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Why investors should focus on key housing releases this week

Brent Nyitray, CFA, MBA

Why investors should focus on key housing releases this week (Part 1 of 6)

Earnings Season is winding down

Last week, we had a lot of REIT earnings and not much economic data to work with. This week, we’ll get a lot of housing data, but not much on the earnings front. Thursday will have more economic data than we had all of last week. The most important releases will be retail sales, the industrial data on Thursday, and housing starts as well as building permits. The homebuilders will have a lot of data to chew on.

Economic data this week

Monday, May 12

  • April Budget Statement
  • MBA mortgage delinquencies
  • MBA foreclosures

Tuesday, May 13

  • NFIB Small Business Optimism
  • Retail sales
  • Import prices
  • Business inventories

Wednesday, May 14

  • MBA Mortgage Applications
  • Producer Price Index

Thursday, May 15

  • Initial jobless claims
  • Bloomberg Consumer Comfort
  • Empire Manufacturing
  • Consumer Price Index
  • Industrial production
  • Capacity utilization
  • Manufacturing production
  • Philly Fed
  • NAHB Housing Market Index

Friday, May 16

  • Housing starts
  • Building permits
  • University of Michigan Consumer Confidence

Earnings reports this week

Wednesday, May 14

  • New Residential Investment Corp. (NRZ)

Impact on mortgage REITs

Mortgage REITs like American Capital Agency (AGNC) and Annaly will focus on data that will move the bond market. None of the reports look like they will be market-moving. Many of the REITs have been betting that MBS (mortgage-backed securities)—and the stocks themselves—have become too cheap.

Impact on homebuilders

Most homebuilders have already reported Q1 earnings, so there isn’t much left except for Toll Brothers (TOL). The builders will focus on the industrial production data, along with the housing starts and building permits data.

Impact on commercial REITs

The most important data for the commercial REITs will be the retail sales data, which will affect the mall REITs like Simon Property (SPG) and General Growth Properties (GGP). Office REITs will also pay close attention to the NFIB Small Business Optimism index and the industrial data, as they give clues as to what the hiring environment looks like going forward.

Continue to Part 2

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