In the U.S.: June nonfarm payrolls increased 222K versus the consensus estimates of 178K. The unemployment rate unexpectedly ticked up to 4.4% from May’s 4.3% reading as more people started looking for work. REIT Focus: Apartment Investment and Management Company (AIV) announced that it acquired the remaining 47% interest in the Palazzo joint venture owned by institutional investors advised by J.P. Morgan Asset Management for $451.5M. The acquisition was funded by taking title subject to existing allocable debt of $140.5M and by payment of $311 million in cash proceeds funded with bank borrowings pending the sales of several properties on the east coast. In China: At the G20 President Xi Jinping called on member nations to follow a “multilateral trade
In the U.S.: The senate health care bill’s CBO score was released which projected that 22M Americans would lose their insurance coverage within a decade. The CBO also concluded that the bill would cut the deficit by $321B over the same time period. The Republican majority struggled to get support from five conservative senators and ultimately pulled the vote scheduled for this week. The IMF cut the 2018 U.S. growth outlook to 2.1% from its previous outlook of 2.5%. The fund highlighted that the change was due to them dropping the assumption that the Trump administration’s tax cuts and fiscal spending plans would boost growth and that the U.S. labor market was already at a level consistent with full employment.
In the U.S.: As expected, all 34 of the largest US banks met the minimal capital requirements in the Dodd-Frank Act Stress Test (DFAST). The test featured a severe global recession with the US unemployment rate rising by approximately 5.25 percentage points to 10%, accompanied by heightened stress in corporate loan markets and commercial real estate. REIT Focus: Pebblebrook Hotel Trust (PEB) sold the Dumont NYC, an upscale hotel on Lexington Ave. in Manhattan, to the LeFrak Organization for $118M. LeFrak plans to convert the 252 room hotel into apartments. In China: MSCI will include domestic China A-shares in its global indices starting June 2018. MSCI cited broad support, as the PBoC continues to lower hurdles for foreign investors to
In the U.S.: The U.S. Senate voted 97-2 for fresh sanctions in response to a trio of Russian actions, including interference in the 2016 election, engagement in Syria, and the invasion of Crimea. Of note, the sanctions would prohibit President Trump from lifting the sanctions without Congressional approval. Amazon.com, Inc. (AMZN) announced the acquisition of Whole Foods Market, Inc. (WFM) for $13.7B. The blockbuster deal shocked the markets with the bulk of grocers down over 10% and subsequent strip center REITs falling over 5% for the session. Analysts noted that the investment by Amazon could change the fundamental grocery space and put pressure on food manufacturing margins going forward. Whole Foods Market operates 440 stores in 42 states, and the acquisition
In the U.S.: The House of Representatives passed the Financial Choice Act aimed at undoing many of the Dodd-Frank banking reforms that limit risk taking. The bill is expected to be revised in the Senate where democrats look to preserve the Consumer Financial Protection Board and the Volcker Rule REIT Focus: Digital Realty Trust Inc. (DLR) agreed to buy Dupont Fabros Technology Inc. (DFT) in a $4.95B stock deal. The deal will give Digital Realty access to key data markets in Virginia, Chicago, and Silicon Valley and greatly improve Digital’s ability to serve the ever growing cloud computing market. In China: May PPI rose 5.5% y/y versus April’s 6.4% y/y reading. The ongoing deceleration in materials was cited as the