Mortgage REITs applaud dovish FOMC minutes


Mixed earlier, a lot more green creeps into the mortgage REIT sector (REM +0.6%) after the FOMC minutes suggest members aren't in as quite of a rush as thought to hike rates. The 10-year note yield is back to flat on the session at 2.68% (was as high as 2.72% pre-release), and the short end is doing even better (steeper curve) with the Dec. 2015 Eurodollar contract higher by six basis points.

Leading the move higher are American Capital Agency (AGNC +1.1%), Chimera Investment (CIM +1.1%), and Hatteras Financial (HTS +1%). Also among those ahead are Annaly (NLY +0.7%), Anworth (ANH +0.6%), Ellington (EFC +1.3%), (EARN +0.1%), and Javelin (JMI +0.6%).

Related ETFs: MORT, MORL

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Comments (8)
  • DeepValueLover
    , contributor
    Comments (11225) | Send Message
     
    Wouldn't be surprised to see the 10 Year yielding ~2.20% by Christmas.
    9 Apr 2014, 03:04 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2863) | Send Message
     
    That'd be very very low
    9 Apr 2014, 03:24 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (11225) | Send Message
     
    Yep. It is obvious that, globally, nothing is set to stop this deflationary storm as central banks around the world have thrown every possible object at it and yields still won't fly.

     

    It is like a planetary Japanese "lost decade" times 20!

     

    Koo and Roche were right all along.
    9 Apr 2014, 03:28 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2863) | Send Message
     
    Even with inflation at 0%, the 10 year should be at roughly GDP growth rate, no? I dont see it above 3.5% for years, but I think things would have to get pretty bad for it to drop that far down.
    9 Apr 2014, 04:46 PM Reply Like
  • Rob1492
    , contributor
    Comments (629) | Send Message
     
    Do you bet on horses also?
    9 Apr 2014, 03:06 PM Reply Like
  • KRT_investor
    , contributor
    Comments (339) | Send Message
     
    I'm happy right where the 10 year is. If it goes lower it squeezes the REITs ability to pay big dividends even though book value would go up. As long it stays where it is and is stable REIT book value will grow slowly over time and big consistent dividends will be paid.....which is fine with me.
    9 Apr 2014, 03:51 PM Reply Like
  • tstreet
    , contributor
    Comments (1035) | Send Message
     
    We have become accustomed to believing the only ball game in town is the FED. Maybe that's because it is. Several decades ago, there was this raging debate between the Monetarists (Milton Friedman) and the Keynesians about which was the best tool to stimulate the economy. Well, the debate never ended, but what we are witnessing now is a very good test of the limits of monetary policy. It has reached its limits, but the powers that be don't want to admit that. If they did admit it, they would have to, you know, use some Keynesian stimulus. But the orthodoxy is that we need to rely on the FED forever and continue to believe that our biggest problem is government spending and taxes that are always too high.

     

    Lost decade? Maybe a lost couple of decades at this rate.
    9 Apr 2014, 04:05 PM Reply Like
  • Urbannek
    , contributor
    Comments (1517) | Send Message
     
    tstreet
    You are totally correct in your comment.
    10 Apr 2014, 07:52 AM Reply Like
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