• Alex Pettee, CFA

REITs Under Pressure As Job Losses Mount [Daily Recap]

  • U.S. equity markets finished mostly higher on Thursday, climbing back into positive territory for the week, on optimism about re-opening the economy amid another day of brutal economic data.

  • Following declines of 2.1% yesterday, the S&P 500 gained 0.6% while the Dow Jones Industrial Average added 30 points following yesterday's 450 point-decline.

  • The tough week for real estate equities continued amid continued uncertainty over rent collection and mortgage forbearance. Equity REIT ETFs declined by 1.6% while Mortgage REITs fell 2.3%.

  • Initial Jobless Claims data showed that a decade's worth of employment gains have been erased - at least temporarily - in the last four weeks alone. 5.2 million claims were filed last week, pushing the 4-week total to over 22 million.

  • Still below "normal" levels of construction, Housing Starts and Permits data indicated that the slow, grinding recovery in new home construction is poised to suffer a sizable setback amid considerable uncertainty in the mortgage and labor markets.

Real Estate Daily Recap

U.S. equity markets finished mostly higher on Thursday, climbing back into positive territory for the week, on optimism about re-opening the economy amid another day of brutal economic data. Initial Jobless Claims data showed that a decade's worth of employment gains have been erased - at least temporarily - in the last four weeks alone. Following declines of 2.1% yesterday, the S&P 500 ETF (SPY) gained 0.6% while the Dow Jones Industrial Average (DIA) added 30 points following yesterday's 450 point-decline. The tough week for real estate equities continued, however, amid continued uncertainty over rent collection and mortgage forbearance as the broad-based commercial Equity REIT ETFs (VNQ) (SCHH) declined by 1.6% with 14 of the 18 REIT sectors in negative territory while Mortgage REITs (REM) finished lower for the fourth straight day, declining by another 2.3%.

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