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Housing Recovery • Casino M&A? • REITs Rally

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  • U.S. equity markets rallied Tuesday as investors cheered a strong slate of housing market data and signs of improving business sentiment that has started to revive long-dormant M&A activity.

  • Following declines of 0.4% on Monday and snapping a two-day skid, the S&P 500 advanced 1.2% today, while the Mid-Cap 400 and Small-Cap 600 each posted gains of over 1.5%.

  • Real estate equities were among the leaders for a second-straight day. The Equity REIT Index advanced 1.2% today with 17-of-18 property sectors in positive territory while Mortgage REITs gained 2%.

  • Homebuilders and the broader Hoya Capital Housing Index added to their strong year-to-date rebound as the economically-critical U.S. housing sector has exhibited resilience in the face of headwinds from sharply higher mortgage rates.

  • Blackstone is reportedly fielding offers for its stake in the Bellagio Las Vegas held by its non-traded fund, BREIT, as it seeks to raise capital to meet investor withdrawal requests. VICI Properties (VICI), Gaming & Leisure (GLPI), and Realty Income (O) are seen as potential interested buyers.

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Income Builder Daily Recap

U.S. equity markets rallied Tuesday as investors cheered a strong slate of housing market data and signs of improving business sentiment that has started to revive long-dormant M&A activity. Following declines of 0.4% on Monday and snapping a two-day skid, the S&P 500 advanced 1.2% today, while the Mid-Cap 400 and Small-Cap 600 each posted gains of more than 1.5%. The Dow gained 212 points. The rally came despite a fresh leg higher in benchmark interest rates, with the policy-sensitive 2-Year Yield jumping 10 basis points to 4.77%, while the 10-Year Yield rose 5 basis points to close at 3.77% - each closing at or near their highest levels since early March. Real estate equities were among the leaders for a second-straight day. The Equity REIT Index advanced 1.2% today with 17-of-18 property sectors in positive territory, while the Mortgage REIT Index advanced 2.0%. 

Disclosure: Hoya Capital Real Estate advises two Exchange-Traded Funds ("ETFs") listed on the NYSE. In addition to any long positions listed, Hoya Capital is long all components in the Hoya Capital Housing Index and in the Hoya Capital High Dividend Yield Index. Index definitions and a complete list of holdings are available on our website.

Hoya Capital Research & Index Innovations (“Hoya Capital”) is an affiliate of Hoya Capital Real Estate, a registered investment advisory firm based in Rowayton, Connecticut that provides investment advisory services to ETFs, individuals, and institutions. Hoya Capital Research & Index Innovations provides non-advisory services including market commentary, research, and index administration focused on publicly traded securities in the real estate industry.

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The views and opinions in all published commentary are as of the date of publication and are subject to change without notice. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. Any market data quoted represents past performance, which is no guarantee of future results. There is no guarantee that any historical trend illustrated herein will be repeated in the future, and there is no way to predict precisely when such a trend will begin. There is no guarantee that any outlook made in this commentary will be realized.

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