Inflation Cools • Rents Firm • REIT Earnings Wrap

May 9, 2023 | Hoya Capital

Inflation Cools • Rents Firm • REIT Earnings Wrap Daily Recap May 10 Written By Alex Pettee, CFA U.S. equity markets advanced while benchmark interest rates retreated after the critical CPI report showed a continued cool-down of inflationary pressures in April, easing pressure on the Fed to hold its restrictive stance. Pushing back into positive territory for the week, the S&P 500 gained 0.2% today, while the Mid-Cap 400 and the Small-Cap 600 posted similar gains.

Real estate equities- the industry group with perhaps the most to gain from moderating inflation and interest rate pressures- were among the leaders today. The Equity REIT Index gained 1.0%. The inflation metric that we watch most closely - CPI-ex-Shelter Index - showed a tenth straight month of cooling in the year-over-year rate. Since July, this CPI ex-Shelter Index has posted an annual inflation rate of just over 1%. Tricon Residential (TCN) - the third largest single-family rental REIT - gained 2% after reporting solid results highlighted by buoyant leasing spreads, consistent with the theme we've observed across residential REIT earnings reports over the past month.

Explore hoya capital INVESTMENT RESEARCH Income Builder Daily Recap U.S. equity markets advanced while benchmark interest rates retreated after the critical CPI report showed a continued cooldown of inflationary pressures in April, easing pressure on the Fed to hold its restrictive stance. Pushing back into positive territory for the week, the S&P 500 gained 0.2% today, while the Mid-Cap 400 and the Small-Cap 600 posted similar gains. The Dow declined 30 points.

Bond investors cheered the encouraging inflation news, sending benchmark interest rates lower on the session with the 2-Year Treasury Yield dipping 12 basis points to 3.91% while the 10-Year Yield retreated 5 basis points to 3.47%. Real estate equities - the industry group with perhaps the most to gain from moderating inflation and interest rate pressures - were among the leaders today. Also buoyed by solid ...