In the U.S.:
- The first print of Q1 GDP showed a 4.8% q/q SAAR contraction, marking the first contraction since 2014. Personal consumption was the big drag on the reading, down 7.6%.
- Promising results from two studies of the Gilead drug Remdesivir were released this week. The studies concluded that the drug aided patients already positive with Covid 19 with faster recovery times and lower mortality rates than those on the placebo.
- The Fed, as expected, held rates steady in the 0.00 – 0.25% range at its recently concluded April meeting. In the statement, the FOMC said the ongoing public health crisis poses considerable risks to the economic outlook.
- Initial jobless claims rose another 3.839M versus last week’s revised 4.427M. This brings the six-week total to over 30M or ~18% of working population.
- In earnings, 273 companies in the S&P 500 Index have reported, 69.2% beat, 0.4% were in-line, and 30.4% missed estimates.
CubeSmart (CUBE) introduced SmartRental, its proprietary fully online rental option. Utilizing SmartRental, customers have the ability to complete the entire rental experience online.
In REIT earnings, 30 companies in the Wilshire U.S. REIT Index have reported, 28 beat, 0 were inline, and 6 missed estimates.
- April official manufacturing PMI was 50.8 versus March’s 52.0 reading. Production gains pared back moderately and export orders fell sharply.
- The Nikkei reported the Japanese government plans to extend a nationwide state of emergency beyond May 6th as the country’s coronavirus outbreak has yet to subside. Many expect the announcement on Monday to urge the public to stay at home for about one month longer.
- March industrial production fell 3.7% m/m, marking the biggest decline since October. The main drags to the reading were transportation equipment and production machinery.
Sun Hung Kai sold a 25% stake in the SHK Commercial Project, above the High Speed Rail West Kowloon Station in Hong Kong, for HK$9.39B. The retail portion of the project will remain wholly owned by Sun Hung Kai.
- The ECB left policy unchanged and announced a new refinancing operation. The decision largely in line with consensus.
- Eurozone Q1 GDP contracted by 3.8% q/q versus Q4’s 0.1% increase. Both France and Spain posted larger declines than expected.
Unibail-Rodamco-Westfield (URW)provided an interim trading update for its shopping center portfolio that spans Europe and the US. The update provided a sobering perspective of the current challenges for the retail sector. No like-for-like rental or valuation data was provided, but tenant sales information was provided both pre-COVID (i.e. January and February) and separately for March as worries over the pandemic accelerated and shelter-in-place orders started to be rolled out across Europe and the US. Tenant sales for January – February were +3.3% in Europe (+3.7% in Continental Europe and +1.3% in the UK) and +1.6% in the US. Following the widespread onset of the COVID-19 pandemic in early March and the closure of most stores (except those deemed essential) by mid-March, tenant sales turned negative and were -59.5% in Europe and -55.2% in the US for the month of March. Since March 24th, all of the company’s shopping centers have been substantially closed, except in Sweden and The Netherlands. While the situation is evolving daily, a number of governments across their portfolio are taking steps to gradually lift the restrictions imposed. Rent collections vary by regional practices, ranging from quarterly in advance to monthly. Most quarterly billing markets have temporarily shifted to monthly billing. As of April 24th, URW had collected approximately 20% of April retail rent, despite having extended payment terms for most of the April and May rent without applying penalties. URW is working with those tenants most in need of help as a result of the crisis through a combination of rent relief and rent deferral. Those tenants primarily consist of small and medium size retailers as well as certain restaurant operators.
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.