In the U.S.:
- The Fed kept interest rates unchanged.Following the meeting the Fed stated that “the labor market has continued to strengthen and that economic activity has been rising at a strong rate. The Fed is expected to raise rates two more times this year.
- July nonfarm payrolls fell to 157K versus June’s upwardly revised 248K.The unemployment rate of 3.9% was in line with consensus, ticking down 0.1% m/m.
- In earnings, 402 companies in the S&P 500 Index have reported, 84.6% beat, 0.7% were in-line, and 14.7% missed estimates.
Brookfield Asset Management Class A (BAM.A) and Forest City Realty Trust Class A (FCE.A) announced a definitive agreement whereby Brookfield will acquire all outstanding common shares of FCE.A for $11.4B or $6.77B excluding debt.
In REIT earnings, 92 companies in the Wilshire U.S. REIT Index have reported, 68 beat, 8 were in-line, and 16 missed estimates.
- July official manufacturing PMI dropped to 51.2 from June’s 51.5 reading.The statistics bureau noted that adverse weather conditions and escalating trade tensions were factors in the drop.
- The government announced plans to levy retaliatory tariffs on ~$60B of US goods if the US starts to slap taxes on Chinese imports.The statement followed the White House confirmation that it was considering a 25% tariff on $200B of Chinese imports, which was up from the original 10% proposal.
- BOJ voted 7-2 to leave short term rates at -0.1% and long term rates at around 0%.Of note, the BOJ introduced forward guidance, highlighting plan to “maintain the currently extremely low levels of short and long-term interest rates for an extended period of time.”
- June industrial production fell 2.1% m/m versus May’s 0.2% fall.Weakness driven by general manufacturing equipment, chemicals, and fabricated metals
CK Asset Holdings Limited decided to redevelop its Hutchison House in Hong Kong’s Central area. The redevelopment will boast 41 stories and 185 parking spaces and is expected to be completed in 2023.
- Eurozone Q2 GDP was 0.3% q/q versus Q1’s 0.4% reading.Slowdowns in both Spain and France were cited as the main contributors to the drop.
- The BoE raised rates to 0.75% from 0.5%.The central bank said it would likely have to raise rates further despite continued uncertainty over Brexit.
Unibail-Rodamco-Westfield (URW) announced the sale this week of four regional shopping centers in Spain for €489M. The sale is part of URW’s targeted dispositions of ≈ €3B following the recent completion of the merger of Unibail-Rodamco and Westfield Corporation. The price was ≈ 4% below the most recent reported appraised values and represented an estimated net initial yield of 5.6% – 5.9%. Together with other announced disposals, including the sale of the Capital 8 office building in Paris, URW has achieved ≈ 58% of its target. URW is one of the largest listed global REITs and operates a mostly retail portfolio across continental Europe, London and the U.S. that has an estimated gross market value of over €60B.
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.