Weekly Realist real estate roundup, August 12–16

Part 6
Weekly Realist real estate roundup, August 12–16 (Part 6 of 7)

Next week’s FOMC statement will be the only market-moving data

After a heavy week, bonds have an easier schedule

After last week’s flood of data, bonds will get a bit of a break. The minutes from the FOMC meeting have the potential to be market-moving. Earnings-wise, the retailers dominate the news—although we’ll get a read on the luxury end of the housing market when Toll Brothers (TOL) reports on Wednesday.

10 year bond yield - LTEnlarge Graph

Economic data this week

Monday, August 19

  • Nothing

Tuesday, August 20

  • Chicago Fed National Activity Index

Wednesday, August 21

  • MBA Mortgage Applications
  • Existing home sales
  • FOMC minutes

Thursday, August 22

  • Initial jobless claims
  • Bloomberg Consumer Comfort
  • Markit PMI
  • FHFA House Price Index
  • Leading economic indicators
  • Kansas City Fed

Friday, August 23

  • New home sales

Earnings releases this week

Wednesday, August 21

  • Toll Brothers (TOL)

Implications for mortgage REITs

Next week will be all about the FOMC statement. No other economic data should be market-moving. The Street is leaning towards a first reduction in asset purchases at the September meeting. The FOMC statement was a bit dovish (not very aggressive), though, so market participants will be ultra-focused on the minutes. After the bloodbath in rates last week, REITs like Annaly (NLY), American Capital Agency (AGNC), and MFA Financial (MFA) are just hoping for some stability.

Implications for homebuilders

Homebuilder earnings are largely done, with only Toll Brothers (TOL) left. Toll Brothers is in the McMansion business, so its numbers are really relevant to only one segment of the market. That said, homebuilders do focus on consumer confidence, and homebuilder analysts will want to hear what some of the retailers have to say. So far, we’ve seen disappointments out of Wal Mart (WMT), which shows that the lower-end consumer is struggling. The builders will also focus on existing home sales—if for no other reason than to get a read on inventory (new homes compete with existing homes). The FHFA House Price Index will also be of interest. New home sales on Friday will be yesterday’s news for the most part.

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