7/29/09

Yesterday, for the first time in three years, the S&P/Case-Shiller home-price index rose in May from the prior month (although it is down 17% from May of last year). On the flip side, however, the Conference Board report showed consumer confidence fell more than forecast. The housing price news was greeted as very good news, as more folks believe that things aren’t going to get any worse in the housing market.

Today for economic news we have Durable Goods Orders, normally pretty volatile and expected to fall, along with the release of the Fed’s Beige Book. Bond prices were up, thus rates are down, to start the day due to the biggest drop in Chinese stocks in eight months. As it turns out, Durable Goods had their biggest decline in 5 months and fell more sharply than expected in June. Oil inventories are up, which either means companies are refining more or people are using less – let’s hope it is the latter. We also have that small matter of selling $39 billion of 5-yr notes, and analysts are hoping that the auction is better received than the 2-yr sale was yesterday. Currently mortgage prices are slightly better than yesterday’s open. Let me know if you have any questions. Try to stay out of the heat today (unless you have aboat!!!)