PHM

July shed 23,000 jobs — a hard data miss that dents the 'resilient labor market' consensus and reopens the Fed rate-cut debate. The 10Y yield already slipped 1.8% this week. The non-obvious trade: large-cap US homebuilders, where every 25bps of mortgage rate relief directly unlocks pent-up demand. Long large-cap homebuilders into a potential Fed pivot narrative.

Berkshire's $6.8B all-cash TMHC acquisition — Greg Abel's first major deal — is a hard-catalyst validation that US homebuilders are undervalued versus structural housing scarcity. With TMHC removed from the investable universe, remaining mid-cap builders absorb both the M&A premium re-rating and the competitive supply reduction. Long surviving independent mid-cap homebuilders.