TWO - AGNC Investment Q2 results reflect wider spreads net hedging losses: BTIG's take

Digging into AGNC Investment's ([[AGNC]] -0.6%) Q2 results, BTIG analyst Eric Hagen points out that spread widening in May and June "essentially reversed the benefits captured in the first quarter from being higher in coupon and hedged with longer-maturity swaps and treasuries."Net hedging losses resulted in -$2.00/share in Q2 vs. a gain of $4.44 in Q1, he added.AGNC stock is down modestly as are many of its peers.He doesn't consider the stock as expensive at ~1x book value, assuming net asset value slipped 1.5%-2.5% in July, "but some curve steepening is likely necessary to help lessen prepayment pressure and reinvestment risk over the near-term," Hagen writes in a note to clients.The lower interest rates fall, the more likely it is that homeowners will refinance their mortgages at a lower rate.The 10-year Treasury yield continues to slip, falling 6 basis points on Tuesdays to 1.24%. Last week, the 30-year fixed-rate mortgage

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AGNC Investment Q2 results reflect wider spreads, net hedging losses: BTIG's take