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Stocks closed out the week with a bang Friday, boosted by an encouraging reading on consumer sentiment.
Ahead of today's opening bell, the University of Michigan said its preliminary consumer sentiment index rose to 55.1 in August from July's final reading of 51.5. However, the data also showed that 48% of survey respondents believe inflation is negatively impacting their living standards.
"Consumers are nervous about spending on big ticket items and are increasingly convinced that now is a bad time to buy a vehicle or a major household item," says Jeffrey Roach, chief economist at independent broker-dealer LPL Financial. "Consumer spending will likely slow in the near term."
Investors will get a closer look at consumer data next week with July's retail sales figures due out Thursday morning, and a heavy dose of retailers on the earnings calendar. While their quarterly results will reveal details on consumer spending during the second quarter, post-report earnings calls with analysts could shed more light on current conditions.
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Today's broad-based rally was led by strong performances in the technology (+2.0%) and communication services (+1.8%) sectors. As such, the tech-heavy Nasdaq Composite outpaced its peers, jumping 2.1% to 13,047. The S&P 500 Index gained 1.7% to 4,280 and the Dow Jones Industrial Average added 1.3% to 33,761. The Nasdaq and S&P closed higher for a fourth straight week, the longest such streak since November.
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Other news in the stock market today:
Although the real estate sector struggled in the first half of 2022, it – like the rest of the stock market – is attempting to recover some of its steep year-to-date losses. Since July 1, the sector is up more than 9%, which is great news for those invested in real estate investment trusts (REITs).
Investors should also be encouraged by the attractive yields on offer by the sector. At the end of July, REITs sported an average dividend yield of 3.2% – more than double that of the S&P 500 – according to Nareit, a leading global producer of REIT investment research.
And thanks to a selloff early in the year, there are plenty of bargains to be found among these high-yielding real estate stocks. Investors stand to benefit in two ways by scooping up value REITs. For starters, discounted shares have the potential to generate outsized price appreciation on a rebound. At the same time, dividend-paying stocks can further juice total returns. With that in mind, we took a look at 10 REITs that have experienced significant share price declines in 2022, yet still offer sturdy fundamentals and healthy dividends. Check them out.
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