To The Moon

🧩 The market remains in a state of cautious observation, with geopolitical tensions and the pace of rate cuts being the key focus points this week.

🔍 $Green Brick Partners(GRBK)$ / $KB Home(KBH)$ / $TRI Pointe(TPH)$ : Driven by strong expectations for aggressive rate cuts, Warren Buffett is leading the way in increasing exposure to the U.S. housing sector.

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Home Sweet Home

Last Friday, Sunrun surged nearly 33% after delivering a blowout Q2 earnings report, supported by favorable policy dynamics. The company was featured in the August 4 episode of NEW ALPHA.

|Making history

August 9 could mark a historic milestone with the largest IPO in human history sparking widespread debate. $Fannie Mae(FNMA)$ and $Freddie Mac(FMCC)$ are expected to launch their IPOs this year, targeting a $30 billion fundraising goal, potentially eclipsing the $29.4 billion record set by Saudi Aramco in 2019.

For Gen Z investors lacking firsthand experience of bear markets, the 2008 subprime mortgage crisis might seem like a distant and unfamiliar event from history books. However, for most investors, the global financial storm that swept markets nearly two decades ago remains vividly etched in memory. FNMA and FMCC were not only at the heart of that crisis but also its enduring remnants.

When the subprime crisis morphed into a full-scale global financial crisis, the U.S. government stepped in, injecting capital and taking over FNMA and FMCC. Today, these entities remain pillars of the U.S. housing market and play an essential role in maintaining stability in global financial markets.

Additionally, Buffett's portfolio deserves attention, as the "Oracle of Omaha" is optimistic about the future of U.S. real estate. Last Friday, $UnitedHealth(UNH)$, which Buffett increased his stake in, closed up 12%, marking its largest single-day gain in five years. At the same time, Buffett has been betting heavily on the U.S. housing sector. With falling interest rates increasingly likely, homebuyers benefiting from lower rates stand to gain. Berkshire Hathaway established new positions in Q2 in two leading homebuilders, $D.R. Horton(DHI)$ and $Lennar(LEN)$ .

So, what is the impact of rate cuts? As of mid-August 2025, the 30-year fixed U.S. mortgage rate dropped to 6.58%, its lowest level in nine months since October 24, 2024, declining 5 bps in a single week. This has directly unlocked approximately 2.3% in purchasing power leverage.

Existing and new home sales have remained below the annualized 5 million units for four consecutive months. A 40-bps decline in rates could push autumn sale season back into the 5.5–5.7 million range, with months of inventory potentially dropping from 3.8 to 3.2.

In summary, while the rate inflection point has arrived, its elasticity still hinges on macroeconomic data and the Fed's path forward. For homebuyers, the window to lock in sub-6.5% rates may only last 4–6 weeks. Key upcoming dates include the unemployment rate on September 5, CPI on September 11, and the FOMC meeting on September 17. Potential stocks to watch include $Green Brick Partners(GRBK)$ / $KB Home(KBH)$ / $TRI Pointe(TPH)$.

| Market recap

Last Friday, U.S. markets saw a narrow pullback, with $NASDAQ(.IXIC)$ down 0.40% and $S&P 500(.SPX)$ down 0.29%, though both posted weekly gains of 0.81% and 0.94%, respectively.

Chinese assets roar, with $NASDAQ Golden Dragon China Index(HXC)$ rising 0.74% last Friday, extending its weekly gains to 1.85%, marking its second consecutive week of recovery.

Wall Street remains in a wait-and-see mode. On one hand, indices are at elevated levels, making markets highly sensitive to economic data. On the other hand, caution surrounds the high-stakes U.S.-Russia summit.

Looking ahead to this week, major U.S. retailers will release quarterly earnings in rapid succession, while Powell's Jackson Hole speech will also draw significant attention. Retailers' results will provide concrete insight into tariff impacts on the economy, while a hawkish Powell could deliver a notable shock to markets.

Megacaps - META: On the Verge of $2 Trillion

Last week, $Meta Platforms, Inc.(META)$ 's total market capitalization surpassed $2 trillion for the first time, making it the sixth U.S. company to achieve this milestone. Year-to-date, META's stock price has surged by an impressive 34%.

In its core AI business, the talent war between Meta and OpenAI remains a focal point. OpenAI recently lost yet another key player, a core developer of ChatGPT Agent, who departed within months of joining and was subsequently poached by Meta. The move sparked widespread online commentary, with many joking that Zuckerberg is “watching OpenAI livestreams to recruit.”

This latest recruitment reflects Meta's accelerated push into AI, aimed at addressing gaps by acquiring top-tier talent.

On the organizational front, Meta plans another round of restructuring for its AI division. The restructuring will center around the newly formed "Meta AI Super Lab," which will be divided into four teams, each focused on different core directions to optimize the company’s R&D and application capabilities in AI.

Simultaneously, Meta is advancing its hardware efforts. The company is reportedly developing a new generation of AI-powered smart glasses. Internally codenamed "Aperol" and "Bellini," the glasses could launch as early as September, with up to four AI glasses models planned, covering a broad spectrum of consumer and professional markets.

Pursuing peace

On August 15, 2025, Putin and Trump held a 2-hour 40-minute meeting in Anchorage, Alaska—the first time in a decade that Putin has set foot on U.S. soil. However, no agreements were reached during the talks. On August 18, Trump will meet Zelensky and key European and NATO leaders at the White House, with plans for a trilateral summit involving the U.S., Russia, and Ukraine.

Top movers

• RUN: Last Friday, driven by favorable policy tailwinds, solar stocks surged. The U.S. released lenient tax credit guidelines for clean energy projects. $Sunrun(RUN)$ , the largest residential solar provider in the U.S., soared 33%, while residential solar equipment supplier $SolarEdge(SEDG)$ gained 17%, and global thin-film solar leader $First Solar(FSLR)$ rose 11%.

• UNH: $UnitedHealth(UNH)$ closed up 12% last Friday following news of increased Buffett holdings, marking the stock's largest single-day gain in five years.

• China A-Shares: The SSE Composite Index hit record highs, with total market capitalization surpassing RMB 100 trillion. Boosted by non-bank deposit growth, easing U.S.-China tariffs, favorable policy expectations, and a strong robotics and technology rally, investors are optimistic about a Q2 earnings recovery for Chinese companies. The SSE Composite is now approaching a decade-high, with the HSTECH index in Hong Kong also up nearly 1%.

| Home! Sweet Home!

This week, global investors will turn their attention to the Jackson Hole Economic Symposium, where Fed Chair Powell is expected to provide new clues on the path of rate cuts. Buffett appears to be betting big on falling rates, significantly increasing his exposure to the U.S. housing sector.

Notable low-PE housing stocks, with valuations around 9x and relatively low market caps and share prices, include $Green Brick Partners(GRBK)$ / $KB Home(KBH)$ / $TRI Pointe(TPH)$ .

GRBK

$Green Brick Partners(GRBK)$ is a residential construction and land development company offering homebuilding and financing services, including mortgage and title solutions. Ranked 27th on the 2025 Builder Top 100 List, two spots higher than last year, GRBK is among the key players in the U.S. homebuilding industry. Buffett-backed D.R. Horton and Lennar occupy the top two spots on this list.

On August 1, GRBK reported Q2 2025 results, missing consensus estimates for EPS and revenue, leading to a 2.7% drop in after-hours trading. Despite challenges, GRBK achieved a 6% growth in home deliveries and new orders. Its strong balance sheet, with low debt-to-equity ratios, remains a positive indicator.

The stock has shown strong resilience, reflecting investor confidence in its business recovery. Since hitting post-earnings lows earlier this month, the stock has rebounded by more than 11%.

KBH

$KB Home(KBH)$ is one of the largest and most established homebuilders in the U.S., with nearly 650,000 homes built over its 60+ year history. The company operates in 45 markets across the country. Ranked 7th on the 2025 Builder Top 100 List, KBH dropped one spot from its 2024 ranking.

The company's primary revenue driver is the U.S. West Coast market, offering affordable housing options targeted at first-time and move-up buyers.

On June 24, KBH reported Q2 2025 earnings exceeding market expectations. Revenue for the quarter came in at $1.53 billion (vs. $1.51 billion expected), while EPS stood at $1.50 (vs. $1.47 expected).

TPH

Ranked 2nd on the 2025 Most Trusted Builders List, $TRI Pointe(TPH)$ has maintained this position for two consecutive years. As one of the largest U.S. homebuilders, the company specializes in premium homes across 10 states, with some communities having been served for over a century.

On July 24, TPH reported quarterly revenue of $884 million, beating analyst expectations. The company posted Q2 EPS of $0.77, beating the consensus estimate of $0.66.

TPH also announced a stock repurchase program allowing up to $50 million in buybacks, representing approximately 1.6% of shares outstanding via open market purchases.

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