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  • Alex Pettee, CFA

From Bad To Worse For REITs

There were few places to hide on another punishing week for global equity markets as the coronavirus-related shutdowns continue to wreak havoc on the global financial system.

Despite unprecedented monetary policy action by central banks and promises of substantial fiscal stimulus, a forthcoming recession appears inevitable and unavoidable but hopefully short-lived.

Following a decline of nearly 10% last week, the S&P 500 plunged another 15% while the Dow Jones dipped another 4,000 points on the worst week for stocks since 2008.

For real estate, this time "should" be different, but markets think otherwise. It was a historically bad week for any and all real estate-related equities. REITs plunged nearly 25% in their all-time worst week.

Backwards-looking data, including Existing Home Sales, has shown that the U.S. economy - and particularly the U.S. housing industry - was firing on all cylinders in early 2020 before the coronavirus crisis.

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Hoya Capital Research & Index Innovations is an affiliated index provider and research firm that builds custom indexes tracking U.S. commercial and residential real estate sectors, including indexes tracked by exchange-traded funds (ETFs). 

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