KBWY - Rates Up REITs Down

• U.S. equity markets finished broadly higher on the first week of 2021 despite partisan tensions flaring following the Georgia runoff elections in which Democrats gained a "trifecta" of political control.
• After finishing 2020 with total returns of 18.4%, the S&P 500 jumped 2.0%. The large-cap index, however, was outpaced by Mid-Caps and Small-Caps, which surged 4.8% and 6.4%, respectively.
• With additional stimulus likely high on the political docket for the incoming Biden administration, rising inflation expectations sent Treasury yields surging to post-pandemic highs, pressuring the yield-sensitive REIT sector.
• It was a busy week of REIT-related news flow. Life Storage became the first REIT to boost its dividend in 2021. Q4 rent collection updates ranged from 99% to a low of 46%, underscoring the continued bifurcation.
• The U.S. economy lost 140k jobs in December - the first month of job declines since April - as the employment rebound reversed amid the "third wave" of coronavirus-induced economic shutdowns.

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