Real Estate
Underweight The spike in UST yields have been weighing on fixed income-proxy sectors with REITs foremost among them. As noted in the top panel of the chart, excluding the inflating of the property bubble in advance of the GFC, REITs have had a very tight…
Highlights Recommended Allocation
Quarterly - October 2018…
Highlights Macro outlook: Global growth will continue to decelerate into early next year on the back of brewing EM stresses and an underwhelming policy response from China. Equities: Stay neutral for now, while underweighting EM relative to DM stocks.…
Highlights Duration: The housing market is the key channel through which monetary policy impacts the economy. As such, it is unlikely that Treasury yields will peak until housing shows meaningful weakness. While residential investment has decelerated in…
Highlights Portfolio Strategy The firming long-term housing demand backdrop, lumber price cost relief, steady new home prices and favorable new home sales expectations, all signal that it is time to buy homebuilders. On the flip side, we do not want to…
The opposing sides of our market- and industry-neutral trade going long the S&P homebuilding index/short the S&P REITs index1 have both been on the receiving end of negative data in the last month. With respect to homebuilders, housing permits, a…
Highlights The latest round of tariffs on U.S. imports from China confirms that the Trump administration's confrontation with China goes beyond the mid-term elections. Desynchronization between the U.S. and China/EM growth foreshadows dollar appreciation…
Highlights The recent improvement in China's housing data has been mainly driven by the central bank's direct lending to the real estate sector. This improvement is unlikely to last, as the authorities are scaling down this form of financing. Structural…
Following up from our inaugural U.S. Equity Market Indicators Report in early-August 2017, this week we introduce the second part in our Indicators series. In this Special Report we have drilled down to the ten GICS1 S&P 500 sectors (excluding the real…
Highlights German real estate and real estate equities remain a worthwhile multi-year position, especially in relative terms. The dominant stocks are Vonovia, Deutsche Wohnen, LEG, and GSW. Swedish real estate and real estate equities are likely to face…