Short Surrender • REITs Rally • Earnings Update

February 1, 2021 | Hoya Capital

Short Surrender • REITs Rally • Earnings Update Daily Recap Feb 1 Written By Summary U.S. equity markets rebounded Monday following sharp declines last week ahead of a busy week of corporate earnings and economic data while the "short squeeze saga" continues to add intrigue. Coming off the worst week for the major indexes since October, the S&P 500 finished higher by 1.61% today while the Dow Jones Industrial Average rebounded 229 points.

Real estate equities - which were a source of stability last week - continued their outperformance today as earnings season heats-up. Equity REIT rallied 2.3% today with 18-of-19 property sectors higher. Mall REIT Macerich (MAC) plunged more than 10% today after reporting preliminary 4Q results. Consistent with our commentary last week, earnings reports have indeed served a "dose of reality" for the high-flying short squeezed REITs. FFO per share plunged by 39% from last year.

The "REIT Squeeze Index" has come back down to earth over the last several trading sessions, diving about 10% from its peak last Thursday including the sharp declines today from Tanger Outlets (SKT), Washington Prime (WPG), and the aforementioned Macerich (MAC). Real Estate Daily Recap U.S. equity markets rebounded Monday following sharp declines last week ahead of a busy week of corporate earnings and economic data while the "short squeeze saga" continues to add intrigue.

Coming off the worst week for the major indexes since October, the S&P 500 ETF ( SPY ) finished higher by 1.7% today while the Dow Jones Industrial Average ( DIA ) rebounded 229 points and the tech-heavy Nasdaq 100 ( QQQ ) surged 2.5%. Real estate equities, which were a source of stability last week, continued their outperformance today as earnings season heats-up. The broad-based Equity REIT ETFs ( VNQ ) rallied 2.3% today with 18 of 19 property sectors in positive territory while the Mortgage REIT ETFs ( REM ) gained 1.8%.

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