Real Estate Investors Digest the Jobs Report
A quiet week ahead
The week after the jobs report is typically pretty data-light and this week is no exception. The jobs report last Friday, or December 4, came in strong enough to keep the Fed on track for raising rates. We do have some important data coming up, primarily retail sales and the JOLTS Job Openings. We’ll hear from luxury builder Toll Brothers as well.
Economic data this week
Here’s a rundown of this week’s economic data:
Monday, December 7:
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Labor Market Conditions Index
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Consumer Credit
Tuesday, December 8:
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NFIB Small Business Optimism
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JOLTS Job Openings
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IBD/TIPP Economic Optimism
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Earnings report for Toll Brothers (TOL)
Wednesday, December 9:
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MBA Mortgage Applications
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Wholesale Inventories
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Wholesale Sales
Thursday, December 10:
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Initial Jobless Claims
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Bloomberg Consumer Comfort
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Import Prices
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Monthly Budget Statement
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Household change in net worth
Friday, December 11:
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Retail Sales
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Producer Price Index
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Business Inventories
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University of Michigan Consumer Sentiment
Impact on mortgage REITs
REITs such as Annaly Capital Management (NLY) and American Capital Agency (AGNC), and especially the non-agency REITs, will focus mainly on the fallout from the jobs report. The jobs report did nothing to change the forecast that the Fed moves next week. The big questions for REIT investors will concern the shape of the yield curve, or whether it will flatten or move parallel. Investors who want to bet on interest rates can look at the iShares 20+ Year Treasury Bond ETF (TLT).
Impact on homebuilders
Builders such as CalAtlantic Group (CAA) and D.R. Horton (DHI) will focus on the numbers out of Toll Brothers. We’re entering the seasonally slow period for builders. This lasts about as long as football season. Investors can trade in the homebuilding sector through the SPDR S&P Homebuilders ETF (XHB).
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