In the U.S.:
- As expected, the Fed cut rates 25 bps. Fed Chair Powell on Wednesday characterized the central bank’s 25 bps rate cut as a “mid-cycle adjustment” and not “the beginning of a lengthy cutting cycle.
- In earnings, 384 companies in the S&P 500 Index have reported, 76.3% beat, 0.5% were in-line, and 23.2% missed estimates.
Welltower (WELL) announced that is has acquired five purpose-built, private pay seniors housing properties recently developed and managed by Sunrise Senior Living for $285M. The communities are located within the Washington, D.C., San Francisco and San Diego metropolitan areas.
In REIT earnings, 88 companies in the Wilshire U.S. REIT Index have reported, 55 beat, 2 were in-line, and 31 missed estimates.
- July Caixin manufacturing PMI was 49.9 versus June’s 49 reading. New orders and output returned to expansion territory, while new export orders improved slightly though remained in contraction.
- US President Donald Trump tweeted on Thursday that he is imposing a 10% tariff on the final ~$300B tranche of Chinese imports. Following the news, China’s foreign ministry spokeswoman Hua Chuying hinted at possible retaliation stating that “China will have to take necessary countermeasures to resolutely defend its core interests”.
- Bloomberg reported that Japanese Prime Minister Shinzo Abe’s cabinet voted to remove South Korea from a so-called “white list” of countries that benefit from less stringent trade checks. Japan cited South Korea’s lax management of sensitive materials as the catalyst to the removal from the list.
Mitsubishi Estate Co., together with office furniture maker Okamura Corp. video-conferencing software vendor V-Cube Inc., and Telecube Inc. are planning to install phone booth-sized offices at train stations, airports and skyscraper lobbies throughout Japan. The 13 sq. ft. cube will have a seat, desk and power outlets and can be reserved via app for approximately $2.30 per 15 minutes, with monthly subscriptions available.
- As expected, the BoE left its key policy settings unchanged. The guidance maintained that increases in rates likely at a gradual pace and to a limited extent, but noted that this assumes a smooth Brexit and some recovery in global growth.
Unibail-Rodamco-Westfield (URW) reported results for the 6-months ended June 30 this week with Adjusted Recurring EPS (AREPS) of €6.45/sh. Despite a challenging retailing environment for its core shopping center business, URW’s results appeared a bit better than expected. URW increased its estimated range for 2019 AREPS from €11.80/sh – €12.00/sh to a new range of €12.10/sh – €12.30/sh. Approximately €0.18/sh of the €0.30/sh increase in the midpoint is due to the implementation of IFRS 16 as of January 1, 2019. Group Net Rental Income (NRI) increased 3.3% for the half year with LFL NRI growth of +2.1% for Continental Europe shopping centers, -3.1% for UK shopping centers, +9.4% for offices and +14.7% for its Convention & Exhibition business. Management noted a better than expected financing environment that is enabled it to reduce its average cost of debt down to 1.6% with the average maturity extended to 8.0 years. Disposals that have closed or agreed to total €1.2 bn year to date with approximately €3.2 bn of disposals over the past 12 months since Unibail-Rodamco closed its merger with Westfield. EPRA NAV ended the period at €216.10/sh, down 2.6% for the half year with a 1.3% decline in the LFL portfolio valuation growth.
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.