices [2]. - The backlog of homes decreased by 16% year-over-year to 14,075 homes, with the backlog value down 19% to $5.3 billion [8][10]. Operational Insights - The company maintains strong liquidity with cash and equivalents totaling $2.66 billion and total liquidity of $5.5 billion [12]. - D.R. Horton has a disciplined approach to capital allocation and flexible lot supply, positioning it to adapt to market conditions [4]. Guidance and Future Outlook - D.R. Horton updated its fiscal 2025 guidance, now expecting consolidated revenues between $33.7 billion and $34.2 billion, down from the previous range of $33.3 billion to $34.8 billion [15]. - Homes closed are anticipated to be between 85,000 and 85,500, compared to the previous expectation of 85,000 to 87,000 [15].

Group 1 - PulteGroup Inc (NYSE:PHM) shares increased by 9.4% to $118.81 after exceeding second-quarter earnings and revenue estimates, aided by buyer incentives [1] - Wedbush raised PulteGroup's price target from $135 to $150 following the earnings report [1] - PulteGroup's stock is up 8.2% year-to-date and has surpassed resistance at the 320-day moving average, reaching its highest levels since late January [1] Group 2 - D.R. Horton Inc (NYSE:DHI) shares rose by 13.8% to $149.47, marking its best day since April 2020, after reporting better-than-expected fiscal third-quarter earnings and revenue [4] - D.R. Horton is now showing a 7.3% year-to-date gain and has broken into positive territory for 2025 [4] - Options trading for D.R. Horton is significantly higher, with 15,000 calls and 11,000 puts traded, which is eight times the typical volume [5]

Core Insights - Century Communities, Inc. is launching Park Grove, a new community in Jacksonville, Florida, featuring modern homes and a prime location near key amenities [1][5][11] Group 1: Community Overview - Park Grove will offer new construction homes with two versatile floor plans: Auburn and Berkshire, designed with modern features such as stainless-steel appliances and quartz countertops [3][4] - The community is strategically located near Jacksonville International Airport and major highways, providing easy access to urban conveniences and coastal areas [1][5] Group 2: Home Features - Homes will feature open-concept layouts with up to 4 bedrooms, 3 bathrooms, and a maximum of 1,965 square feet, emphasizing quality and comfort [8] - The design includes sunlit great rooms, owner's suites with walk-in closets, and luxury vinyl-plank flooring [8] Group 3: Accessibility and Amenities - Park Grove is located within four miles of River City Marketplace and is close to attractions like the Jacksonville Zoo and Botanical Gardens, as well as Fernandina Beach and Jacksonville Beach [5][8] - The community will also benefit from the innovative online homebuying process offered by Century Complete, allowing buyers to purchase homes conveniently [9][11]

Market Overview - Pre-market futures are showing slight increases with the Dow and S&P 500 up by +9 points and Nasdaq up by +4 points [1] - Bond yields are decreasing, with the 10-year yield at +4.36%, the 2-year at +3.84%, and the 30-year down to +4.94% [1] Company Earnings Reports - General Motors (GM) reported Q2 earnings of $2.53 per share, exceeding expectations by +5.86%, with revenues of $47.98 billion, surpassing estimates by +1.89%. However, North American EBIT fell below expectations, leading to a -1.8% drop in shares [2] - Lockheed Martin (LMT) had a strong Q2 with earnings of $7.29 per share, a +12.33% surprise, but revenues of $18.2 billion were below consensus, resulting in a -7% pre-market decline. Northrop Grumman (NOC) reported earnings of $7.11 per share, exceeding estimates by +5.96%, and revenues surpassed expectations by +2.94%, leading to a +3% increase in shares [3] - D.R. Horton (DHI) reported Q3 earnings of $3.36 per share, exceeding consensus by +15.86%, with revenues of $9.23 billion, surpassing expectations by +5.13%. Shares rose by +6% [4] - Coca-Cola (KO) reported Q2 earnings of 87 cents per share, beating expectations of 83 cents, but revenues of $12.54 billion fell short by -0.44%. Shares are down modestly but up +12% year to date [5] - Sherwin-Williams (SHW) missed earnings expectations by -10.11% with $3.38 per share, although revenues of $6.31 billion slightly exceeded estimates by +0.49%. Shares fell by -4% [6] Upcoming Earnings Reports - Key earnings reports expected after market close include Texas Instruments (TXN), Capital One (COF), and Intuitive Surgical (ISRG). TXN anticipates double-digit growth in both earnings and revenues, COF expects over +20% gains, and ISRG projects +8% earnings growth and +16.8% revenue growth [7]