Daily Recap: Worries Wane | Yields Climb | REITs Fade

November 5, 2019 | Hoya Capital

Daily Recap: Worries Wane | Yields Climb | REITs Fade Uncategorized Nov 5 Written By Reports that the US and China are moving closer to "Phase One" of a trade deal - a deal that may now include rollbacks of some existing tariffs - prompted another "risk-on" day in the US equity markets. A better-than-expected ISM services print this morning further eased investor worries, sending the Nasdaq ETF ( QQQ ) to another all-time record high while the S&P 500 ETF ( SPY ) finished roughly unchanged.

A repeat of the trading action yesterday, the 10-Year Treasury Yield ( IEF ) climbed higher by another 7 basis points to 1.87%, flirting with the highest levels since the September 14th close at 1.90%. Defensive and yield-oriented equity sectors, which have led this year's market rally, lagged for the second straight day. The broad-based Real Estate ETF ( VNQ ) ended the day lower by 1.7%, dragged to the downside by the defensively-oriented manufactured housing, healthcare, and net lease sectors.

Hotel REITs were the lone real estate sector finishing in the green. Despite the past month's underperformance, the broad-based REIT ETFs are still clinging to a thin margin of YTD outperformance compared to the S&P 500. The Hoya Capital Housing Index , the benchmark that tracks the performance of the US housing industry, finished the day lower by 0.7% as strength from the real estate technology and brokerage sector, as well as the mortgage lending and servicing sector, was offset by weakness from the residential REITs and homebuilders.

The recently resurgent Realogy ( RLGY ) led the gains for the second straight day while homebuilding products companies Leggett & Platt ( LEG ), Whirlpool ( WHR ), and AO Smith all climbed by at least 2% on the day. Besides a few stragglers next week, real estate earnings season will wrap up this week with another 30 REITs reporting results including Host ...