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Key releases that will be this week’s highlight for REIT investors

Brent Nyitray, CFA, MBA

Key releases that will be this week's highlight for REIT investors (Part 1 of 6)

GDP will be the highlight of the week ahead

This week doesn’t have too much data that will move the bond market. But there are some important data for real estate investors. We’ll get new home sales on Monday, the FHFA and Case-Shiller home price indices on Tuesday, pending home sales and the second revision to second quarter GDP on Thursday, and personal income and personal spending on Friday.

Note that the advance estimate for second quarter GDP came in at +4.0%. Wall Street is forecasting that that number gets revised downward to +2.4%.

Economic data this week

Monday, August 25, 2014

  • Chicago Fed National Activity Index
  • Markit Composite PMI
  • Markit Services PMI
  • New home sales
  • Dallas Fed

Tuesday, August 26, 2014

  • Durable goods
  • FHFA Home Price Index
  • Case-Shiller
  • Consumer confidence
  • Richmond Fed

Wednesday, August 27, 2014

  • Mortgage Bankers Association (or MBA) mortgage applications

Thursday, August 28, 2014

  • Initial jobless claims
  • Bloomberg Consumer Comfort
  • 2Q GDP (second revision)
  • Pending home sales
  • Kansas City Fed

Friday, August 29, 2014

  • Personal income
  • Personal spending
  • ISM Milwaukee
  • University of Michigan Consumer Confidence

Earnings reports this week

  • No real estate–related earnings releases

Impact on mortgage REITs

Mortgage real estate investment trusts (or REITs), like American Capital Agency (AGNC) and Annaly (NLY), will focus on data that will move the bond market.

There isn’t much that is market-moving this week, although personal income will be important, as wage inflation is one thing the Fed is waiting to see.

Non-agency REITs like Two Harbors (TWO) and Newcastle (NCT) will focus on the home price indices.

Impact on homebuilders

There’s a lot of data this week of interest to the builders. Existing home sales, new home sales, and the home price indices are critical data points for them. That said, 2014 is more or less in the books as far as the builders are concerned.

We’re heading into the seasonally slow period of fall and early winter. Homebuilder analysts will focus on the geographies that are experiencing the most growth.

Impact on commercial REITs

Mall REITs like Simon Property Group (SPG) and General Growth Properties (GGP) will pay the most attention to the personal income and personal spending data.

Office REITs, like Brookfield Office Properties (BPO) and Vornado Realty Trust (VNO), will be interested in the GDP report and also some of the Markit PMI reports.

Continue to Part 2

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