TRAI — Research — HD: Home Depot

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_Last updated 2026-10-30 10:00 ET from report. Screening/research, not investment advice._

Home-improvement retailer. Big-ticket remodeling demand is sensitive to mortgage rates (Kalkine, 2026-10-23).

Sympathy peers (whiggity consult): SHW/TSCO are not in TRAI's universe (unverified). HD–WMT ρ 0.41 (weak). HD–LOW 0.92 is the real pair (consult).
2026-10-22: +4.33% to $327.73 with no company news. Housing names rallied as the 10y fell 17 bp to 4.972% (CNBC, 2026-10-22; Kalkine). Mean-reversion fade-short candidate Oct 23.
2026-10-23: UMich durables buying conditions −18% "on the basis of higher interest rates" (UMich). 10y back to ~4.99%; HD −2.71% at 10:14 ET (Yahoo chart API; report §5).
Next earnings: 2026-11-17 BMO (TRAI). HD–LOW ρ 0.92; HD–AMZN 0.00, despite the engine's shared 'Consumer Disc.' flag.

Sector (TRAI): Consumer Disc.. Oct 22: +4.33%, relVol 1, ATR 2.18%, beta60 0.59, residual z 3.38, indicated gap -1.05%, signals: mean_reversion_fade_short (TRAI /api/latest).
Next earnings: 2026-11-17 BMO, gap risk None (TRAI /api/events, asOf 2026-10-23).
Typical earnings reaction (last 4): avg |gap| 2.81% (1.22 ATR), max |gap| 5.04%, gap fill rate 50%, continuation 25%, avg day-1 move in gap direction -1.00% (TRAI /api/events).
Recent events: 2025-11-18 BMO: gap -5.04%, day-1 -1.03%, close-close -6.02%, EPS surprise -2.45%; 2026-02-24 BMO: gap +3.21%, day-1 -1.19%, close-close +1.99%, EPS surprise 7.8%; 2026-05-19 BMO: gap -2.65%, day-1 +3.62%, close-close +0.88%, EPS surprise 0.69%; 2026-08-18 BMO: gap -0.33%, day-1 +0.21%, close-close -0.12%, EPS surprise 3.97% (TRAI /api/events).
Correlation cluster 12 (avg ρ 0.65, 60d): MCD, HD, LOW (TRAI /api/correlations, asOf 2026-10-22).
Highest 60d correlations: LOW 0.92, BX 0.57, PG 0.53, MCD 0.52, BKNG 0.52 (TRAI /api/correlations).

Fade-short candidate; premarket +1.22% (09:13), extending 10-29's move with the 10y −5bp. No news. Report call: treat with LOW as one position (ρ 0.92, S-078) and only short an opening-range failure.

10-29: +3.60% to $328.98 with no company news. Freddie Mac 30-year rate 7.24% (from 7.32%) (Freddie Mac). mean_reversion fade-short candidate. HD–LOW ρ 0.92, so treat them as one position. Next print 11-17.

~10:13 ET: opened +1.33%, now +0.03%, below OR30 (+0.12…+1.77%) and −0.71% vs VWAP. The 09:00 "short only on OR failure" condition has triggered; treat as one position with LOW (S-078). The 10y is still lower (~4.93%), so this is the gap fading, not a rates reversal. XHB −0.04%.
2026-10-30 10:00 — open follow-through, telecom/pharma bid, software split, events blind spot

Rate beta (my calc, 2026 YTD, n 208): −1.99% per +10bp in the 10y, controlling for SPY (t −8.8; SPY beta 0.37). That is as large as XHB/ITB. HD is a duration trade in 2026: 60d ρ to the big banks is ~0 (JPM 0.06), to the utilities 0.35–0.42 (TRAI).
10-29 driver context: 10y −5.6bp, Freddie Mac 7.24%, and the D.R. Horton print (EPS miss, FY27 closings guided as low as 79k; shares still up) (Mortgage News Media/Bloomberg, 2026-10-30).
14:14 ET: +0.16% (open +1.33%, so −1.15% open→now), back inside OR30, −0.17% vs VWAP. That is close to the 2-factor model's +0.33%.
After ≥+3% days with the 10y down ≥3bp (2016–2026, n 25): next-day o→c median +0.59%, so no fade edge over ten years. In October 2026 these days did fade (10-08 −1.44%, 10-22 −1.59%).
Monday rate catalysts: ISM Mon 11-02 10:00 and Treasury refunding estimates Mon 15:00 / statement Wed 11-04 08:30 (Treasury). Next print Tue 11-17 BMO, call 9:00 ET (HD IR). Proposal S-096.
2026-10-30 14:00 — stress label live, rate complex (banks/utilities/housing), HD/LOW rate beta, Friday→Monday set-up