The Hoya Capital US REIT Index finished the day lower by 1.0% following a 2.5% decline yesterday, dragged down by the healthcare, apartment, and net lease REIT sectors. The manufactured housing and mall REIT sectors were the lone segments in positive territory for the day. The 'REIT Rejuvenation' this year has been largely driven by declining long-term interest rates and inflation expectations, which of course has been a double-edged sword as rates have marched higher in recent weeks. The 10-year yield climbed to the highest level since March this week, which appears to have set off some programmatic selling. This slow creep higher in interest rates threaten to derail the 'Goldilocks' conditions that had powered REIT outperformance early this year. The S&P 500 finished the day lower by 0.2% but is still within about 1% of all-time record highs. The Nasdaq finished higher by 0.4%. At 2.59%, the 10-Year Yield finished the day flat on the day and remains roughly 65 basis points lower than it's peak last October.

The Hoya Capital US Housing Index finished the day lower by 0.4%, led to the upside by the Home Improvement Retail and Homebuilder sectors. JP Morgan (JPM), Corelogic (CLGX), Watsco (WCO), Beacon Roofing (BECN), and Regions Financial (RF) were among the top-performers on the day.

The Residential REIT sectors was again the relative underperformer on the day. Restoration Hardware (RH), Tempur Sealy (TPX), Zillow (Z), Eagle Materials (EXP), and Wayfair (W) were each down at least 2.5% on the day. Sleep Number (SNBR) reported earnings this afternoon and is lower in the post-market trading after missing on revenue estimates.

Retail Sales data is released tomorrow, while Housing Starts and Permits data is released on Friday while New Home Sales data is released next Tuesday.

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