Inflation Week • Return To Office? • Storage In Focus
U.S. equity markets rebounded Monday following their worst week since April as bond markets stabilized ahead of another busy week of corporate earnings results and the critical CPI and PPI inflation reports.
Snapping a four-day losing streak, the S&P 500 advanced 0.9%, while the Dow Jones Industrial Average gained 408 points.
Real estate equities were among the leaders today ahead of the final stretch of earnings season over the next several days. Led by office and self-storage REITs, the Equity REIT Index advanced 1.3% today
Several of the most beaten-down coastal office REITs rallied today after tech-firm Zoom - a company that has been the "poster child" of the Work from Home Era - made a splash by calling its employees back to the office.
The Wall Street Journal published an in-depth column on the state of the self-storage industry this morning which focused, in part, on the remarkably strong performance of the industry since the start of the pandemic.
Income Builder Daily Recap
U.S. equity markets rebounded Monday following their worst week since April as bond markets stabilized ahead of another busy week of corporate earnings results and the critical CPI and PPI inflation reports. Snapping a four-day losing streak, the S&P 500 advanced 0.9%, while the Dow Jones Industrial Average gained 408 points. Mid-caps and Small-Caps posted more muted advances following notable outperformance last week. Real estate equities were among the leaders today ahead of the final stretch of earnings season over the next several days. Led by office and self-storage REITs, the Equity REIT Index advanced 1.3% today, with 17-of-18 property sectors finishing in positive territory, while the Mortgage REIT Index slipped 0.1%.
Inflation data is in the spotlight in another jam-packed week of economic data in the week ahead. The main event comes on Thursday with the Consumer Price Index for July, which investors and the Fed are hoping will show a continued cooling of inflationary pressures. The headline CPI is expected to moderate to a 2.8% year-over-year rate as some of the "hottest" prints seen in mid-2022 begin to roll off. We've noted in recent reports that "real-time" inflation - as measured by the CPI-ex-Shelter Index - has averaged less than 1% since last July. We speculate that an inevitable "2-handle" on the headline CPI will be a key narrative-shifting threshold for even the most hawkish Fed officials. On Friday, we'll see the Producer Price Index, which is expected to show an even more significant cooling of price pressures, with the headline PPI expected to slow to just a 0.7% year-over-year rate - down from the recent peak last March at 11.8%. On Friday, we'll see get the first look at Michigan Consumer Sentiment for August - a report which includes the closely-watched inflation expectations survey.
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