Even Utilities and Real Estate Can’t Escape the Market Rout

Real-estate stocks and utilities joined in the latest market rout, showing that even traditional havens that should benefit from lower yields aren’t safe amid a panicked sell-off.

The S&P 500 Real Estate Index declined as much as 7.1% Monday, the most since 2011, reversing this month’s gains despite rising expectations that the Federal Reserve will cut policy rates to zero. Meanwhile, the S&P 500 Utilities Index fell as much as 7%, paring its March rally and poised for its biggest loss since 2008.

“Right now, the market’s not looking for bucking of trends,” Piper Sandler real estate investment trust analyst Alexander Goldfarb said in a phone interview. “Today, if it’s a stock, it’s getting sold.”

The stock performance shows that global headwinds like the eruption of an oil-price war and the spreading outbreak of the novel coronavirus are starting to take their toll even on stocks that traditionally benefit from a flight to safety.

Within real estate, declines in shares of real estate investment trusts like Simon Property Group Inc. that promise yields “well north of 6%,” and generally safer REIT groups like apartments and student housing, show “that the market is taking a broad brush and just selling everything,” Goldfarb said.

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