September 9, 2019 BARRON’S 7
The Big Risk in Bonds
HE BACKDROP FOR STOCKS IMPROVED MARGINALLY
ing on Friday at its highest level since late July.
the jobless rate holding at 3.7%.
Investors are taking comfort from the ex-
accommodative and cut short-term interest
point from the current range of 2% to 2.25%.
“The market is making several assump-
with China in the next six to nine months. In-
terest rates and inflation will remain low, and
The S&P 500 dividend yield is nearly 2%, while the 10-
securities, and corporate bonds.
of the We Co., parent of WeWork, shouldn’t come as a sur-
prise. The company is exhibit A for the ills of the unicorn
ofthem. UberTechnologies (ticker:UBER)isdownnearly
diose ambitions. “Our mission is to elevate the world’s con-
sciousness,” according to the prospectus.
as $20 billion in an IPO—or put off the deal entirely.
hattanofficemarket: SLGreenRealty (SLG)and Vornado
Realty Trust (VNO).
Despite all the fuss about Google and Facebook (FB)
snapping up space in the city, Manhattan is
viewed as the nation’s weakest major office
market. As a result, SL Green and Vornado
2019, and Vornado, at $63, has risen just 1%,
against a 25% gain in the broad Vanguard
Real Estate exchange-traded fund (VNQ).
valuation of $20 billion.
vating old Manhattan towers, and a retrenchment in the fi-
they seem amply reflected in the depressed stock prices.
stock at a 30% discount to net asset value and generating
growth in the portfolio,” he says.
Unlike WeWork, both SL Green and Vornado are asset
sit on $3 billion in cash following the sales of condos at a
be sold—private real estate funds are bursting with money.
ger of becoming a “vast open-air museum.”
Up & Down Wall Street
By Andrew Bary