- Alex Pettee, CFA
REITs And Homebuilders Surge In January
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Powered by the 100th consecutive month of job growth and an increasingly dovish Fed, the S&P 500 climbed 1.6% on the week and notched its best January in 30 years.
Coming off their worst year since the financial crisis, real estate equities led the charge in January. REITs rallied nearly 12% on the month while Homebuilders surged nearly 13%.
Jobs data continues to exceed estimates, powered by a slow march higher in labor force participation. Strong wage growth has gradually pulled discouraged workers back into the workforce.
Housing data was mixed this week. The shutdown-delayed November New Home Sales data exceeded expectations and far outpaced the private market estimates. Pending home sales, however, was significantly weaker than expected.
Sentiment around the US housing market has gradually improved as mortgage rates remain near ten-month lows. REIT and Homebuilder earnings reports so far have generally exceeded modest expectations.