Real Estate roundup, May 12–16: A bag full of mixed data

Real Estate roundup, May 12–16: A bag full of mixed data (Part 1 of 6)

Must-know market update: A very light data week coming up

The earnings season is winding down

We have a very light data week coming up, with only the FOMC minutes to look at. All the economic releases are second-tier data that won’t move the markets. For the most part, earnings are over, although we are entering the final period where the retailers report. The homebuilders may pay attention to home improvement retailers Home Depot (HD) and Lowe’s (LOW), who report next week. Finally, many of the decision makers for mortgage REITs will be attending the Mortgage Bankers Association Secondary Conference in Manhattan this week.

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Economic data this week

Monday, May 19

  • No economic data

Tuesday, May 20

  • No economic data

Wednesday, May 21

  • MBA Mortgage Applications
  • FOMC minutes

Thursday, May 22

  • Initial jobless claims
  • Bloomberg Consumer Comfort
  • The Chicago Fed National Activity Index
  • Markit U.S. Manufacturing PMI
  • Existing Home Sales
  • Leading Economic Indicators
  • The Kansas City Fed

Friday, May 23

  • New Home Sales

Earnings reports this week

Wednesday, May 21

  • Home Dept (HD)

Thursday, May 22

  • Lowe’s (LOW)

Impact on mortgage REITs

Mortgage REITs like American Capital Agency (AGNC) and Annaly (NLY) will focus on data that will move the bond market. The only data this week that will matter for them will be the FOMC minutes. Many of the REITs have been betting that MBS (mortgage-backed securities)—and the stocks themselves—have become too cheap.

Impact on homebuilders

Most homebuilders have already reported Q1 earnings, so there isn’t much left except for Toll Brothers (TOL). The builders will focus on existing home sales and new home sales. The builders can derive some information on housing-related spending from Home Depot and Lowe’s report next week. Are homeowners choosing to fix up existing properties or are they looking to buy new ones?

Impact on commercial REITs

The most important data for the commercial REITs will be the earnings from retailers, which will begin next week and affect the mall REITs like Simon Property (SPG) and General Growth Properties (GGP). Office REITs like Brookfield Office Properties (BPO) and Vornado Realty Trust (VNO) will probably focus more on the Chicago Fed National Activity Index, which will provide an insight on hiring activity going forward.

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