Financial Gravity and Homebuilding

Last Friday's employment situation report gave real estate stocks of all stripes a nasty beating, and not for the first time either.

Ever since the release of the March 2004 employment situation report in April of last year, interest rates and real estate stocks have had a shock-and-regress relationship.

Each new datum suggesting a continuation of the Federal Reserve's rate-hiking campaign -- not including the evidence the Fed itself has stated in increasingly clear terms -- has been met with selling in these groups, only to be followed by renewed buying and a push to new highs. ...