Speak loudly and carry a big stick
In this January 22nd edition of Liquid Real Assets (LRA) Market Update, John Vojticek and team take a look at how public markets viewed listed real assets (real estate, infrastructure, natural resources and commodities).
Click below for the full report, including our Market Commentary, Why it Matters and:
Macro Dive:
Real Assets, Real Insights:
Market Commentary
Global equity markets have climbed since hitting their 2025 lows on the 10th. Markets have favored U.S. “old economy” stocks in the industrial, energy, and materials sectors given the outlook of a more favorable regulatory environment and the pushback of implementing “day one” tariffs. U.S. Treasury yields rose in the period on the prospect of future inflation and continuing fiscal deficits; however, near-term inflation metrics have remained contained. President Trump’s return to power brought a slew of executive orders targeting regulations and energy production, among other key topics. Across the other major indicators we track the VIX, an index of expected S&P volatility, fell 1.5 to 15.1 (roughly 9%). U.S. inflation breakeven yields fell 3 basis points (bps) and 1 bp for the 5- and 10-year, respectively. The U.S. dollar weakened about a percent over the week as measured by the USD DXY index, an average of the dollar’s performance against major peers. Investment grade credit spreads tightened 1bp while high yield spreads tightened 10bps. Gold prices continued to creep up, gaining $42 in the week to end at $2,756. Oil prices fell 3% to $75.44/barrel after digesting potential tariff implications, lower crude output from higher-sanctioned Russia, and adjustments to the supply /demand mix in the United States.*
Against this backdrop, Real Assets trailed Global Equities. Global Real Estate Securities led performance for Real Assets, with Australia, the U.S., and Asia ex-Japan (Hong Kong, Singapore, and Japan) outperforming the market from a regional perspective. In the United States, the Industrial, Data Center, and Specialty segments outperformed on the tailwind of policy direction.? Global Infrastructure companies also outperformed the broader Real Asset Index with strength from Europe, especially in the Communication and Transport segments, while LatAm Airports and Asia ex-Japan infrastructure securities lagged. Natural Resource Equities, Treasury Inflation-Protected securities (TIPS) , and Commodity Futures lagged the Real Asset index. Within Natural Resource Equities the Agriculture and Metals & Mining segments led the way, while Energy companies posted negative performance. Within Commodity Futures, Precious Metals (Palladium, Platinum, Gold) and Agriculture (Cocoa, Soybean Meal, Coffee) outperformed the market, while Energy and Livestock lagged.
Why it matters: There has been a noticeable shift in the tone as U.S. investors and CEOs, especially those in Big Tech, celebrated the inauguration of President Donald Trump. While the hammer could still fall, the market has welcomed the lack of day one tariffs. The California wildfires continue to wreak havoc on people, property, and employment data. Amidst these data points, geopolitical events, and developing policies, investors will need to keep their pencils sharp to decipher business from bluster.
In the full report:
Macro Dive: This week, we review the latest sentiment metrics and weekly jobs data to provide insight into the health of the consumer and economy.
Real Assets, Real Insights: This week we will look at office space in NYC, the powering of America First, and the recent weather impacts on energy prices.
领英推荐
This report is for professional/institutional investors only. To access, please validate accordingly and select "Global English" site for a smoother journey.
* Source: Bloomberg, as of January 23, 2025
Any mentions of specific properties or securities are for illustrative purposes only and should not be considered a recommendation. Past performance is not a guarantee of future results. The opinions and forecasts expressed are those of the authors and may not come to pass. Forecasts are based on assumptions, estimates, views and hypothetical models or analyses, which might prove inaccurate or incorrect.?Forecasts are not a reliable indicator of future returns. DWS does not intend to promote a particular outcome to the U.S. election (or other countries’ elections) due to take place. Readers should, of course, vote in the election as they personally see fit. All investments involve risks, including potential loss of principal. Index returns do not reflect fees or expenses, and it is not possible to invest directly in an index.
Glossary
One basis point (bps) equals 1/100 of a percentage point.
Credit spread is the difference between the yield (return) of two different debt instruments with the same maturity but different credit ratings.
Inflation is the rate at which the general level of prices for goods and services is rising and, subsequently, purchasing power is falling.
Investment grade (IG) refers to a credit rating from a rating agency that indicates that a bond has a relatively low risk of default.
The spread is the difference between the quoted rates of return on two different investments, usually of different credit quality.
The S&P 500 is an index that includes 500 leading U.S. companies capturing approximately 80% coverage of available U.S. market capitalization.
Treasury Inflation-Protected securities (TIPS) are a form of U.S. Treasury bonds designed to protect investors against inflation. These bonds are indexed to inflation and pay investors a fixed interest rate as the bond's par value adjusts with the inflation rate.
The VIX (CBOE Volatility Index) is a trademarked ticker symbol for the Chicago Board Options Exchange Market Volatility Index. It is a popular measure of the volatility of the? S&P 500 as implied in the short-term option prices on the index.
Yield?is the income return on an investment referring to the interest or dividends received from a security and is usually expressed annually as a percentage based on the investment's cost, its current market value or its face value.
075221_247/ 101360_34 (1/2025)