In the U.S.:
- Chatter calling for a more aggressive 50bps rate cut by the Fed has simmered down. Reuters said its latest poll showed that over 95% of 111 economists surveyed now expect a 25 bps rate cut from the Fed later this month.
- The first reading of Q2 GDP came in at 2.1% q/q versus Q1 print of 3.1% q/q. Q4-2018 print revised down to +2.5% y/y from +3.0% y/y.
- In earnings, 218 companies in the S&P 500 Index have reported, 77.9% beat, 0.92% were in-line, and 21.2% missed estimates.
Chesapeake Lodging Trust (CHSP) announced that it has entered into an agreement to sell the 122-room Hyatt Herald Square New York and the 185-room Hyatt Place New York Midtown South, for $138.0M. The proposed sale by the Trust of these New York hotels is anticipated to occur in mid-to-late September 2019 prior to completion of the Trust’s proposed merger with Park Hotels & Resorts, Inc.
In REIT earnings, 28 companies in the Wilshire U.S. REIT Index have reported, 17 beat, 1 was in-line, and 10 missed estimates.
- Hong Kong protests continued this week with Beijing pointing the finger at the US for inciting the protests. The timing of this accusation is unfortunate given that the US and Beijing are to resume trade talks next week in Shanghai.
- July Markit manufacturing PMI was 49.6 versus June’s 49.3 reading. The result marked the third straight month in contraction as weak demand from China due to the ongoing trade war continued to weigh on Japan’s economy.
Mitsui Fudosan announced that it would open a luxury hotel in the hot springs resort town of Hakone in 2022. Mitsui has secured a site for the project and is in talks to bring a foreign hotel operator on board. The new hotel will cater to wealthy domestic and Asian tourists, but also Western travelers planning on long stays.
- As expected, ECB left its policy settings on hold. The ECB reiterated its willingness to adjust all its instruments and instructed relevant committees to examine potential mitigating measures and a new asset purchase program.
- The UK’s new prime minister, Boris Johnson, said he would “much prefer” to leave the EU with an agreement, saying he would work “flat out to make it happen”. PM Johnson announced that he planned to scrap the Northern Ireland backstop for “alternative arrangements”, a move that EU’s chief Brexit negotiator, Michel Barnier, said would be “unacceptable”.
Unite Group, the UK’s leading provider of student accommodation housing, reported 1H19 results this week with EPRA EPS of 23.2 pence/sh (+12% YOY) that was largely in line with expectations. The company reiterated its expectation for rental growth of 3.0% – 3.5% for the upcoming 2019/20 academic year with 92% of the beds already reserved for the upcoming academic year. EPRA NAV/sh ended the period at £8.20/sh, an increase of 4% for the half year since 12/31/18. The company remains on track with its proposed £1.4 bn acquisition of Liberty Live from the Canada Pension Plan Investment Board, although closing is now expected to occur in the fourth quarter instead of the third quarter. The company also announced an 8% increase in their interim dividend.
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.