Elgin Area Chamber Of Commerce: Stock Drop Draws Concern, Kohl's Reportedly Has Suitor, Car Prices Climb

Elgin IL

25 January, 2022

2:29 AM

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Press release from the Elgin Area Chamber of Commerce: January 24, 2022 Stock Decline Draws Concern Real estate stocks weren't immune from Wall Street's drubbing last week for its worst week since 2020 as the major indices dropped for four consecutive days. That raised some concern about where stocks are headed in coming days and beyond now that the Federal Reserve is ratcheting back stimulus funds. The Dow Jones Real Estate Index that tracks real estate investment trust stocks was down 9.6% Friday from the end of last year. The Dow Jones Industrial Average fell about 4.6% for the week. Of the major indices though, the technology-heavy Nasdaq Composite felt the worst of it, falling 7.6%. The S&P 500 dropped 5.7% for the week. Both were the worst weekly losses since March 2020, when the pandemic began. Much of the slump in the markets has been put on investors shifting away from stocks viewed as risky, such as tech companies, with interest rates expected to rise this year on moves by the Fed. Interests have already increased because of the expectations. Bond yields also have risen as investors seek the relative safety of those investments. Kohl's Reportedly Has Suitor A suitor reportedly has emerged for department store chain Kohl's as the company faces pressure from activist investors to sell or make changes, including shedding real estate, to boost value.   Acacia Research Corp., which is controlled by Starboard Value, offered to buy Kohl's for $64 a share on Friday, the Wall Street Journal and the New York Times reported based on sources familiar with the offer. That works out to about $9 billion and a 37% premium above the company's closing price of $46.84 on Friday.   Much of the company's value is in its real estate. Macellum Capital Management, which owns 5% of the chain's shares, put the real estate value at $7 billion to $8 billion in its letter last week urging the company to take action to boost what it said is a lagging share price.   Acacia Research is talking with a potential buyer for the real estate if its bid is successful, according to the New York Times report.   Kohl's didn't respond to an email request for a comment. It said in a statement last week in response to Macaellum that the company's strategy is producing results. Car Prices Gain With supply chain challenges and computer chip shortages hitting supplies of new cars, prices for used vans have shot up faster than other body styles. The index on used car sales site CarGurus shows prices for vans have risen more than 58% over the past year. Minivans followed with a 40.87% increase. For those who want a convertible, those prices rose the least of the body types, with prices rising 20%. Demand for used cars shot up over the past year when new car manufacturing slowed because of a computer chip shortage. Used car prices have been a major reason for rising inflation. Earlier this month, the Labor Department's monthly report showed used car and truck prices increased 37.3% over the previous year, the largest segment by far. New vehicle prices increasing 11.8% over the year was second. Source: www.CoStar.com This press release was produced by the Elgin Area Chamber of Commerce. The views expressed here are the author's own.