Industrials

The Homebuilding Sector is down 5.18% in mid-afternoon trading after Toll Brothers (TOL US) reported a 13% year-on-year decline in orders, especially in the luxury California market, while still reporting an increase in net income which beat analysts’ expectations. TOL was down 10% just after the open but has recouped most of its early trading losses and is now down 1.73% on the day. Fears of higher interest rates and increased building costs continue to depress share prices in the sector.

The weeklong rally from last week’s lows has taken a bite out of the $93.7 billion of mark-to-market profits, +11.12%, short sellers have earned since the beginning of October. Over the last week the S&P 500 index increased by 3.31%, the Nasdaq by 4.3% and the Russell 3000 by 3.23%. The S3 Blacklight platform tracks over 8,000 U.S. domestic equity shorts worth over $825 billion, which incurred mark-to-market losses of $23.3 billion, or -2.86%, over the last week.

General Electric (GE US) short interest is $1.08 billion, the 2nd largest short in the Industrial Conglomerate Sector behind $MMM with $1.4 billion of short interest. GE has 125.9 million shares shorted, for 1.46% of the float, and shares shorted have been flat in November despite GE’s stock price declining by 21.5%.

GE short interest is $1.35 billion, with 121.26 million shares shorted, for 1.41% of the float.

Shorts are up $103 million in mark-to-market profits today on GE’s -7.5% price move. This brings year-to-date mark-to-market profits up to $853 million, a 47% return for the shorts in 2018.

United Parcel Service (UPS) is down over 3% despite its 20% increase in quarterly profits. This is  primarily due to the fear that the China trade war will negatively affect international revenues. Short interest is at $925 million, with 8.10 million shares shorted. This makes the package delivery and supply chain management company the 3rd largest short in the Air Freight Sector sitting behind FedEX & C.H. Robinson. Although, shorts had been covering over the last two weeks, we saw new shorting yesterday ahead of the earnings release.

Shares of Boston-based General Electric, the one-time colossus of American industry dropped again this week in unusually high volume. Shares of the 126-year-old company have dropped steadily since the 50-dav average fell below the 200-day average on March 8 last year. Technical traders see the death cross as a sign of institutional momentum—on the selling side. General Electric has proven to be the second most profitable short this year earning skeptics $673 million a 36% return, behind AT&T.

General Electric Co. (GE) is forecasting adjusted earnings well below 30% of expectations, at $1.05-$1.10 a share, and cash flow estimates, which have disappointed since the 1^st quarter, are down almost 50% from projections, reinforcing the fear that the conglomerate may have to cut part of its $8 billion dividend as well as curtail its stock buyback program.