Live Markets: Real estate leads S&P declines, rates outlook weigh

Vornado Realty Trust

17/01/2024 19:13

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      Main U.S. indexes red: Nasdaq off most, down ~1.1%
    

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      All S&P 500 sectors lower: Real Estate weakest group
    

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      Dollar, crude up; gold down >1%, bitcoin off ~2%
    

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      U.S. 10-Year Treasury yield rises to ~4.11%
    

  
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    REAL ESTATE LEADS S&P DECLINES, RATES OUTLOOK WEIGH
    In a sea of red, the S&P 500 real estate index  .SPLRCR  was
the benchmark's weakest sector on Wednesday, last down 2.5%,
putting it on track for its biggest one-day percentage decline
since September. That compared with the strongest sector
consumer staples  .SPLRCS , which was down just 0.2%.
    The decline had as its backdrop, fading expectations for a
Federal Reserve rate cut as early as March, with the probably
sinking to 51.9% on Wednesday compared with 63.1% on Tuesday,
according to CME Group's Fedwatch Tool.
    The changing view on rates put a damper on the entire market
but real estate companies appeared to be hit hardest as they are
sensitive to interest rates as they depend heavily on borrowing.
    Also a late Tuesday report by the Wall Street Journal that
the commercial real estate market is bracing for a record amount
of maturing loans, likely did little to help real estate
investors' moods on Wednesday. 
    Citing data firm Trepp it said that $541 billion in debt
backed by office buildings, hotels, apartments and other
commercial real estate came due in 2023 and that commercial-debt
maturities are expected to keep rising, with more than $2.2
trillion due between now and year-end 2027.
    The real estate sector's biggest decliner on Wednesday was
Vornado Realty  VNO.N , down more than 5%, followed closely by
SL Green Realty  SLG.N  and Boston Property  BXP.N . 
    The sector's smallest decliner was Public Storage  PSA.N ,
which was down 0.9%.
    
    (Sinéad Carew)
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