Kwarkot
Shares of mortgage finance firms came under some selling pressure in Monday afternoon trading as U.S. Treasury yields rose across the curve.
Mortgage REITs (as of 2:54 p.m. ET): Annaly Capital Management (NYSE:NLY) (-2.2%), AGNC Investment (NASDAQ:AGNC) (-3.3%), Chimera Investment (NYSE:CIM) (-3.1%), Two Harbors Investment (NYSE:TWO) (-2.7%), Orchid Island Capital (NYSE:ORC) (-2.4%), Dynex Capital (NYSE:DX) (-3.2%), Ellington Financial (NYSE:EFC) (-1.4%), and AG Mortgage Investment Trust (NYSE:MITT) (-4.6%).
Rising interest rates generally are a negative for REITs as the result of such a move is decelerating real estate values and a higher cost of debt. At the time of writing, the 10-year UST yield (US10Y) and the two-year (US2Y) each perked up three basis points to 3.41% and 4.00%, respectively.
Commercial mortgage REITs also slid during the session, with the biggest decliners featuring Blackstone Mortgage Trust (NYSE:BXMT) (-3.1%), Brightspire Capital (NYSE:BRSP) (-2.9%), Arbor Realty Trust (NYSE:ABR) (-2.8%) and Granite Point Mortgage Trust (NYSE:GPMT) (-2.4%). Of note, a slew of office and apartment REITs experienced weakness, too.
Meanwhile, most homebuilder stocks, including D.R. Horton (DHI) (+0.5%), Hovnanian Enterprises (HOV) (+1.3%) and Beazer Homes (BZH) (+0.9%), changed hands in the green.
The bearish price action in REITs coincided with a weaker stock market as Good Friday’s strong jobs report bolstered the case for at least one more rate increase by the Federal Reserve.