Debt Standoff • Office Dividend Cut • Cannabis REITs Rebound

May 9, 2023 | Hoya Capital

Debt Standoff • Office Dividend Cut • Cannabis REITs Rebound Daily Recap May 9 Written By Alex Pettee, CFA U.S. equity markets declined Tuesday as traders tracked efforts to end a standoff over an extension of the debt ceiling and took positions ahead of a critical CPI inflation report. Following fractional gains on Monday, the S&P 500 slipped 0.4% today, while the Mid-Cap 400 and the Small-Cap 600 posted similar declines.

The Dow declined 57 points. Real estate equities finished mostly-lower today amid the final stretch of REIT earnings season. The Equity REIT Index declined 0.4% today, with 7-of-18 property sectors in positive territory. Innovative Industrial (IIPR) - the largest of five cannabis REITs - rallied 3% after reporting solid results, noting that its rent collection rate improved to 98% in Q1 - up from 94% in Q4 - with no additional tenants named as non-payers.

West Coast-focused office REIT Hudson Pacific (HPP) dipped another 7% after it reported weak results and reduced its dividend by 50%, becoming the seventh office REIT and 15th overall to reduce its dividend this year. San Francisco remains the hardest-hit major market by the post-pandemic WFH era. Explore hoya capital INVESTMENT RESEARCH Income Builder Daily Recap U.S. equity markets declined Tuesday as traders tracked efforts to end a standoff over an extension of the U.S. debt ceiling and took positions ahead of a critical CPI inflation report on Wednesday morning.

Erasing Monday's fractional gains, the S&P 500 slipped 0.4% today, while the Mid-Cap 400 and the Small-Cap 600 posted similar declines. The Dow declined 57 points. Benchmark interest rates were little changed today, with the 2-Year Treasury Yield climbing a couple of basis points to 4.03% while the 10-Year Treasury Yield was unchanged at 3.52%. Real estate equities finished mostly-lower today amid the final stretch of REIT earnings season. The Equity REIT Index declined 0.4% today with 7-of-18 property sectors in positive territory, while ...