Homebuilders ETF Rumor Spreads
July 16th at 8:25am by Tom Lydon
Rumor has it that the SPDR S&P Homebuilders (XHB) exchange traded fund (ETF) increased 2.5% because Warren Buffett’s Berkshire Hathaway could purchase a stake in Hovanian Enterprises Inc (HOV). HOV makes up 4.2% of XHB. HOV is up 9%, possibly because short sellers don’t want to be in this market, and they don’t want to be against Buffet’s bet, says Jon C. Ogg at MarketWatch. Hovanian has a connection to the California and Florida housing markets, which are especially volatile, so anything is possible.
As for XHB, this small shot upward isn’t really a big deal, it doesn’t change anything. XHB is down 16.9% for the year, so hopefully it can only get better from here. Berkshire Hathaway already owns a lot within the housing sector, so it would be easy to integrate HOV. Imagine what can happen for this sector if it’s already up based on rumors and short covering.
