James Bowen

For the second straight day good market news has led to renewed stock confidence. 2nd quarter GDP was revised upward significantly which has created some positive momentum this morning. Investors are however cautiously optimistic as this figure was buoyed by 2 huge factors-the low value of the US dollar prompting huge foreign exports and the TAX rebates hitting the economy all at once.

Jobless claims were down again for the week, but remained above the benchmark number which still signifies the effects of an overall slowing economy. But, still a bright piece of news none the less. Oil has risen higher again, now above $120/bl, but this isn't having a dramatic effect as cause is known and is viewed as short term adjustment based on GUSTAV coming to call in the Gulf Region.

After bucking the afternoon market increase and not trending higher yesterday, 10 yr tnote yield has begun to "yield" to this good market news. Investors are seeing better short term stock return opportunities and backing off longer term Government Notes. Check this through the day to see how far yield rises. That may determine where rates go today.The trend is likely to continue as the market prepares for the upcoming HOLIDAY.

THIS IS MY OPINION ONLY AND NOT THAT OF EAGLE NATIONWIDE MTG. CO. ALWAYS CHECK WITH YOUR MORTGAGE PROFESSIONAL REGARDING YOUR OWN TRANSACTION

The new report out on durable goods is good news for the market today. This report signals some recovery on purchases of big tickets such as appliances and auto's. Good news both for manufacturers and also for perceived consumer sentiment.

News later will focus on OIL and GAS inventories and that along with continued fears that GUSTAV may disrupt Gulf supplies is appearing to temper any big rally. Keep an eye out through the morning to see if that changes.

Bonds are weakening as a result of this "good' news and also concerns about the 2 upcoming Treasury auctions. There is huge supply right now of 2yr and 5 yr notes and this may be reflected in sale results. The 10 YR NOTE yield is now ranging at 3.83%, up from yesterday's close at 3.78%. This reflects a degree of profit taking over the past 2 days as traders leave bonds. I would expect mortgage rates to increase as well this morning.

THIS IS MY OPINION ONLY AND NOT THAT OF EAGLE NATIONAL BANK. ALWAYS CHECK WITH YOUR MORTGAGE PROFESSIONAL REGARDING YOUR TRANSACTION

Today's market investors are trying to digest several factors in the market today. Sales of new homes in the US was lower than expected, but when looking at Junes revised numbers, sales were up and overall inventories down to the lowest levels in almost 4 years. Prices also rose slightly but are still down over 6% from last year. Imbedded in the report is good news from the NE sector where sales actually rose from last year--the only region in the US to do so. Other very big news today is that Consumer Confidence is up more than expected. So, why isn't the market reacting to all this good news? Well, there is still hesitation in the lead up to the release of the last Fed Res Meeting minutes. Also keeping todays investors on the fence is uncertainty whether oil supply will be threatened by the new Gulf Storm approaching. Oil was up $2/bl as the storm approaches virtually on the same path as FAY did.

The 10 yr TNOTE was flat at open, but has inched up a bit now around 3.81% after closing at 3.79% last eve. Rates may be increased SLIGHTLY this morning, but may react more noticeably after the minutes are released. If the minutes suggest that inflation concerns are lessening investors may come off the fence and the market may react in a more positive direction. We'll have to see later.

THIS IS MY OPINION ONLY AND NOT THAT OF EAGLE NATIONAL BANK. ALWAYS CHECK WITH YOUR MORTGAGE PROFESSIONAL REGARDING YOUR OWN TRANSACTION

The market is not extending it's huge Friday rally into this next week. Even though the report on existing home sales showed a more than double expectation in number of units sold, this is deceiving due to the number of "discount sales" which are occurring, especially in the hardest hit market areas. Financials are again adjusting downwards after Friday's rally with news that AIG (Mortgage Insurer) may be downgraded. Oil is also back up a bit after last week's huge drop.

Mortgage rates should be the beneficiary of this Monday decline as investors are backing away from stocks and into bond havens. Tnote yield has dropped significantly from Friday's close of 3.867%, now trending near 3.78%. I have seen downward rate adjustments today, and if BONDS continue to strengthen, we see another small decrease this afternoon.

THIS IS MY OPINION ONLY AND NOT THAT OF EAGLE NATIONAL BANK. ALWAYS CHECK WITH YOUR MORTGAGE PROFESSIONAL REGARDING YOUR TRANSACTION

Stocks are enjoying another Friday rally. While the Fed Reserve Chair recognizes that there is still much uncertainty regarding inflation long term, he is optimistic about recent dollar strength and lower commodity pricing (really Oil). He again stressed that the Fed Open Market Committee will do all in its power to ensure some kind of pricing stability but GLOBAL commodity action remains uncertain, so uneasiness still exists. But as Markets tend to do, they are are reacting positively to perceived good news with financials benefiting in a large way. The speech also reiterated the fact that Fannie/Freddie won't fail which boosted interest in financials again. At least for today.

Helping "Fed Speech Friday" along is OILS retreat back to the 118/bl range based on the $'s strength. It had been on a 2 day run up towards $122/bl range.

So, once again we see good news in the market having a negative reaction on bonds and increasing TNOTE yield now around 3.87-3.88% range after yesterdays close up to 3.84% range. Rates have already changed upward a bit this morning, so keep an eye out for how high yield gets today in this rally.

THIS IS MY OPINION ONLY AND NOT THAT OF EAGLE NATIONAL BANK. ALWAYS CHECK WITH YOUR MTG PROFESSIONAL REGARDING YOUR TRANSACTION