Annaly (NLY) Hits Another New 52-Week High

Shares of Annaly Capital (NYSE: NLY) are up today amid Fed Chairman Ben Bernanke's comments that suggested more rate cuts are looming. Bernanke, who met with the House Financial Services Committee earlier today, set a dovish tone, saying the Fed is more concerned with the possibility of downside risks related to growth, despite recent economic indicators that suggest inflation is on the rise.

In contrast to most mortgage companies, Annaly is faring extremely well in the U.S.'s waning economy. This is because Annaly only accepts the highest quality mortgages with essentially no credit risk. Additionaly, Annaly substantially benefits from a steeper yield curve as it borrows on a very short-term basis. This is why Annaly performs well as the market prices in higher chances of a future fed rate cute, which would subsequently steepen the yield curve.

It is not hard to tell that Annaly investors feel comfortable in this environment filled with endless speculation related to the next Fed rate reduction: the company's stock has marked new 52-week highs in 10 out of 2008's 39 trading days. Today the 52-week high was set when Annaly's price moved up to $21.20.

Annaly Capital Management, Inc., a real estate investment trust, engages in the ownership, management, and financing of a portfolio of investment securities.

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