Window and Door Stocks Outperform Broader Market in September
Stock prices of publicly traded window and door companies outperformed the broader market in September, as the W&D Stock Index decreased 5.3 percent compared to a 9.6 percent decrease for the S&P 500. These losses pulled in the 12-month return on the W&D Index to negative 15.5 percent compared to a 17.7 percent decrease for the S&P 500. Building products stocks and the broader market were impacted this month by the tighter Fed policy (raising rates 75 bps to the 3-3.25 percent range during its September meeting) and higher probabilities of recession headlines in the media / news cycle.
GDP growth forecasts were revised lower to show a 0.2 percent expansion this year, compared to 1.7 percent seen in June, which weighed on stock prices. Building products companies continue to generate good near-term financial performance but have signaled certain macro headwinds in the broader marketing in providing forward guidance; however, these businesses continue to see growth in pockets of the repair and remodel market despite new construction start / permit activity moderating.