Summary

• U.S. equity markets finished mostly higher Friday, concluding a strong week of performance in the first week of 2021 despite ongoing parison tensions in D.C. and disappointing employment data.
• Ending the week with gains of 2.0%, the S&P 500 finished higher by 0.6% today while the Dow Jones Industrial Average gained 57 points and the Nasdaq 100 jumped 1.3%.
• Real estate equities concluded a disappointing week on the upside as the broad-based Equity REIT ETF (VNQ) gained 1.0% with 13 of 19 property sectors in positive territory.
• The Bureau of Labor Statistics reported that the U.S. economy lost 140k jobs in December - the first month of job declines since April - as the employment rebound reversed amid the "third wave" of economic shutdowns.
• Rising prospectus for additional stimulus in the wake of the Georgia Senate elections has brought inflation fears back to the headlines. We'll break-down what it means for REITs and publish a full analysis of this week's economic data in our Real Estate Weekly Outlook report published on Saturday morning.

Real Estate Daily Recap

U.S. equity markets finished mostly higher Friday, concluding a strong week of performance in the first week of 2021 despite ongoing parison tensions in D.C. and jobs data showing a reversal in the employment recovery. Ending the week with gains of 2.0%, the S&P 500 ETF (SPY) finished higher by 0.6% today while the Dow Jones Industrial Average (DIA) gained 57 points and the Nasdaq 100 (QQQ) jumped 1.3%. Real estate equities concluded a disappointing week on the upside as the broad-based Equity REIT ETF (VNQ) gained 1.0% with 13 of 19 property sectors in positive territory. Mortgage REITs (REM) gained 0.4% today but ended the week off by 0.6%.

Rising prospectus for additional stimulus in the wake of the Georgia Senate elections was the theme throughout the week as rising inflation expectations lifted the 10-Year Treasury Yield higher by another 3 basis points on the day - and 19 basis points on the week - to fresh post-pandemic highs. Bitcoin (BTC-USD) was relatively steady today, holding near record-highs of nearly $40,000. Seven of the eleven GICS equity sectors finished higher on the day, led by the Consumer Discretionary (XLY), Utilities (XLU), and Technology (XLK) sectors. Homebuilders pulled back today, dragging on the Hoya Capital Housing Index despite fresh data from Redfin (RDFN) showing that the housing market momentum has continued into early 2021.

The Bureau of Labor Statistics reported that the U.S. economy lost 140k jobs in December - the first month of job declines since April - as the employment rebound reversed amid the "third wave" of economic shutdowns. Economists had expected gains of 70k. Revisions to the prior two months, however, added 135k. The "headline" unemployment rate stayed steady at 6.7% while the broader U6 underemployment rate dicked lower to 11.7%. The lukewarm nonfarm payrolls report followed encouraging jobless claims data earlier in the week as Initial Claims ticked lower to 787k, the lowest level in five-week.

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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.