REIT - A Hawkish Pivot

2024-04-21 09:00:00 ET

Summary

• U.S. equity markets posted their worst week in a year while benchmark interest rates surged to five-month highs as investors monitored an intensification of geopolitical tensions and hawkish Fed commentary.
• Inflamed by resurgent energy prices and insatiable Federal government spending, Fed Chair Powell and other officials acknowledged a stalling-out of inflation progress in recent months and delayed cut expectations.
• Declining on all five trading sessions, the S&P 500 declined another 3.1% this week - its worst week since March 2023 - while high-flying technology stocks were hit particularly hard.
• Real estate equities remained under considerable pressure this week after a shaky start to earnings season, with notably weak reports from industrial REITs, which had been pandemic-era leaders.
• Logistics stalwart Prologis plunged 13% after lowering its full-year outlook, citing weaker demand and elevated supply. Earnings season is off to a surprisingly solid start for office REITs, however, with results showing a relatively impressive rebound in leasing activity.

Real Estate Weekly Outlook

U.S. equity markets posted their worst week in a year while benchmark interest rates surged to five-month highs as investors monitored an intensification of Middle East tensions and an acknowledgment from Federal Reserve officials that recent inflation data will likely delay rate cuts. Inflamed by resurgent energy prices and insatiable Federal government spending, Fed Chair Powell acknowledged a stalling-out of inflation progress in recent months and noted that it will "likely take longer than expected" to cut interest rates....

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