AOMR - Here We Go Again
2024-04-14 09:00:00 ET
Summary
- U.S. equity markets declined for a second-straight week, while benchmark interest rates surged to the highest levels of the year after inflation data showed an unwelcome reacceleration in price pressures.
- Uncomfortably reminiscent of the mid-2023 inflation reacceleration, the path towards disinflation has been stymied by resurgent oil prices resulting from a further intensification of Middle East tensions.
- Posting its worst two-week skid since last October, the S&P 500 declined by 1.5% this week. For a second week, REITs and small-caps posted declines of nearly 3%.
- Driven by a rebound in gasoline prices, CPI-ex-Shelter - the metric we watch most closely given the substantial lags in the BLS' shelter inflation metrics - posted an annual increase of 2.3% - climbing above the Fed's 2% policy objective for the first time in ten months.
- Dealmaking was a major theme in the REIT space this week. Apartment Income surged more than 20% this week after it announced a $10B deal to be sold to Blackstone Real Estate Partners X in an all-cash deal priced at a 25% premium to AIRC's prior closing price.
Real Estate Weekly Outlook
U.S. equity markets declined for a second-straight week while benchmark interest rates surged to the highest levels of the year after a critical slate of inflation data showed an unwelcome reacceleration in price pressures in early 2024, prompting a re-think of the timing and magnitude of Fed interest rate cuts. As goes oil, so goes inflation. Uncomfortably reminiscent of the mid-2023 inflation reacceleration, the path towards disinflation - and lower benchmark interest rates - has been stymied by resurgent oil prices resulting from a further intensification of red-hot tensions in the Middle East....
Here We Go Again