Why AGNC is buying REITs as the flight to safety trade unwinds

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Part 6
Why AGNC is buying REITs as the flight to safety trade unwinds PART 6 OF 7

Earnings season continues: Key releases to watch for this week

Next week is relatively slow data-wise

The past week had the all-important jobs report, and this week has nothing market-moving. We’re still in the midst of earnings season and we have some important earnings reports coming up. Finally, this week might be somewhat dull with the upcoming three-day weekend.

Earnings season continues: Key releases to watch for this week

Economic data this week

Monday, February 10

  • Mortgage delinquencies
  • MBA Mortgage Foreclosures

Tuesday, February 11

  • NFIB Small Business Optimism
  • JOLTS Job Openings
  • Wholesale inventories
  • Wholesale sales

Wednesday, February 12

  • MBA Mortgage Applications
  • Monthly budget statement

Thursday, February 13

  • Initial jobless claims
  • Bloomberg Consumer Comfort
  • Retail sales
  • Business inventories

Friday, January 14

  • Rose and Chocolate Sales Index
  • Import prices
  • Capacity utilization
  • Industrial production
  • University of Michigan Consumer Confidence

Earnings reports this week

Thursday, February 13

  • Starwood Hotels and Resorts (HOT)
  • Louisiana Pacific (LPX)
  • Realty Income Corp (O)

Friday, February 14

  • NorthStar Realty Finance Corp (NRF)

Impact on mortgage REITs

Mortgage REITs like Annaly (NLY), American Capital Agency (AGNC), and MFA Financial (MFA) are highly interest rate–sensitive. They’ll be at the mercy of the machinations of the bond market based on emerging markets concerns. Nothing coming out this week should affect the bond market at all. REIT analysts will want to see how Northstar Realty Finance (NRF) does this week.

Impact on homebuilders

Next week has an earnings report from Louisiana Pacific (LPX), which is a big building materials supplier. Homebuilder analysts will definitely listen for clues on the company’s conference call regarding demand patterns. The other thing Louisiana Pacific focuses on is pricing, as building materials are a big input cost for builders. Homebuilders have been able to raise prices easily over the past year, but if real estate prices are moderating, then we could see the record-level gross margins they have been reporting begin to contract.

Impact on commercial REITs

The retail sales number will be of interest to the big mall REITs like Simon Property Group (SPG) and General Growth Partners (GGP). We’ll also hear from Realty Income (O).

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