In the U.S.:
As expected the Fed left rates unchanged. The Fed stated that inflation had “increased somewhat since earlier this year” which sets the stage for a December rate hike.
October Nonfarm payrolls rose by 161K versus the 172K consensus estimate. The unemployment rate ticked down to 4.9% from 5.0% and labor force participation fell to 62.8% from 62.9%. Although the results were slightly lower than expected they would likely not affect the decision for the Fed to raise rates in December.
In earnings, 422 companies in the S&P 500 Index have reported, 75.6% beat, 1.3% were in-line, and 22.7% missed estimates.
Welltower Inc. (HCN) is close to selling approximately $1B of U.S. elderly homes to China’s Cindat Capital Management. The purchase would be Cindat Capital Management’s first purchase in U.S. senior housing real estate.
In REIT earnings, 99 companies in the Wilshire U.S. REIT Index have reported, 53 beat, 21 were in-line, and 25 missed estimates.
October’s official manufacturing PMI was 51.2 following September’s 50.4 reading. The better than expected PMI reading was led by arebound in new orders on strong demand.
October services PMI was 50.5 versus September’s disappointing 48.2 reading. Japan’s service firms were supported by a sharp expansion in new products in anticipation of the upcoming 2020 Tokyo Olympic Games.
H2 Tokyo office rents rose 12.56 pts from a year earlier to 169.89. The jump in rents marked the highest second-half level since 2007 and reflected the strong demand for office space in Tokyo.
Cheung Kong Property Holdings to sell its stake in The Center office tower to an unidentified Chinese buyer for approximately HK$35.7B. Cheung Kong Property holds 75% stake in The Center, which if sold, would become the most expensive office tower sale in Hong Kong handedly beating the sale of the Mass Mutual Tower, which sold for HK$12.5B in 2015.
Canadian Prime Minister Justin Trudeau signed Canada’s free trade agreement with Europe (CETA). Once implemented, CETA will remove 98% of tariffs and boost trade by approximately $12B.
Q3 Eurozone GDP remained steady at 0.3%. The consistent GDP, which was unchanged from last quarter, demonstrated the muted effects that the BREXIT has had during the first full quarter after the vote.
The U.K.’s High Court ruled that Parliament must first vote on whether the U.K. can start the process of leaving the E.U. by invoking Article 50 of the Lisbon Treaty. Prime Minister Theresa May has indicated a desire to invoke Article 50 in March 2017 to start the two-year negotiating process over the terms of its exit with the EU. While some could view the latest court ruling as potentially throwing Brexit into doubt or bringing into questions whether the U.K. will pursue a “hard” or “soft” exit from the EU, it will mostly likely only serve to further prolong the uncertainty as to what Brexit will ultimately mean for the U.K. economy and its impact on the property markets.
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.