Alex Pettee, CFA
Real Estate Daily Recap: REITs & Homebuilders Mostly Flat As Market Awaits Critical Jobs Day
The Hoya Capital US REIT Index ended the day roughly flat after surging more than 2% yesterday as investors await the critical nonfarm payrolls report tomorrow. The industrial, single family rental, and apartment REITs led the way, while the mall, hotel, and storage sectors lagged. Following nearly 1% gains yesterday, the S&P 500 gained another 0.7% while the Nasdaq climbed 0.8%. At 2.12%, the 10-Year yield finished the day flat, after hitting the lowest level in 21 months earlier this week.
The Hoya Capital US Housing Index finished the day lower by 0.5% with five of the eight sectors in positive territory. The Real Estate Technology & Insurance and Homebuilding Products sector were the outperformers on the day. Sherwin-Williams, Re/Max, Owens Corning, and Whirlpool were each up by at least 2% each. The Home Furnishings sector dipped more than 4% on the day on weak earnings results from At Home Group and Lay-Z-Boy.
Jobs data highlights a busy week of economic data ahead, which will be closely watched by market participants around the world. The US labor markets have defied expectations on the upside for much of the past half-decade, and continued strength in job growth should be expected to strengthen the Administration's hand at the negotiating table and improve the outlook for a trade deal with China. On the flip-side, a particularly weak report will very much put Fed rate cuts back in play and may leave the 10-year with a 1-handle by next weekend. Construction spending on Monday, factory orders on Tuesday, and ADP employment data on Wednesday are the other notable releases this week.
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