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Why analysts saw a slow week and a disappointing Black Friday

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Dec. 4 2020, Updated 10:53 a.m. ET

Why follow the weekly Realist 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 homebuilders.

Bonds meander in a narrow range on a holiday-shortened week

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Last week contained some important economic data—primarily some of the Fed surveys and building permits. But with the Thanksgiving holiday and a short Friday, most of the action was in the first three days. Many senior traders took the week off and markets were illiquid. The ten-year bond yield increased about 2 basis points.

Initial reports on Black Friday look disappointing

The initial reports regarding Black Friday shopping look like we’re seeing the first actual decline in seven years. Retailers have been promotional from the very beginning. Perhaps some of the sales will pick up on Cyber Monday. Certainly a lackluster holiday shopping season bodes ill for any sort of acceleration into the beginning of 2014. The Fed is anticipating a big increase in growth in 2014, but investors should recognize that the Fed’s forecasts for GDP growth have been consistently high.

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.

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