Tue, Feb. 3, 3:52 PM
- Unable to put any sort of positive move together even as interest rates tumbled this year, mREITs (REM +0.9%) are uniformly higher this session as the 10-year yield jumps 11 basis points to 1.78%.
- American Capital Agency (AGNC +1.3%) reported better-than-hoped Q4 results last night, but has altered its mix of portfolio holdings and hedges to brace for what it expects will be a wave of prepayments. If rates keep this up, those prepayments may not materialize.
- Annaly (NLY +1.1%), Chimera (CIM +1.5%), CYS Investments (CYS +1.3%), American Capital Mortgage (MTGE +1.8%), Hatteras (HTS +1.1%), MFA Financial (MFA +1.3%), Western Asset (WMC +1.8%), Dynex (DX +1.1%), Ellington Financial (EFC +1.2%).
Tue, Feb. 3, 11:43 AM
- With the big declines in interest rates in late 2014 and thus far this year, American Capital Agency (AGNC +1.4%) has taken steps to protect its portfolio from what it expects will be a big rise in prepayments.
- Webcast and prepayment slides
- Among them is taking exposure to 30-year mortgages way down, with total face value at year-end of $14.7B vs. $23.2B three months earlier. Generics should exhibit the fastest prepayment speeds and they're now $5.1B vs. $13.2B the previous quarter. That money has gone into 15-year mortgages, where prepayments should be lower.
- The hedging portfolio has also been significantly altered, with a portion of longer-dated swaps terminated, and shorted-dated swaps added. The company has also altered its Treasury holdings, buying the long end and selling short-dated paper. AGNC's 10-year Treasury position went from short $2.7B to long $2.4B by year-end.
- Previously: American Capital agency beats, posts rise in book value (Feb. 2)
- Previously: American Capital Agency beats by $0.11 (Feb. 2)
Wed, Jan. 28, 4:05 PM
- The iShares Barclays MBS Bond Fund (MBB +0.2%) hit a new lifetime high, which should be good for the book values of mortgage REITs (assuming they weren't too hedged), but the yield curve continues to sharply flatten. The 10-year Treasury yield is all the way down to 1.71% and the 30-year at a record-low 2.29% - this as the Fed says it's on track for a mid-year rate hike.
- In addition to shaving margins for leveraged holders of mortgages, the lower rates could result in another refinance wave, and thus a surge in prepayments.
- Annaly Capital (NLY -1%), American Capital Agency (AGNC -1.6%), Armour Residential (ARR -0.7%), Hatteras Financial (HTS -0.7%), Western Asset (WMC -2.2%), Apollo Residential (AMTG -0.7%)
- ETFs: REM, MORT, MORL
- Previously: Bond yields slide after FOMC (Jan. 28)
- Previously: FOMC: Still "patient," but rate hike remains on the way (Jan. 28)
Tue, Jan. 6, 2:17 PM
- The 10-year yield has plunged all the way down to 1.94% and one would figure on some nice increases in book value for the mortgage REITs (REM -0.1%), but on the flip side are narrowing interest rate spreads (especially as the Fed still seems to be intent on hiking short rates), and what hedging losses the companies are taking.
- Other ETFs: MORT, MORL
- Individual names: Annaly Capital (NLY +0.4%), American Capital Agency (AGNC), Armour Residential (ARR -1%), CYS Investments (CYS -0.2%), Invesco Mortgage (IVZ -2.7%), New York Mortgage Trust (NYMT -0.5%), Hatteras Financial (HTS -0.3%), Western Asset Mortgage (WMC -2.7%), Ellington Residential (EARN -0.4%), Javelin Mortgage (JMI -3%).
Dec. 9, 2014, 12:57 PM
- Unable to catch a bid for a few sessions, mortgage REITs (REM +1%) have turned higher in afternoon action, led by Annaly (NLY +0.7%) and American Capital Agency (AGNC +1.5%).
- Helping are jitters in the stock market (though U.S. averages are well off the lows), and a 10-year Treasury yield that's retreated all the way to 2.21% after hitting the mid-2.30s on the back of Friday's strong jobs number.
- Armour (ARR +1.1%), Two Harbors (TWO +0.9%), CYS Investments (CYS +1.4%), Invesco (IVR +1.8%), American Capital Mortgage (MTGE +1%), Hatteras Financial (HTS +2%), Capstead (CMO +2%).
- Other ETFs: MORT, MORL
- Also showing some green are the recently beaten-up BDCs, including Prospect Capital (PSEC +0.2%), Fifth Street Finance (FSC +0.2%), Ares Capital (ARCC +0.5%), FS Investment (FSIC), Triangle Capital (TCAP +1.7%).
- ETFs: BDCL, BDCS, BIZD
- Previously: Money flows back into fixed income (Dec. 9, 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%).
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, 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.
Sep. 19, 2014, 3:32 PM
- Leading the mREIT sector (REM +0.2%) higher this session are American Capital Agency (AGNC +1.9%) and American Capital Mortgage (MTGE +1%) after the two maintained their $0.65 per share quarterly payout last night. Neither move should have been a surprise as both comfortably out-earned their dividend last quarter.
- Also maintaining its payout ($0.30 per shares) after the bell yesterday was Annaly Capital (NLY +0.8%).
- The sector is also getting a break from rising rates with the 10-year Treasury yield lower by four basis points to 2.58%
- ETFs: MORT, MORL
Sep. 18, 2014, 1:10 PM
- The entire sector is in the red, but the biggest declines are being seen in the industry giants, about the only spots large investors can move a lot of shares quickly: Annaly Capital (NLY -1.6%), American Capital Agency (AGNC -1.6%).
- Yesterday's FOMC statement may have left in the "considerable period" language, but the committee remains on course to begin a rate hike cycle in less than a year.
- Further, the selloff on the long end of the curve can has reached the sizable stage - the 10-year yield is up 32 basis points in a month, and has now erased about all of the summer's decline. Book values could take a hit (though hedging is likely to ease the pain).
- REM -0.7%
- Other ETFs: MORT, MORL.
- Other names: Armour (ARR -1.3%), Invesco (IVR -0.7%), Hatteras (HTS -3%), Capstead (CMO -0.3%), Western Asset (WMC -0.4%)
Sep. 17, 2014, 2:51 PM
- Another $10B taper this month brings QE to just $5B monthly, an amount the FOMC expects to go down to zero with its next policy meeting. The "dots" shifted somewhat higher - meaning maybe a slightly earlier start to Fed rate hikes and a higher level of Fed Funds at the end of the next few years, with the median forecast being 2.9% at the end of 2016.
- Mortgage REITs (REM +0.2%) have been under pressure in the sessions ahead of the FOMC, and are mostly snoozing through today's news.
- Annaly (NLY -0.1%), American Capital Agency (AGNC +0.1%), CYS Investments (CYS +0.2%), New York Mortgage Trust (NYMT +0.5%), Dynex (DX +0.8%), Ellington Residential (EARN +1.2%), Javelin (JMI +1.3%).
- Previously: FOMC statement and projections lean hawkish
- Previously: Yellen press conference: Falling UE rate still masking labor market weakness
Sep. 2, 2014, 2:26 PM
- REITs and other so-called "shadow bankers" for the last several years have used captive insurers to join Federal Home Loan Banks, thus getting access to more dependable financing and better terms than they otherwise could.
- The FHFA for some time has voiced its concern over the practice, and under new rules just proposed, would sunset those existing memberships over a five year period.
- ETFs: REM, MORT, MORL
- Two Harbors (TWO -1.8%), Invesco Mortgage (IVR -1.9%), Hatteras Financial (HTS -1.2%), Dynex Capital (DX -1.1%), PennyMac Mortgage (PMT -1.5%), Annaly Capital (NLY -0.8%), American Capital Agency (AGNC -0.3%).
Jul. 28, 2014, 4:16 PM
- Net spread and dollar roll income of $0.87 per share compares $0.71 in Q1, and to the $0.65 dividend.
- Book value per share of $26.26 up 7.2% from June 30 book value of $24.49. Today's close of $23.69 is a 9.8% discount to book. Dividend plus boost in book value translates to 9.9% economic ROE for Q2.
- CPR of 9% up 200 basis points from Q1.
- Net interest spread of 1.84% up 25 basis points from Q1.
- Average "at risk" leverage of 7.1x vs. 7.2x in Q1.
- CIO Kain takes a victory lap: "Our results this quarter were bolstered by several important strategic decisions ... Most important was our decision to maintain our leverage as we believed the supply and demand outlook for agency MBS was very positive despite the tapering of Fed purchases."
- Conference call tomorrow at 11 ET
- AGNC +1.3% AH
- Previously: American Capital Agency beats by $0.19
Jul. 10, 2014, 10:17 AM
- Working today as both stock and bond yields fall in response to banking troubles in Portugal are both equity and mortgage REIT names.
- Leading in the mortgage REIT sector are Annaly (NLY +0.8%) and American Capital Agency (AGNC +0.8%), and a sampling of equity REIT names: Realty Income (O +0.6%), Omega Healthcare (OHI +1%), Ventas (VTR +1.2%), Medical Properties (MPW +1%), Avalon Bay (AVB +0.5%), Simon Property (SPG +0.8%), Boston Properties (BXP +0.8%)
- ETFs: IYR, VNQ, DRN, URE, SRS, ICF, RWR, SCHH, DRV, KBWY, REK, FRI, FTY, PSR, FNIO, WREI, REM, MORL, MORT
Jul. 3, 2014, 9:56 AM
- A few days ago, the 10-year Treasury yield stood at about 2.50%, but it's been on the rise all week and shot up to near 2.7% this morning following the strong jobs print and drop in unemployment to 6.1%. Checking the short end of the curve, Eurodollar futures are selling off as well, and now have baked in more than one rate hike between now and one year from now, and 75 basis points of hikes by the end of 2015.
- Previously: Treasury yields jump, gold slumps after strong jobs print
- Off 1.1% today, Annaly Capital (NLY) is down nearly 5% since this time last week, with a similar move having taken place in American Capital Agency (AGNC -1.2%).
- Chimera (CIM -1.4%), CYS Investments (CYS -1%), Invesco Mortgage (IVR -1.8%), American Capital Mortgage (MTGE -1.6%), New York Mortgage Trust (NYMT -1.2%), AG Mortgage (MITT -1.8%), Ellington Residential (EARN -0.7%), Dynex (DX -0.8%), MFA Financial (MFA -0.9%).
- ETFs: REM, MORT, MORL
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