It's becoming more and more clear that Home is where it’s at; for many Americans, Home is that single-family house (white picket fence optional). The existing home sales report underscores the fact that our housing revival continues even with raw materials and skilled labor shortages.

• Inventories - 8%
• Months’ Supply -10.6%

Highlights from the report on a year-to- year basis include:

• 5.62 Million Annualized Rate: +2.75%
• $252,800 Median Price: +5.8%
• Days on Market: 27 from 32
• First –Time Buyers: 33% from 30%

It’s those first-time buyers, including millennials that are making the difference. All investors should have exposure to this trend, which is underway as supply issues improve. 

Corroborating with this Home Sweet Home theme, La-Z- Boy (LZB) shares surged 22% on strong earnings and guidance, while shares of Zillow (Z) popped on twice its average daily volume. 

Housing, driven by household formation, is critical for the economy along with the goal of reaching 3% or better annual Gross Domestic Product (GDP) growth. Even the current quarter in which the Atlanta Fed initially modeled for a 4.3% growth, is now under three percent and some models are fewer than 2%.

Today, we get the Senate healthcare plan. So much is riding on this “less mean” replacement of Obamacare, which has become essential to the rest of the Trump Economic Agenda. On that note, I would also say this bill will not provide the same baseline of savings as the House version; in that regard, the GOP should really consider tax cuts no matter what happens immediately. 

Senate leadership is pushing for a vote before the July 4th recess.

Message of the Market

As for the market on Wednesday, the slide in oil and rotation is back; high-tech and biotech took the Dow lower while lifting the NASDAQ much higher. 

Technology is really buzzing as Silicon Valley is awash in cash and record high share prices. There is a tremendous buzz about Apple (AAPL) acquiring Netflix (NFLX), a rumor that makes more sense each day.

Broadcom LTD (AVGO) is on the prowl for a chip name after reports that it will not make a $20.0 billion bid for Toshiba’s semiconductors business. I also think it would be a great time for someone to buy Advanced Micron Devices (AMD). I made subscribers a ton of money in the takeover of PeopleSoft. I feel confident that at some point, David Duffield’s latest company Workday (WDAY) will also receive a bid.

Today’s Session

It looks like a flat start, although lots of early morning intrigue.  

Qatar Airways has filed a notice of intent to take a major stake in American Airlines.  This is lifting shares of all airlines just as the transportation index was raising red flags with its inability to rally on the back of plunging oil prices.

The Chinese government has banned video and audio on Weibo because that site hasn’t been tough enough on negative user posts.  Interesting since Weibo has always had a close relationship with the communist government.  I think this will be short-lived, but Chinese Internet stocks getting hit- they are buys on weakness.

Don’t bury me yet

Two brick and mortar names that according to conventional wisdom are destined to the dustbin of history are showing great life this morning.

• Staples may be bought by a private equity firm.
• Barnes and Nobles posted results that beat the street this morning.

It looks like another tug of war at the open. 

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