Tractor Supply is the largest operator of retail farm and ranch stores in the United States. The company targets recreational farmers and ranchers and has little exposure to commercial and industrial farm operations. Currently, the company operates 2,233 of its namesake banners in 49 states, including 81 Orscheln Farm and Home stores (rebranded as Tractor Supply), along with 202 Petsense by Tractor Supply stores. Stores are generally concentrated in rural communities, as opposed to urban and suburban areas. In fiscal 2023, revenue consisted primarily of livestock, equine & agriculture (27%), companion animal (25%), and seasonal & recreation (22%).

The underlying fundamentals of the housing market remain strong. Still, mortgage rates above 7% are pushing prospective buyers to the sidelines and could turn housing from being a contributor to 2024 economic growth to being a drag unless the economy gets rate relief. Homebuilder confidence declined for the first time since November 2023, according to the May National Association of Home Builders/Wells Fargo Housing Market Index. "The market has slowed down since mortgage rates increased and this has pushed many potential buyers back to the sidelines," NAHB Chairman Carl Harris said after mortgage rates topped 7% for a fourth consecutive week. Other industry executives see strong drivers of long-term demand. "While it appears interest rates will remain higher for slightly longer, the market continues to remain massively underbuilt and pent-up demand is only being exacerbated," said Nicholas Fink, CEO of Fortune Brands Innovations, whose products include Moen faucets, Therma Tru doors, and Master Locks. Based on the May 16 GDPNow estimate from the Atlanta Fed, residential fixed investment is expected to make a small positive contribution to 2Q GDP, but there are risks from new data that looks lackluster. The Commerce Department reported April Housing Starts of 1.36 million at a seasonally adjusted annual rate, down from 1.37 million year earlier. This morning, we expect the National Association of Realtors to report April Existing Home Sales of 4.20 million (SAAR), down from 4.22 million in April 2023. Tomorrow, we expect the Commerce Department to report April New Home Sales of 675,000 (SAAR), down from 679,000 a year earlier. The S&P/Case-Shiller National Home Price Index jumped 6.4% in February. We expect it to rise about 5% for March amid tight inventories. High mortgage rates are a challenge, but we remain bullish on the sector because demographics point to strong demand amid a decades-long shortage of affordable homes.

Tractor Supply Co. with 2023 sales of $14.6 billion, offers a broad range of items for home, land, pet and livestock owners who generally have above average income and a below average cost of living. TSCO, based in Brentwood, Tennessee, has five product categories: Livestock and Companion Animal (pet) (combined 52% of sales); Seasonal & Recreation Products (22%); Hardware, Tools and Truck (16%); Clothing, Gift & Decorating (7%) and Agriculture (3%). More than 85% of the company's customers have pets and animals. The company ended 2023 with more than 2,400 stores in 49 states: 2,216 under the Tractor Supply banner and 198 Petsense stores. 60% of stores are free standing and 40% are in shopping centers. Texas has 253 stores. North Carolina has 118; Florida, 111; Georgia, 108; Pennsylvania, 110; Tennessee 105; and Ohio 103. Stores are typically an hour, or more, outside of major cities. Formed in 1982 from the assets of a catalog company that had been selling farm supplies since 1938, Tractor Supply is converting its older stores to larger formats (17,000-19,000 square feet) and opening new smaller-format stores and distribution centers beyond its core Southern and Midwestern markets. The company has more than 50,000 employees. TSCO shares are a component of the S&P 500. The Company's IPO was in May 1994. TSCO's year ends on the last Saturday of December.

Stock opened higher Monday but have since lost direction. The S&P 500, DJIA, Nasdaq Composite, and Russell 2000 are all toggling back and forth between small gains and small losses as investors seem to be stuck in place. Perhaps indicative of how badly some are stretched to find a catalyst, meme stocks are the order of the day once again - with GameStop higher by 63%. By Tuesday, there should be more-meaningful news to spur traders, as that day starts a string of meaningful reports on inflation and consumer behavior (PPI, CPI and Retail Sales in particular).