Fed Hikes • Stocks Drop • REIT Earnings

May 1, 2023 | Hoya Capital

Fed Hikes • Stocks Drop • REIT Earnings Daily Recap May 3 Written By Alex Pettee, CFA U.S. equity markets reversed early-session gains Wednesday after the Federal Reserve hiked interest rates by another 25 basis points and signaled a surprising indifference to recent banking industry turmoil. Following declines of more than 1% on Tuesday, the S&P 500 declined by another 0.7% today - finishing near session-lows. The Dow declined 270 points.

Real estate equities were mixed amid the busiest 48 hour-stretch of REIT earnings season. The Equity REIT Index declined 0.4% today, with 12-of-18 property sectors in negative territory. Mall REIT Simon Properties (SPG) dipped about 4% today despite reporting decent first-quarter results and hiking its dividend while also raising its full-year outlook. Questions over SPG's plan to spend $1.5B on redevelopment and expense headwinds offset strong leasing results. Hotel REITs Apple Hospitality (APLE) and Xenia Hotels (XHR) each rallied about 3% after reporting strong first-quarter results.

Skilled nursing REIT Omega Healthcare (OHI) rallied 10% after reporting improving health of tenant operators. Explore hoya capital INVESTMENT RESEARCH Income Builder Daily Recap U.S. equity markets reversed early-session gains Wednesday after the Federal Reserve hiked interest rates by another 25 basis points and - through a unanimous decision that received "very strong across the board” - signaled a surprising indifference to recent banking industry turmoil and real-time inflation metrics showing muted inflationary pressures since mid-2022.

Following declines of more than 1% on Tuesday, the S&P 500 finished lower by another 0.7% today - finishing near session lows - while the tech-heavy Nasdaq 100 declined 0.6%. The Dow declined 270 points. Real estate equities were mixed amid the busiest 48 hour-stretch of REIT earnings season. The Equity REIT Index declined 0.4% today, with 12-of-18 property sectors in negative territory, while the Mortgage REIT Index advanced 0.2%.

As expected, the Federal Reserve raised short-term interest rates for a 10th consecutive meeting, containing the most ...