KBWY - The Fed Disconnect

2023-03-26 09:00:00 ET

Summary

• U.S. equity markets posted gains while benchmark interest rates dipped to the lowest levels of the year as lingering financial stability concerns cast doubt on the Fed's economic and interest-rate projections.
• Posting a second-straight week of gains following its worst weekly decline in six months, the S&P 500 advanced 1.5% while the tech-heavy Nasdaq 100 gained another 1.8%.
• Real estate equities were laggards this week as investors weighed potential tailwinds from lower interest rates against increased credit concerns across several property sectors.
• Homebuilders were a bright spot on data showing a rebound in home sales and a retreat in mortgage rates, suggesting the housing market is beginning to stabilize after a tumultuous year.
• Office REITs remained under pressure this week after Blackstone stopped making debt payments on its $325M loan on the Hughes Center office campus in Las Vegas. CMBS spreads increased this week to the highest levels since July 2020.

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