Alex Pettee, CFA
Daily Recap: REITs & Housing Gain | CPI Comes in Hot | Cooling Trade Tensions
Signs of cooling trade tensions between China and the US ahead of critical trade talks sent the S&P 500 (SPY) and the Nasdaq (QQQ) higher and edging towards record-highs. The broad-based REIT ETF (VNQ) climbed by 0.3% on the day despite the continued tick higher in the 10-Year yield. The REIT sector was led by gains in the cell tower, industrial, and manufactured housing REIT sectors, but dragged down by weak performance from the mall and hotel sectors.
The Hoya Capital Housing Index set another new record high, climbing another 0.3% on the day. The housing sector was led by the Homebuilding and Home Furnishing Sectors with strong performance from KB Home (KBH), Sherwin-Williams (SHW), MDC Holdings (MDC), Wayfair (W), and AO Smith (AOS).
Within the real estate sector, American Tower (AMT), Terreno (TRNO), PS Business Park (PSB), Eastgrou (EGP), and Equinix (EQIX) each gained at least 2% on the day. Small-cap mall REIT CBL & Associates (CBL), which surged more than 30% yesterday, plunged by more than 18% today along with weak performance from fellow mall REITs Washington Prime (WPG) and Pennsylvania REIT (WPG).
With gains of nearly 24% so far this year, the broad-based REIT ETFs (VNQ and IYR) continue to outperform the S&P 500, which has climbed roughly 20%. The US Housing sector has climbed 28% this year led by the 46% surge in Homebuilders (ITB) and strong gains from the Home Furnishings and Homebuilding Products & Materials sectors. At 1.79%, the 10-year yield has retreated by 90 basis points since the start of the year and is roughly 150 basis points below peak levels of 2018 around 3.25%.
For an in-depth analysis of all real estate sectors, be sure to check out all of our quarterly reports: Apartments, Homebuilders, Student Housing, Single-Family Rentals, Manufactured Housing, Cell Towers, Healthcare, Industrial, Data Center, Malls, Net Lease, Shopping Centers, Hotels, Office, Storage, Timber, and Real Estate Crowdfunding.
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