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  • Alex Pettee, CFA

REITs Rebound | Dividend Boosts | Jobless Claims Rise

Updated: Sep 19, 2020

Daily Recap

  • U.S. equity markets finished mixed Thursday led by a continued bid for large-cap technology stocks as employment data this morning presented an uncertain picture for the state of the economic rebound.

  • Pushing its gains to 0.4% this week, the S&P 500 finished higher by 0.3% while the Dow Jones Industrial Average snapped a three-day losing streak with gains of 47 points.

  • After retreating by 1.8% yesterday, Equity REIT ETFs finished higher by 1.0% today with 16 of 18 property sectors finishing in positive territory. Mortgage REITs finished flat.

  • Initial Jobless claims jumped back above one million last week, but Continuing Claims continue to decline rapidly. Since its peak, Continuing Claims have now declined by more than 10 million.

  • Two REITs raised dividends today while troubled mall REIT CBL & Associates (CBL), student housing REIT American Campus (ACC), and small-cap REIT Postal Realty (PSTL) continue to be in focus.

U.S. equity markets finished mixed Thursday led by a continued bid for large-cap technology stocks as employment data this morning presented an uncertain picture for the state of the economic rebound. Pushing its gains to 0.4% so far this week, the S&P 500 ETF (SPY) finished higher by 0.3% while the Dow Jones Industrial Average (DJI) snapped a three-day losing streak with gains of 47 points with the Nasdaq 100 ETF (QQQ) jumped 1.4%. After retreating by 1.8% yesterday, the Equity REIT ETF (VNQ) finished higher by 1.0% today with 16 of 18 property sectors finishing in positive territory. The Mortgage REIT ETF (REM) finished flat after gaining 0.1% yesterday. 

It was a particularly "top-heavy" day of performance with the S&P 500 gaining ground despite just 3 of the 11 GICS sectors finishing in positive territory: Technology (XLK), Communications (XLC), and Commerical Real Estate (XLRE). Residential REITs led the Hoya Capital Housing Index to another day of gains while homebuilders finished modestly higher as well ahead of Existing Home Sales data tomorrow morning. Flying under-the-radar in recent weeks, and explaining some of the choppiness in equity markets this week, has data showing a modest reacceleration in daily coronavirus cases across several European countries while case counts continue to trend downward in the United States since its peak in late July. 

Today's mixed performance came after mixed signals in the weekly jobless claims data this morning. After retreating back below 1 million for the first time since March last week, Initial Jobless Claims jumped back above to threshold to 1.11 million. Under the hood, however, the data wasn't quite as bad as it looked as non-seasonally adjusted claims rose a much smaller 52,000 to 891,000. Perhaps most encouragingly, Continuing Jobless Claims dipped by roughly 1 million from last week down to 14.84 million. Since the peak in early May at around 25 million, Continuing Claims have retreated by 10.1 million. Earlier this month, the BLS reported that the U.S. economy added 1.8 million jobs in July - better than economists' estimates for gains of 1.5 million - which followed the single largest month of job growth ever.

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

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