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FOMC Meeting Should Be a Non-Event This Week

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

FOMC meeting is the highlight of the week

This week contains some important economic and housing data—GDP (gross domestic product), personal spending, personal incomes, new home sales, pending home sales, and Case-Shiller. In addition, we’ll get the FOMC’s (Federal Open Market Committee) decision on April 27 at 2:00 PM EST. Wall Street has been handicapping a de minimis chance of a rate hike at this meeting. The latest speeches from various Federal Reserve heads suggests that the Fed is worried about the global economy. It’s becoming less hawkish. Finally, we’ll hear from mortgage REIT giant American Capital Agency.

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Economic data this week

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

Monday, April 25:

  • new home sales
  • Dallas Fed

Tuesday, April 26:

  • durable goods orders
  • capital goods orders
  • Case-Shiller
  • Markit US Services PMI
  • Markit US Composite PMI
  • consumer confidence
  • Richmond Fed

Wednesday, April 27:

  • MBA mortgage applications
  • pending home sales
  • FOMC rate decision

Thursday, April 28:

  • initial jobless claims
  • Bloomberg Consumer Comfort
  • GDP
  • GDP Price Index
  • personal consumption
  • Kansas City Fed

Friday, April 29:

  • employment cost index
  • personal income
  • personal spending
  • real personal spending
  • PCE deflator
  • PCE core
  • ISM Milwaukee
  • Chicago Purchasing Manager
  • University of Michigan consumer sentiment

The earnings this week include:

Monday, April 25

  • American Capital Agency (AGNC)

Wednesday, April 27

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. The big event for investors will be the April FOMC meeting. Investors are assigning a 0% probability that the Fed will hike rates next week. Investors who want to bet on interest rates can look at the iShares 20+ Year Treasury Bond ETF (TLT).

Impact on homebuilders

Homebuilders like PulteGroup (PHM) and CalAtlantic (CAA) will pay the most attention to new home sales and the Case-Shiller. The seasonal uptick for the homebuilding sector is in full swing. Investors will be waiting to hear about traffic patterns. Investors can get access to the homebuilding sector through the SPDR S&P Homebuilders ETF (XHB).

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