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Stocks turn lower as higher rates sting real estate

Published 10/27/2016, 10:42 AM
Stocks turn lower as higher rates sting real estate
  • The 10-year Treasury yield is making new bear-cycle highs today, up another seven basis points to 1.86% - its perkiest level since May. The move up in yields is global, with U.K. 10-years up 11 bps and Germany's up 8.5 bps.
  • Earlier today, the U.K. reported Q3 GDP growth of 0.5% - far better than what had been predicted post-Brexit.
  • Facing at least a little more competition in the yield department, equity REITs have turned sharply lower, with VNQ down 2.1%, and IYR off 1.8%. Mortgage REITs (REM -0.6%) are faring a little better as solid Q3 earnings begin to roll in.
  • The major U.S. averages have given up early gains and turned red, led by the S&P 500 and Nasdaq, both off 0.25%.
  • Individual equity REITs: Verreit (VER -2.2%), Welltower (HCN -2.4%), Equity Residential (NYSE:EQR -1.6%), Omega Healthcare (OHI -3.2%), Simon Property (SPG -3.2%), General Growth (GGP -2.6%), Public Storage (NYSE:PSA -2.9%), Gramercy Property (GPT -1.9%), Washington Real Estate (WRE -1.2%), Hersha (HT -2.9%), Sunstone Hotel (SHO -1.4%), Stag Industrial (STAG -2%)
  • Mortgage REITs: AGNC Investment (AGNC -1.5%), Annaly (NLY -0.7%), Two Harbors (TWO -0.4%), Capstead (CMO +0.3%)
  • ETFs: VNQ, IYR, MORL, REM, MORT, DRN, RQI, URE, SCHH, ICF, RWR, SRS, RNP, RFI, JRS, KBWY, NRO, DRV, RIT, RIF, REK, DRA, FRI, FTY, FREL, LRET, PSR, WREI, XLRE, IARAX, RORE

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