Real estate stocks slide as Trump slams door on stimulus

Tuesday’s sudden drop suggests market had priced in another round of government aid

National /
Oct.October 06, 2020 06:25 PM
Donald Trump, Federal Reserve Chairman Jerome Powell, Treasury Secretary Steven Mnuchin, and Speaker of the House Rep. Nancy Pelosi (Credit: MANDEL NGAN/AFP, ERIC BARADAT/AFP, Erin Scott-Pool, and Alex Wong, via Getty Images)

Donald Trump, Federal Reserve Chairman Jerome Powell, Treasury Secretary Steven Mnuchin, and Speaker of the House Rep. Nancy Pelosi (Credit: MANDEL NGAN/AFP, ERIC BARADAT/AFP, Erin Scott-Pool, and Alex Wong, via Getty Images)

Real estate stocks sank with the broader market Tuesday after President Trump said his administration would no longer negotiate an economic stimulus bill to buttress the economy. Until “immediately after I win.”

The announcement, which arrived via Twitter, sent markets into a tailspin hours after Federal Reserve Chairman Jerome Powell said that any “recovery will be stronger and move faster” if the government supports the economy “until it is clearly out of the woods.”

On Friday, real estate stocks had climbed on news that 318,000 jobs returned to the leisure and hospitality industry in September, accounting for nearly half of all jobs gained last month.

Tuesday’s sudden drop suggests the market had priced in another round of government aid, thought to have been aimed at struggling businesses and laid off workers.

“The expansion is still far from complete,” Powell said during a press conference Tuesday, before Trump’s tweet. “Too little support would lead to a weak recovery, creating unnecessary hardship.”

The Dow Jones Equity All REIT Index reversed course following news of the impasse over negotiations, falling more than 1 percent to end the day in negative territory. The Real Estate Select Sector SPDR Fund, which includes real estate management and development companies as well as REITs, ended the day down nearly 0.85 percent.

In all, 20 of the 29 real estate stocks The Real Deal tracks had entered negative territory at the closing bell. Some larger companies including Hilton Worldwide, Marriott International and Simon Property Group bucked Tuesday’s trend, ending the day with gains.

Talks over a second round of stimulus — to follow the $2.2 trillion CARES Act — began in August and faced an uphill battle during election season. Markets had maintained their optimism, however, as talks continued last week between House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin.

For now, those hopes are dashed. The Dow Jones, S&P 500 and Nasdaq all ended the day with losses between 1.3 and 1.6 percent.





    Related Articles

    arrow_forward_ios
    Make Greenland Great Again? Trump wants to buy Arctic territory
    Make Greenland Great Again? Trump wants to buy Arctic territory
    Make Greenland Great Again? Trump wants to buy Arctic territory
    Hamptons’ priciest summer rental to host MAGA extravaganza next month
    Hamptons’ priciest summer rental to host MAGA extravaganza next month
    Hamptons’ priciest summer rental to host MAGA extravaganza next month
    Theaters in some cities are opening with restrictions. (Getty, Photo Illustration by Alison Bushor for The Real Deal)
    Coming attraction: Movie theaters reopen in New York, San Fran
    Coming attraction: Movie theaters reopen in New York, San Fran
    (Getty, Photo Illustration by The Real Deal)
    Retail had its reckoning. Will subleases flood the market?
    Retail had its reckoning. Will subleases flood the market?
    Donald Trump with sons Eric and Don Jr. and 1125 South Ocean Boulevard (Getty, Google Maps/Illustration by Alexis Manrodt for The Real Deal)
    Trump lists beachfront mansion next to Mar-a-Lago for $49M
    Trump lists beachfront mansion next to Mar-a-Lago for $49M
    Gov. Andrew Cuomo's emergency powers are about to go up in smoke (Getty, iStock)
    Cuomo to lose shutdown power, but could still extend Covid restrictions
    Cuomo to lose shutdown power, but could still extend Covid restrictions
    The comedy club argues that if SNL can operate, then they should be allowed to operate too. (Getty)
    Manhattan comedy club sues Cuomo over pandemic closures
    Manhattan comedy club sues Cuomo over pandemic closures
    (iStock/Illustration by Alexis Manrodt for The Real Deal)
    Order up: Real estate investors line up to buy drive-throughs
    Order up: Real estate investors line up to buy drive-throughs
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...