US equity markets took another leg lower this week despite otherwise solid economic data in the US. Economic data from Asia and Europe signal a clear slowdown in global growth. Real estate equities led the decline even as mortgage rates ticked to a three month low. Giving back recent outperformance, REITs dipped by 2% while Homebuilders declined more than 3%.
Retail sales topped estimates in November as the brick and mortar resurgence continues. Retail sales are on pace to grow 5% in 2018, the best year since 2011. Inflation expectations decreased to the lowest level since the passage of tax reform last December. Plunging oil prices and the strong US Dollar have quickly erased the inflationary pressure.
With easing inflation expectations, slowing global growth, and a sputtering housing market, all eyes are on the Fed’s pivotal meeting next week.