In the U.S.:
- As expected, the Fed left rates unchanged. Fed Chairman Jerome Powell stressed that it would remain patient even though some of the global risks seen in March had partly subsided.
- April nonfarm payrolls were a strong 263K versus March’s revised 189K. The Unemployment rate ticked down to 3.6%, a level not seen since 1969.
- In earnings, 389 companies in the S&P 500 Index have reported, 76.2% beat, 0.3% were in-line, and 23.5% missed estimates.
Marriott International, Inc. (MAR) is getting into the short term vacation home rental market by releasing over 2,000 high end homes throughout the US, Europe, and Latin America. The entry into the segment by MAR will hurt companies like Airbnb and VRBO as Marriott brings a certain expectation of quality and can access its hotel network to create innovative stay packages and integrated loyalty programs.
In REIT earnings, 85companies in the Wilshire U.S. REIT Index have reported, 59 beat, 1 was in-line, and 25 missed estimates.
- Factory output rose unexpectedly to 52.7 versus February’s 49.5 reading. The boost in output could allow the PBoC to delay its expected RRR cut if the economy continues to expand.
- A top official of the ruling party told Nikkei that the consumption tax hike to 10% from 8% would likely proceed as scheduled in October. PM Shinzo Abe had delayed the proposed tax hike twice before to spur on growth.
Morgan Stanley analysts turn more bullish on Hong Kong Property Stocks. The analysts cited a dovish Fed, and lower supply as the main reasons for the improved outlook.
- The Eurozone flash inflation reading for April accelerated to 1.7% y/y versus March’s 1.4% y/y reading. Economists noted that April’s inflation growth will likely dissipate in May and would likely not alter the current ECB policy trajectory.
Intu Properties, one of the UK’s largest shopping center operators, provided an interim period update this week that continues to point to a challenging retail environment in the UK for both retailers and landlords. Recently appointed CEO Matthew Roberts highlighted a priority to reduce leverage and an operating environment faced with more uncertainty for the balance of the year. The company’s loan-to-value stood at 53% at December 31, 2018 and has an interim target to reduce it below 50% thru asset sales (partial and full) and reduced cap ex spend. The company revised its 2019 guidance for like-for-like net rental income to a range of -4% to -6% from the prior range of -1% to -2% driven by a higher than expected level of CVA’s (Company Voluntary Agreements) and a slowdown in new lettings as tenants delay their decisions due to the uncertainties in the current political and retail environments. The company indicated that it plans to provide a strategic update with its half year results at the end of July.
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.