Bears, Bulls, And Survey Support For Both

The American Association of Individual Investors (AAII) says that, over the past 10 weeks, an average of 23.9% of investors have been bullish.

Which makes sense considering all the bearish movements in that time. If anything, I’m slightly surprised it’s not lower.

The Morning Brief tells us:

Truist Co-Chief Investment Officer Keith Lerner points out this is the lowest average level of bullishness since the June 2016 Brexit referendum and one of the least optimistic readings since the survey’s inception in 1987.

That’s why we saw the market rally last week, it goes on to state. (The S&P gained 6%+, the Dow gained 5.5%, and the Nasdaq added 8%+). Moreover, history suggests that activity could continue for the next 6-12 months.

Then again, “All of this bizarre hopefulness could turn on a dime in the current environment.” Right now, we just don’t know.

We’re not exactly living in normal times these days, after all.

As for this day, speculation about Nike (NKE) could influence larger stock direction, as it reports earnings after the bell. So could Atlanta Federal Reserve President Raphael Bostic’s remarks to the National Association for Business Economics about “Labor Markets and the Economic Outlook.”

I’m also going to use this section to mention how stock buybacks hit a record level last quarter. To quote S&P Global:

S&P 500 Q4 2021 buybacks were $270.1 billion, up 15.1% from the record set in Q3 2021. Total 2021 buybacks were $881.7 billion, up 69.6% from 2020 and up 9.3% from the prior annual record set in 2018.

Meanwhile, Berkshire Hathaway (BRK-A) (BRK-B) found something to invest in after all. Warren Buffett may have been sighing over the investing landscape a week ago, but his company just agreed to buy Alleghany Corp. (Y) for $11.6 billion.

More Non-REIT News to Know About

I also need to mention that three U.S. oil field services companies – Halliburton (HAL), Schlumberger (SLB), and Baker Hughes (BKR) – came out over the weekend to announce sanctions against Russia. All three basically boil down to this: They’re suspending new investments in the country.

According to Jeffrey Sonnenfeld, a senior associate dean at Yale University, they join more than 400 U.S. companies in this effort.

Speaking of U.S. companies – just on a completely separate note – Microsoft (MSFT) conducted a recent survey that found 50% of them want to return employees to pre-pandemic norms. In other words, they want their butts back in the office 40 hours a week again.

That’s good news for office real estate investment trusts (REITs). What isn’t is how 52% of workers seem to be looking for jobs that allow them to work at home full- or part-time.

And here’s another interesting poll we can easily link to REITs, courtesy of Evercore ISIS and written up by Yahoo Finance:

The survey found a Covid-era record 74% of people say they are comfortable eating at a restaurant, above the prior high of 70% last summer. “We believe much of this increase is due to the recent 94% reduction in Covid cases in the U.S. Importantly, Covid fatigue also seems to be impacting comfort levels – comfort is higher than at any point in time since the start of the pandemic despite cases being [2x-3x] higher than summer 2021 and vaccine efficacy being lower than in the past,” explained the survey’ author and analyst, David Palmer.

That news might help the S&P 500 Restaurant Index, which is down close to 4% this past month.

The World According to REITs

Perhaps I should have mentioned this next bit in the “Non-REIT News” portion and the office and restaurant surveys here. But we just learned that existing home sales fell 7.2% in February month-over-month and 2.4% year-over-year.

Pending home sales fell November-January. So this makes sense considering the month-or-more lag between the two phases. Still, analysts had predicted a January-to-February drop of only 6.2%.

Also on the residential side, MarketWatch reports:

In January, there was a seven-fold increase in foreclosure starts as compared to December… according to a report from mortgage data and analytics company Black Knight. What’s more, data from real estate data analytics firm ATTOM Data Solutions revealed that lenders repossessed 2,634 U.S. properties through completed foreclosures in February 2022…

That’s a 70% increase from February 2021 but down 45% from January 2022 and 40% from before the shutdowns. So for homebuyers looking for price relief, that remains around another corner.


Hopefully, some of the following REIT reporting can help distract you until then:

  • Preferred Apartment Communities (APTS) says the “go-shop” period ended in its agreement with Blackstone Real Estate Income Trust. As such, BREIT will move forward with acquiring APTS’ outstanding shares for $25 per share, or $5.8 billion.
  • Camden Property Trust (CPT) will purchase the outstanding partnership interests (68.7%) in two discretionary investment funds from the Teacher Retirement System of Texas for approximately $2.1 billion.
  • Power REIT (PW) signed a lease amendment concerning a six-acre greenhouse cultivation property in York County, Maine. It will now finance an energy-efficient onsite power generation and cooling system for the existing facility costing about $3.5 million. In return, the tenant will pay around $654,000 more in annual rent.

As shown below, the latter’s stock was already on an uptrend even regardless.

(Click on image to enlarge)

(Source: The Daily REITBeat)

Brad Thomas is the Editor of the Forbes Real Estate Investor.

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