Important releases to watch for as earnings season starts off

Important releases to watch for as earnings season starts off (Part 1 of 6)

Why bonds ended the week flat after a “meh” jobs report

Why follow this weekly real estate roundup?

The roundup is a weekly series in which we discuss the week’s trading in government bonds and TBA (To-Be-Announced) mortgage-backed securities. We’ll see where mortgage rates have been and we’ll go over the weekly economic data and earnings announcements. Then we’ll look forward to what’s coming up the following week. The information in this series will be relevant to mortgage REITs like American Capital Agency (AGNC), Annaly (NLY), Hatteras (HTS), Capstead (CMO), and MFA Financial  (MFA) as well as people who invest in fixed income ETFs like TLT or in homebuilders.

10 year bond yield - LTEnlarge Graph

Bonds sell off mid-week and then rally back to closed basically unchanged

Bonds opened the week under pressure after some strong economic data. The ISM Milwaukee survey came in much stronger than expected, although the Chicago Purchasing Manager Index was weaker. On Wednesday, bonds sold off on the better-than-expected factory orders numbers. The ADP jobs report came in around expectations, although the revisions were strong. These two things pushed bond yields up to 2.8%. 

Finally, on Friday, we had the jobs report, which could be characterized as “okay.” Payrolls rose by 192k (the first time in a long time the ADP number predicted the BLS number), but the unemployment rate was unchanged at 6.7% and the labor force participation rate rose to 63.2%. Average hourly earnings were flat, but hours rose. The jobs report was neither strong enough nor weak enough to change the Fed’s thinking at all.

After starting the week at 2.73%, bonds rallied to finish the week at 2.72%. So overall, bonds sold off early in the week but recovered their losses on Friday.

In the next parts of this series, we’ll look at trading in the TBA market (which is the basis for mortgage rates), see where mortgage rates have been for the week, and then discuss past and upcoming economic data.

The Realist Discussions

  • http://www.bidnessetc.com/ anitacoleman1813

    At least we can say that the company has been able to consistently post Revenues in the last five quarters and as mentioned; performed better than the industry. And with its entrance in the S&P 500 index, more investors will buy the stock which will drive the price up.

    • Stevebry56

      The company reported net income for the 4QFY13 up 140% from the same quarter last year.And since it is acquiring smaller malls and focusing more on market penetration, it should be able to achieve growth in the upcoming months.