“The market got whiplashed by the new-home sales report, it’s 180 degrees different from what we expected,” Michael Woolfolk, a global-markets strategist at Bank of New York Mellon in New York, said in a phone interview. “She’ll continue to say temporary factors will depress first-quarter growth, but the committee believes the outlook for 2014 is positive.”
The recovery in home building has been flagged by the recovery in the shares of property developers over the last two years as well as the declining number of foreclosures hitting the market.
Cement companies are also exhibiting recovery characteristics on a global basis which suggest that surprises are likely to be to the upside. This should be positive for construction materials companies generally.
Vulcan Materials bottomed in 2011 and has held a progression of higher reaction lows since. It consolidated below $60 for a year and broke successfully above that level three weeks ago. A sustained move below $60 would now be required to question recovery potential.