In the U.S.:
- President Trump announced, via twitter, that the US would impose a 5% tariff on all imports from Mexico and would increase the tariffs every month thereafter until they reached 25%. The escalation in tariffs is said to be due to the White House’s view that Mexico is not doing enough to stop the influx of migrant families to the US Border.
American Tower (AMT) announced that it had entered into an agreement to acquire Eaton Towers Holding Limited for approximately $1.85B. Eaton Towers runs 5,500 communications sites in Africa and is expected to generate roughly $260M in property revenues over a one year period.
- May official manufacturing PMI fell to 49.4 versus April’s 50.1 reading. The disappointing PMI raised expectations that the PBoC would increase easing measures.
- April Industrial production rose 0.6% m/m versus March’s 0.6% m/m reading. The growth was led by autos and other transportation equipment, along with production machinery.
Henderson Land won the rights to purchase a 39,479 square meter plot in Beijing’s Chaoyang district Residential Site for 3B Yuan. The move marked the first Beijing site purchase for Henderson Land in 15 years.
- The May German unemployment rate rose for the first time in over five years to 5% from 4.9%. The metric was the latest deteriorating economic reading for Germany, which is battling the effects of a slower global economy due to the US trade war with China and looming auto tariffs if trade talks between the EU and US begin to fail.
Last week’s European Parliament elections resulted in a more fragmented political landscape across the region, creating a cloud of uncertainty in the coming months as the process of allocation for the top European Union positions plays out. Key among the positions is the head of the ECB to succeed Mario Draghi when his term ends on October 31st, coincidentally the new deadline for the UK’s exit from the EU. Amidst this backdrop of greater political uncertainty and increased concerns over global trade discussions and its impact on the global economy, bond yields have declined in a flight to safety by investors. While lower bond yields are a plus for property stocks, the more uncertain economic and political outlook was a headwind for European property stocks this week. For the week, the FTSE EPRA NAREIT Developed Europe Index was down approximately 2%.
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.