Posts

Hot Housing Data Powers Stocks To Fresh Records by Brad Thomas

avatar of @leo.syndication
25
@leo.syndication
·
0 views
·
3 min read

Summary

  • The Christmas spirit is alive and well this year as US equity markets climbed to fresh record highs for the fourth straight week, powered by impressive housing data.
  • The S&P 500 jumped another 1.7% on the week, bringing this year's total return to roughly 30% and within striking distance of its best year since 1997.
  • Despite a 10 basis point jump in the 10-year Treasury yield, the typically yield-sensitive real estate sector bounced back following a rough week, gaining roughly 1.5%, led by cell tower REITs.
  • Housing data showed signs of continued reacceleration with better-than-expected Homebuilder Sentiment, Housing Starts and Building Permits data. Existing Home Sales, however, remain constrained by lack of supply.
  • Homebuilders, along with the broader US housing industry, have been an unexpected source of stability and strength for an economy that seemed to be searching for direction for much of the year.
  • This idea was discussed in more depth with members of my private investing community, iREIT on Alpha. Get started today »

Real Estate Weekly Outlook

What a difference a year makes, and what a year it's been. This Christmas season has been a far merrier one for investors than a year ago when global equity markets were in a state of free-fall that ultimately bottomed on Christmas Eve with the S&P 500 down more than 20% from its previous highs. The Christmas spirit is alive and well this year, however, as US equity markets climbed to fresh record highs for the fourth straight week, powered by another month of impressive housing data, a fitting full-circle-type-ending to a year and to a decade that began with dramatic turbulence in the housing market.

(Hoya Capital, Co-Produced with Brad Thomas through iREIT on Alpha)

The S&P 500 ETF (SPY) finished at record weekly closing highs, climbing another 1.7% on the week and bringing this year's total return to roughly 30% and within striking distance of the index's best year since 1997. Investors shrugged off this week's impeachment vote and the continued political drama unfolding in Washington, and instead keyed-in on the still-solid domestic economic outlook and on the renewed clarity regarding the geopolitical uncertainties that hung over the market for much of the year. Despite a 10 basis point jump in the 10-year Treasury yield (IEF), the typically yield-sensitive real estate sector bounced back after dipping more than 3% last week with the broad-based Real Estate ETF (VNQ) climbing 1.4% on the week.

Leading this week's gains in the commercial real estate sector was the cell tower and data center REITs as American Tower (AMT) and Crown Castle (CCI) each gained more than 7% on the week after a potential 'mystery partner' for DISH Network (DISH) emerged during T-Mobile (TMUS)-Sprint (NYSE:S) merger trial. As we discussed in our recent Cell Tower REIT report, the emergence of a fourth competitor as a precondition to approval has been an unexpected coup for cell tower REITs, but questions remain about DISH’s viability as a national competitor. The emergence of a strategic partner - potentially Apple (AAPL), Google (GOOG) (NASDAQ:GOOGL), or Amazon (AMZN) - would greatly enhance the likelihood of viability. We discussed four possible merger scenarios and their impact on the sector, concluding that cell tower REIT investors should be happy with three viable competitors, ecstatic at the potential four, but worried about the possibility of two. As it currently stands, DISH would be a distant fourth competitor behind AT&T (T), Verizon (VZ), and T-Mobile.

...Originally Posted On Seeking Alpha

Author Bio:

Steem Account: @bradthomas Twitter Account: rbradthomas

Steem Account Status: Unclaimed***

Are you Brad Thomas? If so, you have a Steem account that is unclaimed with pending cryptocurrency rewards sitting in it from your content. Your account was reserved by the Steemleo team and is receiving the rewards of all posts syndicated from your content on other sites.

If you want to claim this account and the rewards that it has been collecting, please contact the Steemleo team via twitter or discord to claim the account. You can also view the rewards currently sitting in the account by visiting the wallet page for this account.

What is Steemleo Content Syndication?

The Steemleo community is syndicating high-quality financial content from across the internet. We're also creating free Steem accounts for the authors of that content who have not yet discovered the Steem blockchain as a means to monetizing their content and we're listing those accounts as the 100% beneficiaries to all the rewards. If you want to learn more about Steemleo's content syndication strategy, click here.

Posted via Steemleo | A Decentralized Community for Investors