NEW YORK (Real Money) -- How high are rates going to go? How much of a desire to raise rates will the Fed show at its Wednesday meeting? If you own Treasuries going into Janet Yellen's den, you have to be a little daunted by the action in the real estate investment trusts and the banks, because they are telling you the same story: rates are headed higher this week -- maybe much higher.
Whether it be the sudden animal spirits of Goldman Sachs (GS) and Morgan Stanley (MS) or the strength in regionals like First Horizon (FHN) and KeyBanc (KEY) , the signs are clear: we are about to get some net interest margin going here, and it is happening at the exact right time: the last month in the quarter. It's practically universal, big and small banks, so it's not just a gigantic SPDR Financial Sector (XLF) trade that's making things happen. We have seen these fake outs before, but this is the most pronounced move of the year.
But it is nowhere near as bullish as the action in real estate investment trusts is bearish. I am seeing moves that are simply hideous, a 15.5 million share secondary for Health Care REIT (HCN) priced at $63.75 didn't hold, with the stock going out at $63.25, now with a 5% yield. A huge amount of pressure being put on AvalonBay (AVB) . A hammering of shopping center chain Equity One (EQY) . A horrendous week for Simon Property Group (SPG) , the regional mall chain. No wonder the iShares S&P 500 (IYR) fell from $75 to $71.