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All about that Jobs Report: What Matters for Real Estate this Week

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A packed week of data ahead

Investors return after a dovish FOMC statement to a packed week of data. The biggest report will be the jobs report on Friday, and the bond market will focus like a laser on wage growth.

In other economic data, we’ll get personal income and personal spending today along with construction spending. We’ll get the ISM Manufacturing and ISM Non-Manufacturing indices this week too. While investors expect to see continued weakness in the manufacturing numbers due to the strong dollar and the collapse in oil prices, they expect the services numbers to remain strong.

In earnings, we’ll hear from mortgage REIT heavyweight American Capital Agency and also from Two Harbors.

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Economic data this week

Here’s a rundown of this week’s economic data.

Monday, February 1:

  • personal spending
  • personal income
  • PCE deflator
  • PCE Core
  • Markit US Manufacturing PMI
  • ISM Manufacturing
  • construction spending

Tuesday, February 2:

  • ISM New York
  • IBD / TIPP Economic Optimism
  • vehicle sales

Wednesday, February 3:

  • MBA (Mortgage Bankers Association) mortgage applications
  • ADP employment change
  • Markit US Services PMI
  • Markit US Composite PMI
  • ISM Non-Manufacturing Index

Thursday, February 4:

  • initial jobless claims
  • Bloomberg Consumer Comfort
  • factory orders
  • durable goods orders
  • capital goods orders
  • unit labor costs

Friday, February 5:

  • trade balance
  • non-farm payrolls
  • unemployment rate
  • labor force participation rate
  • average hourly earnings
  • average weekly hours
  • consumer credit

Earnings reports

Monday, February 1:

  • American Capital Agency (AGNC)

Wednesday, February 3:

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Impact on mortgage REITs

REITs like Annaly Capital Management (NLY) and American Capital Agency (AGNC) will likely focus mostly on data that will move the bond market. For them, it will be all about the jobs report. The Bank of Japan’s surprising move to implement negative interest rates will probably dominate global bond markets. Investors who want to bet on interest rates can look at the iShares 20+ Year Treasury Bond ETF (TLT).

Impact on homebuilders

Homebuilders like Lennar (LEN) and CalAtlantic (CAA) are likely to focus on construction spending and the jobs report. The spring selling season is just around the corner. It unofficially kicks off around Super Bowl Sunday. Investors can trade the homebuilding sector through the SPDR S&P Homebuilders ETF (XHB).

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