After months of flirting with the inevitable, we’ve finally breached bear market territory. Investors awoke yesterday and, taking account of the inflation metrics from Friday’s Consumer Price Index (CPI), decided to sell off 495 of S&P 500’s 500 assets.

A bear market is defined when an index sheds 20% for a sustained time—and that’s exactly where we’re at now.

The Wall Street Journal Reports:

Faced with rising chances of aggressive monetary tightening by the Federal Reserve, investors broadly unloaded risk. The S&P 500 slumped 3.9%, with most member stocks down on the day. Meanwhile, a rout in cryptocurrencies highlighted investors’ increasing unwillingness to hang on to their most speculative holdings. The price of bitcoin plunged Monday below $23,000, at one point trading down 67% from its November high.

The declines put the S&P 500 in a bear market—down more than 20% from its January high—for the first time since 2020. The Dow Jones Industrial Average fell 2.8%, or about 875 points, while the tech-heavy Nasdaq Composite declined 4.7%.

This year has been accented with incredible market anxiety and major equity shifts as investors wring their hands over interest rate hikes. During the pandemic, rock-bottom interest rates kept our badly wounded economy afloat. But now we’re seeing the residual effects as demand has driven inflation through the roof.

The Fed has no choice but to levy higher costs on loans and mortgages in order to slow the surge in demand. Raising rates may seem like an easy fix, but it carries with it the potential for a recession. And Wall Street is now concerned that interest rates may be higher than initially proposed.

After Friday’s CPI, nearly every sector shed value. Tech stocks, which remained particularly resilient during the pandemic, took huge losses. Apple (AAPL) shares were gutted by 3.8%, while Amazon (AMZN) shares dipped 5.5% and Meta Platforms (META) fell 6.4%. Nvidia (NVDA) slid 7.8% and Tesla (TSLA) took a 7.1% hit.

The uncertainties in this market truly make it an unprecedented era for investors. While we are officially in a bear market, who knows what tomorrow will bring? As we look to the Fed for further guidance, we can only hope that they’re keeping our best interest in mind—literally.

More Non-REIT News to Know About 

Microsoft Enables Activision Unions 

Microsoft (MSFT) has long been a staple of American capitalism. With a $456 billion valuation and a $1.8 trillion market cap, the father of the tech world has held its own across every major shift in our ever-evolving technology landscape.

Now, it’s breaching new territory with the unionization of its videogame arm, Activision Blizzard Inc. (ATVI). The PC pioneer entered into an agreement with the Communications Workers of America to allow employees at Activision an easier path to unionization.

Under this “labor neutrality agreement,” Microsoft will allow employees and union reps to correspond easily and will provide a structured process for employees to decide whether to join a union.

This represents a huge shift in both the political and tactical standards of the American blue-chip business sector. The company’s share prices dropped 4.24% in the wake of this announcement but, of course, the tech sector was already wrecked from Friday’s CPI findings.

It’s Official: Prologis Snaps Up Duke 

As promised in last week’s blog, I’m continuing my coverage of the much-anticipated Prologis (PLD) acquisition, and there’s some big news: It’s actually happening.

Prologis, the world’s largest warehouse REIT, has officially agreed to buy out its rival Duke Realty Corp. (DRE) in a $26 billion takeover.

This acquisition marks the largest REIT deal since the start of the pandemic, according to real estate analytics firm Green Street.

The two companies revealed the deal Monday, after months of hostile pursuit by Prologis and Duke’s early denial of a $24 billion offer. The all-stock acquisition, which includes debt, is expected to close by year-end, adding another 160 million square feet to the Prologis portfolio.

Prologis operates a one-billion-square-foot system of industrial facilities around the world for blue-chip companies like Amazon (AMZN), FedEx (FDX), and others.

When asked about the state of the real estate market and his decision to execute this all-stock deal, Prologis CEO Hamid Moghadam said, “In whatever macro-environment—good or bad—that we have, the new company will perform even better than the old companies”.

Prologis shares fell 7.5% yesterday to $108.43 while Duke rose about a point.

To be honest, I don’t know that Prologis made the right move in doubling down on warehouse assets when it could have diversified its portfolio with an alternative acquisition. I suppose there is some logic in sticking to what you do best, but in this economy, it’s always helpful to cast a wide net. I’ll definitely keep an eye on this to see what happens next.