Daily Recap: Dovish Cut | Stocks And REITs Rally | GDP Beats

October 30, 2019 | Hoya Capital

Daily Recap: Dovish Cut | Stocks And REITs Rally | GDP Beats Uncategorized Oct 30 Written By Responding to what investors interpreted as a "dovish cut" by the US Federal Reserve, the S&P 500 ETF ( SPY ) rallied to new record-highs, gaining 0.3% on the day while the Nasdaq ETF ( QQQ ) climbed 0.5%. As expected, the Fed cut short-term rates by 25 basis points and signaled a pause in future action.

Stocks and bonds rallied in the subsequent press conference as the 10-Year Treasury Yield ( IEF ) ticked lower by 4 basis points, closing at 1.80% Investors keyed in on a key comment from Fed Chair Powell: "We'll really significant move up in inflation that’s persistent before we even consider raising rates to address inflation concerns.” Broad-based inflation has been almost non-existent over the five years outside of rising housing costs.

Core CPI ex-Shelter has averaged roughly 1% since the start of 2012. Real estate equities were generally higher on the day as investors gear up for another busy afternoon of earnings. The broad-based REIT ETF ( VNQ ) ended the day higher by 0.4%, led to the upside by the shopping center, office, and apartment REIT sectors while the storage and mall REIT sectors lagged. The Hoya Capital Housing Index , the benchmark that tracks the performance of the US housing industry, finished the day flat as strength from the home improvement retailers Home Depot ( HD ) and Lowe's ( LOW ) was offset by softness in the mortgage lenders and real estate technology and brokerage sector.

Apartment REIT UDR ( UDR ) delivered a solid day after boosting same-store NOI guidance while single-family rental REIT Invitation Homes ( INVH ) finished mildly lower despite reporting very strong blended rent growth of 4.6%. This morning, homebuilder Taylor Morrison ( TMHC ) this morning reported that net orders surged 39% from last year, but gave ...