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  • Writer's pictureAlex Pettee, CFA

Weekly Outlook: Inflation Is A Problem

  • U.S. equity markets edged to fresh record-highs this week, shrugging-off the "fourth wave" of the COVID pandemic and another round of red-hot inflation data that has weighed on consumer sentiment.

  • Real estate equities delivered a mixed week - but remain the top-performing asset class in 2021 - as a historically strong second quarter earnings season wrapped-up with several strong reports.

  • The BLS reported that both consumer and producer prices climbed at hotter-than-expected rates in July but showed some hints of moderation following three of the hottest months on record.

  • Calling into question the fate of the infrastructure package that passed the Senate this week, the public appetite and political support for additional fiscal expansion continues to deteriorate.

  • Soaring rents are just beginning to filter into the inflation metrics. The BLS reported that rents rose just 1.9% in July while residential REITs reported rent growth averaging roughly 10%.

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Disclosure: A complete list of holdings and Real Estate and Housing Index definitions and holdings are available at HoyaCapital.com. Hoya Capital Real Estate advises an Exchange Traded Fund listed on the NYSE. Hoya Capital is long all components in the Hoya Capital Housing 100 Index.

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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