Last Updated: 10/12/2007

Friday's bond market has opened in negative territory after this morning's economic news gave us mixed results. The stock markets have reacted favorably with the Dow up 52 and the Nasdaq up 26 points. The bond market is currently down 6/32, but due to strength in bonds late yesterday we will still see an improvement in this morning's mortgage rates of approximately .125 of a discount point. The first of today's three reports was September's Retail Sales data. It showed an increase in sales of 0.6% from August's levels. This was much higher than the 0.2% rise that was expected and indicates that consumers were more active in the month than many had thought. Even if more volatile transportation related sales are excluded, last month's sales exceeded forecasts by 0.1%. This can be considered negative news for bonds and mortgage rates because the stronger level of consumer spending raises economic activity and inflationary concerns. Please have a safe and pleasant weekend.