The stock started to work again over the past few months after bond yields plunged.
We started buying Home Depot shares last week as a play on housing and interest rates. Our initial 50-share buy was around $362. We bought 50 more shares Wednesday a few dollars higher. The Dow stock is having a mixed year — up about 7% compared to the S & P 500 's more than 16% gain. After rallying to $395 in March when the market anticipated as many as six Fed rate cuts this year, Home Depot then traded as low as $325 in May as investors reset their expectations lower.
Still, if Yearley is correct, then it won't be too long until mortgage rates are at a sweet spot where housing turnover really starts to pick up, making now the time to start buying Home Depot. The knock against retail right now is that the U.S. consumer is on shaky ground, but housing is a different animal because rising home values tend to lead Home Depot sales.
Housing Retail Industry Breaking News: Business Lowe's Companies Inc Best Buy Co Inc Toll Brothers Inc Ted Decker Real Estate Home Depot Inc Jim Cramer Investment Strategy Markets Breaking News: Markets S&P 500 Index Business News
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