In the historically lowest month, the US stock market gave investors a "warning" at the beginning of September.

The August non-farm payroll data in the United States clearly revealed a trend of labor market cooling faster than expected, intensifying concerns about economic slowdown and dampening investors' risk appetite.

As the interest rate cut cycle approaches, many savvy investors are also looking for new opportunities. In addition to the previously mentioned articles on interest rate cuts, there have been医疗股,公共事业股,Consumer staples.,Communication services,Financial stocksIn addition to investment opportunities in multiple industries, this article will bring another industry that is benefiting to mooers - real estate.

From the performance of the industry this year, real estate stocks have experienced a strong rebound since mid-April. $Real Estate Select Sector Spdr Fund (The) (XLRE.US)$ The cumulative increase is as high as 23%, while during the same period$S&P 500 Index (.SPX.US)$The increase is 7.69%.

Property stocks are expected to become the "strongest interest rate cut trade", and Buffett has already bet on it in advance.

During the high interest rate period in the past two years, US stock property stocks have been severely affected.

However, once the Federal Reserve ends the cycle of interest rate hikes and turns to interest rate cuts, the "mediocre students" in the US stock market may quickly become "top students". From the trend of property stocks this year, it seems that they have already priced in the interest rate cuts, among them:

Real Estate Investment Trusts (REIT) $Iron Mountain (IRM.US)$ The annual increase is as high as 59%, $Welltower Inc (WELL.US)$ cumulative increase of over 40%, $Ventas Inc (VTR.US)$ increased by nearly 29%, $Equity Residential (EQR.US)$ increased by over 24%, $AvalonBay Communities Inc (AVB.US)$Up over 21%, $Simon Property (SPG.US)$ has accumulated an increase of nearly 20%. These six REITs have all reached historical highs this year;

the American housing construction giant $NVR Inc (NVR.US)$Please use your Futubull account to access the feature.$PulteGroup (PHM.US)$Please use your Futubull account to access the feature.$Lennar Corp-B (LEN.B.US)$Please use your Futubull account to access the feature.$D.R. Horton (DHI.US)$ The annual increase is in the range of 20% to 30%, also reaching a historical high within the year.

It is worth noting that as early as last year, stock god Warren Buffett had already made an early bet on property stocks. In the third quarter of 2023, he bought three stocks, all of which are large American home builders, namely D.R. Horton, $Lennar Corp (LEN.US)$and NVR Inc.

Last year, market insiders pointed out that due to Berkshire Hathaway's prominent position in the real estate field, this move to establish positions has significant implications. CFRA Research analyst Cathy Seifert believes, "Because they own real estate services and part of the manufacturing business, they have a good grasp of the dynamics of the real estate market."

Looking at this year's trend, Buffett's move can be seen as a precise bet on this wave of rise, with D.R. Horton, Lennar Corp, and NVR Inc, these three companies have collectively risen by over 92%, 88%, and 63% since the second quarter of last year.

In addition to these real estate stocks, there are many real estate-related ETFs in the US stock market that investors should pay attention to. The top 5 largest ETFs currently include $Vanguard Real Estate ETF (VNQ.US)$Please use your Futubull account to access the feature.$Real Estate Select Sector Spdr Fund (The) (XLRE.US)$Please use your Futubull account to access the feature.$Schwab Strategic Tr Us Reit Etf (SCHH.US)$Please use your Futubull account to access the feature.$iShares US Real Estate ETF (IYR.US)$Please use your Futubull account to access the feature.$Ishares Trust Global Reit Etf (REET.US)$ , with a year-to-date increase in the range of 8% to 11%.

In addition to real estate stocks in the US stock market, there are also many interest rate-sensitive real estate stocks in the Hong Kong stock market. Recently, many major banks including Citigroup, Morgan Stanley, HSBC, and UBS have also expressed optimism about Hong Kong property stocks, with six property stocks being unanimously favored. $HENDERSON LAND (00012.HK)$Please use your Futubull account to access the feature.$SWIREPROPERTIES (01972.HK)$Please use your Futubull account to access the feature.$LINK REIT (00823.HK)$Please use your Futubull account to access the feature.$WHARF REIC (01997.HK)$Please use your Futubull account to access the feature.$KERRY PPT (00683.HK)$Please use your Futubull account to access the feature.$SHK PPT (00016.HK)$

Morgan Stanley pointed out that the valuation of Hong Kong real estate development is currently at its lowest level in history, while the high dividend yield has attracted a large number of investors. In the past year, although Hong Kong property stocks have faced tremendous market pressure, the attraction of high dividends and the upcoming interest rate cuts will help improve market sentiment. The bank stated that

bullish $SHK PPT (00016.HK)$Please use your Futubull account to access the feature.$LINK REIT (00823.HK)$ Nvidia. $WHARF REIC (01997.HK)$ because they have stable profit prospects and may provide higher dividends in low interest rate situations.

In addition, $HENDERSON LAND (00012.HK)$ and $KERRY PPT (00683.HK)$ should also benefit.

However, the bank $NEW WORLD DEV (00017.HK)$Please use your Futubull account to access the feature.$HANG LUNG PPT (00101.HK)$ and $HYSAN DEV (00014.HK)$ Stay cautious.

HSBC report also indicates that hong kong property stocks finally outperformed the market amid rising rate cut expectations. The bank believes there is still room for further rebound, as favorable exchange rate fluctuations and lower loan costs have yet to be reflected. The bank recommends $LINK REIT (00823.HK)$Please use your Futubull account to access the feature.$WHARF REIC (01997.HK)$ Nvidia. $SHK PPT (00016.HK)$.

Why are real estate stocks expected to stand out in the rate cut cycle?

The real estate market is a typical interest rate-sensitive industry, historically its performance is directly related to interest rates. The market's current response indicates that investors have begun to price in potential interest rate cuts. In the United States, the 30-year fixed mortgage rate has fallen to about 6.50%, which will encourage more homebuyers to enter the market and boost the recovery of real estate transaction activity.

Overall, the strong performance of U.S. real estate stocks is driven by the market's strong expectations for a rate cut by the Fed. With the decline in mortgage rates, the activity of homebuyers will significantly increase, thereby further driving the development of the industry.

Wedbush's latest view sees a good opportunity to layout American stocks REITs, the bank said,

Although the overall real estate transaction market has been slow in the past 18-24 months, REITs focused on net leasing largely rely on tenant relationships to continue external growth, and their stability is stronger than real estate stocks.

However, there are still many risks in investing in real estate stocks. First, although the market generally expects interest rate cuts, any changes in interest rate policies may be affected by unexpected economic data or external events. Secondly, the supply and demand relationship in the real estate market is complex, and the situation of insufficient inventory may continue, thus affecting the overall stability of the market. Finally, investors need to closely monitor the financial statements of each company to ensure their good operational status and maintain profitability during economic fluctuations.

Is the US expected to cut interest rates? Interest rate-sensitive long bonds, small-value stocks, biotech stocks and other assets have benefited from the rebound, and savvy investors who have deployed early have already gained profits! If you are still unsure about which assets to allocate during an interest rate cut cycle? How to allocate?Take a look at the "Interest Rate Investment Lazy Pack" course, which comes with the most comprehensive guide >>.

Editor/Somer