• Alex Pettee, CFA

Mandates, Inflation, And Earnings

  • U.S. equity markets were mixed this week as disappointing "big tech" earnings and concerns over controversial COVID vaccine and mask mandates were offset by historically strong earnings results from domestic-focused companies.

  • Retreating from the record-highs set last week, the S&P 500 slipped 0.3% on the week but the Small-Cap 600 rallied 1.8% and the Mid-Cap 400 advanced 1.2%. The tech-heavy Nasdaq dipped 1%.

  • Real estate equities continued their strong performance following an impressive slate of earnings results and strong forward guidance - particularly from residential REITs and homebuilders.

  • The political tightrope on further fiscal expansion got ever-thinner this week after the core PCE Index - the Fed's "preferred" gauge of inflation - rose at the highest rate since 1992 while consumers remain highly concerned about rising prices.

  • Don't expect inflation to cool anytime soon. Sunbelt-focused REITs reported average rent growth on new leases of 20% in July while Home Price Index data showed that home prices have risen more than 15% over the past year.

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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.

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