AGNC Investment Corp. preferreds offer high single-digit yields, zero credit-risk holdings, and a strong up-in capital profile, making them attractive to investors. AGNCL's reset structure provides a natural hedge, but recent outperformance and reduced Fed rate cut expectations make AGNCP's floating-rate shares more compelling. Relative to its floating-rate counterparts, AGNCP offers potential capital gains and lower call price risk.

US equity markets posted modest declines this week amid a "DeepSeek" tumble, while interest rates declined to six-week lows as markets responded to the pause in the Fed's rate-cutting cycle. The Nasdaq 100 was the center of the action this week, dipping 1.4% on concern over potential competition from Chinese startup DeepSeek, which sparked a sharp sell-off in AI-darlings. Real estate equities were among the stronger performers for a third-straight week, buoyed by easing interest rates and by a relatively solid start to REIT earnings season.

Following the best week since November, U.S. markets posted their best first-week of a Presidential term since 1985 as investors saw business-friendly undertones in the early days of the new administration. Striking an agreeable tone for markets that were wary of the inflationary impacts of trade and fiscal policy, President Trump focused on supply side policies and didn't immediately implement sweeping tariffs. Posting record-highs for the first time since early December, the S&P 500 gained another 1.7% on the week, notching back-to-back weekly gains following a stretch of 4-of-5 weekly losses.

The real estate cycle will finally transition from the "Recession" phase to the "Recovery" phase in 2025. Muted supply growth will be the silver-lining to the brutal three-year bear market. False Start: REITs surged 20% leading up to the Fed's initial "jumbo" interest rate cut in September, but have hit the skids once again since the rate cuts actually began. Historically Cheap: REITs have underperformed the S&P 500 by a whopping 45 percentage points since the start of the Fed hiking cycle in 2022 - a historically remarkable underperformance gap.

U.S. equity markets climbed to fresh record-highs while benchmark interest rates dipped sharply, as investors parsed inflation data and deliberated the potential implementation and impacts of Trump Administration policies. Markets cheered the nomination of Scott Bessent for US Treasury Secretary, reflecting expectations that the implementation of hawkish trade and immigration policies would consider the impacts on U.S. financial markets. Extending its post-election gains to around 6%, the S&P 500 advanced another 1.2% this week. The Small-Cap 600 gained 1.1% this week - lifting its post-election gains to over 10%.

Recent macroeconomic changes, including the yield curve uninverting and Fed rate cuts, have significantly impacted REIT preferreds, leading to price increases and varied forward return potentials. Despite overall price rises, select REIT preferreds remain deeply discounted, offering high yields and substantial capital appreciation potential. Mispricing due to accrued dividends and variable rate conversions presents lucrative opportunities in preferreds.

U.S. equity markets soared to record highs this week after President-elect Trump scored a surprisingly decisive election victory, including a likely "trifecta" of Republican legislative control in Congress. The outcome sparked powerful moves across global financial markets as investors priced in a combination of domestic-focused and "pro-growth" economic policies but also reflected concern over deficits and immigration policy. Characteristic of the "Trump trade" dynamic, smaller-cap companies led the surge, outperforming mega-cap technology and international-heavy peers. The S&P Small-Cap 600 soared 9%, outpacing 5% gains from the S&P 500.

Ahead of a pivotal week of consequential decisions, U.S. equity markets posted a second-straight week of declines as investors parsed a relatively disappointing slate of employment and inflation data. The pivotal Nonfarm Payrolls report showed that the U.S. economy added just 12k jobs in October - the weakest month since 2020 - with notably weaker trends under the surface. Private employment declined by 28k during the month, fueled by the largest plunge in manufacturing employment since the pandemic shutdown, alongside job declines in retail, transportation, and hospitality.

U.S. equity markets snapped a six-week winning streak, while benchmark interest rates surged to three-month highs as investors braced for a volatile two-week stretch of market-moving events. Another surprisingly solid slate of domestic economic data - highlighted by improved jobless claims and consumer sentiment reports - lifted the U.S. Economic Surprise Index to the highest-level since April. Retreating from record-highs, the S&P 500 finished lower by 1% on the week, declining for just the second time in the past twelve weeks. Rate-sensitive segments and small-caps were laggards.

AGNC preferreds have rallied in 2024 alongside the broader income market due to a strong macro backdrop and Fed rate cuts. Within the preferred suite, we like AGNCL and floating-rate AGNCO, trading at yields of 7.7% and 9.8% respectively. We see a yield upside for AGNCL and a downside for AGNCO. Redemption risk for floating-rate preferreds is mitigated by high yields and modest price impact.