Recommendation: Watch out for lots of REIT earnings this week

Recommendation: Watch out for lots of REIT earnings this week (Part 1 of 6)

Recommendation: Watch out for lots of REIT earnings this week

After a tumultuous week, we get a bit of a breather on the economic front

Last week, we had an incredible amount of economic data to sift through—from the ISM reports to the jobs report, GDP, construction spending, and personal income and spending. And if that wasn’t enough, we also had the FOMC meeting.

NLY book valueEnlarge Graph

Typically, the week after the jobs report is very light, data-wise. This week is no exception, with almost no market-moving data. That said, we have a lot of earnings next week—especially in the REIT sector, with heavyweights Vornado (VNO) and Annaly Capital (NLY) reporting.

Economic data this week

Monday, May 5

  • Markit Services PMI
  • Markit US Composite PMI
  • ISM Services Index

Tuesday, May 6

  • Trade balance
  • IBD/TIPP Economic Optimism

Wednesday, May 7

  • MBA Mortgage Applications
  • Non-farm productivity
  • Unit labor costs
  • Consumer credit

Thursday, May 8

  • Initial jobless claims
  • Bloomberg Consumer Comfort

Friday, May 9

  • JOLT Job Openings
  • Wholesale inventories
  • Wholesale sales

Earnings reports this week

Monday, May 5

  • Vornado Realty Trust (VNO)

Tuesday, May 6

  • Digital Realty Trust (DLR)

Wednesday, May 7

  • Annaly Capital Management (NLY)
  • Two Harbors Investment (TWO)

Thursday, May 8

  • Walter Investment Management (WAC)
  • American Realty Capital Properties (ARCP)
  • Nationstar Mortgage (NSM)

Friday, May 9

  • Northstar Realty (NRF)

Impact on mortgage REITs

Mortgage REITs like American Capital Agency (AGNC) will focus on Annaly’s (NLY) and Two Harbors’s (TWO) earnings reports. 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). Nothing coming out this week will affect them that deeply, though they’ll pay close attention to the IBD/TIPP Economic Optimism report, as consumer confidence is a big driver of homebuilder returns.

Impact on commercial REITs

Commercial REIT analysts will listen to Vornado’s (VNO) conference call. Vornado is a big office REIT, and demand for office space gives us clues about job growth going forward. Even mall REITs like Simon Property Group (SPG) and General Growth Properties (GGP) are interested in job growth.

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