On Homebuilders, China & AI

The interest-rate-sensitive S&P 500 Homebuilding industry index counterintuitively sank after the Fed launched its new easing cycle; the stocks had already rallied in anticipation of the move. Jackie examines whether the correction was warranted. The industry’s forward revenues and earnings are historically high, and KB Homes reported a decent August quarter. But do valuations capture the potential new competition from existing homes amid lower mortgage rates? … Also: China has been trying to stimulate its economy with a raft of new measures. But several business- and consumer-unfriendly government policies undermine its objectives. … And a look at the surprising underperformance of the largest AI-investing ETFs.