RQI - Fed Blinks Finally

Summary

• U.S. equity markets extended their rebound this week after the Federal Reserve slowed its pace of interest rate hikes while strong employment data alongside cooling wage pressures supported "soft landing" prospects.
• Gaining for the fourth week in the past five, the S&P 500 advanced 1.6% while the tech-heavy Nasdaq 100 rallied 3.3% - its fourth-straight week of gains. Small caps soared 5%.
• Real estate equities also continued their hot start to the new year as REIT earnings season kicked into gear. Equity REITs advanced 1.8% this week while Homebuilders rallied 5%.
• Residential REITs were the upside standouts of the first week of REIT earnings season with strong reports from Mid-America and Equity LifeStyle highlighted by strong renewal rent growth. Lab space owner Alexandria also reported very strong results.
• The U.S. economy added 517k jobs in January - significantly above expectations of 185k. Average Hourly Earnings rose 4.43% - the slowest annual pace since June 2021 - providing evidence that a cool-down in inflationary pressures may not require a period of job losses.

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