In the U.S.:
- January flash manufacturing PMI was 51.7 versus December’s 52.4 reading, marking the softest reading since October. New orders were marginal as domestic and foreign demand weakened.
- The Senate impeachment trial of President Donald Trump kicked off this week with the Democratic managers laying out the details of their case. The republican majority will offer their rebuttal over the weekend as well as Q&A early next week.
W. P. Carey (WPC) announced the acquisition of a 67,500 square-meter UK Class-A logistics facility for £85M ($112M). The facility is triple-net leased for a period of 13.5 years with fixed rent increases.
- The city of Wuhan has been locked down and officials have imposed travel restrictions on at least three major cities in an attempt to contain the coronavirus outbreak that has hit the region. Although the new virus is not seen as dangerous as SARS and MERS, it has infected over 800 people and caused over 25 deaths.
- As expected, the BOJ voted 7-2 to leaving short term rates at minus 0.1% and long-term rates at around 0%. The statement reiterated forward guidance that rates will be kept at present or lower levels as long as necessary.
Mapletree Logistics Trust announced the acquisition of DC Deokpyung from DC Deokpyung LLC for 35.8 billion won. The property is in Yongin-Icheon, a logistics cluster in the south-east region of the Seoul Metropolitan Area.
- The WSJ noted that France and the US reached a deal where France will postpone a 3% tax on digital revenue from tech companies with more than €750M in annual global sales and the US will delay the import tariffs it had planned on French imports. French officials say they now hope to reach an international agreement on digital taxation by the end of this year.
- As expected, the ECB left key policy settings and forward guidance unchanged. The statement reiterated that rates would remain at present or lower levels until the inflation target was met and QE would run for as long as necessary.
UK shopping center REIT Intu Properties responded to press speculation from last weekend of a possible equity raise and confirmed that it is planning to target a possible equity raise alongside the release of its FY 2019 results on February 19th. The company indicated that it is currently engaged in “constructive discussions” with both existing shareholders and potential new investors. Intu was the worst performing stock in Europe in the FTSE EPRA NAREIT Developed Index in 2019 with a local currency total return of -70.02%. Notwithstanding a reported 95% occupancy rate with the 3Q19 trading update last year, retail rents and values have been under pressure and their LTV is high. Intu has been looking to selectively sell assets to reduce leverage and is looking at an equity raise to accelerate the reduction in leverage.
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.