In the U.S.:
- Donald Trump won the electoral vote to become the next President of the U.S. in January 2017. The U.S. markets rallied the following day calming fears of the sharp decline that had been hinted by the futures markets the night before. However, many uncertainties exist regarding global trade, corporate tax reform, immigration, health care, civil rights and environmental policies as Mr. Trump transitions from a candidate to President.
- In earnings, 453 companies in the S&P 500 Index have reported, 76.2% beat, 1.4% were in-line, and 22.3% missed estimates.
Rexford Industrial Realty, Inc. (REXR) purchased a multi-tenant industrial property in Wilmington, Los Angeles for 13M. The 134K sq. ft. property is currently 63% occupied with most tenants under a month to month contract. Rexford plans to upgrade the property and utilize its premium location near the 110 freeway and the Port of Los Angeles to command premium rents.
In REIT earnings, 105 companies in the Wilshire U.S. REIT Index have reported, 55 beat, 21 were in-line, and 29 missed estimates.
- National Development and Reform Commission (NDRC) stated that the country had achieved its full-year target of cutting 45M tons of steel capacity by the end of October. Although China reached their target cuts, excess capacity remained in the industry as the cuts had done little to decrease output.
- Following the victory of U.S. President elect Donald Trump, a large shadow was cast on Trans-Pacific Partnership (TPP) trade agreement as Mr. Trump expressed strong opposition to TPP and other free trade agreements. China responded by stating it could implement its own rival trade agreement with Asian Countries, while Japan was left in limbo as legislation regarding TPP had already passed the lower house.
- October PPI fell to -2.7% y/y versus September’s -3.2% y/y reading. Although PPI remained very weak, the readings continued an upward trend and signaled that some of the BoJ’s monetary efforts to curb deflationary pressures were working.
In an effort to counter a new regulation in Hong Kong that would double the 7.5% stamp duty for non-first time homebuyers, Cheung Kong Property Holdings stated that it would pay the new stamp duty for customers.
- In the U.K., fears of a “hard BREXIT” were tempered as signs emerged that Article 50 would not pass the Supreme Court. If this occurs, Article 50 would then be sent to parliament where it would need to be softened to gain a majority.
News sources reported this week that Blackstone is buying Officefirst Immobilien (“Officefirst”), the core office portfolio of German IVG (“IVG”). The portfolio totals 97 properties totaling 1.4M sq. m across Germany’s major cities. The rumored purchase price is €3.3B. Blackstone is believed to have made an offer back in the summer, but IVG elected to pursue a public listing when the price did not meet their expectations. Officefirst had been close to an IPO as recently as October, but elected not to move forward due to market conditions/volatility at the time.
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.