Post-Election Rally | Lower-For-Longer | REITs Boost Dividends

November 4, 2020 | Hoya Capital

Post-Election Rally | Lower-For-Longer | REITs Boost Dividends Daily Recap Nov 4 Written By U.S. equity markets surged Wednesday as Election Results pointed towards a divided government and the prospects of political stability regardless of the winner of the still-undecided Presidential race. Pushing its weekly gains to over 5%, the S&P 500 jumped another 2.2% today and the Dow Jones Industrial Average gained 367 points while the tech-heavy Nasdaq 100 surged 4.5%.

REITs lagged today - particularly the COVID-sensitive sectors - as the Equity REIT ETF (VNQ) finished higher by 0.1% today with 11 of the 18 property sectors finishing in negative territory. We view the "divided government" outcome as an especially ideal environment for residential and commercial real estate equities and other yield-sensitive sectors that tend to outperform during economic regimes of low-interest rates, low inflation, and modest economic growth. Economic data was mixed with disappointing ADP data offset by strong housing market data as mortgage applications activity showed robust housing demand.

We have another busy afternoon of REIT earnings with more than a dozen reports. Real Estate Daily Recap U.S. equity markets surged Wednesday as Election Results pointed towards a divided government and the prospects of political stability regardless of the winner of the still-undecided Presidential race. Pushing its weekly gains to over 5%, the S&P 500 ETF ( SPY ) jumped another 2.2% today and the Dow Jones Industrial Average ( DIA ) gained 367 points while the tech-heavy Nasdaq 100 ( QQQ ) surged 4.5%.

Real estate equities lagged today, particularly the COVID-sensitive sectors as the broad-based Equity REIT ETF ( VNQ ) finished higher by 0.1% today with 7 of the 18 property sectors finishing in positive territory while the Mortgage REIT ETF ( REM ) finished lower by 0.8%. We view the "divided government" outcome - particularly one with a fiscally conservative Senate - as an especially ideal environment for commercial real estate equities ...