Stocks continued to get hammered today as both the price of oil and retail inflation fell. Oil prices touched levels not seen since 2003 and all major indexes dropped and the concerns of an extended fall in the price of oil have been bolstered due to recent data indicating both a worldwide glut as well as lowered demand for crude. A lower demand for crude indicates a slowing economy.

Retail prices, as reported by the Labor Department, actually fell by 0.1% as analysts were looking for something closer to unchanged for the month of December. One can make the case that the price of energy was a major contributor to the decline in retail prices as the CPI actually rose by 0.1% when you remove the volatility of food and energy. Still, this is far from the 2.00% consumer inflation target set by the Fed, pushing a rate increase further and further away.

Overall, December reported weakness here in retail sales, industrial production and exports while manufacturers show a drop in inventory and production. Clearly, investors are moving out of stocks as fast as they can and putting their funds into Treasuries and mortgage bonds. The 10 year Treasury touched 1.945 today while the benchmark FNMA 3.5 coupon was trading 104.10, or 410 basis points above the baseline.

It is getting closer to the point where those who purchase real estate investment properties back in early 2013-2015 may be considering refinancing to a lower fixed rate. With rental rates still on the rise in most markets, lower financing costs will swell cash flow with these two dynamics.