• Alex Pettee, CFA

September Slump, October Opportunity?

  • U.S. equity markets delivered their worst week since February - and worst month since the pandemic began - amid heightened concerns over potential stagflation, supply chain issues, and political dysfunction.

  • Large-cap equities felt the brunt of the pressure this past week as S&P 500 slipped 2.2% while the tech-heavy Nasdaq dipped 3.6%. Mid-Caps declined 0.5% while Small Caps gained 0.9%.

  • Continuing the theme from the prior week, significant underperformance from large-cap technology REITs masked an otherwise solid week for real estate equities with nearly half of REITs posting gains.

  • The pace of rent increases continues to accelerate across the country amid an intensifying housing shortage. Apartment List data showed rents have risen by a "staggering" 16.4% so far in 2021.

  • Meanwhile, the PCE Index - the Fed's "preferred" gauge of inflation - rose another 0.4% in August, pushing the annual rise to 4.3%, the largest year-over-year rise in consumer prices since 1991.

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Disclosure: Hoya Capital Real Estate advises two Exchange-Traded Funds listed on the NYSE. In addition to any long positions listed below, Hoya Capital is long all components in the Hoya Capital Housing 100 Index and in the Hoya Capital High Dividend Yield Index. Index definitions and a complete list of holdings are available on our website.

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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