By David Bailin
Chief Investment Officer
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While new infections continue to increase in the US, we are seeing further signs of economic strength.
The duration, impact and course of the pandemic may be changing. It appears that the spread of the disease is accelerating in the US. Nonetheless, it is also possible that the disease is becoming less fatal overall. While there are many explanations for the data presented herein, in an interview with Dr. Philip Barie, we heard that COVID is less fatal in Texas and California. (See The Coronavirus Conundrum below.)
Last Thursday, US employment continued rebounding, rising 4.8 million, significantly above expectations. While public fear over the spread of COVID is likely to inhibit growth rates, the economic rebound has enough strength to continue through a spike in the disease (See Jobs and Markets below.)
During this 2020 COVID recession, we have seen real estate become a highly cyclical investment asset. Overall equity REIT yields are at the highest spread above US Treasury yields since the Global Financial Crisis. We think a closer analysis of the public markets for real estate can identify areas of potential value for client portfolios. (See Gimme Shelter: Real Estate Post-COVID below.)
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