Residential investment at 3.2% of GDP remains well below its 4.7% average since 1950.  Residential investment reached 6.7% of the economy at its peak in the fourth quarter of 2005 and troughed at 2.4% in 2010.  While housing’s share of the economy seems relatively small (personal consumption expenditures represent 68.5%), the housing market has an outsized effect on consumer behaviour and spending.  We see residential investment gradually recovering over the next several years, providing ongoing support for economic growth, as labor markets improve and credit conditions normalize.  Thus, we maintain an overweight position to homebuilders, and to consumer discretionary stocks in general, for our growth portfolios. 

David Fuller's view

Here is the Weekly View.

Interestingly, there is no mention of Wall Street’s technical condition at this time.