With a relatively light week data-wise, the market will probably just fret about the upcoming FOMC meeting
This week is relatively data-light, as the big report was last Friday’s jobs report. This week, we’ll get some inflation data through import prices and the PPI. We will also get retail sales, which will cover back-to-school shopping and give us a read on how the consumer is doing.
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Economic data this week
Monday, September 9
Tuesday, September 10
Wednesday, September 11
Thursday, September 12
Friday, September 13
Earnings Releases this week
Monday, September 9
Implications for mortgage REITs
After not mattering for quite some time, inflation numbers are now relevant as far as Fed policy goes. REITs like American Capital Agency (AGNC) or Annaly (NLY) will focus on the import price index and the producer price index. If the Fed starts seeing some inflation, it will not only breathe a sigh of relief, but it will also probably accelerate the unwinding of quantitative easing. Needless to say, next week will basically just be a week of marking time, waiting for the FOMC meeting.
Implications for homebuilders
Homebuilder earnings are largely done, with only Hovnanian (HOV) left. That said, there’s a lot of economic data of interest to builders like Lennar (LEN) and KB Home (KBH) this week. Retail sales will give clues as to how the consumer is faring—a happy consumer spending money is good for the economy and new home sales in particular. The back-to-school shopping season is second to the holidays in importance for retailers. Watch to see how different sectors of the retail space are performing and compare them to the builders. Is it the high end that is doing well? (Tiffany and Toll Brothers), or is it the lower end (Walmart and Pulte). Finally, the University of Michigan Consumer Confidence number is big, as consumer confidence is a big driver of homebuilders.