On the eve of the arrival of the Chinese trade delegation to Washington DC to resume trade negotiations between the two largest global economies, investors saw signs of hope on news that China was open to reaching a partial trade deal. US equity markets were broadly higher on the day with the S&P 500 (SPY) gaining 0.9% and the Nasdaq (QQQ) climbing 1.0%. Tensions had appeared to ratchet up in recent weeks, exasperated by the ongoing protests in Hong Kong, which have finally caught the attention of the American public after the highly-covered clash with the National Basketball Association. All eyes will be on trade talks tomorrow and into the weekend as the political calculus is seemingly shifting day-by-day in both the US and in China.

Real estate equities were generally flat on the day following two straight days of outperformance. The broad-based REIT ETFs (VNQ and IYR) finished the day higher by 0.1%, led to the upside by single-family rental, data center, and timber REIT sectors while the shopping center, hotel, and mall REIT sectors lagged on the day. Top individual performers included data center REITs QTS Realty (QTS), Digital Realty (DLR), and Equinix (EQIX) and single-family rental operator Invitation Homes (INVH).

The Hoya Capital Housing Index, the benchmark that tracks the performance of the US housing industry, finished the day higher by 0.4% with all seven of the eight industry groups finishing in positive territory on the day. The real estate brokerage and technology and the homebuilding products sectors led the gains while the homebuilders lagged. Top individual performers included Sleep Number (SNBR), At Home (HOME), American Woodmark (AMWD), Eagle Materials (EXP), and Realogy (RLGY).

This morning, the U.S. Bureau of Labor Statistics (BLS) reported job openings and labor turnover (JOLTS) were little changed in August, coming in at 7.1 million versus expectations of 7.2 million. While still a solid reading, August's reading was the lowest level since March 2018. After peaking at a growth rate near 20% in late 2018, the rate of growth in job openings have been trending lower this year, consistent with cooling job growth seen across most labor market metrics. Within separations, the quits rate was largely unchanged at 2.3%, and the layoffs and discharges rate was unchanged at 1.2%.

On the economic slate for the rest of the week, CPI data comes out on Thursday morning. While lower oil and food prices continue to put downward pressure on the headline inflation data, core inflation (excluding food and energy) has perked up over the last three months. There are two primary factors behind this summer's acceleration in core inflation: rising core goods costs (largely related to tariffs) and rising housing costs. Housing (CPI: Shelter) accounts for more than a third of the total CPI weight (42% including housing-related services), and since 2013, housing costs have been the few persistent drivers of overall inflation.

For an in-depth analysis of all real estate sectors, be sure to check out all of our quarterly reports: Apartments, Homebuilders, Student Housing, Single-Family Rentals, Manufactured Housing, Cell Towers, Healthcare, Industrial, Data Center, Malls, Net Lease, Shopping Centers, Hotels, Office, Storage, Timber, and Real Estate Crowdfunding.

Disclosure: An investor cannot invest directly in an index and index performance does not reflect the deduction of any fees, expenses or taxes. The information presented does not reflect the performance of any fund or other account managed or serviced by Hoya Capital Real Estate. We consider the information in this presentation to be accurate, but we do not represent that it is complete. It should not be relied upon as the sole source of suitability for investment. Please consult with your investment, tax or legal adviser regarding your individual circumstances before investing. Visit our website for a complete definition of all indexes cited in this report. Investing involves risk and loss of principal is possible.