Key releases: The earnings season kickoff and the FOMC minutes

Key releases: The earnings season kickoff and the FOMC minutes (Part 1 of 6)

Key releases: The earnings season kickoff and the FOMC minutes

A very light data week ahead

The week following the jobs report tends to have very little economic data, and this week is no exception. That said, something could come out of the FOMC minutes that could move markets. Earnings season officially kicks off in the traditional way, with Alcoa (AA) reporting second quarter earnings after the close on Tuesday.

Fed 2014 Inflation ForecastEnlarge Graph

Economic data this week

Monday, July 7

  • No economic data

Tuesday, July 8

  • NFIB Small Business Optimism
  • JOLTS Job Openings
  • Consumer credit

Wednesday, July 9

  • MBA Mortgage Applications
  • FOMC minutes

Thursday, July 10

  • Initial jobless claims
  • Bloomberg Consumer Comfort
  • Wholesale inventories

Friday, July 11

  • Monthly Budget Statement

Earnings reports this week

  • Alcoa (AA)

Impact on mortgage REITs

Mortgage REITs like American Capital Agency (AGNC) and Annaly (NLY) will focus on data that will move the bond market. For them, it will be all about the FOMC minutes and in particular the Fed’s sense of how inflation is behaving. If we’re beginning to feel inflationary pressures, the bond market will probably begin selling off. This would be negative for mortgage REITs. That said, the short end of the curve will probably be anchored until late next year.

Impact on homebuilders

There isn’t much for builders to focus on this week, except for maybe the JOLTs job openings. The NFIB numbers will also be interesting. Most of the job growth has been in the small business sector. Once we start seeing job growth for the Millennial generation, we should see housing move back to normalcy.

Impact on commercial REITs

The most important data for commercial REITs will be the consumer credit data. This affects mall REITs like Simon Property (SPG) and General Growth Properties (GGP). Office REITs like Brookfield Office Properties (BPO) and Vornado Realty Trust (VNO) will also focus on the ISM PMI data—especially the services index.

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