Markets

(New York)

Investors should be worried about US real estate. That is the conclusion of new data analyzing the US housing market. This worries are particularly high at the top end of the market, where a mountain of new luxury apartment inventory is about to hit the market at a time when vacancy rates are already rising. As a result of the glut, banks have been tightening credit lines to developers, and previously planned projects are stalled. Rental inflation also appears to have peaked, all of which has weighed on residential REITs.


FINSUM: This article paints a pretty bleak picture of US real estate, but on the flip side, the low end of the market seems like it will stay strong as first-time Millennial buyers keep things buoyant.

Source: Wall Street Journal

(New York)

Investors have many reasons to like Donald Trump, not least because there has been a major rally since his election. In public, most high ranking financiers show support for him and optimism on his policies. However, this article says that in private, they are much more skeptical. The image that emerges is of billionaires and financiers that like Trump’s policies, but are uncomfortable with the man behind them and his ability to actually enact change.


FINSUM: Trump is a complicated figure to say the least and we understand these feelings. There seem to be many who support his policies, but wish he could get out of his own way with the off-topic and incendiary comments and tweets.

Source: Barron’s

(New York)

Markets are flashing warning signs all across the board, if you know where to look. One of the most worrying signs has been the steady fall in Treasury yields, but a less-discussed indicator is the change in the market’s leadership. Investors have rotated out of bullish financial shares and have moved into defensive sectors like utilities and real estate companies with strong balance sheets. Even the switch to tech companies indicates investors are looking for stocks with growth when there is no broad economic growth to be had. Economic indicators are looking poor too, as the Trump boost to the economy in the first quarter seems to have not materialized—the Fed’s GDP “nowcast” shows growth of just 0.5% for the quarter.


FINSUM: There are a wealth of bearish indicators building up, but to be honest this could all just blow over pretty quickly, especially if Washington can get something done in regards to healthcare or taxes.

Source: Wall Street Journal

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