Core Viewpoint - Annaly Capital Management's performance is closely linked to mortgage rates and Federal Reserve policies, with recent trends indicating lower mortgage rates which may enhance housing affordability and support growth in home purchases and refinancing activities [1][2]. Mortgage Rates and Federal Reserve Policy - Mortgage rates have decreased to 6.09% as of February 12, 2026, down from 6.11% the previous week and significantly lower than 6.87% a year ago [1]. - The Federal Reserve has maintained its benchmark federal funds target range at 3.50-3.75% and is expected to implement two 25-basis-point rate cuts later in 2026, which will reduce funding costs for mortgage REITs [3]. Financial Performance - Annaly's net interest income (NII) rose to $1.14 billion in 2025 from $247.8 million the previous year, reflecting improved earnings due to lower funding pressure [3]. - The Zacks Consensus Estimate for Annaly's 2026 sales indicates a year-over-year growth of 74%, with projected sales of $1.98 billion [16]. Portfolio Diversification - Annaly operates a diversified investment platform that includes Agency mortgage-backed securities (MBS), residential credit, and mortgage servicing rights (MSR), which aids in balancing income generation and risk management [5]. - As of December 31, 2025, Annaly's investment portfolio totaled $104.7 billion, with $92.9 billion in highly liquid Agency MBS, primarily rated 'AAA' [6]. Strategic Initiatives - The company is expanding its MSR platform through a long-term agreement with PennyMac Financial Services, enhancing its servicing capabilities and operational efficiency [7]. - Annaly has exited its commercial real estate and Middle Market Lending businesses to focus on core housing finance operations, allowing for more concentrated capital deployment [8]. Liquidity and Capital Distribution - Annaly maintains a strong liquidity position with $9.4 billion in total assets available for financing, including $6.1 billion in cash and unencumbered Agency MBS [10]. - The company has a current dividend yield of 12.14%, having increased its quarterly cash dividend by 7.7% to 70 cents per share in March 2025 [12]. Market Performance - Annaly's shares have increased by 11.8% over the past six months, outperforming the industry average of 5.7% [20]. - The stock is currently trading at a forward 12-month price-to-tangible book (P/TB) multiple of 1.12X, which is higher than the industry average of 1.05X [23].

Core Insights - Home equity rates have seen slight increases, with the $30,000 home equity line of credit rising to 7.32% and the five-year home equity loan increasing to 7.92% [1][2] - Despite the recent rise, home equity rates remain near three-year lows, making them attractive for homeowners, particularly those looking to consolidate debt [2][4] - The primary drivers of home equity rates are Federal Reserve policy and long-term inflation expectations, with forecasts indicating potential interest rate cuts in the future [3][4] Current Home Equity Rates - The current average rates for home equity products are as follows: HELOC at 7.32%, five-year home equity loan at 7.92%, ten-year home equity loan at 8.09%, and fifteen-year home equity loan at 8.09% [2][5] - Historical comparisons show that HELOC rates have decreased from 8.29% one year ago, while five-year home equity loans have dropped from 8.41% [2] Comparison with Other Credit Types - Home equity rates are significantly lower than rates for unsecured credit types, with credit cards averaging 19.60% and personal loans at 12.16% [5] - The use of home as collateral for HELOCs and home equity loans results in lower interest rates compared to unsecured loans [4][5] Market Context - The Federal Reserve's current stance on interest rates is cautious, with a focus on monitoring inflation and the job market, which influences home equity rates [3][4] - The job market appears to be stabilizing, and inflation is moderating, contributing to a balanced risk environment for future rate decisions [4]

Core Viewpoint - Mortgage rates have increased following the Federal Open Market Committee's decision to maintain rates, with expectations for future rate changes remaining stable [1][8]. Mortgage Rate Trends - The 30-year fixed-rate mortgage rose to 6.11% as of February 5, which is 78 basis points lower than the same week last year [2]. - The 15-year fixed-rate mortgage increased to 5.5%, up from 5.49% the previous week, while the average for this week in 2024 was 6.05% [2]. - A significant rise in rates was noted by other trackers, with the 30-year FRM reported at 6.34%, which is 35 basis points higher than the previous week [7]. Economic Indicators - The 10-year Treasury yield, a benchmark for mortgage pricing, was stable around 4.27% during the first three trading days of February, slightly lower at 4.214% later in the week [4][5]. - Job creation was reported at 22,000 for the previous month, significantly below expectations, which may influence future Fed rate cuts [12][13]. Market Sentiment - Homebuyer sentiment indicates that 94% of potential buyers would alter their plans if mortgage rates do not drop below 6% this year, with two-thirds expecting rates under that threshold [8][9]. - The bond market sentiment is considered a critical factor influencing mortgage rates, potentially more so than Fed announcements [10]. Housing Market Dynamics - The combination of improved affordability and home availability is seen as a positive sign for the upcoming spring sales season [4]. - Homeowners are adjusting to slower demand and lower sale prices compared to the pandemic period, with buyers becoming more selective [12].

Core Insights - Home equity borrowing costs have decreased significantly, with the $30,000 home equity line of credit dropping to 7.31%, a reduction of 13 basis points, and the five-year home equity loan decreasing to 7.90%, down two basis points [1][2]. Group 1: Current Rates - The current average rates for home equity products are as follows: HELOC at 7.31%, five-year home equity loan at 7.90%, ten-year home equity loan at 8.08%, and fifteen-year home equity loan at 8.07% [2][4]. - Compared to four weeks ago, HELOC rates have decreased from 8.22% to 7.31%, and the five-year home equity loan has slightly decreased from 7.97% to 7.90% [2][4]. Group 2: Influencing Factors - Home equity rates are primarily influenced by Federal Reserve policy and long-term inflation expectations, with the Fed maintaining interest rates at its January meeting while monitoring inflation and the job market [3][4]. - Forecasts suggest that the Fed may implement three quarter-point cuts in 2026, indicating a potential easing of monetary policy [3]. Group 3: Comparison with Other Credit Types - Home equity products are generally less expensive than unsecured credit options, with HELOCs at 7.31% and home equity loans at 7.90%, compared to credit cards at 19.61% and personal loans at 12.27% [5]. - The rates for home equity loans are more favorable due to the collateralization of the home, which reduces the risk for lenders [4][5]. Group 4: Borrower Considerations - Borrowers are advised to consider their financial situation and goals when deciding between a HELOC and a home equity loan, and to consult with a loan officer for tailored advice [2][6]. - Key questions for borrowers include the amount of money needed, the frequency of withdrawals, and comfort with potential interest rate fluctuations [6].

Market Overview - Bitcoin fell below $73,000 on February 4, 2026, marking a significant decline from its all-time high of over $125,500 in October 2025, representing a roughly 40% drop in four months [2][7] - Large holders sold more than 50,000 BTC in the past two weeks, contributing to persistent selling pressure despite retail investors attempting to buy the dip [2] Mining Sector Impact - Bitcoin mining companies experienced severe losses, with stocks like Marathon Digital Holdings trading around $8.09 and Riot Platforms at approximately $13.52, both reflecting drops of over 10% in a single session [3] - Mining profitability has reached a 14-month low due to declining Bitcoin prices and increased network difficulty, leading to a decrease in the hashrate on the Bitcoin network [4][7] Broader Crypto Market Effects - Other companies exposed to cryptocurrency, such as Strategy (formerly MicroStrategy), also faced challenges, with MSTR stock hitting a 52-week low and unrealized gains on its Bitcoin treasury falling below 10% [5] - The decline in Bitcoin prices coincided with a broader selloff in tech stocks, particularly affecting software companies, which has historically correlated with Bitcoin's performance [6] Future Outlook - The ongoing pressure on Bitcoin prices and mining profits suggests that the mining sector will continue to face challenges until there is an adjustment in network difficulty or stabilization of prices above profitable levels for operators [7]

Market Overview - Major indices, except the Russell 2000, finished higher with the Dow Jones up 0.64% at 49,412, S&P 500 up 0.50% at 6,950, and Nasdaq up 0.43% at 23,601, while Russell 2000 closed down 0.36% at 2,659 [2] - Anticipation of earnings reports from major technology companies like Microsoft, Meta, and Tesla, along with the upcoming Federal Reserve meeting, contributed to the positive market sentiment [2] Treasury Bonds - Treasury yields decreased as buyers responded positively to a well-received auction of 2-year notes, with the 30-year bond closing at 4.80% and the benchmark 10-year note at 4.21% [3] - Investor concerns regarding inflation and Federal Reserve policy influenced the demand for U.S. government debt [3] Oil and Gas - Oil prices declined due to a stronger-than-expected supply outlook and profit-taking after recent price increases, with Brent Crude closing at $65.68 (down 0.30%) and West Texas Intermediate at $60.76 (down 0.31%) [4] - Natural gas prices surged over $7 during the day, the highest since December 2022, but finished at $6.47, up 22%, following profit-taking [4] Earnings and Economic Outlook - The week is significant for earnings reports from major companies, particularly the "Magnificent 7," marking the biggest week for 4th quarter earnings results [5] - The Federal Reserve is expected to maintain current rates, with investors looking for more economic data to assess inflation trends [5]

Core Insights - Home equity rates have reached their lowest levels in three years, with the five-year home equity loan at 7.92% and the home equity line of credit (HELOC) at 7.44% [1][3] Group 1: Current Rates and Trends - The benchmark five-year home equity loan decreased by six basis points to 7.92%, while the HELOC rate remained unchanged at 7.44% [1] - Over the past four weeks, the HELOC rate has decreased from 7.63% to 7.44%, and the five-year home equity loan rate has dropped from 7.99% to 7.92% [3] - The 52-week average for HELOCs is 8.04%, and for the five-year home equity loan, it is 8.22% [3] Group 2: Factors Influencing Rates - Home equity rates are primarily influenced by Federal Reserve policy and long-term inflation expectations [4] - The Federal Reserve's rate cuts in 2025 have contributed to the current low levels of HELOCs and home equity loans [4] - Forecasts suggest that home equity rates may continue to decline if the Fed implements projected rate cuts in 2026 [4] Group 3: Market Demand and Economic Conditions - Increased demand for home equity borrowing is noted due to rising homeowner equity, growing household debt, and strong renovation activity [2] - The current economic conditions are expected to maintain a favorable environment for home equity borrowing, potentially applying downward pressure on rates [5] - HELOCs and home equity loans are comparatively less expensive than unsecured credit options like credit cards and personal loans [6]

Core Insights - HELOC rates have significantly decreased, reaching three-year lows, with the average rate dropping to 7.44% due to a major lender resuming promotions [1] - The overall trend indicates a falling-rate environment for HELOCs and home equity loans, with expectations of rates potentially approaching 7% by the end of the year [2] Rate Comparisons - Current HELOC rate is 7.44%, down from 7.63% four weeks ago and 8.28% a year ago, with a 52-week average of 8.05% and a low of 7.44% [2] - The five-year home equity loan rate is currently at 7.98%, slightly up from 7.99% four weeks ago and down from 8.40% a year ago [2] Influencing Factors - Home equity rates are primarily influenced by Federal Reserve policy and long-term inflation expectations, with recent Fed rate cuts contributing to lower HELOC and home equity loan rates [3] - The Fed's current focus on labor market conditions rather than inflation may lead to increased home equity borrowing and potentially lower rates [4] Comparative Rates - HELOCs and home equity loans are significantly cheaper than unsecured credit options, with average rates of 19.64% for credit cards and 12.19% for personal loans [5] - Lenders typically limit total home loans to a maximum of 80% to 85% of a home's value, affecting individual offers for HELOCs and home equity loans [5]

Core Insights - Home equity line of credit (HELOC) rates have increased significantly, with the average rate rising by 59 basis points to 8.22% as a major lender ended promotions [1] - The benchmark five-year home equity loan rate has slightly decreased to 7.97% [1] Rate Trends - Current HELOC rate is 8.22%, compared to 7.81% four weeks ago and 8.27% one year ago, with a 52-week average of 8.07% and a low of 7.63% [3] - The five-year home equity loan rate is currently at 7.97%, down from 7.99% four weeks ago and 8.43% one year ago, with a 52-week average of 8.24% and a low of 7.97% [3] - Other home equity loan rates include 10-year at 8.16% and 15-year at 8.10% [3] Influencing Factors - Home equity rates are primarily influenced by Federal Reserve policy and long-term inflation expectations [4] - The Fed's rate cuts in 2025 have led to the lowest HELOC and home equity loan rates in two years, with potential for further reductions in 2026 if projected cuts occur [4] - The Fed's current focus on labor market conditions rather than inflation may increase home equity borrowing appetite, potentially applying downward pressure on rates [5] Comparative Rates - HELOCs and home equity loans are generally less expensive than unsecured credit options, with HELOCs at 8.22% and home equity loans at 7.97%, compared to credit cards at 19.65% and personal loans at 12.20% [6] - Individual offers for HELOCs or home equity loans depend on factors such as creditworthiness, financials, home value, and ownership stake [6]

Group 1: Keynote Insights at CES - Nvidia CEO Jensen Huang and AMD CEO Lisa Su will deliver keynote speeches at CES, which could significantly influence sentiment in the AI infrastructure sector heading into 2026 [1][2] - Huang's presentation will be closely watched for announcements regarding next-generation AI accelerators and data center roadmaps, as well as customer demand sustainability [1] - AMD's Lisa Su is under pressure to showcase the adoption of the MI300 series and competitive positioning against Nvidia in data center GPUs, with potential wins from cloud service providers enhancing AMD's credibility [1] Group 2: Economic Data and Market Sentiment - The week features a comprehensive economic data calendar culminating in the December jobs report, which will provide insights into labor market conditions and influence Federal Reserve policy expectations [2][3] - Key economic indicators such as ISM Manufacturing and Non-Manufacturing PMIs will offer insights into industrial and services sector health, impacting market sentiment and potential sector rotation [4][6] - The absence of major earnings reports allows economic data and CES announcements to dominate market focus, testing whether the market can maintain momentum from any year-end rally [2][6] Group 3: Inflation and Federal Reserve Policy - The week's economic data will provide multiple perspectives on inflation, with ISM prices components and wage growth data being crucial for assessing inflationary pressures [7] - The Federal Reserve's December meeting highlighted the need for sustained evidence of disinflation before committing to further policy easing, making this week's inflation signals particularly significant [7] - Any evidence of reaccelerating price pressures could impact rate-sensitive sectors and support the dollar, while benign inflation readings may provide relief for risk assets [7]