News
REITs Perform Like Utilities on Stock Market
A new analysis reveals that REITs and utilities have become nearly identical in terms of stock market performance. Bloomberg compared its REIT index to the S&P 500's utilities index and found that since the start of 2014 correlation rose to 0.960 out of a possible 1, which would mean the two indices performed "in lockstep." The report noted that REITs and utilities are also alike in being "bond market proxies" that are especially vulnerable to the Fed's expected interest rate hike this June. The correlation jumped from 0.677 in 2013 and 0.584 the previous year.
Last week, certain economists spoke of increasing concerns that the sizzling REIT index had indeed become overheated and was likely headed for a correction.
