Should AGNC Investors Be Concerned About First-Quarter Earnings?
Most financial assets performed poorly in the first quarter of 2022. Investors came to the realization that inflation was not "transitory" and that shortages of labor and materials were likely to be around for a while. The Russian invasion of Ukraine pushed up energy prices, which will in turn push prices of everyday goods and services higher. The Federal Reserve moved up its assessment of inflation, took down its estimates for GDP growth, and penciled in a much higher forecast for interest rates.
One of the harder-hit sectors from all these headwinds was mortgage-backed securities. That's likely to mean rough sledding for first-quarter numbers. The most vulnerable mortgage real estate investment trust (REIT) is AGNC Investment (NASDAQ: AGNC), whose assets are under direct assault from the Fed's actions. Should investors be worried about first-quarter numbers?
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