REITs Rally Despite Mounting Dividend Cuts

Published Sat, 09 May 2020 10:00:00 -0400 on Seeking Alpha

The rebound continued for U.S. equity markets this week despite another brutal week of unemployment data. Nearly a fifth of the American workforce has filed for jobless claims since mid-March.
Investors are wagering that WWII-levels of fiscal spending combined with unprecedented levels of monetary support can help to offset the economic pain from the coronavirus shutdowns.
Real estate equities continued their recent rebound on the busiest week of real estate earnings season as more than 75 REITs reported earnings results and rent collection metrics.
Real estate earnings season has generally topped expectations. REIT dividend cuts continue to mount, however, as 41 out of 165 Equity REITs have cut dividends since the start of the pandemic.
Homebuilders and housing-related equities have led the recent rebound on mounting optimism that the housing industry will lead the eventual economic recovery amid a potential "suburban revival."
Real Estate Weekly Outlook
The rebound continued for U.S. equity markets this week despite another brutal week of unemployment data that showed that more than 33 million Americans - a fifth of the workforce - have filed for unemployment claims in the last seven weeks as the coronavirus-related shutdowns continue to inflict a devastating - but hopefully temporary - impact on the American economy. Investors are wagering that WWII-levels of fiscal spending combined with unprecedented levels of monetary support can help to offset the economic pain from the coronavirus shutdowns amid discussions over another round of stimulus and debate over the "shape" of the eventual recovery.

(Hoya Capital Real Estate, Co-Produced with Brad Thomas)
Following a decline of 0.1% last week, the S&P 500 ETF (SPY) ended the week higher by 3.4% while Mid-Cap (MDY) and Small-Cap (SLY) stocks delivered a second-straight week of strong gains of 5.6% and 4.0%, respectively. Real estate equities continued their recent rebound on the... Read more