Dec. 5, 2014, 10:12 AM
- This morning's big jobs number has pushed yields higher at both the short and long end of the curve, and has mortgage REIT investors mulling losses on MBS holdings.
- The mREIT ETF (REM -0.6%) Others: MORT, MORL
- Annaly (NLY -1.2%), American Capital Agency (AGNC -1%), Armour Residential (ARR -0.6%), Chimera (CIM -0.6%), MFA Financial (MFA -0.9%), Western Asset (WMC -1.3%).
- Previously: Short end of yield curve on the move after jobs number (Dec. 5, 2014)
- Previously: Bonds and dollar higher, gold slumps after strong jobs report (Dec. 5, 2014)
Nov. 19, 2014, 3:42 PM
- A check of the mortgage REITs following FOMC minutes which shows the discussion moving a bit more seriously towards rate hikes finds the sector (REM -0.5%) modestly lower.
- Individual names: Annaly (NLY -0.3%), American Capital Agency (AGNC), CYS Investments (CYS -0.3%), Invesco Mortgage (IVR -0.9%), New York Mortgage Trust (NYMT -0.4%), Hatteras Financial (HTS -0.8%), MFA Financial (MFA -1%), Capsteam Mortgage (CMO -0.6%), Ellington Residential (EARN -0.4%).
Nov. 17, 2014, 4:03 PM
Oct. 29, 2014, 1:43 PM
- Fed purchases of mortgage-backed securities are ending today, but reinvestments are likely to keep a firm bid in the market, says Deutsche's MBS team. The "real risk" to the MBS market won't come until the Fed ends reinvestments - early 2016 at the soonest, and maybe not until 2017.
- QE's end, says the team, leaves the Fed with $1.7T in MBS holdings and private investors with just $3.5T. The Fed's massive holdings - 1/3 of the universal amount, but 1/2 of dollar duration - keep a source of volatility out of the market.
- The end of the Fed as a net buyer will be about the first time since the early 1990s when MBS haven't been getting a bid from either the GSEs, Treasury, or Fed.
- ETFs" REM, MORT, MORL
- Names of interest: Annaly (NLY -1.6%), American Capital Agency (AGNC -2.5%), Armour (ARR -1.2%), Hatteras (HTS -1.6%), CYS Investments (CYS -1.7%)
Oct. 28, 2014, 11:31 AM
- "We expect those changes to be at the margin," says American Capital Agency (AGNC -0.6%) CIO Gary Kain, speaking on the earnings call about recent loud headlines suggesting the GSEs are about to sharply ease credit/down payment standards for mortgages. Kain doesn't see some of the changes being talked about as materially affecting the mortgage market.
- Webcast and presentation slides
- He describes current mortgage market conditions as right in company management's wheelhouse - i.e., more active portfolio management is a must.
- Previously: American Capital Agency beats by $0.10
- Previously: American Capital agency book value slips in Q3
Oct. 27, 2014, 4:18 PM
- Q3 net spread and dollar roll income of $0.85 vs. $0.87 in Q2. Quarterly dividend was $0.65..
- Net book value per share of $25.54 down 2.7% from the end of Q2. Today's close of $23.20 is a 9.2% discount to book. Decrease in book value combined with dividend makes for an annualized 1.1% economic loss for the Q.
- CPR of 10% up 100 basis points from Q2.
- "At risk" leverage of 6.7x vs. 7.1x in Q2.
- Net interest rate spread of 1.9% up six basis points from Q2.
- No shares repurchased during quarter. Buyback program ($992M remaining) is extended through year-end 2015.
- Conference call tomorrow at 11 ET
- Previously: American Capital Agency beats by $0.10
- AGNC -0.4% AH
Oct. 27, 2014, 4:03 PM
Oct. 26, 2014, 5:35 PM
Oct. 20, 2014, 10:44 AM
- The mortgage REIT sector receives its first notable downgrade in awhile, with JMP's Steve Delaney downgrading American Capital Agency (AGNC +0.2%) to Market Perform.
- The stock's ahead 16% YTD along with a dividend yield of nearly 12%. AGNC, along with the rest of the sector, is lower since Labor Day, but did gain over the past couple of weeks as money exited the broader equity market, and expectations for rate hikes evaporated.
- Q3 earnings results are due on October 27.
Oct. 16, 2014, 4:14 PM
Oct. 13, 2014, 4:19 PM
- Both equity and mortgage REITs saw plenty of buying as nearly all of the rest of the market was lit up bright red, and Treasury ETFs signaled a sharp drop in yields when government bonds reopen for trade tomorrow (closed this session for Columbus Day).
- A sampling of equity names: Senior Housing Properties (SNH +1.2%), Medical Properties Trust (MPW +1.4%), Gramercy Property Trust (GPT +1.7%), Equity Residential (EQR +0.7%), Inland Real Estate (IRC +0.9%), Sovran Self Storage (SSS +1.1%), Highwoods Properties Trust (HIW +1%).
- One equity REIT sector in the red along with the rest of the market is lodging amid worsening Ebola fears: Ashford Hospitality Trust (AHT -2.9%), Sunshine Hotel Investors (SHO -1.4%), LaSalle Hotel Properties (LHO -1.5%), Summit Hotel Properties (INN -1.5%).
- Mortgage REITs: American Capital Agency (AGNC +1.4%), CYS Investments (CYS +2.2%), Invesco (IVR +1.1%), American Capital Mortgage (MTGE +1.5%), Western Asset (WMC +1.1%).
- ETFs: IYR, VNQ, REM, MORL, MORT, DRN, URE, REZ, SRS, RWR, SCHH, ICF, ROOF, DRV, KBWY, RTL, REK, FRI, FTY, PSR, IFNA, FNIO, WREI
Oct. 9, 2014, 1:55 PM
- The Fed is nervous higher rates will boost volatility, put a dent in asset (stock and home) prices, and push the U.S. into recession, says Wells Fargo analyst Joel Houck. With the Fed thus trapped from hiking, Houck remains bullish on the mREITs (REM -0.1%), notably American Capital Agency (AGNC +0.7%), CYS Investments (CYS +0.1%), Hatteras Financial (HTS), and Annaly Capital (NLY +0.1%).
- Previously: Mortgage REITs see more gains as averages slide
Oct. 9, 2014, 10:40 AM
- It's been a good week for mortgage REITs (REM +0.7%) which rose on Tuesday as the broad market tumbled and brought yields down with it, rose more on Wednesday, this time alongside a major broad market rally on dovish FOMC minutes, and are on the move higher again today as the averages again head south.
- Down to 2.28% earlier in the session (a 16-month low), the 10-year Treasury yield is now flat on the day at 2.32%.
- This week's strong move comes following a tough September in which the mREITs gave back a nice chunk of their YTD gains.
- Annaly (NLY +1.2%) is up nearly 5% over the last four sessions. American Capital Agency (AGNC +1.5%) is ahead more than 6%.
- Others: Armour (ARR +1%), Chimera (CIM +1%), CYS Investments (CYS +1.2%), New York Mortgage (NYMT +1.3%), Anworth (ANH +0.8%), Dynex (DX +1%), Javelin (JMI +1.5%), Five Oaks (OAKS +0.9%).
- Other ETFs: MORT, MORL
Oct. 7, 2014, 11:12 AM
- Sector giants Annaly Capital (NLY +1.2%) and American Capital Agency (AGNC +1%) are pacing gains in the mortgage REIT sector (REM +0.3%) on a day when the major averages are lower by about 0.75% and the 10-year yield at 2.39% has about erased all of its big post-Labor Day gain.
- Additional ETFs: MORT, MORL
- Among other names, there's CYS Investments (CYS +0.5%) - whose management has been the most publicly skeptical of the higher interest rates meme.
Oct. 1, 2014, 3:02 PM
- Despite a strong period for mortgage REITs ever since the financial crisis, most of the benefits from structural changes to the mortgage market have yet to be realized, says American Capital Agency (AGNC +1.8%) and American Capital Mortgage (MTGE +0.8%) CIO Gary Kain, wrapping up his company's Mortgage REIT day with a look at the future.
- Presentation slides
- Why is this? First, Fed MBS purchases have dwarfed the declines in GSE portfolios; second, the GSEs/FHA still account for the vast majority of new originations; third new non-agency securitization volumes are negligible; fourth GSE credit risk transfers are only beginning to ramp up.
- At some point, there's going to be greater reliance on private capital, says Kain, and he and his team believe it's going to provide significant opportunity in the mREIT (REM +0.6%) space in the intermediate to longer term in the agency, non-agency, and MSR sectors.
- Previous coverage
Oct. 1, 2014, 9:20 AM
- American Capital Agency (NASDAQ:AGNC) and American Capital Mortgage (NASDAQ:MTGE) CIO Gary Kain is set to launch the all-day proceedings in a few minutes.
- Link to webcast and presentations
- Noted in Kain's slides are the fast pace of share repurchases at the two companies amid the large discount between price and book value which opened up last year. AGNC bought back 10% of its stock in 2013, far more than the majority of its agency REIT peer group. MTGE repurchased 13% of its float in 2013, also several orders of magnitude larger than much of its non-agency REIT peer group.
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