Update #2/ Week of August 3, 2009

Good Morning Everyone and Happy Tuesday! Pundits still call for a pull back in the stock market as equity traders continue to post new highs day after day. The S&P has gained more than 3% in just the last 3 trading sessions. Take a look at any graph of any index on the equity side for the last month and the rally is quite impressive. It appeared we might get some giving back of some of the recent gains this morning right out of the gate, but several economic news reports fueled another come back and all indexes are in positive territory as of this writing. One of our investors repriced almost 30 mins after posting their early morning rate sheet, but things seem to have settled down a bit now. Our pricing is still better than last Tuesday’s, but a little worse than yesterday’s.

What could have sparked another rally again today? I’m glad you asked. Personal incomes dropped a bit more than analysts expected in June. The drop was 1.3% when experts were anticipating a 1.0% drop. That’s really not much of a surprise with all the unemployment going on in our economy and businesses cutting everyone’s hours back as much as possible– very frustrating for everyone. Personal spending rose in the face of declining incomes, a rise of .4% in June, better than the .3% increase expected.

Stocks got their pop this morning when the NAR reported that pending homes sales rose 3.6% in June, far better than the .7% increase expected. This report has largely been written off as insignificant in recent months since pending contracts have such a low pull-through rate these days. Yet, this is the 5th straight month of positive numbers, so there is definitely activity in the real estate market. Albeit, most contracts are at the shallow end of the price range pool.

Have a terrific Tuesday!