In the U.S.:
- As expected, the Fed cut rates by 25 bps. Fed chair Jerome H. Powell, said at a news conference after the meeting that the United States economy remained strong and unemployment low, but that “there are risks to this positive outlook.” If the economy weakens, he said, a “more extensive sequence” of rate cuts could be appropriate.
- The US announced new sanctions against Iran’s central bank in response to the attack on Saudi oil fields this past weekend. The Pentagon on Thursday called the attacks a “dramatic escalation” of tensions in the region.
Bloomberg reported that CyrusOne (CONE) has drawn interest from Digital Realty Trust (DLR). CyrusOne was previously reported to be exploring a sale after receiving takeover interest.
- The trade talks with the US seem to have hit another wall after US President Trump said that no deal was necessary before the 2020 election and China’s officials canceled several farmland visits scheduled for next week.
- August Core CPI rose 0.5% y/y versus July’s 0.6% y/y reading. Underlying inflation was steady at 0.6%, slightly above 0.5% consensus.
- Bloomberg discussed how the BOJ lowered its JGB buying across three maturity zones by a combined 50B on Friday. The article also noted that was first time it has cut purchases in three segments simultaneously since introducing the yield-curve control in 2016.
Sun Hung Kai Properties nearly sold out of a batch of 352 apartments in its Cullinan West III project. The successful sale was welcome news as the Hong Kong protests continued to weigh on the company.
- In an interview with Sky News, European Commission President Juncker said a deal can be had on Brexit by 31-Oct, and he is prepared to get rid of the controversial Irish backstop plan from the withdrawal agreement. The statement followed increased skepticism that UK PM Boris Johnson would be able to get a deal done in time.
- The BoE left rates on hold at 0.75%. The central bank reiterated their warnings that a no-deal Brexit risked hitting the sterling and damaging growth.
This week saw some M&A activity with funds managed by Blackstone Group making an all cash bid at the start of the week to acquire Dream Global REIT (Dream) for CAD 16.79/sh, representing an 18.5% premium to Dream’s Friday closing price and a 9.1% premium to their last reported EPRA NAV/sh as of 6/30/19. Dream owns primarily office assets across Western Europe, including Germany, Netherlands and Austria. Approximately 6% of its assets are in logistics. Dream was listed by its Canadian sponsor in 2011 to create a platform for investing across Europe. Dream is externally managed by Dream Asset Management. Dream is dual listed on both the Frankfurt and Toronto Stock Exchanges.
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.