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Why the FOMC Meeting Will Dominate the Week Ahead

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Why the FOMC meeting is the highlight of the week

This week has a slew of important economic data in addition to the FOMC (Federal Open Market Committee) meeting. Currently, the markets are predicting something like a 15% chance that the Fed will raise the federal funds target on March 16. The consensus seems to be no move, but a hawkish statement.

In addition to the FOMC meeting, we’ll get important housing data with housing starts, building permits, and the NAHB Homebuilder Sentiment Index. We’ll also get important macro data with retail sales, inflation data, and manufacturing production.

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Economic data this week

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

Monday, March 14:

  • no economic data

Tuesday, March 15:

  • retail sales
  • producer price index
  • Empire Manufacturing
  • NAHB Housing Market Index
  • Business Inventories
  • TIC flows

Wednesday, March 16:

  • MBA mortgage applications
  • housing starts
  • building permits
  • FOMC rate decision
  • consumer price index
  • real average weekly earnings
  • industrial production
  • manufacturing production
  • capacity utilization

Thursday, March 17:

  • initial jobless claims
  • Bloomberg consumer comfort
  • current account balance
  • Philly Fed
  • JOLTS job openings
  • Index of Leading Economic Indicators

Friday, March 18:

  • University of Michigan Consumer Sentiment

Earnings this week

  • no real-estate-related earnings
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Implications for mortgage REITs

REITs like Annaly Capital Management (NLY) and American Capital Agency (AGNC) will likely focus on data that will move the bond market. For them, it will be all about the FOMC meeting on March 15–16. 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) will pay the most attention to housing starts and building permits. The seasonal uptick for the homebuilding sector is just starting. Investors can get access to the homebuilding sector through the SPDR S&P Homebuilders ETF (XHB).

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