Daily Recap: Stocks Flatline | Solid PMIs | Another Big Week of Housing Data
After snapping their three-week winning streak with modest declines last week, US equity markets started the first week of Autumn little-changed with the S&P 500 climbing 0.1% and the Nasdaq gaining 0.5%. Trading in a tight range for most of the day, investors digested solid US PMI data coming after weaker-than-expected manufacturing data from Germany earlier in the day. The 10-Year yield fell 5 basis points on the day, resuming a retreat after perking higher to 1.90% back on September 14th, but well off the recent lows of 1.45% hit on September 3rd.
Coming off a week that saw the broad-based REIT ETFs (VNQ and IYR) jump by more than 2%, the REIT ETFs finished the day modestly higher, led by the Data Center, Apartment, and Industrial REIT sectors. Top individual performers on the day included CBL & Associates (CBL), Equnix (EQIX), Paramount Group (PGRE), Physicians Realty (DOC), Digital Realty (DLR), CoreSite (COR), Healthcare Trust of America (HTA), and National Health Investors (NHI). The single family rental REIT sector was the laggard on the day after jumping more than 4% last week.
The Hoya Capital Housing Index, the benchmark that tracks the performance of the US housing industry, finished the day flat, led to the upside by the Mortgage Lending and Services and Home Improvement Retail sectors. At Home (HOME), Williams-Sonoma (WSM), La-Z-Boy (LZB), Lennar (LEN), DR Horton (DHI), and Re/Max (RMAX) were among the top individual performers in the housing sector ahead of another big week of housing data.
On that point, Home Price data from S&P/Case Shiller and the FHFA is released on Tuesday. Home price appreciation moderated meaningfully from mid-2018 through early 2019, but has shown early signs of stabilization and even reacceleration in recent months amid a favorable backdrop of lower mortgage rates. New Home Sales data is released on Wednesday followed by Pending Home Sales on Thursday with each expected to see a meaningful rise over last month, consistent with other single-family housing market indicators. On Friday, PCE inflation data, the Fed's preferred inflation metric is released, as is the closely-watched personal income and spending data for perhaps the best "read" on the strength of the US consumer.
With gains of 25% so far this year, the broad-based REIT ETFs (VNQ and IYR) continue to outperform the S&P 500, which has climbed roughly 20%. The US Housing sector has climbed roughly 27% this year led by the 49% surge in Homebuilders (ITB) and strong gains from the Home Furnishings and Homebuilding Products & Materials sectors. At 1.71%, the 10-year yield has retreated by 99 basis points since the start of the year and is roughly 155 basis points below peak levels of 2018 around 3.25%.
For an in-depth analysis of all real estate sectors, be sure to check out all of our quarterly reports: Apartments, Homebuilders, Student Housing, Single-Family Rentals, Manufactured Housing, Cell Towers, Healthcare, Industrial, Data Center, Malls, Net Lease, Shopping Centers, Hotels, Office, Storage, Timber, and Real Estate Crowdfunding.
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Disclosure: An investor cannot invest directly in an index and index performance does not reflect the deduction of any fees, expenses or taxes. The information presented does not reflect the performance of any fund or other account managed or serviced by Hoya Capital Real Estate. We consider the information in this presentation to be accurate, but we do not represent that it is complete. It should not be relied upon as the sole source of suitability for investment. Please consult with your investment, tax or legal adviser regarding your individual circumstances before investing. Visit our website for a complete definition of all indexes cited in this report. Investing involves risk and loss of principal is possible.