In the U.S.: November nonfarm payrolls increased 228K versus October’s downwardly revised 241K increase. The unemployment rate remained unchanged at 4.1% and wages disappointed with average hourly earnings increasing only 0.2% m/m versus the 0.3% m/m expected. REIT Focus: RLJ Lodging Trust (RLJ) announced the expansion of its relationship with Interstate Hotels and Resorts. Once the transaction is completed, RLJ will have 73 management contracts with Interstate, including 62 hotel contracts acquired from White Lodging. Once the transaction closes in January 2018, Interstate will be RLJ’s largest management company. In China: November’s trade surplus was $40.2B versus the consensus forecast of $36.5B. The trade surplus was led by dollar-denominated exports which rose 12.3% y/y. Economists noted that the strong result
In the U.S.: As of midday Friday, the GOP’s tax overhaul seems to have the votes necessary to pass. Of note, Senator Bob Corker’s plan to include tax increases to offset the deficit impact was rejected, while a $10,000 deduction for state and local property taxes was added to the bill. Former Trump national security advisor, Michael Flynn, plead guilty to making false statements to the FBI about conversations he had with Russian ambassador Sergei Kislyak, and that he would cooperate fully with the investigation led by Special Counsel Robert Mueller. Of note, the court released statement named “senior transition officials” as part of Flynn’s communications with the Russian government, which contradicts the White House’s previous statements. REIT Focus: Alexandria
North America In the U.S.: Fed Chair Janet Yellen stated that the economy is “reasonably close” to the central bank’s dual mandate of maximum employment and price stability. However, while Yellen expects inflation to move back up over next year or two, she was “very uncertain” about this and the extent to which transitory factors are depressing inflation. The tax reform bill in the Senate is currently seen as likely to pass. However, the reconciliation process will likely see some heated debates regarding the elimination of the SALT deduction, one-year delay of corporate tax rate reduction, and the treatment of pass-through entities. REIT Focus: Select Income REIT (SIR) announced the subsidiary IPO filing of Industrial Logistics Properties Trust, or ILPT.
In the U.S.: Following the House’s passing of the proposed GOP tax package, the Senate Finance Committee voted along party lines (14-12) to bring the legislation to the floor the week after Thanksgiving. However, many concerns regarding several provisions in the tax package along with the addition of eliminating the individual mandate of Obamacare will make it a difficult bill to pass. In earnings, 474 companies in the S&P 500 Index have reported, 77.4% beat, 0.6% were in-line, and 22.0% missed estimates. REIT Focus Starwood Waypoint Homes (SFR) shareholders approved the merger with Invitation Homes (INVH). The merger closed on November 16th with each share of SFR converting into 1.614 shares of INVH. In REIT earnings, 106 companies in the
In the U.S.: President Donald Trump was in Asia this week where he pressed China’s President Xi Jinping on the North Korean nuclear issue and continued his strong rhetoric that bilateral trade had been unfair to the US. As details of Tax Reform were released, the focus has been on the differences between the House and Senate plans and the likely headwinds the legislation will face during reconciliation. The notable key differences focus on the timing of the corporate tax break, the number of individual tax brackets, international tax rules, and estate taxes. In earnings, 457 companies in the S&P 500 Index have reported, 76.0% beat, 1.0% were in-line, and 23.0% missed estimates. REIT Focus: M&A activity heated up in