9/25/09

Good morning. Yesterday we learned that Existing Home Sales fell by 2.7% in August, which was unexpected and broke the string of four increases. The median price (half above, half below) was $177,000, which is down 12.5% from a year ago, although sales were up versus a year ago. There’s about an 8-9 month supply on the market. This news helped bonds (a weak economy supposedly leading to lower rates) and hurt stocks, which had their second straight down day. It also helped rates that the 7-yr note auction went well after a mediocre 5-yr auction the day before. This morning we’ve already seen that orders for Durable Goods (items lasting longer than 3 years) were down 2.4%, the biggest drop since January. Not good for stocks, but good for bonds: This morning we have seen some slight improvement in mortgage prices. Have a great weekend.