With a slew of housing data due next week, have the homebuilders hit rock bottom?
Ara Hovnanian, CEO & President of Hovnanian Enterprises joins the panel for this conversation. Following is a summary of his main points.
What should we expect next week?
No surprises, replies Hovnanian. The market is slowing. Starts are coming down to a million a year. But, that's not a surprise.
Does that mean the data will be bad?
I wouldn’t say bad, replies Hovnanian. Things will remain in this current slow state. Keep in mind, over the past few housing corrections, the housing market bottomed at around a million housing starts. That’s probably a reasonable number.
What do you think about the pace of downgrades?
Write-offs are directly related to pace and price. I don’t expect downside risk to pace. But price is the wild card. And I think there’s more uncertainty in existing homes than new homes.
Karen, what are you expecting from Home Depot (HD) and Lowe's (LOW)?
I like both for the long term. But I hold put options too, says Karen Finerman, as downside protection.
Of all the economic data coming next week, what’s most likely to move the market?
The numbers that measure inflation, replies Tim Seymour. PPI in particular, is important. Watch inflation.
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Trader disclosure: On Feb. 22, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Macke Owns (DIS), (YHOO); Seymour Owns (AAPL), (INTC), (MER), (S), (TSO); Seygem Asset Management Owns (GFA); Finerman Owns (GS); Finerman's Firm And Finerman Own (KALU); Finerman's Firm Owns (MPG), (MSFT), (TSO), (VLO), (WMT), (YHOO), (AAPL), (GE), (JCP), (KSS); Finerman's Firm Is Short (IYR), (IWM), (IJR), (MDY), (SPY), (GFI), (LEH); Finerman's Firm And Finerman Own (HD) And (HD) Puts; Finerman's Firm And Finerman Own (CROX) And (CROX) Options; NBC Universal Is The Parent Company Of CNBC