A Wall Of Worry

May 21, 2023 | Hoya Capital

A Wall Of Worry Sector Report Weekly Outlook May 21 Written By Alex Pettee, CFA U.S. equity markets climbed to nine-month highs this week as investors weighed signs of progress on debt-ceiling negotiations and solid economic data against a continued drumbeat of hawkish Fed commentary. Snapping a two-week losing streak and climbing to its highest levels since August, the S&P 500 advanced 1.7% while the tech-heavy Nasdaq 100 rallied 3.5% to fresh 52-week highs.

Real estate equities were laggards this week, pressured by a rebound in benchmark interest rates. The Equity REIT Index dipped 2.0% but Office and Mortgage REITs were among the leaders. Homebuilders and the broader Housing Index continued their strong start to 2023 on data indicating that the housing industry is beginning to emerge from its nearly two-year-long recession. A flurry of M&A and dealmaking was the theme this week in the REIT space amid a historically slow year of commercial real estate transaction activity.

Regency Centers announced a $1.4B deal to acquire Urstadt Biddle Properties. Both Casino REITs also announced major deals. U.S. equity markets climbed to nine-month highs this week as investors weighed signs of progress on debt-ceiling negotiations and solid economic data against a continued drumbeat of hawkish central bank commentary. The rebound came despite a surge in benchmark interest rates, which rose to their highest level since March as Fed officials across a dozen public appearances pushed back on calls for a pivot towards less-aggressive monetary tightening.

READ THE FULL REPORT HERE Alex Pettee, CFA Comments (0) Newest First Oldest First Newest First Most Liked Least Liked Add Comment --> Preview Edit --> Post Comment… Previous Previous Fed Talks Tough • Debt Limit Countdown • Week Ahead Next Next Office REITs: Just How Bad Is It?