Why Morgan Stanley's Slimmon Favors Homebuilder Stocks

The video discusses the stock market's reaction to a poor quarter, highlighting early cycle stocks and their potential future benefits due to expected lower mortgage rates. It examines the recovery of home builders and the consumer discretionary sector, suggesting opportunities in home-related stocks. The housing market is analyzed, noting high rental income and a lack of housing supply, contrasting with the 2008 crisis.

Why are stocks rising despite a poor quarter?

• They reflect a great earnings season for 2020.

• They were heavily impacted last year and are early cycle stocks.

• Due to expected future increases in mortgage rates.

• Because they are late cycle stocks.

What is a potential opportunity beyond initial home builders?

• Investing in technology stocks.

• Focusing on home furnishing stocks.

• Investing in energy stocks.

• Buying more real estate.

What was the consumer discretionary sector's performance last year?

• It saw a slight increase.

• It was down by 37%.

• It remained stable.

• It was up by 37%.

What is a key difference between the current housing market and 2008?

• There is a huge glut of houses already built.

• There is no significant housing glut currently.

• New housing starts were completed last year.

• Interest rates are much higher now.

What is contributing to the high rental income currently?

• A large supply of new houses.

• Low demand for rentals.

• Sky-high rents.

• Decreasing interest rates.