![]() The resulting spike in rates has caused an adverse reaction in housing and mortgage finance. The pace of this rate hike cycle is unmatched by any other period. Here’s a chart showing the speed and path of rate hikes in comparison to prior cycles. For better or worse, this creates tremendous cycles.Īs we have seen in the past year, this sector has taken a large beating as rates have moved up at an unprecedented speed. This is because the sector is highly sensitive to swings in interest rates. During times of economic turmoil, when most sectors of the economy falter and there is a general lack of confidence in the equity markets, the mortgage origination sector is often the first to see a glimmer of hope. Many of these companies are also trading significantly below their recent IPO price.Īs a whole, the mortgage origination sector is somewhat counter-cyclical in nature due to its unique position in the broader economy. ( IMH ) are all trading at the bottom of their 52-week range. ( AOMR ), and Impac Mortgage Holdings, Inc. ( LDI), Finance Of America Companies Inc. Wells Fargo raised its price target slightly and moved up its earnings estimate for Rocket after its big beat.In 2023, investors should consider mortgage originators, especially after seeing these companies' stock prices plummet in 2022. Rocket reported stronger-than-expected fourth-quarter earnings on Thursday, which impressed some Wall Street analysts. The short covering tends to fuel the stock's rally further. When a stock with high short interest jumps sharply higher, it could force short sellers to cover their bearish positions in order to limit their losses. The broader market also experienced some spillover impact from the frenzy as many big investors took down risk across the board. A month ago, an army of retail investors on Reddit managed to push the brick-and-mortar video game retailer up 1,500% in about two weeks, inflicting huge pain on short selling hedge funds. The surge in Rocket could be a sign that the retail trading mania seen in GameStop earlier this year is still a factor. When rates go down, it's not hurt our business.'" and frankly don't understand why the stock did not react to what was a very good where they basically laid out a story that just said, 'We can show how when rates go up, it has not hurt our business. "I have been a huge fan of Jay Farner and Dan Gilbert. … When people see that, they think you can bust the sellers," CNBC's Jim Cramer said Tuesday on "Squawk on the Street," while adding he actually likes Rocket Companies' management and business fundamentals. ![]() Still, it remains to be seen whether there is the kind of social groundswell that could keep momentum going in Rocket shares. Meme-driven chatter on Rocket was not nearly as intense as seen on GameStop, according to AI firm Accrete. Najarian cited a jump in Rocket options trading volume following increased mentions on Reddit. These men and women are back and they're into this one in a big way," said Najarian, co-founder of Market Rebellion who has call positions in Rocket Companies and put positions in GameStop. "Our beta-tested social media stuff right now picked up on yesterday some really just hugely bullish comments over on the Reddit board WallStreetBets again. ![]() Najarian, a panelist on CNBC's " Halftime Report" known for spotting unusual activity in the options market, said on Tuesday's show that his interest in Rocket Companies was piqued a day earlier. The jump in Rocket Companies shares Tuesday did not catch trader Jon Najarian by surprise. We expect the shares to normalize and again trade on fundamentals, however the timing is uncertain."įandetti has an equal weight rating on the stock. "We noted our incrementally more positive view, but not good enough to support this move which is the third trading day after earnings. "We believe the trading reflects retail/Reddit activity like we've seen in other stocks recently," wrote Wells Fargo analyst Donald Fandetti on Tuesday. $1.7M all-in, let's gooo YOLO," and it quickly drew more than 1,700 comments. Personal Loans for 670 Credit Score or LowerĪ number of popular posts Tuesday on the WallStreetBet chat room featured Rocket. Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |