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There was a lot of positive news this morning which has Wall Street investors happy, and therefore selling off bonds and buying stocks. The DOW is currently up more than 200 points, the highest level in 2009. The NASDAQ is also rallying up close to 50 points today.

• Home resales increased in June 3.6%, more than was forecast. This marks the third consecutive month of increased sales, and is attributed to lower borrowing rates, the $8000 tax incentive, and of course, the lower house prices. This gain in sales seems to confirm Bernanke's remarks to Congress this week, that the housing slump "appears to be moderating." Other economists agree. Michelle Meyer, an economist at Barclays Capital in New York commented that the "bottoming process is under way."
• The percentage of homes that were distressed sales or foreclosed homes fell to 31% last month which is a huge decline from the 45% - 50% we have seen in prior months. FAlling property values are both helping and hurting demand, because some people who wish to take advantage of low prices and move are unable to do so due to owing more than their houses are worth (making them unable to sell right now.)
• Earnings reports from some of the DOW 30 (biggest companies) continue to beat expectations, though most companies are reporting higher revenues based on lower costs, rather than on increased sales.
• The level of continuing unemployment claims decreased by 88,000 for the week ending July 11. This is the lowest number since April 2009. 41 states and territories reported increased claims while 12 reported a decrease.

There was other news today that apparently is already "priced into the market", including:

• Wells Fargo reported that bad loans jumped in numbers last quarter as more and more Americans are unable to keep up with payments. "Assets no longer collecting interest cimbed 45% as of June 30, compared to the first quarter of 2009."
• U.S. initial jobless claims increased by 30,000 last week.

With the stock market rallying so significantly today, and breaking through all sorts of points of resistance, there have been numerous comments by analysts on Wall Street that this rally could continue at least for the short term.

We are seeing the big investors (mutual funds, EFTs, etc.) moving back into the markets, and bonds are selling off. Mortgage rates have risen this morning along with the 10 year Treasury bond yield. The mortgage market opened with rates higher this morning, and we have seen at least 2 rate increases since the open. However, for those of you with investments in the stock market, this is a great day.!

Are you enjoying the cooler weather today? Get out and enjoy - we're in for a scorcher starting tomorrow and continuing into next week.

Have a fabulous day today. The week is almost over.

Best regards,

Shelby

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