Real estate stocks push up this week as U.S.-China trade tensions ease

Real estate stocks have outperformed the S&P 500 over the past month

Aug.August 30, 2019 06:55 AM
With a cooling trade war, stocks perform well, including real estate. (Credit: iStock)

With a cooling trade war, stocks perform well, including real estate. (Credit: iStock)

A renewed optimism for trade talks between the U.S. and China helped push real estate stocks up so far this week, along with the broader stock market.

Since Monday, the S&P 500 is up 2 percent.

And 19 of the 28 real estate stocks The Real Deal follows — a mix of real estate investment trusts, real estate services firms and technology companies — also made gains for the week.

Among TRD’s stock list, CBRE was Thursday’s winner for the day. The real estate services firm’s stock jumped 3.03 percent since market open to close at $51.63.

For the week so far, two brokerages have seen the biggest percentage gains. Marcus & Millichap rose 4.12 percent, from $34.12 to $35.66; and Newmark Knight Frank ticked up 4.11 percent, from $8.27 to $8.61.

On the other end of the spectrum, national brokerage Realogy’s stock plummeted almost 23 percent to $4.73 on Thursday and was down 26% from Monday’s opening bell. Realogy disclosed on Wednesday that it is shutting down its military rewards program, a move that will impact its 2020 earnings.

Other industry indices saw a similar scenario play out, though with weaker gains than the S&P.

The Real Estate Select Sector SPDR Fund — an index that is heavily weighted in the real estate sector — inched up 0.43 percent for the week, ending the day trading at $39.20. And the week-to-date returns on industry group Nareit’s All-REIT index were up 0.66 percent as of Wednesday.

Though real estate stocks also have been hurt by broader market fluctuations, there are signs they are outperforming.

For example, over the past month, the SPDR Fund has grown 5.5 percent, compared to the S&P, which has fallen 3.3 percent.

The stock market overall has taken hits over the past several weeks on fears of a looming recession and the U.S.’s trade war with China. For example, concerns over an inverted yield curve —
a potential red flag for a U.S. economic downturn — sent the Dow spiraling 800 points earlier this month. And last week, a new round of tariffs imposed by China set off another market selloff.

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