The Fed Could Crush This Industry, and These 2 Stocks Are Feeling the Pressure
The Federal Reserve made its latest decision on interest rates on Wednesday, and the response from Wall Street was one of concern, as markets fell sharply after the announcement of a three-quarter percentage-point increase. Yet investors seemed a little more comfortable Thursday morning, perhaps accepting that short-term economic headwinds from high interest rates could eventually reduce inflationary pressures for a more extended period of time. As of 9 a.m. ET, stock index futures on the Dow Jones Industrial Average (DJINDICES: ^DJI), S&P 500 (SNPINDEX: ^GSPC), and Nasdaq Composite (NASDAQINDEX: ^IXIC) had risen slightly, although the benchmarks failed to reclaim all their lost ground from the previous session.
The homebuilding industry has attracted a lot of attention lately, because rising interest rates have had an impact on home affordability in many key U.S. real estate markets. That had many investors watching for the latest financial reports from Lennar (NYSE: LEN) and KB Home (NYSE: KBH). Even though the immediate stock price movements for these two homebuilders weren't extreme, what their executives said about the current environment for housing shows that market conditions are turbulent at the moment and could turn ugly in a prolonged recession.
Shares of Lennar were actually higher by nearly 2% in premarket trading on Thursday. The Miami-based homebuilder's fiscal third-quarter results for the period ending Aug. 31 showed more strength than expected, and that offset worries about what the future could bring.
Source Fool.com
