iREIT Daily

The Stock Market Holds Steady

Brad Thomas

467 postsJune 16, 2022

For the last several days, Wall Street has prepared for impact as the Federal Reserve was set to increase interest rates to fight inflation. Yesterday, Fed Chair Jerome Powell announced a 0.75% rate hike, increasing the benchmark federal funds rate to 1.5–1.75%.

Not only does this signal the largest single rate increase since 1994, it’s indicative of the most aggressive rate climb campaign since the early ’80s.

Many investors expected this update to send shockwaves through Wall Street. As evidenced by Friday’s Consumer Price Index (CPI) and the subsequent plunging of the S&P 500, a 0.75% increase was supposed to spell an economic crash. But, strangely, this wasn’t the case.

In fact, all major indices closed in the black yesterday. The S&P 500 climbed 55 points, the Dow gained 300 points, and Nasdaq gained 270 points.

To me, this seems like the calm before the storm. If you remember the market’s reaction to the CPI last Friday, it’s easy to see how things can head south very quickly in this economy. But it is good to see that the rate increase didn’t trigger an immediate crash.

Aside from adjusting the benchmark, Powell also indicated inflation hasn’t yet hit a peak. In fact, the Fed is forecasting for a further 4.3% increase, trumping its 4.1% estimate in March. For 2023, the Fed sees price consumption expenditures rising by 2.7% before decelerating to 2.3% in 2024.

Who knows how all this information will affect the market once Wall Street has the night to sleep on it? Pre-market trading can be especially volatile under circumstances like these. so the opening bell should be interesting.

As for the day’s standout movers, Yahoo! Finance reports:

Boeing (BA) shares added to Tuesday’s gains after the company said it delivered a total of 35 aircraft in May, more than doubling last year’s tally of 17. The majority of these were for its lucrative 737 Max jet. Separately, The Seattle Times, citing a Federal Aviation Administration official, reported Boeing may be able to resume 787 Dreamliner deliveries in the coming weeks.
Revlon (REV) shares sharply rose for a second straight day, gaining 17% intraday to build on Tuesday’s nearly 60% gain. The stock posted its biggest one-day decline on record last week, falling more than 50% in a single day, after the cosmetics company was reportedly preparing to file for Chapter 11 bankruptcy.
Baidu (BIDU) shares rose after Reuters reported the Chinese internet giant has been in talks to sell its majority stake in streaming business iQiyi. The deal could reportedly value the firm around $7 billion.”

For now, we’ll sit and wait. In this economic climate, it’s almost impossible to predict exactly what the indices will do day to day.

More Non-REIT News to Know About

Lego’s Billion-Dollar Build

Danish building block behemoth Lego has long been essential to the American toy industry. With a $9.1 billion valuation, this household name has been growing rapidly since 1949.

Now, the world’s largest toy company is poised to spend $1 billion to build a new factory in the U.S. as it looks to meet growing demand.

The U.S. is, of course, one of Lego’s biggest markets, with over 100 Lego retail outlets and around 2,600 employees. The toy giant also added thousands of retail partners to its U.S. distribution network after the implosion of Toys “R” Us, including department stores, hobby stores, and discount chains.

In March, it reported annual sales had grown 27% year-over-year as it began diversifying its product portfolio to appeal to builders of all ages. Its new lines include scenes from Seinfeld, Star Wars, and even a small-scale Titanic with nearly 10,000 pieces. Of course, it’s also breached big screen territory with movies including The Lego Batman, The Lego Movie 4D, and many others.

My question is, when will it go public so I can get a piece? (No pun intended.)

The World According to REITs

REIT Execs Remain Bullish Despite Repricing Period

Last month, Amazon (AMZN) released earnings statements and announced it’d be subletting about 30 million square feet of industrial and warehouse space. This triggered total returns for the Nareit All Equity REITs Index to fall over 15% and usher in an era of repricing in the REIT sector.

And while the broader stock market has taken REITs down with its painful descent these last few months, most people in the REIT world remain confident. Why? Because they’ve done enough due diligence to establish that the near-term fundamentals and sound balance sheets in their portfolios are enough to weather the storm.

Nareit Executive Vice President John Worth is among those unfazed by our current economic circumstances. When asked about this cycle, he had this to say:

Over the last six weeks, there’s been a repricing cycle where investors are pricing in rising rates and the prospect of slower growth. When we look at the all equity REIT index from the beginning of May through Monday, it is down a little more than 15.5 percent. In June, it is down 10.9 percent. May was not a great month. It was quite bumpy because of the concerns about pricing and rates and the slowing economy and that’s only been exacerbated in the early part of June.
What’s interesting related to that in the context of REITweek is that we talked with REIT management teams and they remain very upbeat about current operating performance. We heard from more than one team that in terms of operations, it’s all green. Occupancies are up, rents are up and current earnings trajectories look really good. They are upbeat about current performance and the near-term outlook is very positive.

I believe he’s spot-on in this assessment. If you focus on factors inside the real estate sector instead of setting your sights on the broad market, it’s easy to see these REITs are performing well on an individual basis and this makes me bullish even in this climate.

Happy Investing

Brad Thomas

467 posts

View all my Posts

Brad Thomas is Senior Research Analyst at iREIT and CEO of Wide Moat Research LLC. With over 30 years of real estate experience, he is also long-time Editor of Forbes Real Estate Investor, a monthly subscription-based newsletter that dives deep into the vast world of profitable properties, and since 2021, he has served as an adjunct professor at New York University.

Thomas has also been featured on or in Forbes magazine, Kiplinger's, U.S. News and World Report, Money, NPR, Institutional Investor, GlobeStreet, CNN, Newsmax, and Fox. And he was the #1 contributing analyst on Seeking Alpha in 2014, 2015, 2016, 2017, 2018, 2019, 2020 and 2021 based on both page views and number of followers.

Thomas is the recently-published author of The Intelligent REIT Investor Guide (2021), co-author of The Intelligent REIT Investor (2016), and he wrote The Trump Factor: Unlocking The Secrets Behind The Trump Empire (2016) - all available on Amazon.

Thomas received a bachelor of science in business/economics from Presbyterian College and is married with five wonderful kids.

There’s No Stopping the Inevitable

REIT Mutual Fund	Symbol
Alpine Realty Income and Growth Fund	AIGYX, AIAGX
American Century Real Estate Fund	REAIX, REACX, AREEX, AREWX, ARYCX, AREDX
Real Estate Securities Fund	MRESX
AR Capital Real Estate Income Fund	ARIAX, ARICX, ARIPX
AssetMark Real Estate Securities Fund	AFREX
Aston/Harrison Street Real Estate Fund	AARIX, ARFCX
Baron Real Estate Fund	BREIX, BREFX
BlackRock Real Estate Securities	BIREX, BAREX, BCREX
Brookfield U.S. Listed Real Estate Fund	BRUAX, BRUCX, BRUIX, BRUYX
CGM Realty Fund	CGMRX
West Loop Realty Fund	REIIX, REIAX, REICX
Cohen & Steers Institutional Realty Shares	CSRIX
Cohen & Steers Realty Income Fund	CSEIX, CSDIX, CSBIX, CSCIX
Cohen & Steers Realty Shares	CSRSX
Columbia Real Estate Equity Fund	CREAX, CREIX, CRRVX, CRERX, CREEX, CRRFX, CREWX, CRECX, CREBX
Compass EMP REC Enhanced Volatility Weighted Fund	CWRAX, CWRIX, CWRTX, CWRCX
Davis Real Estate Fund	RPFRX, DREYX, DRECX, DREBX
Delaware Real Estate Investment Trust Portfolio II	DPRTX, DPRBX
Delaware Real Estate Investment Trust Portfolio	DPREX, DPRSX, DPRRX, DPRCX
DFA Real Estate Securities Portfolio	DFREX
Dunham Real Estate Stock Fund	DAREX, DNREX, DCREX
DWS RREEF Real Estate Securities Fund	RRRRX, RRREX, RRRAX, RRRSX, RRRBX, RRRCX
DWS RREEF Real Estate Securities Income Fund	REFAX, REFCX, REFIX, REFSX
Eaton Vance Real Estate Fund	EAREX, EIREX
EII Realty Securities Fund	EIIRX
Fidelity Advisor Real Estate Fund	FHEIX, FHEAX, FHETX, FHECX, FHEBX
Fidelity Advisor Real Estate Income Fund	FRIRX, FRIQX, FRINX, FRIOX
Fidelity Real Estate Income Fund	FRIFX
Fidelity Real Estate Investment Portfolio	FRESX
Fidelity Spartan Real Estate Index Fund	FSRNX, FRXIX, FSRVX
Fidelity Series Real Estate Equity Fund	FREDX, FREFX
Fidelity Series Real Estate Income Fund	FSREX, FSRWX
Forward Real Estate Long/Short Fund	KSRYX, FRLSX, FFSRX, KSRAX, KSRCX, KSRBX
Forward Real Estate Fund	FPREX, FFREX, KREAX, KRECX
Forward Select Income Fund	KIFYX, FSIMX, FFSLX, KIFAX, KIFBX, KIFCX
Franklin Real Estate Securities Fund	FREEX, FRLAX, FRRSX, FSERX
GMO Real Estate Fund	GMORX
Goldman Sachs Real Estate Securities Fund	GREIX, GRETX, GREAX, GRESX, GRERX, GREBX, GRECX
Great-West Real Estate Fund	MXREX
Heitman REIT Fund	OARTX, OBRTX
ING Real Estate Fund	CRARX, IREWX, IDROX, CLARX, CRWRX, CRCRX, CRBCX
INVESCO Real Estate Fund	REINX, IARFX, IARIX, IARYX, IARAX, IARRX, IARCX, AARBX
Ivy Real Estate Securities Fund	IRSAX, IREIX, IRSYX, IRSRX, IREEX, IRSCX, IRSBX
John Hancock Real Estate Securities Fund	JIREX
Johnson Realty Fund	JRLTX
J.P.Morgan Realty Income Fund	URTLX, JRIRX, URTAX, URTBX, URTCX
J.P. Morgan Security Capital U.S. Core Real Estate Securities Fund	CEEAX, CEERX, CEEFX, CEESX, CEECX
J.P. Morgan U.S. Real Estate Fund	SUSIX
Lazard U.S. Realty Equity Portfolio	LREIX, LREOX
Lazard U.S. Realty Income Portfolio	LRIIX, LRIOX
Manning & Napier Real Estate Series	MNRIX, MNREX
Morgan Stanley Institutional U.S. Real Estate Portfolio	MSUSX, MUSDX, MSULX, MURSX
Natixis AEW Real Estate Fund	NRFAX, NRFYX, NRFBX, NRFCX, NRFNX
Neuberger Berman Real Estate Fund	NBRIX, NBRFX, NREAX, NRERX, NRECX, NRREX
Nuveen Real Estate Securities Fund	FREAX, FARCX, FRSSX, FREBX, FRLCX, FREGX
Oppenheimer Real Estate Fund	OREAX, OREIX, OREYX, ORENX, OREBX, ORECX
PHOCAS Real Estate Fund	PHREX
PIMCO RealEstateRealReturn Strategy Fund	PRRSX, PETPX, PETAX, PETDX, PETCX, PETBX
Pioneer Real Estate Shares	PWREX, PYREX, PCREX, PBREX
Principal Real Estate Securities Fund	PIREX, PIRPX, PREPX, PRETX, PREJX, PRRAX, PRERX, PRENX, PRAEX, PRCEX, PRLEX
ProFunds Real Estate UltraSector ProFund	REPIX
Prudential Select Real Estate Fund	SREAX
Prudential U.S. Real Estate Fund	PJEAX, PJEZX, PJECX, PJEBX
REMS Real Estate Income 50/50 Portfolio	RREIX
REMS Real Estate Value-Opportunity Fund	HLRRX, HLPPX
Rydex Real Estate Fund	RYREX, RYHRX, RYCRX
SA Real Estate Securities Fund	SAREX
SEI Institutional Mgd Real Estate Fund	SETAX, SEIRX
Spirit of America Real Estate Income & Growth Fund	SOAAX
SSgA Clarion Real Estate Fund	SSREX
Stratton Real Estate Fund	STMDX
T.Rowe Price Real Estate Fund	TRREX, PAREX
TIAA-CREF Real Estate Securities Fund	TIREX, TRRPX, TRRSX, TCREX
Vanguard REIT Index Fund	VGSNX, VGRSX, VGSLX, VGSIX
Virtus Real Estate Securities Fund	PHRAX, PHRIX, PHRCX, PHRBX

REIT ETF	Symbol
Flex Shares	ASET
Wisdom Tree Global Ex-US	DRW
S&P 500 Equal Weight	EWRE
iShares FTSE Industrial/Office	FNIO
MSCI Real Estate Index	FREL
S&P REIT Index	FRI
First Trust S&P REIT	FRI
iShares Real Estate 50	FTY
Flexshares Global	GQRE
iShares Cohen & Streers	ICF
iShares International Developed RE	IFGL
iShares US RE	IYR
Premium Yield Equity REIT	KBWY
ETRACS Monthly Pay 2x Leverage	MORL
Market Vector Mortgage	MORT
iShares Global REIT	REET
iShares FTSE Mortgage	REM
iShares Residential	REZ
IQ US Real Estate Small Cap	ROOF
iShares FTSE NAREIT Retail	RTL
DOW Jones Global RE	RWO
SPDR Dow Jones	RWR
Schwab US REIT	SCHH
Super Dividend REIT	SRET
ProShares Ultra RE	URE
Vanguard REIT	VNQ
Vanguard Global ex-US	VNQI
iShares International Developed	WPS
Wilshire US REIT	WREI
Pacer Benchmark Data & Infrastructure RE	SRVR
Pacer Benchmark Industrial RE	INDS
Pacer Benchmark Retail RE	RTL
Hoya Capital Housing	HOMZ
NetLease Corporate RE	NETL

REIT Name	Ticker	Annual Increases/yr
Federal Realty	FRT	51
Universal Health Realty	UHT	33
National Retail Properties	NNN	29
Realty Income	O	27
Tanger Outlets	SKT	26
Urstadt Biddle	UBA	25
Essex Property Trust	ESS	25
W.P.Carey	WPC	22
National Health Investors	NHI	17
Equity Lifestyle	ELS	15
Digital Realty	DLR	15

The Stock Market Holds Steady

Brad Thomas

467 postsJune 16, 2022

Featured Articles

The Great Housing Market Migration Is VERY Interesting

Let Dividends Help You Deal With Disappointment In The Stock Market

Amazon Wants to Ask What Ails You

Wall Street’s Workforce Crisis Should Be Taken Seriously

Santa Claus Has Left the Building

The Stock Market Holds Steady

467 postsJune 16, 2022

REIT Mutual Funds

REIT ETFs

Not All Dividends Are the Same