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Weekly Realist Real Estate Roundup, October 21–25

Part 6
Weekly Realist Real Estate Roundup, October 21–25 (Part 6 of 7)

Must-know: What you should watch for in real estate this week

The Washington crisis is over—back to earnings and economic data

Now that the government has figured out a way to kick the can down the road for a while, the focus turns back to economic data and earnings. Earnings season started two weeks ago, but we’re heading into the the thick of it, with lots of REITs along with major bellwethers.

Case-Schiller 2Enlarge Graph

Earnings season officially kicked off last week, but for the next few weeks, earnings reports will be coming in fast and furious.

Economic data this week

Monday, October 28

  • Industrial production
  • Capacity utilization
  • Manufacturing production
  • Pending home sales
  • Dallas Fed

Tuesday, October 29

  • Producer Price Index
  • Retail sales
  • Case-Shiller
  • Business inventories
  • Consumer confidence

Wednesday, October 30

  • MBA Mortgage Applications
  • Consumer Price Index
  • ADP Employment Change
  • FOMC decision

Thursday, October 31

  • Initial jobless claims
  • ISM Milwaukee
  • Bloomberg Consumer Comfort
  • Chicago Purchasing Managers Index

Friday, November 1

  • Markit PMI
  • ISM Manufacturing
  • Vehicle sales

Earnings reports this week

Monday, October 28

  • American Capital Agency (AGNC)

Thursday, October 31

  • Ocwen Group (OCN)
  • Realty Income Corp (O)
  • Standard Pacific (SPF)

Friday, November 1

  • Newcastle Investment Corp (NCT)

Impact on mortgage REITs

Mortgage REITs like Annaly (NLY), American Capital Agency (AGNC), and MFA Financial (MFA) are highly interest rate–sensitive. While the upcoming economic data will factor into the Fed’s decision, the shutdown probably has ended the possibility of a near-term change in policy. Yes, we have a FOMC meeting this week, but it’s highly unlikely the Fed will make any changes to policy at this meeting.

We do have some important earnings next week, with agency bellwether American Capital Agency (AGNC) and non-agency Newcastle Investment Corp (NCT). The Street will be looking particularly closely at American Capital Agency’s leverage ratios.

Impact on homebuilders

Homebuilders like Lennar (LEN) and KB Home (KBH) are heading into a seasonally weak period, so they’re in inventory reduction mode. Of course, the situation in Washington hasn’t done great things for consumer confidence, which does affect the builders. Most of the builders have reported already, but we will hear from Standard Pacific (SPF).

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