Inflation Cools • REITs Lead • Fed Ahead

December 13, 2022 | Hoya Capital

Inflation Cools • REITs Lead • Fed Ahead Real Estate Daily Recap Dec 13 Written By U.S. equity markets rallied Tuesday after CPI inflation data showed a continued cooling of price pressures, raising hopes that the Fed can begin to scale back its aggressive tightening course. Despite giving back much of its early-session gains, the S&P 500 gained 1.0% on the day - finishing near session lows after rising as much as 3.2% immediately after the CPI report.

Real estate equities - the sector with perhaps the most to gain from easing inflation and a potential Fed pivot - were among the leaders today. Peak Inflation? Perhaps. Investors received more "good news" on the inflation front this morning as the Consumer Price Index showed a cooler-than-expected increase in prices in November with the Headline and Core CPI coming in well below expectations,. The CPI-ex-Shelter Index was negative for the fourth month in the past five.

Remarkably, in the five-month period beginning in July, CPI ex-Shelter has averaged a -1.9% annualized rate - among the most deflationary five-month periods in the CPI record. Income Builder Daily Recap U.S. equity markets rallied Tuesday after CPI inflation data showed a continued cooling of price pressures, raising hopes that the Fed can begin to scale back its aggressive tightening course and avoid a "hard landing." The S&P 500 advanced 1.0% on the day but finished near session lows after opening the session with nearly 3% gains while the tech-heavy Nasdaq 100 closed with gains of 1.3% today - nearly 4% below its early-session highs.

Real estate equities - the sector with perhaps the most to gain from easing inflation and a potential Fed pivot - were among the leaders today with the Equity REIT Index advancing 2.0% today with 16-of-18 property sectors in positive-territory while the Mortgage REIT Index finished higher by 1.0%. Homebuilders gained nearly 2% as mortgage rates fell to three-month lows. ...