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Gary Kain-led American Capital Agency (AGNC -2.8%) and American Capital Mortgage (MTGE -2%) lead...

Gary Kain-led American Capital Agency (AGNC -2.8%) and American Capital Mortgage (MTGE -2%) lead the decline in an all-red mREIT sector (MORT -1%) today, with AGNC taking out its post-earnings low from last week. On the earnings call, Kain said upward pressure on rates had cooled to start Q2 and book value was headed higher, but markets may not be cooperating. The 10-year yield is up 8 bps today to a near 2-month high. Others: Annaly (NLY -1.2%), Invesco (IVR -1.2%), MFA (MFA -1.8%), Western Asset (WMC -1.3%).
Comments (12)
  • TwistTie
    , contributor
    Comments (2477) | Send Message
     
    What's going on?

     

    I don't know, but I monitor the 5, 10, and 30 year US government bond rates.

     

    Just for grins, I just peeked at them.

     

    These are the respective percentage increases today:

     

    5yr: +9.37%
    10yr: +4.80%
    30yr: +3.60%

     

    This looks patently evil to me.

     

    The short rates are spiking HIGHER/FASTER than the long rates.

     

    I don't know enough to be able to explain this.
    10 May 2013, 03:15 PM Reply Like
  • Whitehawk
    , contributor
    Comments (3129) | Send Message
     
    This happened last year after rates hit record lows. My guess is that this spike does not represent a substantial trend out of the trading ranges we've seen, but when the yields hit the top ends of the ranges, that technical breach needs to be monitored. The 2-yr is at 0.24, and that reached 0.29 at some point last Aug and 0.31 last Oct, before a decline again to 0.20 on May 1. http://bloom.bg/11qXCGH
    10 May 2013, 06:17 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (7776) | Send Message
     
    Japan looks to have finally destroyed its bond yield structure with its outrageous new money printing scheme.

     

    This is hitting the U.S. bond complex as Japan is a massive holder of said bonds.
    10 May 2013, 09:26 PM Reply Like
  • 6312061
    , contributor
    Comments (38) | Send Message
     
    The key short rate would be ther 2 year... Last time I looked it was in the .22% range. As long as the spread between the 10 and the 2 widens, that should help the mReits...
    10 May 2013, 03:31 PM Reply Like
  • Aikman
    , contributor
    Comments (117) | Send Message
     
    This is a nice opportunity to add to my long WMC position. They will report on May 15th and so far they have been outperforming the mReit industry.
    10 May 2013, 03:44 PM Reply Like
  • Teutonic Knight
    , contributor
    Comments (1988) | Send Message
     
    Rates rise is inevitable now; because house prices are heating up. If the brakes are applied too late by the Fed it would become a major disaster.
    10 May 2013, 04:20 PM Reply Like
  • Whitehawk
    , contributor
    Comments (3129) | Send Message
     
    Fed just announced thru the WSJ conduit its "strategy" for exit of QE: http://on.wsj.com/10y8BI1. This may provide upward pressure on rates (particularly long-term).
    10 May 2013, 07:18 PM Reply Like
  • JaxxBat
    , contributor
    Comments (527) | Send Message
     
    Nibbled at 29.90 today..
    10 May 2013, 09:02 PM Reply Like
  • Todd Johnson
    , contributor
    Comments (6918) | Send Message
     
    Interesting data and story line. QE, Bernanke, deflationary pressures, influx of foreign capital into U.S.

     

    I have heard some Cyprus bank depositors have moved $ to U.S. :)
    10 May 2013, 09:19 PM Reply Like
  • B.Wain
    , contributor
    Comments (3) | Send Message
     
    Bernanke hasn't put in his order for the 10yr MBSs yet.
    11 May 2013, 01:22 AM Reply Like
  • DADDY1970
    , contributor
    Comments (2) | Send Message
     
    Glad I sold, do you think AGNC is headed back down to 28's I will enter again at that lvl. I need an income stream... In ARR again but lost so much in AGQ and miners. Any thoughts?
    11 May 2013, 01:35 AM Reply Like
  • Iron Hamster
    , contributor
    Comments (419) | Send Message
     
    It might hit 28, again, or come close, but I only buy at the very bottom or sell at the very top by lucky guesses. Resource stocks and PM's have been painful this year. My three thoughts on income streams are diversify, diversify, and diversify. Check out bond funds HYG and COY, Business Development Companies MAIN and KCAP, and specialty distiller CLMT. That said, nothing currently beats the mREITs that doesn't involve red-23. I don't see rates rising much, since it would kill our Federal budget to have an extra trillion going out to service the debt.
    11 May 2013, 02:41 PM Reply Like
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