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REITs are getting bullish as bonds rally on tensions: Should you?

Part 6
REITs are getting bullish as bonds rally on tensions: Should you? (Part 6 of 7)

Must-know: Why the jobs report looms large this week

This week has some important housing data

We have a very data-heavy week coming up, with the ISM, the employment report, factory orders, and the household change in net worth. Earnings season has largely wound down, so we have nothing to focus on there.

Unemployment rate - LTEnlarge Graph

Economic data this week

Monday, March 3

  • Personal income
  • Personal spending
  • Personal consumption expenditures
  • ISM Manufacturing
  • Markit PMI
  • ISM Prices Paid
  • Construction spending

Tuesday, March 4

  • ISM New York
  • IBD/TIPP Economic Optimism

Wednesday, March 5

  • MBA Mortgage Applications
  • Beige Book
  • ISM Services
  • ADP Job Report

Thursday, March 6

  • RBC Consumer Outlook
  • Challenger Job Cuts
  • Non-farm productivity
  • Unit labor costs
  • Initial jobless claims
  • Factory orders
  • Household change in net worth

Friday, March 7

  • Non-farm payrolls
  • Unemployment rate
  • Labor force participation rate
  • Average hourly earnings
  • Average workweek
  • Trade balance
  • Consumer credit

Earnings reports this week

  • No real estate–related earnings this week

Impact on mortgage REITs

Mortgage REITs like Annaly (NLY), American Capital Agency (AGNC), and MFA Financial (MFA) are highly interest rate–sensitive. The jobs report will loom the largest, but tapering seems to be on autpilot at this point, so you might not see any big moves out of the REITs on an exceptionally strong or weak number

Impact on homebuilders

Analysts will focus on the numbers that impact employment the most. The ISM numbers, along with payrolls, will be the most important for them. Earnings season is largely over, so builders will be keying off the strength of the spring selling season, which has more or less begun. Has the weather created pent-up demand?

Impact on commercial REITs

The personal income and personal spending data will be important for mall REITs, as they influence retail sales. The change in net worth is another number mall REITs will focus on, as home price appreciation should start driving consumption at some point.

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