What's really going on in housing?
Masco's and Armstrong's dour numbers are at odds with those of every homebuilder we've heard from.
Monday night, we saw a downbeat outlook from Masco (MAS), the kitchen-bath company, and a horrendous report from Armstrong (AWI), which makes floor and ceiling tiles. Both indicated the U.S. had taken a sudden turn for the worse. Armstrong's was right up there with the worst calls of the quarter.
On the other hand, USG (USG) and Whirlpool (WHR), while acknowledging that the world has been weak, didn't say all that much that was negative about the U.S. Instead they reiterated the party line -- that things are improving off a small base.
It is possible that Masco and Armstrong are right, but their book of business is dramatically at odds with that of every homebuilder we have heard from, as well as with that of Lumber Liquidators (LL), which boosted its outlook significantly. Plus, we just heard Weyerhaeuser (WY) say good things about home sales in the U.S., along with Pulte (PHM), D.R. Horton (DHI) and Meritage (MTH) last week.
I'm sure Armstrong isn't deliberately sandbagging, and much of its downbeat commentary focused on commercial. For instance, there was this gem: It has seen a "fairly precipitous drop in the second quarter in almost every commercial subsegment, education, health care, retail."
Masco isn't putting out the white flag either. It is simply saying the economy is "losing momentum" and the second half will be "less robust."
Still, Masco and Armstrong sliced through the bull case pretty effectively, despite all the national data and individual housing company data we've seen.
Stocks are on hold ahead of the Federal Reserve decision. Otherwise, I think these two reports would be doing some real damage to the housing case Tuesday -- damage I actually would have wanted to buy. That's particularly so with stocks like USG, which is not seeing these kinds of declines in the U.S. while it simultaneously extricates itself from the European markets that continue to haunt both Armstrong and Masco.
Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and is long WY.
More from TheStreet.com
You pay $125,000 to build the house on this lot. Total Investment is now $200K
The bank would most prpbably appraise this completed project aroung $150K
You are already $50K in the hole and havent even finished decorating.
Housing is a BAD INVESTMENT by all standards...
futhermore CEO'S ARE MAKING 18 MILLION off the backs of workers who make poverty wages
the CEO'S screw up and get bonuses...the workers screw up , they get fired
NOT GOOD FOR HOUSING................but that's free market capitalism
MY EXPERTISE IS IN STOCKS BUT I'LL TAKE A STAB AT HOUSING TO ACCEPT MTKABOATER'S CHALLENGE
but first i must state that i have issued what i call the cramer challenge .............despite issuing this
challenge MANY times i haven't gotten any takers..........you pick a cramer recommended stock
and i will make a pick and beat cramer..............MTKABOATER might be my first taker
now for housing..........interest rates are low but people with excellent credit can't get loans to buy
or re-fi nicely underpriced homes...........banks SAY they won't loan because appraisers lowball the prices........in reality banks won't loan because they have too many bad loans on the books
SO MTKABOATER..........HOUSING IS NOWHERE UNTIL PEOPLE CAN GET FINANCING
No Jobs, No home buying. No jobs. No buying much of anything. U.S. Companies are holding on to tons of money right now. They won't let go of it for hiring, improvements and upgrades on equipment till this election is over. They are worried about Obama because he is not laying out any future plans on taxes, etc. etc. etc.
We need Manufacturing back in this country. I'm tired of smoke and mirrors out of Washington.
This is such a ridiculous statement that its hard to believe someone wrote it. YOU SIGNED to buy at a certain price and at a certain rate. There's no cussion if you made a bad decision.
Geez. Go live in Greese.
Copyright © 2014 Microsoft. All rights reserved.
While they don't know when it will burst, they do recommend looking to Europe if you want a safer bet.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.