GameStop Frenzy • REIT Dividend Boosts • Earnings Update
Summary
- U.S. equity markets posted sharp declines Friday pushing the major averages to the worst-week since last October amid an ongoing "short squeeze frenzy" that overshadowed a generally strong week of earnings.
- Finishing the week with declines of nearly 3.5%, the S&P 500 finished lower by 1.9% today while the Dow Jones Industrial Average slid 620 points. Mid-Caps were hit especially hard this week.
- Real estate equities were a source of stability both today and on the week as the broad-based Equity REIT ETFs were lower by 1.2% today with 6-of-19 property sectors in positive territory.
- Overshadowed by the short squeeze phenomenon, we also heard a flurry of REIT dividend increases over the last 24 hours as Invitation Homes (INVH), Apartment Income (AIRC), and Postal Realty (PSTL) each boosted payouts.
- Among these heavily-shorted names, previously-surging Macerich (MAC) dipped over 15% each today on reports that its biggest shareholder, Ontario Teachers Pension Plan, sold its entire 16% stake or roughly $500M.
Real Estate Daily Recap
U.S. equity markets posted sharp declines Friday pushing the major averages to the worst-week since last October amid an ongoing "short squeeze frenzy" that overshadowed a generally strong week of earnings and economic data. Finishing the week with declines of nearly 3.5%, the S&P 500 ETF (SPY) finished lower by 1.9% today while the Dow Jones Industrial Average (DIA) slid 620 points. Real estate equities were a source of stability both today and on the week as the broad-based Equity REIT ETFs (VNQ) were lower by 1.2% today with 6 of 19 property sectors in positive territory while the Mortgage REIT ETFs (REM) declined by 2.3%.
Uncertainty over the potential ramifications of the GameStop (GME) saga weighed on investor sentiment this week, but importantly, bond markets have so far been unphased by the sudden surge in equity market volatility with the major bond indexes ending the week essentially unchanged. All eleven GICS equity sectors were lower on the day and for the week, dragged on the downside by the previously high-flying Energy (XLE) sector. We'll publish a full analysis and commentary of this week's developments in the real estate industry, as well as an analysis of the busy week of economic data in our Real Estate Weekly Outlook report published on Saturday morning.
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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.