Bank Bailouts • Yields Plunge • REITs Rebound

March 13, 2023 | Hoya Capital

Bank Bailouts • Yields Plunge • REITs Rebound Real Estate Daily Recap Mar 13 Written By U.S. equity markets remained under-pressure Monday while benchmark interest rates plunged after regulators were forced to step-in to contain the fallout from the second and third-largest bank failures. Following its worst week since September 2022, the S&P 500 dipped another 0.2% today, while the Mid-Cap 400 and Small-Cap 600 were each lower by roughly 2%.

The Dow declined 90 points. Real estate equities and other yield-sensitive industry groups rebounded following a punishing week as investors consider potential silver-linings in the sharp plunge in benchmark interest rates. The turmoil from the collapse of Silicon Valley Bank last week and Signature Bank over the weekend has prompted a rapid repricing in Fed rate hike expectations. Swaps markets now imply a Fed Funds rate of 4% by year-end, down from the 4.75% today.

Valuations of residential and commercial mortgage-backed bonds have rallied over the past two sessions as tailwinds from lower benchmark interest rates have more-than-offset the widening of credit spreads while underlying delinquency rates entered this turmoil at historically-low levels. Income Builder Daily Recap U.S. equity markets remained under pressure Monday while benchmark interest rates plunged after regulators were forced to step-in to contain the fallout from the second and third-largest bank failures.

Following its worst week since September 2022, the S&P 500 dipped another 0.2% today, while the Mid-Cap 400 and Small-Cap 600 were each lower by roughly 2%. The Dow declined 90 points. Real estate equities and other yield-sensitive industry groups rebounded following a punishing week as investors consider potential silver linings in the sharp plunge in benchmark interest rates. The Equity REIT Index advanced 1.3% today with all 14-of-18 property sectors in positive territory, while the Mortgage REIT Index declined 0.8%.

The turmoil from the collapse of Silicon Valley Bank and Silvergate Capital last week and Signature Bank over the weekend has prompted ...