There are so many factors at play with this economy, creating an ongoing ordeal where volatility is the only constant.

As I’ve said before – and as you know regardless – runaway inflation, recession fears, and geopolitical tensions are twisting and turning central banks, bond markets, stocks, and currency futures alike. If one of these facets falls into further decline, the domino effect can easily spell disaster.  

Yesterday morning, we caught a good glimpse of this fiscal phenomenon. Nearly every equity index fell off a cliff in early morning trading, as you’re no doubt aware.

U.S. investors were getting optimistic about commodities prices and the possibility of tariffs on China easing. But then anxieties amped up over economic growth, and voila!

It was off to the negative races just like that.

The New York Post reports:

“Wall Street investors dumped stocks Tuesday as worries grew over a possible recession amid record levels of inflation and soaring energy prices.

“The Dow Jones Industrial Average was down by more than 600 points as of 10:00 a.m. on Tuesday morning while the Nasdaq dropped by more than 1.1%. JPMorgan Chase was off 2.5% while Wells Fargo dropped 2.7%.

“Energy companies had some of the biggest losses as U.S. oil prices fell 5%. Exxon Mobil shed 2.8%.

“Analysts at Morgan Stanley believe that the U.S. economy is firmly in the grip of a slowdown as the Russian invasion of Ukraine drags on, putting a squeeze on an already-tight oil market.”

Of course, the S&P and Nasdaq rebounded right above the red by the end of the day. And the Dow moved much, much closer to that point as well.

But is that good or bad? It’s hard to tell these days, as it might be nice to just get the bear market over and done with instead of experiencing this constant unpredictable whiplash.

Typically, July is a healthy month for the stock market. But this year, all bets seem to be off. Meanwhile, economic data points to lower factory output and decreased retail spending serves as yet another reason for economic concern.

Across the “pond,” European markets are experiencing much of the same. They continue to bear the brunt of the Ukraine invasion – including by way of increased oil prices and thereby record-high gas prices.

And the euro keeps declining in value as well… down to a 20-year low.

I guess that means now’s the best time for non-euro citizens to plan a trip?

More Non-REIT News to Know About

Blackstone (BX) could easily be called one of America’s most notorious alternative investment corporations. The company has an extensive history of setting unique market trends with its aggressive acquisitions model and diverse market exposure.

With over $900 billion in assets – across real estate, private equity, hedge fund solutions, and insurance – this behemoth has seemingly infinite capital to continue to expand.

So expand it is, this time further into entertainment-related real estate with its purchase of Crown Resorts, a $6.3 billion Australian casino and resort operator.

It’s a strange move since that country has been so hard on socialization efforts compared to the rest of the world. Cities like Melbourne spent over 260 days in strict lockdown during the Covid era…

Yet Blackstone seems to believe those days are behind “the land down under.”

“There’s a collective sense of wanting to get back out there,” said Chris Heady, Blackstone’s head of Real Estate Asia.

In 2014, the company purchased Las Vegas’s iconic Cosmopolitan Hotel for a cool $1.8 billion. After pumping about $500 million into the property, it then flipped the asset for $5.65 billion.

If Blackstone can achieve something similar with Crown Resorts, this could be its biggest real estate win to date. Obviously, an economic slowdown would get in the way of that goal, since travel and leisure are some of the first areas to take a hit in tighter economies.

Perhaps this purchase is a sign of Blackstone’s confidence in global economic resilience then? I sure hope so.

The World According to REITs

Speaking of hospitality real estate…

Hersha Hospitality (HT) is an upscale Pennsylvania-based real estate investment trust that did a great job shoring up its base during the shutdowns.

That’s not to say it came out unscathed. Because it definitely didn’t. Only that it took action right away to protect what it could.

With a bi-coastal portfolio of pristine resort properties, Hersha operates 36 hotels with over 5,800 rooms nationwide. Its brands include big names like Marriot, Hilton, and Hyatt.

What I really like about the REIT is the rapid demand acceleration it’s seen in the last two years. With a 96% revenue per available room (RevPAR) recovery since its pre-pandemic levels, it’s on track for a healthy summer as its prime properties take on the return of tourism.

Right now, Hersha is trading at just under $10 per share with a dividend of $0.40. Still, considering the uncertainty about the economy – and the fact that we’re not exactly Blackstone here – I have Hersha as a hold for the time being.

Rest assured it remains on my watchlist though. And you’re more than welcome to put it on yours too!

Author’s Note: If you do determine this stock is right for you, make sure to purchase it at a smart entry point. Even the best of companies can burn you badly by buying in at inflated prices.

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