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

Fed Ahead • Rotation Reverses • Retail Sales Cool

Summary

  • U.S. equity markets were mixed Tuesday after weaker-than-expected retail sales and industrial production data halted the recent "reopening trade" ahead of the closely-watched Fed press conference tomorrow.

  • Following gains of 0.6% yesterday, the S&P 500 finished lower by 0.1% while Dow Jones Industrial Average retreated 128 points. However, the tech-heavy Nasdaq 100 gained 0.6%.

  • Pressured by reopening-sensitive property sectors, real estate equities were mostly-lower today as the broad-based Equity REIT ETFs finished lower by 0.4% today with 13-of-19 property sectors in negative-territory.

  • Retail Sales were weaker than consensus estimates in February, declining by -3.0% from the prior month but were still higher by 6.3% from last February. Only gasoline stations recorded higher sequential sales.

  • Shopping Center REIT Retail Properties of America (RPAI) became the 47th equity REIT to raise its payouts through the first eleven weeks of 2021 - a historically strong start to the year for REIT dividend growth.

Real Estate Daily Recap

U.S. equity markets were mixed Tuesday after weaker-than-expected retail sales and industrial production data halted the recent "reopening trade" ahead of the closely-watched Fed press conference tomorrow. Following gains of 0.6% yesterday, the S&P 500 ETF (SPY) finished lower by 0.1% while Dow Jones Industrial Average (DIA) retreated 128 points. The tech-heavy Nasdaq 100 (QQQ) gained 0.6%. Pressured by reopening-sensitive property sectors, real estate equities were mostly-lower today as the broad-based Equity REIT ETFs (VNQ) finished lower by 0.4% today with 13-of-19 property sectors in negative territory while the Mortgage REIT ETFs (REM) declined by 1.1%.

All eyes will be on interest rates tomorrow afternoon as the Federal Reserve will make public remarks at the conclusion of their two-day policy meeting that investors will parse for signs of changes in their highly-accommodative monetary policy posture amid the uptick in inflation and economic growth expectations. Long-term rates were steady today despite softer-than-expected economic data as the 10-Year Treasury Yield (IEF) finished higher by a basis point to close at 1.62%. Six of the eleven GICS equity sectors finished in negative testimony today with the economically-sensitive Energy (XLE), Industrials (XLI), and Financials (XLF) weighing on the downside.

This morning, the NAHB reported that its Homebuilder Sentiment Index - a leading indicator of housing activity - ticked lower to 82 in March. While still near historically-high levels, homebuilder optimism has been tempered in recent months by rising materials prices even as housing demand remains at historically robust levels. This afternoon, we'll hear results from Lennar (LEN). As discussed in our Earning Recap, builders continue to sell homes as fast as they can build them as the housing industry continues to be a source of strength throughout the early post-pandemic economic recovery.

The Census Bureau reported that Retail Sales were weaker than consensus estimates in February, declining by -3.0% from the prior month but were still higher by 6.3% from last February before the pandemic began. Sales were impacted by unseasonably bad weather in the Southeast and by the impacts of stimulus check which boosted January's data and should lead to a substantial re-acceleration in March as well. Nearly all categories besides gasoline stations saw sequential declines last month. Consumers continued to spend most heavily on housing-related goods as the Building Materials category is higher by 14.2% from last year while Furniture sales are higher by almost 9%.

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