In the U.S.:
- The US trade deficit in goods grew 10% last year to just over $891B, the widest on record. The reports dealt a blow to the current administrations trade policies which were meant to narrow the trade gap.
- February nonfarm payrolls were up only 20K which missed the180K consensus estimate. Although unknown factors such as the impact from the government shutdown and inclement weather could have altered the data, the report was disappointing and could factor into future Fed policy decisions.
- In earnings, 486 companies in the S&P 500 Index have reported, 71.4% beat, 1.2% were in-line, and 27.4% missed estimates.
An article in the WSJ highlighted that shopping center owners were warming up to the idea of Amazon storefronts. Amazon’s vision to expand its physical space for book stores, pop-up shops, cashier less convenience stores, and grocery stores now make it an attractive potential tenant.
In REIT earnings, 105 companies in the Wilshire U.S. REIT Index have reported, 61 beat, 4 were in-line, and 40 missed estimates.
- Articles this week from the NY Times and WSJ have cast doubt on the amount of progress that has been made on trade negotiations with the US. MNI reported that China proposed phasing in key elements, including IP protections and tech transfers, over six years, though holding out on bigger structural reforms.
- February exports fell an unexpected 20.7% y/y versus the consensus for a ~5.0% y/y decline. Exports to the US contracted 28.6% following a 2.8% decline in January.
- Q4 GDP was revised up to 1.9% versus the 1.4% previously reported. The revision was welcomed news as the previous quarters’ 2.4% contraction was the biggest decline in over four years.
Digital Realty Trust, Inc. announced that MC Digital Realty, a 50/50 joint venture between Mitsubishi Corporation and Digital Realty, reached an agreement to acquire a five-acre land parcel in Tokyo. The initial facility is expected to deliver up to 35.6 megawatts of total IT capacity.
- The EU was said to make a new offer to the U.K. in an attempt to break the Brexit impasse. However, it was reported that the new deal falls short of Britain’s demands and may not be enough to get a deal past a Parliament vote.
- The ECB reversed course by announcing new stimulus efforts to combat the global economic slowdown. The stimulus efforts include a longer timeline for keeping ultralow interest rates and a third round of TLTROs to spur on lending.
An article in PropertyWeek, highlighted that UK investment deals had slowed by over 40% in the first two months of this year. The lack of deals, which is most likely due to the uncertainty regarding Brexit, could persist if the UK were to face a no deal Brexit scenario.
The views expressed in this update are as of the date of this blog entry. These views and any portfolio holdings discussed in the update are subject to change at any time based on market or other conditions. The adviser disclaims any duty to update these views, which may not be relied upon as investment advice. In addition, references to specific companies’ securities should not be regarded as investment recommendations or indicative of the Adelante products, strategies, or portfolios.