In the U.S.:
- In May, the U.S. economy added 223K jobs and the unemployment rate decreased to 3.8%. Wage growth rose slightly to 2.7% y/y, as higher oil prices and faster growth globally raised demand for manufacturing and construction workers.
- The US imposed steel and aluminum tariffs on EU, Mexico, and Canada. Canadian Prime Minister Justin Trudeau retaliated swiftly by imposing levies on as much as $12.8B of U.S. imports
Simon Property Group (SPG) plans to transform former Sears locations with new and compelling ways for consumers to live, work, play, stay and shop. A combination of innovative retail, restaurant and entertainment concepts are being considered for each center.
Education Realty Trust (EDR) is meeting with private-equity firms about a potential sale or take-private transaction. Shares of EDR jumped on the news closing roughly 3.7% higher on Friday giving the company a market value of approximately $2.8B.
- US President Donald Trump stated that the US would allow telecommunications-equipment maker ZTE to remain in business after paying a $1.3B fine, changing its management and providing “high-level security guarantees.” In addition, ZTE must hire American compliance officers to monitor its operations.
- May Caixin manufacturing PMI was unchanged at 51.1. Growth in production and new orders was offset by a fall in new export sales.
- May final manufacturing PMI was 52.8 versus April’s 53.8 reading. The slowdown was led by a drop in new orders and longer delivery times driven by material shortages.
A Hang Lung Properties unit won the land use right for the ~45K sq. m. site in Hangzhou’s Xiacheng district for 10.7B Yuan. The red hot land bid in Hangzhou and growing liquidity concerns led to a broad selloff in Chinese property developer stocks due to fears that regulatory tightening was imminent.
- Following Sunday’s vetoed nomination of economy minister Paolo Savona, Italy’s two large antiestablishment parties, the League and the 5 Star Movement, struck a deal Thursday on a coalition government, resolving a political crisis and putting a euro skeptic administration into power. Also easing fears, were the oversubscribed auctions of the nation’s5 yr. and 10 yr. debt
- In Spain, Prime Minister Mariano Rajoy was forced out of office and Spanish Socialist Workers’ Party (PSOE) leader Pedro Sanchez was named acting prime minister. The move came after a long-running corruption trial, known as the Gürtel case, ended with the court finding former officials of Mr. Rajoy’s Popular party guilty of operating a slush fund.
U.S. listed Public Storage (PSA) announced this week that the company is exploring a potential IPO of its European self-storage platform that operates under the “Shurgard” brand. The Shurgard portfolio is the largest in Western Europe with over 12 mn sf across seven countries (including the UK) and has an estimated value in excess of $3 bn. Shurgard is currently owned in a joint venture between PSA (49%) and the New York Common Retirement Fund (NYCRF). The JV was set up a little over ten years ago when PSA sold the stake to NYCRF. The next two largest self-storage operators in Europe are Big Yellow and Safestore Holdings, which operate portfolios totaling approximately 5.6 mn sf and 6.3 mn sf, respectively. Big Yellow operates exclusively in the UK, while Safestore operates in the UK and France (Paris metro).
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.