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Janney Capital Markets research director Dan Wantrobski on the sectors that are making money off of the young millennial renters entering the market.
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Let's get to a way to actually invest in something simply by looking at a social trend.
College enrollment for example.
It's actually up 32%.
When you look at it from 1999 to about 20082009.
And guess what.
Those so called millennial inch closer and closer to graduation.
They -- need somewhere to live once they graduate but how can you cash in on that actual trend.
Let's bring it down what Trotsky he's actually look at all of this is -- Janney capital markets' technical research director joining me live from Philadelphia and a Fox Business exclusive of we -- this story because you simply looked at a trend and said.
Guess what certain stocks may benefit from a bunch of graduates flooding the market let's talk about that what -- And surely it started you know several months ago when we were looking at the -- -- of the homebuilding sector.
As well -- actually the banking sector.
And and really months ago these unloved under weighted sectors literally started ripping.
And started leaving the market and they still lead to this day he's a relative strength leaders and the market place.
And the interesting thing was you know consensus was that really was no bottom in the single family housing market.
So we were wondering why why do the charts look like this -- these trends in place what are they discount ten and so that kind of brought -- really the demographic study in the cycles.
That the US undergoes with that in an essentially an and a lot of analysts are very excited about this.
We're going forward we have a huge boom population waiting in the wings this is the millennial boom generation.
They number north of -- 82 million by our account.
Well if you look at the specific cohort -- there.
You know large numbers of that demographic are getting ready to graduate college for.
So you know if they're they're kind of at a crossroads where.
They can either age you know move back in with mom and dad or two they could buddy up and look for an apartment which is you know a typical.
Action of -- young adults so.
But boy when we're talking about when we're talking down to viewers who want to make money off of this -- that we just -- at London's got the young and the renting meaning.
That rental rates at the -- there are not that many opportunities now because people are flooding this market after graduating and they're renting.
What do -- look for here I'm trying to make some money off that trend.
But that that's you know where the correlation comes in so multifamily housing as you say you know rental rates vacancy rates -- -- multi year -- we have them eight or nine lows that means.
There's not enough supply on the markets to meet this and coming demographic post college.
So we think that's one of the reasons why the homebuilders and the banks as a derivative play.
Are rallying.
So you can look at things like the -- the home building ETF.
We -- look at single stocks like Toll Brothers or DHI those are two of the leaders.
Even in today's tape Toll Brothers was up you know one point north of 2%.
I'm so we think they are discount -- possibly this new thematic trend and demographics.
Doesn't mean it's gonna be all up into the right from here crowd but certainly -- buyers on weakness -- -- all of them in the banks.
As continued leaders this as far as sector rotation gone down.
I asked then if if X that you know there's an exit metal -- then we get -- -- if if -- -- is hey invest in reits that deal with multifamily units or.
-- for example rentals opportunities for rental market.
Then could you figure out.
There might be an opportunity for things that go inside them I'm thinking we -- -- -- the durable goods number today things like washing machines is there opportunity there it's just more about.
Yeah absolutely you know the REIT market -- -- say the REIT stocks.
Look very strong here yes if we have a market pull back a broad market pullback which is -- you know all these sectors are gonna take a hit but but reits apartment -- multifamily -- -- very strong and technical basis here but you mentioned lesbian derivative plays Whirlpool.
Looks very strong here LG electronics and he has some of those inputs that go into these multifamily housing units.
They could be plays as well that's all early cyclical plays.
And when you have early cyclicals with rallying plus technology which is leading plus the banks.
That's good leadership in -- in a bull market might -- world tell us what.
Kind of the right how -- chart year to date for Whirlpool let's just quickly ask because we be remiss if we didn't have a mind like yours -- -- and not ask you about.
Where you see this market right now are there any warning signals or Green lights that you like I mean would you call this strong bull market at the moment or some.
The different.
And I think it's a strong bull market we don't think it's a secular -- -- -- what I mean by secular bull market is it's.
Really the next expansionary wave here in the US we've had these cycles where you have twenty year up trends and expansions in the economy is it where we are we firmly in the cycle or are relating to -- very young vibrant bull market.
I'd say well I think.
We are indeed terminal phase of our last bear market which is now 1012 years old.
And we are in the very early infancy stages of the next secular bull market.
It's not going to be without its problems and quite frankly on the short term basis markets are very overheated and there's a lot of bullish sentiment out what we know we've got people we've got the bull with them.
The whitening mustache right there -- for a little thing -- -- him.
But it looks like it's still very fast.
-- -- one of the you know one of the reasons probably for the grey -- that you know we're looking at large cap leadership said he asked a question and large when large caps are leading the charge.
You know is a bull market and it's mature -- and you know it it could quite possibly be but that doesn't mean that the top is that hands that you know.
Don't forget small caps have been leading the charge for the last twelve years actually small caps relative to large caps have been outperforming for over a decade now.
Although seemingly could -- lately they've -- -- flag that's right.
Damn I have you know -- I'm noticing something about oil and I want to keep you here because it's it's very much a story that matters to a lot of our viewers.
And oil's getting getting crushed today we've mentioned -- -- viewers -- gonna stand by here because there's news that western nations.
May be reconsidering -- release of oil reserves.
