After last week's modest gains, stocks got the green light Monday, supposedly on some perceived softening of President Trump's tariff stance, and traders took the bait like a hungry school of fish, sending the major indices to the best gains in weeks.
The overall effect of Monday's rise will be to instill some confidence in markets, though how enduring the thrill may be is questionable. Nothing eally has changed in terms of geo-politics, economics, or market structure other than a one-day wondrous rally. Anybody with skin in the game knows that trends do not develop overnight and the start of the week, though buoyant, may face downward pressure in subsequent sessions.
One item that may or may not impact sentiment was the earnings report from KB Home (KBH), one of America's largest builders of new homes. The company reported revenues of $1.39 Billion and diluted earnings per share of $1.49, both of which fell short of estimates.
According to CEO, Jeffrey Mezger, Chairman and Chief Executive Officer:
"Consumers are working through affordability concerns and uncertainties related to macroeconomic and geopolitical issues, which are causing them to move slowly in their homebuying decisions. Demand at the start of this Spring’s selling season was more muted than what we have seen historically, despite a healthy level of traffic in our communities. In mid-February, we took steps to reposition our communities to offer the most compelling value, and buyers responded favorably to these adjustments. Although we missed our sales goals for the first quarter, we are encouraged by the significant improvement in weekly sales and normalizing absorption pace over the last five weeks."
OK, things are about to pick up. So says the CEO. Raise your hand if you're buying that line of reasoning. Um, anybody? How about, "we slashed our prices and a few suckers ponied up."
At a median price of $446,300, the only people buying KB's McMansions are those caught in the past or devoid of any rudimentary understanding of supply and demand economics. Prices have more than doubled since the brief bottom in 2009-10, thanks in large part to the Fed's aggressive zero interest rate policy and multiple rounds of money creation (QE). Not to be forgotten, the screaming fraud of pandemic stimulus raised new home prices by about a third in just two years (2020-2022).
Being the gold standard for ignoring the obvious, Wall Street will probably look right past the extreme unaffordability of housing that's become normalized over the past four years thanks to free-spending policies of Joe and Kamala and their colleagues in congress and step up to buy more stocks, because, as we all know, stocks never go down, except when they do.
As noted in the edit at the start of this post, this is the 4,000th daily screed and nothing has changed. Wall Street remains possibly the most corrupt acreage on the planet (City of London vying for top honors) and deluded individuals continue to feed the beast, expecting their money to grow like it was fruit from a tree when the reality is that the currency has been debased to near worthlessness and their wealth is a grandiose fiction.
Maybe the next 4,000 posts will offer some improvement.
At the Close, Monday, March 24, 2025:
Dow: 42,583.32, +597.97 (+1.42%)
NASDAQ: 18,188.59, +404.54 (+2.27%)
S&P 500: 5,767.57, +100.01 (+1.76%)
NYSE Composite: 19,704.21, +249.90 (+1.28%)
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