brent

Brent Nyitray, CFA, MBA

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Brent Nyitray has 18+ years of experience in the investment industry, primarily focused on the Real Estate Sector at a variety of hedge funds, including Elliot Management and Dellacamera Capital Management. Until 2004, Brent was a Managing Director at Bear Stearns, responsible for the European Risk Arbitrage trading desk in London. Brent earned an MBA in 1994 from the Simon Graduate School of Business with a 3.9 GPA. He was formerly a US Naval Officer.

Disclosure: I am in full compliance with all ethics and other policies for Market Realist research analysts. I am not invested in securities that I cover on Market Realist.

More From Brent Nyitray, CFA, MBA

  • uploads///Mortgage Rates
    Consumer

    Mortgage rates fall as bonds sell off, affecting homebuilders

    The average 30-year fixed-rate mortgage rose 12 basis points as the ten-year yield rose 10 basis points, and TBAs sold off. With the refinance boom over, originators are overstaffed.

    By Brent Nyitray, CFA, MBA
  • uploads///Fannie Mae Attitudes about housing expected px appreciation
    Consumer

    Why consumers are more conservative about housing than the pros

    In the latest survey, consumers expect home prices to rise by 2.9% over the next 12 months. This is flat month-over-month and down 100 basis points year-over-year.

    By Brent Nyitray, CFA, MBA
  • uploads///Fannie Mae TBA
    Financials

    Why Fannie Mae securities rallied with bonds about 1/4

    The main action driving TBAs specifically seems to be out of Washington, between the Fed purchases and the government’s policies to drive origination.

    By Brent Nyitray, CFA, MBA
  • uploads///MBS Yields
    Financials

    The end of the carry trade — Part 5

    Back to Part 4 Impact on mortgage REITS The Treasury Department Financial Stability Oversight Council report mentioned the mortgage REIT sector specifically as at risk for a convexity event. A convexity event comes into play when interest rates move sharply. Because borrowers can prepay their mortgage without penalty, mortgage-backed securities are difficult to hedge in […]

    By Brent Nyitray, CFA, MBA
  • uploads///Lennar Revenues
    Consumer

    Lennar reports increases in units and prices in 2nd quarter 2014

    For the second quarter, Lennar reported $1.64 billion in revenues. This is an increase of 29% year-over-year. Homebuilding revenues increased 28%, to $1.6 billion from $1.3 billion in the second quarter of 2013.

    By Brent Nyitray, CFA, MBA
  • uploads///NAHB Homebuilder Sentiment Index
    Consumer

    Homebuilder sentiment leaps in June

    The National Association of Homebuilder Sentiment Index is a closely-watched measure of future building activity The National Association of Homebuilders Sentiment Index measures the confidence of homebuilders. It gauges builder perceptions of current and future sales of single family residences and asks them to characterize them as “good,” “fair,” or “poor.”  It also asks the […]

    By Brent Nyitray, CFA, MBA
  • uploads///Distressed Sales
    Consumer

    Distressed Home Sales Fall

    Distressed Home sales are tracked by CoreLogic in their monthly Market Pulse Distressed Sales and shadow inventory are closely related. Distressed sales include Real Estate Owned (REO) and short sales. REO sales are generally foreclosures, while short sales are below the current outstanding debt on the property. Distressed supply will put a damper on pricing as […]

    By Brent Nyitray, CFA, MBA
  • uploads///MR household formation
    Real Estate

    Why household formation drives homebuilder demand (Part 2)

    Continued from Part 1 The state of the first-time homebuyer The first-time homebuyer has been in a difficult position post-crisis. Many college students graduated with high levels of student loan debt and grim job prospects. Given the harsh job market, many graduates decided to return to school, moved in with their parents, or moved in […]

    By Brent Nyitray, CFA, MBA
  • uploads///Mortgage Rates
    Consumer

    Why mortgage rates have been flat with the bond market, at 4.17%

    The average 30-year fixed-rate mortgage was flat at 4.17%, as the ten-year yield rose 1 basis point, while TBAs rallied. With the refinance boom over, originators are overstaffed

    By Brent Nyitray, CFA, MBA
  • uploads///GEVA ALXN LAL D
    Miscellaneous

    Backing Out of the Synageva BioPharma Deal, Part 3

    Things like acts of war and natural disasters aren’t MACS unless they disproportionately affect Synageva relative to other early-clinical-stage biopharmaceutical companies.

    By Brent Nyitray, CFA, MBA
  • uploads///RAD_WBA comps
    Miscellaneous

    Could the Rite Aid–Walgreens Merger Get Competitive?

    In the Rite Aid–Walgreens merger, Walgreens is paying about 0.6x trailing-12-month revenues and 13.6x trailing-12-month EBITDA.

    By Brent Nyitray, CFA, MBA
  • uploads/// year bond yield LT
    Financials

    Why Did Bonds Barely React to the FOMC Minutes?

    On July 6, the Fed released the minutes from the June FOMC meeting. The Brexit vote mainly overshadowed anything that came out of the June FOMC meeting.

    By Brent Nyitray, CFA, MBA
  • uploads///Fannie Mae TBA
    Financials

    Fannie Mae TBAs Rise with the Bond Market

    For the week ending August 12, 2016, Fannie Mae TBAs ended at 103 24/32—up 4 ticks for the week. The ten-year bond yield fell by 8 basis points to 1.51%.

    By Brent Nyitray, CFA, MBA
  • uploads///NLY leverage
    Financials

    Recommendation: REITs are getting bullish—should you?

    2013 was a very difficult year for mortgage REITs, as the Fed finally began to lighten its footprint in the mortgage market by reducing asset purchases.

    By Brent Nyitray, CFA, MBA
  • uploads///Business Inventories
    Consumer

    Inventories Spike In November, Portending Weak December Sales

    Sales fell 0.2% in November. Inventories increased 0.2%. Interestingly, the inventory build was with the retailers, not the manufacturers.

    By Brent Nyitray, CFA, MBA
  • uploads///Nonfarm Payrolls
    Macroeconomic Analysis

    Jobs Report Postponed until Friday, May 8

    The jobs report should have gone out last Friday. But the BLS decided to postpone it until this Friday, May 8. Unless the report is unusually good, the bond market will probably take it in stride.

    By Brent Nyitray, CFA, MBA
  • uploads///Initial Jobless Claims
    Financials

    Initial jobless claims jump

    Initial jobless claims rose to an annualized rate of 360,000 for the week ended May 10th Initial jobless claims are one of the few labor market indicators that are released every week. Unemployment is a profound driver of economic growth, and persistent unemployment has been the Achille’s heel of this recovery. While it seems like […]

    By Brent Nyitray, CFA, MBA
  • uploads///Government Spending
    Consumer

    Does the economy need a government spending shot in the arm?

    Do we need a new New Deal? Construction spending doesn’t have to be simply residential (or private construction). Public construction also matters (however, it’s less than half of private construction dollars). The use of federal construction dollars to increase demand in the economy has been an issue of tremendous debate, with one side believing that […]

    By Brent Nyitray, CFA, MBA
  • uploads///MR Retail Sales
    Consumer

    Retail sales increase 0.2% in July, homebuilder opportunity ahead

    Retail sales data gives analysts insight into the strength of the consumer Consumption is the biggest driver of the U.S. economy and accounts for 70% of GDP. Consumption has been relatively subdued since the recession began, as Americans have boosted their savings rate and spent only on essentials. The real estate bubble drove consumption in […]

    By Brent Nyitray, CFA, MBA
  • uploads///Twos Tens
    Financials

    Strong economic data is causing the yield curve to steepen

    The shape of the yield curve matters almost as much as the absolute level of interest rates to financial companies As a general rule, financial companies (banks, REITs) borrow short and lend long. What this means is that they lever their balance sheet by borrowing at short-term interest rates and generally invest in longer-maturity assets, […]

    By Brent Nyitray, CFA, MBA
  • uploads///Fannie Mae TBA
    Miscellaneous

    Fannie Mae TBAs Rally with the Bond Market

    For the week ending April 1, Fannie Mae TBAs ended at 105 2/32. The ten-year bond yield, tradable through TLT, fell by 5 basis points to 1.7%.

    By Brent Nyitray, CFA, MBA
  • uploads///Capacity Utilization
    Real Estate

    A rebound in capacity utilization helps office REITs like SL Green

    While most people don’t think of industrial data affecting office REITs, it does influence the top-line growth of commercial REITs like SL Green (SLG).

    By Brent Nyitray, CFA, MBA
  • uploads///Construction Spending
    Consumer

    Why construction spending pulls back in June

    Construction spending is just off its post-recession high, but it’s still depressed—current levels equate to mid-2003 spending levels—construction spending peaked at $1.2 trillion in March, 2006.

    By Brent Nyitray, CFA, MBA
  • uploads///MR IBD TIPP
    Consumer

    Economic optimism rebounds, but it still remains depressed

    The IBD/TIPP Optimism Index increased by 3 points to 41.4 versus 38.4 in October. It’s well below its 12-month average of 45.

    By Brent Nyitray, CFA, MBA
  • uploads/// year bond yield LT
    Consumer

    What to watch for in real estate next week

    The week ahead Earnings season is pretty much over. Only five companies will report next week; nobody related to real estate is reporting. Next week is not all that heavy data-wise, although we will get the S&P Case-Schiller Home Price Index and Pending Home Sales. The Case-Schiller data will be from March, which should begin […]

    By Brent Nyitray, CFA, MBA
  • uploads///MR KBH
    Consumer

    KB Home swings to a profit and its turnaround stays on pace

    Unlike some of the other builders, KB is a turnaround story. The company believes its strategic focus on first-time and move-up homebuyers is finally beginning to pay off.

    By Brent Nyitray, CFA, MBA
  • uploads///MR consumer confidence
    Financials

    Consumer confidence ticks down as Americans fret the economy

    The Conference Board Consumer Confidence Index fell to 79.7, from an upward-revised 81.8 in August. (Consumer confidence in 1985 was 100.)

    By Brent Nyitray, CFA, MBA
  • uploads///Fannie Mae Attitudes about housing expected px appreciation
    Consumer

    Consumers are tempering their home price appreciation expectations

    The 2.3% home price expectation is much lower than the 6%–7% forecast we’re seeing out of the National Association of Realtors and the mid single-digit forecast we’re seeing from most Wall Street professionals.

    By Brent Nyitray, CFA, MBA
  • uploads///DHI Gross Margins
    Earnings Report

    D.R. Horton’s Gross Margins Fall Slightly

    Like most other builders, D.R. Horton has been reporting lower gross margins due to sticker shock. Home prices have been increasing, but wage growth has been stagnant.

    By Brent Nyitray, CFA, MBA
  • uploads///Construction Spending
    Consumer

    Construction Spending Fell in June

    In June 2016, private construction fell 0.6%, and public construction fell 0.6% month-over-month.

    By Brent Nyitray, CFA, MBA
  • uploads///GDP
    Consumer

    GDP Will Be the Highlight This Week

    We’re nearing the end of August—many investment professionals will be watching markets from the beach. The second revision to Q2 GDP will be out on Friday.

    By Brent Nyitray, CFA, MBA
  • uploads///ISM PMI
    Consumer

    ISM manufacturing survey shows more manufacturing expansion

    Overall increases in business activity and consumption are starting to drive more business for homebuilders.

    By Brent Nyitray, CFA, MBA
  • uploads///Fed Assets
    Financials

    The Fed maintains its policy on reinvesting QE assets

    The Fed’s decision to reinvest QE assets in the markets affects REITs. It keeps a bid under TBAs, and it supports MBS values in general.

    By Brent Nyitray, CFA, MBA
  • uploads///Unemployment Rate
    Consumer

    Why the FOMC minutes and weak payroll data drove REITS and builders

    Last week, we had two important data points with the FOMC minutes from the December meeting and the Employment Situation report on Friday.

    By Brent Nyitray, CFA, MBA
  • uploads///Mortgage Rates
    Consumer

    Must-know: Why mortgage rates rose slightly as bonds sold off

    Mortgage rates are the lifeblood of the housing market, which is why the Fed began conducting quantitative easing (or QE) in the first place. Lower rates allow homeowners to refinance.

    By Brent Nyitray, CFA, MBA
  • uploads///Richmond Fed
    Consumer

    Manufacturing activity keeps improving in the Mid-Atlantic region

    The Richmond Fed Manufacturing Survey looks at business conditions in the Fed’s fifth district, which covers Washington, DC, Baltimore, Richmond, and Charlotte.

    By Brent Nyitray, CFA, MBA
  • uploads///Business Inventories
    Consumer

    Business inventories rise slower than sales, good for activity

    This series focuses on industrial and manufacturing releases that will affect the real estate sector. Since homebuilders are highly cyclical, housing analysts watch the manufacturing data closely.

    By Brent Nyitray, CFA, MBA
  • uploads///Manufacturing Production
    Macroeconomic Analysis

    Construction Supply Production Increases In December

    Construction supplies increased 1.4% in December, a standout number. This might portend a more vibrant building season in 2015.

    By Brent Nyitray, CFA, MBA
  • uploads///Foreclosure Completions
    Real Estate

    Foreclosure Completions Drop In October

    Since foreclosures represent a process that may or may not wind up with the bank owning the home, foreclosure completions are a better indicator of foreclosure activity than foreclosure starts.

    By Brent Nyitray, CFA, MBA
  • uploads///Hourly Earnings
    Macroeconomic Analysis

    Wage Growth Could Be Picking Up

    Average hourly earnings rose by 9 cents on a month-over-month basis in October and were up 2.4% YoY (year-over-year) to $25.20. However, wage growth is still barely outpacing inflation.

    By Brent Nyitray, CFA, MBA
  • uploads///Housing starts
    Macroeconomic Analysis

    Last Week’s Housing Starts Came In Stronger than Expected

    Last week we had some stronger-than-expected economic data with housing starts and building permits topping 1.1 million.

    By Brent Nyitray, CFA, MBA
  • uploads///Consumer Price Index
    Consumer

    Investor outlook: Consumer price inflation meets the Fed’s target

    This report will probably hold the hawks on the Fed at bay and allow them to continue to maintain ultra-low interest rates. The Fed wants to see annual inflation of about 2%.

    By Brent Nyitray, CFA, MBA
  • uploads/// year bond yield historical
    Financials

    Recommendation: Should REIT investors fear an accelerated taper?

    Last week, we had some stronger-than-expected data with housing starts and some of the industrial production data. Does that mean the Fed will accelerate tapering?

    By Brent Nyitray, CFA, MBA
  • uploads///Ginnie Mae TBA
    Financials

    Must-know: Why the jobs report slammed Ginnie Mae TBAs

    Friday’s stronger-than-expected jobs report was the catalyst for a heavy sell-off in the bond market. The ten-year bond sold off by 15 basis points.

    By Brent Nyitray, CFA, MBA
  • uploads///Import Price Index
    Financials

    Import prices fall in May

    Import prices are an important driver of inflation The Bureau of Labor Statistics releases its U.S. Import and Export Price Indices monthly. The report keeps track of import prices by locality, type, and fuel/non-fuel. It also separates commodities and non-commodities. Commodity prices tend to be more volatile than non-commodity prices, so it makes sense to […]

    By Brent Nyitray, CFA, MBA
  • uploads///NFIB Small Business Optimism
    Real Estate

    Why small business optimism continues to recover slowly

    Small business accounts for roughly half of the U.S. gross domestic product (or GDP) and jobs.

    By Brent Nyitray, CFA, MBA
  • uploads///MR PPI
    Consumer

    Why the Producer Price Index increasing 0.8% in June will hurt homebuilders

    The Producer Price Index measures inflation at the wholesale level Analysts have typically taken inflation at the wholesale level to predict inflation at the consumer level. In a normal business environment, producers pass these increased costs to consumers, which would decrease disposable income if wages didn’t rise accordingly. Investors consider a little inflation a good thing. […]

    By Brent Nyitray, CFA, MBA
  • uploads///ZU QVCA comps
    Miscellaneous

    Could the Zulily Transaction Get Competitive?

    There’s a tender and support agreement between the founding members and Liberty Interactive. These Zulily shareholders have agreed to the Liberty Interactive tender offer.

    By Brent Nyitray, CFA, MBA
  • uploads///Fannie Mae TBA
    Financials

    Weekly Realist real estate roundup (Part 2)

    Back to Part 1 Mortgage-backed securities are the starting point for all mortgage market pricing, and they’re the investment of choice for mortgage REITs  When the Federal Reserve talks about buying mortgage-backed securities (MBS), it’s referring to the To-Be-Announced market (usually referred to as the TBA market). The TBA market allows loan originators to take individual […]

    By Brent Nyitray, CFA, MBA
  • uploads///N ORCL Forbes list
    Technology & Communications

    Parsing Oracle-NetSuite Material Adverse Effect Clause: Part 1

    In the merger deal between Oracle (ORCL) and NetSuite (N), the MAE clause lays out the circumstances under which Oracle can back out of the transaction.

    By Brent Nyitray, CFA, MBA
  • uploads///BHI HAL BHI basics
    Miscellaneous

    Baker Hughes basics

    Baker Hughes (BHI) is a leading supplier of oilfield services, products, technology, and systems to the worldwide oil and natural gas industry.

    By Brent Nyitray, CFA, MBA
  • uploads///Fed  Inflation forecast
    Financials

    Why Did the Fed Increase Its Inflation Forecast?

    The Fed has been consistently high in its inflation forecasts. At the June 2016 FOMC meeting, the Fed took up its 2016 inflation forecast from 1.6% to 1.7%.

    By Brent Nyitray, CFA, MBA
  • uploads///Foreclosure Starts
    Consumer

    Why foreclosure starts dropped 35% from last year as prices rose

    Foreclosure starts are closely watched by investors, realtors, and homebuilders alike because they forecast future housing supply. Foreclosure timelines can vary widely by state.

    By Brent Nyitray, CFA, MBA
  • uploads///Foreclosure Starts
    Consumer

    Why foreclosure starts ticked up in October but are still falling

    Foreclosure starts are closely watched by investors, realtors, and homebuilders alike because they forecast future housing supply.

    By Brent Nyitray, CFA, MBA
  • uploads///Fed  GDP forecast
    Company & Industry Overviews

    Why the FOMC Statement Is Constructive on the Economy

    The FOMC didn’t change its characterization of the economy. The labor markets are improving, economic growth slowed, and household spending moderated.

    By Brent Nyitray, CFA, MBA
  • uploads///Hourly Earnings
    Macroeconomic Analysis

    Wages Dipped Slightly in December: Here’s Why

    Average hourly earnings fell by 1 cent on a month-over-month basis in December 2015 and were up 2.5% year-over-year to $25.24. Average weekly hours were flat at 34.5.

    By Brent Nyitray, CFA, MBA
  • uploads///DHI Gross Margins
    Earnings Report

    D.R. Horton Maintained Its Gross Margins

    D.R. Horton’s gross margins held steady at 19.9% in the fourth quarter of 2015. However, they fell on a YoY (year-over-year) basis from 20.5% in the fourth quarter of 2014.

    By Brent Nyitray, CFA, MBA
  • uploads///Hourly Earnings
    Macroeconomic Analysis

    The Jobs Report: This Week’s Highlight for REIT Investors

    We’ll get a lot of important economic data this week, and the biggest release will be the jobs report on Friday.

    By Brent Nyitray, CFA, MBA
  • uploads///Mortgage Rates
    Consumer

    Mortgage Rates Are Not Buying The Rally Yet

    The average 30-year fixed-rate mortgage decreased six basis points to close at 3.92%. The ten-year bond rose and yields decreased by 15 basis points.

    By Brent Nyitray, CFA, MBA
  • uploads///Case Schiller
    Macroeconomic Analysis

    The Jobs Report Is the Highlight of This Short Week

    The bond market will be most sensitive to the jobs report, particularly to wage inflation. REITs such as MFA Financial will also focus on the jobs report.

    By Brent Nyitray, CFA, MBA
  • uploads///CoreLogic Home Price Index  year
    Consumer

    Must-know: Home prices increase 7.4% YoY

    The 7.4% year-over-year (or YoY) gain resembles the gains we saw during the bubble years. On a month-over-month basis, the increase was only 1.2%. It was decent. The prices for ex-distressed sales increased 6.8%. Prices are still 11.9% below their peak in April 2006.

    By Brent Nyitray, CFA, MBA
  • uploads///FHFA House Price Index
    Financials

    April Federal Housing Finance Agency House Price Index rose 7.4%, good for investors

    The Federal Housing Finance Agency (FHFA) House Price Index The FHFA House Price Index differs from the other house price indices like Case-Schiller and Radar Logic in that it only looks at houses with mortgages guaranteed by Fannie Mae and Freddie Mac. This means all the home prices are below the conforming threshold, which is $417,000. […]

    By Brent Nyitray, CFA, MBA
  • uploads///Capacity Utilization
    Financials

    Capacity Utilization falls in May

    Capacity utilization is a bellwether of economic activity Capacity utilization is a good top-down macroeconomic indicator, which helps forecast the labor market, final demand, consumption, and inflation. While manufacturing is no longer the primary driver of the U.S. economy, it still influences the economy to a large degree, particularly for unskilled workers. U.S. manufacturing is […]

    By Brent Nyitray, CFA, MBA
  • uploads///Leading Economic Indicators
    Consumer

    Index of Leading Economic Indicators takes a breather in August

    The Index of Leading Economic Indicators (or LEI) is a business cycle indicator. It’s based on 11 different economic statistics—average workweek, initial jobless claims, new orders, building permits, unfilled durable goods, commodity prices, consumer expectations, stock prices, and money supply.

    By Brent Nyitray, CFA, MBA
  • uploads///FHFA HPI Cumulative
    Macroeconomic Analysis

    Home Prices Hit New Records: What Does This Mean for REITs?

    The recent 5.5% year-over-year gain for home prices has put the FHFA House Price Index about 3% past its April 2007 levels.

    By Brent Nyitray, CFA, MBA
  • uploads///Ginnie Mae TBA
    Financials

    Ginnie Mae securities catch a bid as bonds rally, reaching 105 5/32

    The front-month Ginnie Mae TBA drifted higher as bonds rallied. After starting the week at 105 17/32, they added about 5/8 of a point to close at 105 5/32.

    By Brent Nyitray, CFA, MBA
  • uploads///Consumer Confidence
    Real Estate

    Why rising asset prices are driving consumer confidence higher

    The CCI is one of the oldest consumer surveys, originally started as a mail-in survey in 1967. It asks respondents whether certain conditions are positive, negative, or neutral.

    By Brent Nyitray, CFA, MBA
  • uploads///Consumer Sentiment
    Financials

    Consumer Confidence dips in May but still improving.

    The Thomson Reuters/University of Michigan Consumer Confidence Index is a leading indicator for the U.S. economy The Thomson Reuters/University of Michigan Consumer Confidence Index is an important indicator of the consumer’s perception of the U.S. economy. Similar to other consumer confidence measures, it asks consumers about their views on the current economic conditions, and their […]

    By Brent Nyitray, CFA, MBA
  • Weekly economic recap: why REITs are crushed while homebuilding is bullish
    Consumer

    Weekly economic recap: why REITs are crushed while homebuilding is bullish

    The ten-year bond is the basis for all mortgage pricing Long-term interest rates are priced off the benchmark long-term bond, which is the ten-year Treasury. These days, the ten-year bond reacts to economic data through the Federal Reserve’s asset purchase program, also known as quantitative easing (QE). As a general rule, economic data that shows […]

    By Brent Nyitray, CFA, MBA
  • uploads///Ginnie Mae TBA
    Financials

    Ginnie Mae TBAs rally before the Fed meeting

    Mortgage-backed securities are the starting point for all mortgage market pricing and the investment of choice for mortgage REITs When the Federal Reserve talks about buying mortgage-backed securities, it’s referring to the To-Be-Announced (also know as the TBA) market. The TBA market allows loan originators to take individual loans and turn them into a homogeneous product […]

    By Brent Nyitray, CFA, MBA
  • uploads///Fed  Unemployment Forecast
    Financials

    Why The Fed Continues To Anticipate Lower Unemployment

    At the March 2013 meeting, the Fed was forecasting that 2015 unemployment would be 6.7%–7%. Now, the Fed is forecasting that unemployment will be 5.2%–5.3%.

    By Brent Nyitray, CFA, MBA
  • uploads///XAL over
    Healthcare

    Merger must-knows: The shareholder vote and 90% tender condition

    Once the SEC approves the proxy, a vote is scheduled. Usually, the last condition for a deal is the vote of the target shareholders.

    By Brent Nyitray, CFA, MBA
  • uploads///Ginnie Mae TBA
    Consumer

    Why did the Ginnie Mae TBAs catch a bid on the bond market rally?

    The front-month Ginnie Mae TBA drifted higher as bonds rallied. After starting the week at 105 4/32, they traded 7/16 higher to close at 105 18/32.

    By Brent Nyitray, CFA, MBA
  • uploads///MBA Refinance Index
    Real Estate

    The End Of Quantitative Easing Could Make Mortgage REITs Vulnerable

    Big agency REITs like Annaly (NLY) and American Capital Agency (AGNC) took the chance to deleverage their balance sheets after the warning in the spring of 2013.

    By Brent Nyitray, CFA, MBA
  • uploads///Bloomberg Consumer Comfort
    Consumer

    Bloomberg consumer comfort index hits a post-recession high, good for homebuilders

    The Bloomberg Consumer Comfort Index rose to -28.3 for the week ending June 23 The Bloomberg Consumer Comfort Index is a weekly sentiment index that covers three critical variables: respondents’ perception of the state of the economy, their evaluation of their personal finances, and whether it’s a good time to purchase goods and services. The […]

    By Brent Nyitray, CFA, MBA
  • uploads///CI ANTM EPS accretion
    Miscellaneous

    Is the Cigna–Anthem Merger a Setup?

    The Cigna–Anthem merger deal will be subject to all sorts of headlines that will affect the spread. You can make a decent return trading around the position by keeping your head .

    By Brent Nyitray, CFA, MBA
  • uploads///FHFA House Price Index
    Company & Industry Overviews

    Home Prices Keep Climbing, and Here’s What It Means

    The latest Existing Home Sales report shows available inventory at 4.7 months and a market that’s tilted heavily in favor of sellers.

    By Brent Nyitray, CFA, MBA
  • uploads///CI ANTM downside
    Miscellaneous

    The Risk-to-Reward Ratio of the Cigna–Anthem Merger

    If the Cigna–Anthem merger closes, you end up making about $35 a share. If the deal breaks, then you would have to cover at $52 a share.

    By Brent Nyitray, CFA, MBA
  • uploads///Fannie Mae TBA
    Financials

    Fannie Mae mortgage-backed securities fall nearly 3 points in a week

    Mortgage-backed securities are the starting point for all mortgage market pricing and the investment of choice for mortgage REITs When the Federal Reserve talks about buying mortgage-backed securities, it’s referring to the To-Be-Announced (TBA) market. The TBA market allows loan originators to take individual loans and turn them into a homogeneous product that can be […]

    By Brent Nyitray, CFA, MBA
  • uploads///Housing Starts LT
    Consumer

    How D.R. Horton plans to address the first-time homebuyer

    D.R. Horton CEO Donald Tomnitz said that the first-time homebuyer will drive the next leg in the sector and has been underserved in this recovery.

    By Brent Nyitray, CFA, MBA
  • uploads///Unemployment rate LT
    Macroeconomic Analysis

    January Saw Unemployment Drop below 5%

    In January 2016, the unemployment rate fell from 5.0% to 4.9%, or by about 7.8 million people. The underemployment rate was flat at 9.9%.

    By Brent Nyitray, CFA, MBA
  • uploads///HARP Refinances
    Financials

    Why the HARP refis dry up as rates rise, lowering prepay speeds

    HARP was designed to help people who wanted to stay in their home and who had adjustable-rate mortgages where they wouldn’t be able to afford the payment once the mortgage adjusted upward.

    By Brent Nyitray, CFA, MBA
  • uploads///MFA Financial
    Financials

    Why home price appreciation has saved MFA Financial

    MFA Financial is a REIT that invests in both agency and non-agency mortgage-backed securities MFA Financial (MFA) is a mortgage real estate investment trust (REIT) that invests in both agency (government-guaranteed) and non-agency (non-guaranteed) mortgage-backed securities (MBS). Its portfolio is primarily invested in hybrids, adjustable-rate mortgages (ARM), and 15-year fixed-rate mortgages. It chooses to invest […]

    By Brent Nyitray, CFA, MBA
  • uploads///Housing starts
    Macroeconomic Analysis

    A Closer Look at the August 15 Drop in Housing Starts

    Housing starts fell from a downward-revised ~1.16 million to ~1.13 million in August 2015. This was below Wall Street estimates of just over 1.16 million.

    By Brent Nyitray, CFA, MBA
  • uploads///EMC DELL comps
    Miscellaneous

    Could a Competing Bid Back up the Dell-EMC Merger?

    In the Dell-EMC merger, EMC has been pushed into a sale process by Elliott Management, which had seats on the Board of Directors.

    By Brent Nyitray, CFA, MBA
  • uploads///Home Equity
    Consumer

    Aggregate home equity increases 9% in Q113

    Corelogic puts out a quarterly report on aggregate home equity in the U.S. Corelogic’s Home Equity Report analyzes changes in home equity from a number of different perspectives. Home equity can be used to predict default rates, and we saw a large number of strategic defaults early in the housing bust as professional investors realized […]

    By Brent Nyitray, CFA, MBA
  • New York PMI falls in May
    Consumer

    New York PMI falls in May

    The Institute of Supply Management index assesses the state of manufacturing in the New York City Metropolitan Area The Institute of Supply Management (ISM) New York Purchasing Manager’s Index (PMI) is similar to the ISM PMI , however, it covers the New York City area. The ISM PMI looks at various business indices, like new […]

    By Brent Nyitray, CFA, MBA
  • uploads///Fannie Mae Attitudes about housing go up
    Company & Industry Overviews

    Consumers Are Tempering Their Bullishness on Real Estate Prices

    Rising real estate prices can be positive for non-agency REITs. However, they can be negative for agency REITs.

    By Brent Nyitray, CFA, MBA
  • uploads///MBA Mortgage Apps
    Financials

    Massive mortgage market transformation: The return of subprime?

    The mortgage market is undergoing a massive transformation as the private label mortgage market returns.

    By Brent Nyitray, CFA, MBA
  • uploads///Leading Economic Indicators
    Consumer

    Jump in leading economic indicators shows an improving economy

    After increasing by 0.5 in July, the Index of Leading Economic Indicators rose by 0.2 to end at +0.7. Overall, the index indicates an economy that’s slowly mending.

    By Brent Nyitray, CFA, MBA
  • uploads///Ginnie Mae TBA
    Real Estate

    Why Ginnie Mae securities followed bonds lower

    The ten-year bond sold off, with yields increasing from 2.19% to 2.27%. Ginnie Mae TBAs followed, dropping from 104 23/32 to 104 20/32.

    By Brent Nyitray, CFA, MBA
  • uploads///AGN PFE PFE basics
    Miscellaneous

    Allergan–Pfizer merger: What Does Pfizer Make besides Viagra?

    The Allergan–Pfizer merger will change Pfizer’s domicile to Dublin, Ireland, and allow them to gain access to overseas cash without a US repatriation tax.

    By Brent Nyitray, CFA, MBA
  • uploads///MR NFIB
    Financials

    NFIB Small Business Survey flashes warning signs for REITs

    The National Federation of Independent Business Optimism Survey is a finger on the pulse of small business.

    By Brent Nyitray, CFA, MBA
  • uploads///JOLT Job Openings
    Consumer

    The FOMC Leaves The Big Question About Jobs Unanswered

    There was no discussion of the “speed limit” issue in the July FOMC minutes. This is generally a “cyclical versus structural unemployment” issue.

    By Brent Nyitray, CFA, MBA
  • uploads///PCL WY comps
    Miscellaneous

    Could the Plum Creek Timber-Weyerhaeuser Merger Get Competitive?

    In the Plum Creek Timber-Weyerhaeuser merger, Weyerhaeuser is paying about 7.4x trailing-12-month revenues and 25.4x trailing-12-month EBITDA.

    By Brent Nyitray, CFA, MBA
  • uploads///NAHB Housing Market Index
    Consumer

    Why homebuilder sentiment hits post-bubble highs, helping stocks

    Homebuilders are in a better position than the smallest construction firms in that they have easy access to credit.

    By Brent Nyitray, CFA, MBA
  • uploads///KLAC LRCX comps
    Miscellaneous

    Could the Lam Research-KLA-Tencor Merger Get Competitive?

    In the Lam Research-KLA-Tencor merger, Lam Research is paying about 3.9x trailing-12-month revenues and 14.8x trailing-12-month EBITDA.

    By Brent Nyitray, CFA, MBA
  • uploads///ISM PMI
    Consumer

    ISM PMI shows manufacturing back in expansionary territory

    The Institute for Supply Management Index assesses the state of manufacturing in the United States. The Institute for Supply Management Purchasing Manager’s Index (ISM PMI for short) is similar to the other regional PMI indices, however, it covers the entire country. The ISM PMI looks at various business indices, like new orders, production, employment, supplier […]

    By Brent Nyitray, CFA, MBA
  • uploads///Fannie Mae TBA
    Financials

    Fannie Mae TBAs rally as Ben Bernanke soothes the bond market, better for mortgage REITs

    Mortgage-backed securities are the starting point for all mortgage market pricing, and they’re the investment of choice for mortgage REITs  When the Federal Reserve talks about buying mortgage-backed securities, it’s referring to the To-Be-Announced market (usually referred to as the TBA market). The TBA market allows loan originators to take individual loans and turn them into […]

    By Brent Nyitray, CFA, MBA
  • uploads///Foreclosure Completions
    Consumer

    August foreclosure completions tick up but homebuilders unaffected

    Increases in foreclosure activity correlate with lower home prices because distressed properties tend to trade at a discount to non-distressed properties.

    By Brent Nyitray, CFA, MBA
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