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Tickers in this Article: LEN, PHM
MoneyShow's Jim Jubak takes a look at a group of stocks that fell on macro news despite having strong numbers, setting up a potential rebound.

One of the things I like to look at to try to figure out what's driving a market—what the market thinks is more important—is when I get data that's pushing the same stocks in two different directions. Which part of the data wins?

So on June 20, that we had a report on existing home sales that said for the month, we came in at an annual rate of 5.18 million. This was up from an annual rate of 4.97 million the last time. The consensus was 5 million, so better than consensus, better than last month, good news on existing home sales.

Now, homebuilders don't sell existing homes, but they like to see robust existing home sales because that keeps pricing rising for those homes, which also supports prices for new homes. The interesting thing is that on this day, when we had better than expected news on existing home sales, we had really, really big drops in homebuilders. Lennar (LEN) was down 4.6% on the day, and Pulte Group (PHM) was down almost 6% on the day.

So we go, OK, what's going on here? Well, what's going on is that the worry about rising mortgage rates, the worry about the Fed ending its policy of buying mortgage-backed securities, and therefore letting rates rise, trumped the good news about existing homes.

I think that tells you a lot about where the market is right now. The market will go through long periods where it really ignores fundamental news because the macro news is so overwhelming. I think we're sort of in that period right now.

One of the things to watch is to see, well, do you get some kind of move back by the housing stocks? Some kind of move up even though Fed policy hasn't changed, as people go, "OK, the world hasn't come to an end. We're still seeing very good growth in the housing sector, so I'll look at these at bargains?

The question is, when will people see bargains? When will people start to see that the fundamentals are still OK, and when will they pull back a little bit from the extreme fear that they feel right now about the macro Fed policy in the financial markets?

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