PECO - Surprise Spring Slowdown

2024-05-19 09:00:00 ET

Summary

• U.S. equity markets climbed to fresh record highs, while benchmark interest rates dipped to one-month lows after a critical slate of inflation and retail sales data showed an unexpected cooldown.
• Reflecting the mounting quantity of downside economic surprises, the Citi Economic Surprise Index dipped to the lowest level since early 2023, indicating a rather abrupt reversal in economic momentum.
• Mildly encouraging inflation news and sluggish retail sales data lifted bets that the Fed can cut rates multiple times this year. Climbing to fresh record highs, the S&P 500 gained 1.6%.
• CPI-ex-Shelter - the metric we watch most closely given the substantial lags in the BLS's shelter inflation metrics - rose 0.3% on the month and 2.20% on the year, representing a welcome relief following two red-hot months in February and March.
• Buoyed by the rate retreat, real estate equities were among the leaders for a fourth-straight week as a relatively solid REIT earnings season wrapped up with the final slate of earnings reports.

Real Estate Weekly Outlook

U.S. equity markets climbed to fresh record highs while benchmark interest rates dipped to one-month lows after a critical slate of inflation and retail sales data showed an unexpected cooldown of inflationary pressure alongside slowing consumer activity, lifting bets that the Fed can cut rates multiple times this year. Reflecting the mounting quantity of downside economic surprises, the Citi Economic Surprise Index dipped to the lowest level since early 2023, indicating a rather abrupt reversal in economic momentum in late Spring....

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