Daily Recap: Record Day | Rates Climb | Merger Monday
The S&P 500 ETF (SPY) climbed 0.6% to a new closing record high on Monday as the busiest remaining week of 2019 kicked off on a high note. The stars align this week for a "data dump" that includes the monthly job report, the first look at third-quarter GDP, more than 140 S&P 500 earnings reports, and the critical Federal Reserve rate decision. The Nasdaq ETF (QQQ) gained 1.0% on the day, closing barely shy of new all-time records.
Coming off a week of uncharacteristic underperformance, real estate equities were again lower on the day as the 10-year Treasury Yield (IEF) ticked higher by another 5 basis points, closing at 1.85% which is at the top of the 3-month range, up from a low of 1.43% on September 3rd. The broad-based REIT ETF (VNQ) ended the day lower by 0.3%, led to the upside by the timber, manufactured housing, and hotel REIT sectors but dragged down by the cell tower, mall, and industrial REIT sectors.
Coming off a record weekly closing high, the Hoya Capital Housing Index, the benchmark that tracks the performance of the US housing industry, finished off by 0.5%, dragged down by a sell-off in the high-flying homebuilders. The home improvement retailers and real estate brokerage and technology firms led to the upside today with Re/Max (RMAX), Realogy (RLGY), Redfin (RDFN), and Zillow (Z) all delivering a strong day.
On the earnings slate among US Housing Index components this afternoon is home building products and materials companies Simpson (SSD), Leggett & Platt (LEG), PotlaticDeltic (PCH), Trex Companies (TREX), and Cavco (CVCO) as well as apartment REIT AvalonBay (AVB), and senior housing REIT Welltower (WELL).
Last night, industrial REIT stalwart Prologis (PLD) announced a deal to acquire Liberty Property Trust (LPT) in an all-stock deal valued at about $12.6B. Prologis plans on selling about $3.6B in assets - roughly $2.8B worth of non-strategic logistics assets, and $700M of office properties. Prologis ended the day down by more than 5% while Liberty ended higher by nearly 14%.
For the commercial real estate industry, the business week of earnings season kicks off today with reports from Alexandria (ARE), Brixmor (BRX), Healthcare Trust of America (HTA), Corporate Office (OFC), SBA Communications (SBAC), and Vornado (VNO), in addition to the housing REITs mentioned above. We'll have full coverage of earnings season on the iREIT on Alpha Marketplace.
As discussed in our Weekly Outlook, the "data dump" of economic data begins tomorrow with Case Shiller Home Prices and Pending Home Sales. Rest up, because on Wednesday, we'll see the first look at third-quarter GDP right in the morning before the critical Fed interest rate decision in the afternoon. On Thursday, we'll see PCE inflation data, and then on Friday, we'll get a look at the nonfarm payrolls report for October. Throughout the week, we'll hear from more than 140 S&P 500 companies in the busiest week of earnings reports this quarter. Buckle up.
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.
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