Keepin' It Real  

Economics, Housing, & Commercial Real Estate Analysis

apartment REITs
homebuilders ETFs
single family rental REITs
manufactured housing REITs
student housing REITs
data center REITs
Cell tower REITs
net lease REITs
industrial REITs
storage REITs
office REITs
mall REITs
REIT Preferreds and Bonds
hotel REITs
Timber REITs
healthcare REITs
REIT ETFs
Billboard REITs
shopping center REIT
High-Yield Real Estate ETFs
Real Estate CEFs
Casino REITs
cannabis REITs
prison REITs
mortgage REITs
real estate crowdfunding
REIT Portfolio Strategy
REITs Taxes
1/1
Housing100logo.png
ETF express.png
  • Alex Pettee, CFA

Deep Freeze • Rates Jump • REIT Earnings

Summary

  • U.S. equity markets retreated from all-time-highs today as interest rates and inflation expectations jumped to mid-pandemic highs amid a Southern 'Deep Freeze' that disrupted energy production.

  • Following gains of 1.3% last week, the S&P 500 finished lower by 0.1% today while the Dow Jones Industrial Average finished higher by 62 points.

  • Real estate equities, along with most yield-sensitive sectors, were under pressure today ahead of a jam-packed week of earnings reports as the broad-based Equity REIT ETFs finished lower by 0.8%.

  • Prison REIT GEO Group (GEO) dipped nearly 3% after reporting this morning that it expects that operations will continue to be negatively impacted from COVID-19's and from the Biden administration's shift away from private prisons.

  • Sunbelt-focused Apartment REIT NexPoint Residential (NXRT) finished higher by nearly 4% after it reported the strongest full-year revenue and NOI growth out of any of the apartment REITs to report results thus far.

Real Estate Daily Recap

U.S. equity markets retreated from all-time-highs today as interest rates and inflation expectations jumped to mid-pandemic highs amid a Southern 'Deep Freeze' that disrupted energy production. Following gains of 1.3% last week, the S&P 500 ETF (SPY) finished lower by 0.1% today while the Dow Jones Industrial Average (DIA) finished higher by 62 points. Real estate equities, along with most yield-sensitive sectors, were under pressure today ahead of a jam-packed week of REIT earnings reports as the broad-based Equity REIT ETFs (VNQ) finished lower by 0.8% with 15-of-19 property sectors in negative territory while the Mortgage REIT ETFs (REM) gained 1.7%.

Eight of the eleven GICS equity sectors finished in negative territory today, led to the downside by the yield-sensitive Utilities (XLU) and Real Estate (XLRE) sectors after the 10-Year Treasury Yield (IEF) jumped 10 basis points, closing at 1.30% as surging energy prices pushed inflation expectations to the highest levels since last March. Bitcoin (BTC-USD), which has become an "inflation proxy" of sorts, was also back in the headlines today after trading above 50,000 for the first time. As discussed in our Real Estate Weekly Outlook, U.S. equity markets entered the week at all-time-highs, propelled by a historically strong slate of corporate earnings, encouraging coronavirus trends, and economic data showing muted inflationary pressure in early 2021.

In addition to the frenetic week of earnings, we have a jam-packed slate of economic data in the holiday-shortened week ahead. On Wednesday, we'll see NAHB Homebuilder Sentiment data, the BLS Retail Sales report, and Producer Price Index data. On Thursday, we'll see Housing Starts and Building Permits for January which are expected to moderate slightly after reaching 12-year highs in late 2020. Then on Friday, we'll see Existing Home Sales for January as well as Manufacturing and Services PMI data. As usual, we'll also be watching the weekly Mortgage Applications and Jobless Claims data as well on Wednesday and Thursday, respectively.


To Continue Reading, Click Here To Visit Seeking Alpha!


Join our Mailing List on our Website

The REIT Forum is now the exclusive home to Hoya Capital premium research. Visit our website and join our email list for quick access to our real estate research library: HoyaCapital.com where we have links all of our real estate sector reports and daily recaps. You can also follow our real-time commentary on Twitter, LinkedIn, and Facebook.

Disclosure: A complete list of holdings and Real Estate and Housing Index definitions and holdings are available at HoyaCapital.com. Hoya Capital Real Estate advises an Exchange Traded Fund listed on the NYSE. Hoya Capital is long all components in the Hoya Capital Housing 100 Index.

Additional Disclosure: It is not possible to invest directly in an index. Index performance cited in this commentary does not reflect the performance of any fund or other account managed or serviced by Hoya Capital Real Estate. Data quoted represents past performance, which is no guarantee of future results. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy.

REIT Forum HOYA AD.png