• Alex Pettee, CFA

Perfect Week • Jobs Day • REIT Earnings

Summary

  • U.S. equity markets continued their rally Friday, ending the week with strong gains, following as corporate earnings reports and recent economic and coronavirus data suggested a sooner-than-feared return to normalcy.

  • Ending a "perfect" week with five-straight days of gains totaling 4.8%, the S&P 500 finished higher by another 0.4% today while the Dow Jones Industrial Average added another 92 points.

  • Real estate equities higher again today and ended the week with similarly robust gains. The broad-based Equity REIT ETFs gained 0.4% today to end the week with gains of 3.7%.

  • Today's gains came despite a mixed slate of employment data. The Bureau of Labor Statistics reported that the U.S. economy added 49k jobs in January - slightly below expectations of between 50-100k job gains.

  • We heard reports from two dozen REITs this week. We'll publish a full recap of this week's REIT earnings in our Real Estate Weekly Outlook report published on Saturday morning.

Real Estate Daily Recap

U.S. equity markets continued their rally Friday, ending the week with strong gains, following as corporate earnings reports and recent economic and coronavirus data suggested a sooner-than-feared return to normalcy. Ending the week with gains of 4.8%, the S&P 500 ETF (SPY) finished higher by another 0.4% today while the Dow Jones Industrial Average (DIA) added another 92 points. Real estate equities higher again today and ended the week with similarly robust gains. The broad-based Equity REIT ETFs (VNQ) gained 0.4% today to end the week with gains of 3.7% while Mortgage REITs (REM) gained 1.2% today and 6.3% this week.

Ten of the eleven GICS equity sectors finished on the upside today - and all eleven were higher on the week - led today by the Materials (XLB) sector. Homebuilders and the broader Hoya Capital Housing Index were also upside standouts today while Small-Caps (MDY) and Mid-Caps (MDY) continued their outperformance to end the week with gains of 5.5% and 6.0%, respectively. We'll publish a full analysis of this week's developments in the real estate industry, as well as an analysis of the busy week of economic data in our Real Estate Weekly Outlook report published on Saturday morning.

Today's gains came despite a mixed slate of employment data. The Bureau of Labor Statistics reported that the U.S. economy added 49k jobs in January - slightly below expectations of between 50-100k jobs added - and revisions to the prior two months subtracted 159k jobs. The "headline" unemployment rate, however, ticked lower to 6.3%. The lukewarm nonfarm payrolls report followed encouraging jobless claims data earlier in the week as Initial Claims ticked lower to 779k while ADP Payrolls came in ahead of estimates.

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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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