Fed Resolute • Yields Jump • Solid Payrolls Data

October 5, 2022 | Hoya Capital

Fed Resolute • Yields Jump • Solid Payrolls Data Real Estate Daily Recap Oct 5 Written By U.S. equity markets declined Wednesday following their best two-day rally since 2020 as slightly better-than-expected employment and PMI data reversed the recent pull-back in long-term interest rates. Following consecutive gains of over 2.5% in the previous two sessions, the S&P 500 finished lower by 0.2% in a choppy session while the Mid-Cap 400 and Small-Cap 600 each declined 0.5%.

Real estate equities were laggards today, pressured by the jump in long-term rates. The Equity REIT Index declined 2.1% today with all 18 property sectors in negative territory. Following downbeat JOLTS data on Tuesday, solid ADP employment data today showed a private payrolls gain of 208k in September as strong hiring in the transportation and logistics sectors offset job losses in the manufacturing, financial services, and energy sectors. Hawkish Fed commentary from SF Fed President Daly - who reiterated that the Fed is "resolute" in their policy path - and from Atlanta Fed President Bostic - who wants to raise rates by another 75 to 150 basis points by year-end - contributed to the upward pressure on yields.

Income Builder Daily Recap U.S. equity markets declined Wednesday following their best two-day rally since 2020 as slightly better-than-expected employment and PMI data reversed the recent pull-back in long-term interest rates. Following consecutive gains of over 2.5% in the previous two sessions, the S&P 500 finished lower by 0.2% in a choppy session while the Mid-Cap 400 and Small-Cap 600 each declined by 0.5%. Real estate equities were laggards today, pressured by the jump in long-term rates.

The Equity REIT Index declined 2.1% today with all 18 property sectors in negative territory while the Mortgage REIT Index dipped 4.6%. Homebuilders also lagged as mortgage applications dipped to the slowest pace since 1997. Continuing the 'good news is bad news' theme, a slightly better-than-expected ADP employment report ...