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The jobs report looms large this week for REITs and homebuilders

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Nov. 20 2020, Updated 5:13 p.m. ET

The most important economic release

The upcoming week will be about the jobs report on Friday, which is the biggest driver of Fed policy at the moment. The market is forecasting an increase in payrolls of about 200,000, which would be considered an anemic number.

Economic data this week

Monday, March 31

  • ISM Milwaukee
  • Chicago Purchasing Manager
  • Dallas Fed

Tuesday, April 1

  • Markit Manufacturing PMI
  • ISM Manufacturing
  • ISM Prices Paid
  • Construction spending
  • IBD/TIPP Economic Optimism
  • Vehicle sales

Wednesday, April 2

  • MBA Mortgage Applications
  • ADP Employment Change
  • ISM New York
  • Factory orders

Thursday, April 3

  • Initial jobless claims
  • Challenger Job Cuts
  • RBC Consumer Outlook
  • Bloomberg Consumer Comfort
  • Markit Services PMI
  • ISM Non-Manufacturing

Friday, April 4

  • Non-farm payrolls
  • Unemployment rate
  • Underemployment rate
  • Average hourly earnings
  • Average weekly hours
  • Labor force participation rate

Earnings reports this week

  • No earnings reports this week

Impact on mortgage REITs

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Mortgage REITs like Annaly (NLY), American Capital Agency (AGNC), and MFA Financial (MFA) are highly interest rate–sensitive. The only thing they’ll care about will be the jobs report on Friday and trying to divine when the Fed will start increasing interest rates. Tapering is on autopilot at this point, so for the REITs, it’s all about when short-term rates go up.

Impact on homebuilders

Homebuilders like Lennar (LEN) and PulteGroup (PHM) will obviously take a keen interest in the jobs report, but the ISM Manufacturing and ISM services reports are key to them as well. The builders are hoping to see a more robust economy bring back the first-time homebuyer, who has been MIA since the real estate bust.

Impact on commercial REITs

Commercial REITs have quite a bit of data to chew on this week, especially the ISM data, which will be big for office REITs like Kilroy (KRC) and Brookfield Office Properties (BPO).

To learn more about investing in REITs and homebuilders, see the Market Realist series Why do increasing home prices matter to REITs and homebuilders?

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