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  • Alex Pettee, CFA

Incomes Rise | Savings Swell | REITs Rebound

Updated: Sep 10, 2020

Daily Recap

  • U.S. equity markets marched higher yet again Friday with the S&P 500 eclipsing closing record-highs on all five days this week as economic and coronavirus data continue to trend favorably.

  • Finishing the week with gains of more than 3% - and finishing higher for the eighth week in the past nine - the S&P 500 finished higher by 0.7% today.

  • Ending the week with gains of roughly 2%, Equity REITs finished higher by 0.6% today with 13 of 18 property sectors finishing in positive territory. Mortgage REITs gained 0.9% today.

  • Wrapping up the busy slate of economic data was Personal Income and Spending data this morning, which came in ahead of estimates. Aided by $3 trillion in fiscal stimulus, income levels are 5% above pre-pandemic levels.

  • Personal spending rose 1.9% from last month, but remains roughly 5% below pre-pandemic highs as Americans continue to save rather than spend this increased income. The savings rate stood at 17.8% last month, the highest level ever for the month of July.

Our Real Estate Daily Recap discusses the notable news and events in the real estate sector over the last trading day and highlights sector-by-sector performance. We publish this note every afternoon at HoyaCapital.com and occasionally on Seeking Alpha to cover significant news and events. Subscribe to our free mailing list to make sure you never miss the latest developments in the commercial and residential real estate sectors. You can also follow our real-time commentary on Twitter and LinkedIn.

U.S. equity markets marched higher yet again Friday with the S&P 500 eclipsing closing record-highs on all five days this week as economic and coronavirus data continue to trend favorably. Finishing the week with gains of more than 3% - and finishing higher for the eighth week in the past nine - the S&P 500 ETF (SPY) finished higher by 0.7% today. The Dow Jones Industrial Average (DJI) jumped 162 points while the Nasdaq 100 ETF (QQQ) gained 0.5%. Ending the week with gains of roughly 2%, the Equity REIT ETF (VNQ) finished higher by 0.6% today with 13 of 18 property sectors finishing in positive territory. The Mortgage REIT ETF (REM) finished higher by 0.9% following gains of 1.2% yesterday. 

After several days of narrow leadership early in the week, the gains on Thursday and Friday were broad-based with all 11 GICS equity sectors finishing in positive territory today led by the economically-sensitive Energy (XLE) and Materials (XLB) sectors. Of note, while the S&P 500 is at record-highs with gains of nearly 10% in 2020, Mid-Cap (MDY) and Small-Cap (SLY) stocks remain 10% or more below their pre-pandemic highs. Residential REITs led the Hoya Capital Housing Index to another day of gains even as the high-flying homebuilders finished lower for the second-straight day. We'll have full analysis of the busy week of housing data in our Real Estate Weekly Outlook report published on Saturday morning. 

Wrapping up the busy slate of economic data was Personal Income and Spending data this morning, which came in ahead of estimates, a common theme as the Citi Economic Surprise Index has remained at-or-near record-high levels for the past two months. Incomes rose 0.4% in July and are now 5% above pre-pandemic levels from February as WWII levels of fiscal stimulus have more than offset the near-term hit from the spike in shutdown-related unemployment. Personal spending rose 1.9% from last month, but remains roughly 5% below pre-pandemic highs as Americans continue to save rather than spend this increased income. The savings rate stood at 17.8% in July, the highest level ever for the month of July. 

To read the full report, click here to visit Seeking Alpha!

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