The biggest ever merger of real estate investment trusts — the combination of Equity Residential and AvalonBay, announced Thursday — has investors and analysts alike left with dropped jaws. 

The all-stock merger will have a market capitalization of about $52 billion and a total enterprise value of approximately $69 billion, according to a release. It will create one of the largest real estate companies in the U.S., with more than 180,000 rental apartments. 

“This combination creates a new and fundamentally stronger company with differentiated capabilities that will drive structurally superior cash flow generation, earnings and dividend growth, and value for shareholders,” said Benjamin Schall, CEO of AvalonBay. 

Schall will become CEO of the newly formed company, and Equity Residential CEO Mark Parrell will retire when the transaction closes.

Allan Swaringen, president and CEO of JLL Income Property Trust, called the tie-up “unbelievable.”

“That they would merge is really incredible,” he said. 

JLL Income Property Trust is part of LaSalle Investment Management, which manages about $90 billion of real estate investments globally for institutional clients and high-net-worth individuals.

Swaringen noted that the stocks of both companies are trading at below their net asset values, a situation that makes them both ripe to be bought and privatized. 

“I think this might be a defense against privatization. By putting themselves together, they’re almost too big to get bought,” Swaringen said. 

He also noted the high cost of building technology, which residential tenants now demand – from online leasing to credit checking to delivering bandwidth and Wi-Fi. Consolidating could reduce those costs.

“Strategically, the rationale is straightforward: scale, liquidity, balance sheet efficiency and overhead synergies,” said David Auerbach, chief investment officer at Hoya Capital Real Estate. 

Auerbach said he thinks this could be the first of more megadeals in the space. 

“We have WAY too many Apartment REITs out there, and it’s a sector ripe for consolidation,” he wrote in emailed comments to CNBC. 

Auerbach noted that the deal comes after a challenging stretch for apartment landlords, who have been dealing with sluggish rent growth due to the post-Covid construction boom that delivered a massive wave of new supply.

Neither Auerbach nor Swaringen said they expect to see any effect on rents. While the combined company’s market share might be growing in certain markets, they are still going to have to compete with the rest of the field. The apartment market is highly diversified, building to building,…

Spring is traditionally the busiest season for home sales, and while this year’s market dynamics have shifted strongly in favor of buyers, broader forces in the economy are creating significant challenges.

The most important factor in any season is mortgage rates. They were expected to be lower this year, as the Federal Reserve dropped its lending rate to counter inflation, but the war with Iran has turned that on its head. The cost of oil is shooting higher, leading to rising inflation and causing the Fed to reconsider.

Now, U.S. interest rates are rising, with mortgage rates following suit.

The average rate on the popular 30-year-fixed mortgage had started this year lower, even briefly dipping below 6% at the end of February, but it rose sharply this week to 6.53% on Friday, the first day of spring, according to Mortgage News Daily. It is now just 18 basis points below where it was a year ago.

Higher rates will weigh on affordability, but other factors have flipped the market in favor of buyers. Homes are sitting on the market longer, sellers are increasingly willing to lower prices and the supply of homes for sale is rising, albeit not as quickly as it should be.

“As the housing market approaches the ‘best time to sell’ season, it sits in a precarious position, caught between long-term improvements and sudden short-term instability,” Jake Krimmel, senior economist at Realtor.com, wrote in a Weekly Housing Trends report. “Everything seems much more unsettled and uncertain than it did just a month ago.”

For the week ending March 14, active inventory was up 5.6% year-over-year, according to Realtor.com, but new listings were down 1.4%.

This means the number of homes for sale is climbing not because there are so many more sellers, but because the homes on the market are sitting. That may be because potential sellers who expected to put their homes on the market are holding back due to concerns about the implications of the Iran war.

“I think inventory is the bigger decider,” said Jonathan Miller, director of markets for StreetMatrix, a housing market data provider. “The idea that rates are going to noticeably come down this year, I think, is generally off the table.”

A hotter-than-expected wholesale inflation reading for February had traders contemplating the possibility that the Federal Reserve won’t be lowering interest rates at all this year.

Following a Bureau of Labor Statistics report that the producer price index posted its biggest gain in a year, futures markets took any realistic chance of a cut off the table until at least December.

Even then, odds of a reduction at the final Fed meeting of the year fell to about 60% as persistently higher inflation — brought on by tariffs, the Iran war and elevated services costs — will keep the central bank on hold. The PPI report came just hours before the Federal Open Market Committee was to release its latest interest rate decision.

The wholesale inflation reading “likely reinforces a hold decision by the Federal Reserve later today but tilts the risk toward a more hawkish tone in today’s FOMC” statement, said Eugenio Aleman, chief economist at Raymond James. “Even if rates are left unchanged and we see multiple dissents, the messaging may lean toward ‘higher for longer,’ especially with energy inflation set to re-enter the picture in coming months.”

Before the war that began Feb. 28, traders had been looking for interest rate cuts in both June and September, with an outside possibility of one more in December as the Fed sought to balance its dual mandate of stable prices and low unemployment.

But odds for a June cut have now slumped to just 18.4%, July is down to 31.5% and September to 43.6%, according to the CME’s FedWatch tool, which calculates probabilities using 30-day fed funds futures contracts.

Low conviction

Chances for a December reduction were at 60.5%, indicating that traders are leaning toward a cut, though with a relatively low level of conviction. Historically, the 60% level or above has been associated with Fed moves in either direction.

Futures are implying a 3.43% fed funds rate by the end of 2026, compared with the current level of 3.64%.

To be sure, trading in fed funds futures is volatile, and the Fed could be pushed back into an easing stance if the labor market weakens further. Fed Governors Stephen Miran and Christopher Waller have been advocating for immediate cuts, though the rest of the committee seems more inclined to hold rates where they are until the economic picture clears.

Correction: The Iran war began Feb. 28. A previous version misstated the country’s name.

Norway’s $2 trillion oil fund, the largest of its kind, generated an annual profit of about $248 billion last year, with strong gains in global equities driving a 15.1% return.

Norges Bank Investment Management (NBIM) manages the fund, which was set up in the 1990s to invest revenues from Norway’s oil and gas industry, on behalf of the Norwegian population. It’s an investor in more than 7,200 companies across 60 countries and has stakes in around 1.5% of the world’s publicly listed stocks.

The fund’s value stood at around $2.2 trillion at the end of 2025, up from about $2.08 trillion a year earlier.

The fund generated a 2.36 trillion Norwegian kroner, or $248 billion, gain last year, or 15.1%. That was 0.28 percentage points, or 50 billion kroner, lower than its benchmark index’s performance.

In a statement, NBIM CEO Nicolai Tangen highlighted a “strong upturn” in global equities, with U.S. technology the biggest contributor, along with financials, as the portfolio weathered U.S. tariff increases. He also highlighted “positive developments” in renewables infrastructure investments.

Acknowledging that 2025 had been a year of “constant turmoil and surprises,” Tangen said solid corporate earnings, optimism around AI and central bank interest rate cuts helped lift its equity investments.

“U.S. technology stocks contributed most to the positive return, driven mainly by the largest technology companies,” he said in the report.

Overall, nearly 40% of NBIM’s investments are in U.S. equities, with its most valuable holdings including a 1.3% stake in Nvidia, a 1.2% stake in Apple and a 1.3% stake in Microsoft. NBIM also invests in fixed income, real estate and renewable energy infrastructure.

Its equities investments, which have a market value of about $1.6 trillion and make up more than 71% of the fund, returned 19.3% last year.

That was followed by its unlisted renewable energy infrastructure portfolio, which generated an 18.1% gain. Last year, the fund made several renewable power investments, including in Germany’s largest electricity grid.

Fixed income assets, which make up more than 26% of the fund’s assets at $594 billion, advanced 5.4%, while its unlisted real estate investments rose 4.4%

On Thursday, NBIM said it was now using AI to screen investments for ethical issues, a process that began in late 2024 when it introduced Anthropic’s Claude model to its ESG process.

Late last year, the fund suspended its usual ESG assessment processes after the White House criticized its decision to divest a holding in American firm Caterpillar over its ties to the conflict in the West Bank.

Chicago Federal Reserve President Austan Goolsbee said Tuesday that interest rate cuts aren’t appropriate until there’s more evidence that inflation is on its way down.

With recent indicators showing that inflation is well off its highs but still above the Fed’s 2% target, Goolsbee noted that policymakers “have been burned by assuming transitory inflation” in the past and shouldn’t make the same mistake again.

“I feel that front-loading too many rate cuts is not prudent in that circumstance,” he said in remarks before the National Association for Business Economics at its annual gathering in Washington, D.C. “People express that prices are one of their most pressing concerns. Let’s pay attention. Before we cut rates more to stimulate the economy, let’s be sure inflation is heading back to 2%.”

The most recent inflation data, for December, showed core inflation, which excludes volatile food and energy prices, running at 3%, as measured by the consumption expenditures price index, the Fed’s primary forecasting gauge. That was up 0.2 percentage point from November and came somewhat due to tariffs, which are viewed as temporary, but also from underlying pressures in the service sector and areas not directly impacted by the duties.

Specifically, Goolsbee said stubbornly high housing inflation isn’t tariff driven, emphasizing the need for the Fed to be “vigilant.”

Goolsbee noted that a 3% inflation rate “is not good enough — and it’s not what we promised when the Federal Reserve committed to the 2% target. Stalling out at 3% is not a safe place to be for a myriad of reasons we know all too well.” He has said previously that he thinks the Fed will be able to cut later in the year.

The remarks come with markets expecting the Federal Open Market Committee, of which Goolsbee is a voter this year, to stay on hold until at least June and probably July. Futures traders are placing about a 50-50 chance of a cut in June and about a 71% probability of a July reduction, according to the CME Group’s FedWatch gauge. The Fed enacted three quarter percentage point cuts in the latter part of 2025.

Fed Governor Christopher Waller, who has been an advocate for lower rates, took a more measured approach Monday while also speaking to the NABE conference.

Though Waller said he thinks policymakers should “look through” tariff impacts, he said recent data shows the labor market may be in better shape than previously indicated, mitigating the need for further cuts. If the jobs picture continues to improve, that would further lessen the case for cuts, though he said he isn’t convinced that the January nonfarm payrolls data wasn’t “more noise than signal.”

Tuesday will be an active day for Fed speakers,…

Artificial intelligence is having a moment. And in markets, that usually means someone else is having a rough week.

The latest victims of the technology are real estate, trucking and logistics stocks, joining financial and software-as-a-service stocks in plunging on AI fears.

Office towers could soon be empty, according to Elon Musk, who made the comments on a podcast last week, as AI replaces workers. It’s a point echoed in an essay by OtherSide AI co-founder and CEO Matt Shumer, who argued that AI could eradicate entry-level, white-collar jobs. If fewer people clock in, fewer leases get signed.

In freight, the pressure was more concrete. AI company Algorhythm Holdings released a tool it claims allows operators to scale freight volumes by 300% to 400% without hiring more employees. That prospect was enough to send trucking and logistics stocks plummeting.

“We believe investors are rotating out of high-fee, labor-intensive business models viewed as potentially vulnerable to AI-driven disruption,” Jade Rahmani, an analyst at Keefe, Bruyette & Woods, said in a note Wednesday.

Not every balance sheet is under siege. Japan’s SoftBank said it added $4.2 billion in value to its OpenAI investment, which helped boost its Vision Fund by $2.4 billion in the December quarter.

AI was also the centerpiece of Prime Minister Lawrence Wong’s 2026 budget announcement. The city-state will launch a “national AI council,” support firms that want to harness AI and provide citizens who undergo select courses with six months of free access to advanced AI tools.

Separately, CK Hutchinson Holdings on Thursday said that it would take “legal recourse” against APM Terminals, an affiliate of Danish shipping giant Maersk, if it takes over its operations at the Balboa or Cristobal ports in Panama. A CK Hutchinson subsidiary currently runs those ports, but Panama’s Supreme Court recently ruled to void the firm’s license, a move widely viewed as a victory for the Trump administration.

— CNBC’s Michelle Fox, Sarah Min, Lim Hui Jie and Anniek Bao contributed to this report.