Recommendation: Watch out for lots of REIT earnings this week
By Brent Nyitray, CFA, MBAMay. 5 2014, Published 3:37 p.m. ET
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.
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
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.
