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Why this week will be key for REITs like Annaly and homebuilders

Why this week will be key for REITs like Annaly and homebuilders (Part 1 of 6)

Why this week will be key for REITs like Annaly and homebuilders

A big, big week of data and earnings

This week, we’ll have a tremendous amount of data and events that could move the bond markets. The week starts off slow data-wise, but we get a torrent of activity starting on Wednesday, with the FOMC rate decision and the advance estimate of first quarter GDP. On Thursday, we get the ISM as well as personal incomes and consumption. Finally, on Friday, we get the all-important jobs report.

Nonfarm PayrollsEnlarge Graph

Earnings-wise, we’ll hear from a couple big REITs—American Capital Agency (AGNC), one of the biggest mortgage REITs, and General Growth Properties (GGP), one of the biggest mall REITs.

Economic data this week

Monday, April 28

  • Pending home sales
  • Dallas Fed

Tuesday, April 29

  • Case-Shiller
  • Consumer confidence

Wednesday, April 30

  • MBA Mortgage Applications
  • ADP Employment Change
  • Employment Cost Index
  • Q1 GDP
  • ISM Milwaukee
  • Chicago Purchasing Manager’s Index
  • FOMC Meeting

Thursday, May 1

  • Initial jobless claims
  • Bloomberg Consumer Comfort
  • Personal consumption
  • Personal spending
  • Personal consumption expenditures
  • Markit Manufacturing PMI
  • ISM Manufacturing
  • Construction spending

Friday, May 2

  • Non-farm payrolls
  • Unemployment rate
  • Weekly hours
  • Average earnings
  • ISM New York
  • Factory orders

Earnings reports this week

Monday, April 28

  • General Growth Properties (GGP)
  • CBL and Associates (CBL)
  • American Capital Agency (AGNC)

Thursday, May 1

  • Realty Income (O)
  • Senior Housing Property Trust (SNH)

Impact on mortgage REITs

Mortgage REITs like Annaly (NLY) and American Capital Agency (AGNC) will focus on the FOMC as well as the jobs report. People will be interested to see how American Capital Agency views the MBS market going forward. Many of the REITs have been betting that MBS (and the stocks themselves) have become too cheap.

Impact on homebuilders

Last week was a big week for the homebuilders, with earnings reports out of Pulte (PHM), D.R. Horton (DHI), and Ryland (RYL). The builders will want to hear the GDP report, the ISM, and also the personal consumption numbers.

Impact on commercial REITs

Commercial REIT analysts will listen to General Growth Properties’ (GGP) and Realty Income Fund’s (O) conference calls for indications of how the consumer is doing. Simon Property Group (SPG)—a good comp for GGP—reported good numbers last week. For the commercial REITs, it’s all about job growth and consumer spending.

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