It’s a huge earnings day with some big names coming up, especially on the tech side. We also get housing data, where housing market conditions are a hot topic for investors as mortgage rates continue to rise.
Last week, existing home sales posted their first eight-month decline since 2007. A recent UBS survey shows that the five largest US cities are overrated.
our today’s call From Jeffrey Kolitch, Portfolio Manager, Baron Real Estate Fund
Thanks to the massive drop in these stocks this year, we’re seeing rare bargains among the ‘best in class’ related companies.
If the current recession leads to recession, real estate companies are in a good place to start, Kolitch said in a recent third-quarter shareholder letter. He is cautious in the short term thanks to central bank rate hikes and political risks, but more optimistic about the outlook for a few.
In the first nine months of 2022, many real estate firms experienced a correction of 30% to 60%, given low valuation multiples and expectations of slower growth, Korich said. said, adding that their fund is now “crammed with real estate.” Unsustainably cheap real estate stocks. ”
Corlich is optimistic that, in addition to strong business fundamentals and healthy balance sheets for many companies, there are also signs of hope for the economy as a whole.
He also said there were no signs of the over-leveraging and over-building that characterized the housing market recession in 2008.
His “Best in Class” selection had to meet criteria including: Owning unique and well-placed assets in a market with high barriers to entry, Strong long-term growth prospects, Sector leader, Conservative with a liquid balance sheet and prudent management.
Looking at real estate investment trusts (REITs), Kolitch highlights Invitation Homes.
It is the largest institutional owner of single-family rental housing and focuses on areas with decent schools and employment opportunities.Equity Residential
The other is the largest US apartment REIT with quality units in select coastal markets.
Equinix, a global carrier and cloud-neutral data center operator
and industrial REIT giant Prologis
Also get a mention.
Some of our home-related recommendations include well-known names such as homebuilder Lennar.
and Thor Brothers
Among alternative asset managers, Kolitch looks to Brookfield Asset Management.
Rated at over 50% discount against management’s own rating, but big shot Blackstone
It’s rated at a “moderate premium” to the S&P 500 index despite “far superior long-term growth prospects.”
Under the umbrella of travel-related properties, the manager of casino group MGM Resorts International
‘Compelling’ value with mountain resort gigantic Vail Resorts
Oil prices rise slightly
It trades at around $19,356.
Earnings from some well-known companies. GE
falling Mixed results.
Microsoft will contact you after the bell
Canopy Growth said it would create an exchangeable share structure with a US holding company
24% more in premarket, Match the premium offered by Largest shareholder to buy the remaining stake in the grill maker at $6.25 per share.
S&P Case-Shiller and the Federal Housing Finance Agency will release their August Home Price Index at 9am ET, followed by the Consumer Confidence Index.
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How Sticky Is High Inflation? A team of Deutsche Bank strategists, led by Jim Reed, used 50 advanced and emerging market Look at consumer price inflation.
“Looking at this full history, if inflation goes above 8%,
It will take about two years for median inflation to stabilize below 6%
From the initial 8% shock to five years later, it’s roughly flat.This is about 2pp above
Median pre-shock in c. 4%,” said the strategist. His CPI in the US he reached 8.5% in March.
As they point out, the current consensus is that inflation will return or even fall below 3% just two years after its initial breakthrough of 8%. “History never repeats itself exactly,” but it shows that when inflation typically crosses these thresholds, especially in the period since 1970, history is rather sticky.
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