Market Analysis

The bond market improved yesterday late afternoon on the release of meeting minutes from last month's federal open market committee showing that the Fed is going to wait to beginning selling their massive portfolio of mortgage-backed securities (MBS) issued by Fannie Mae and Freddie Mac.  It was anticipated that their sale of MBS would put upward pressure on mortgage rates.

In economic news today, a slew of economic data was released and the general take on it by the markets was that it was not good news with regards to economic recovery.  While Initial Unemployment Claims for the week ended 7/10 came in lower than expected at 429,000 (vs expectations for 450,000), Continuing Claims for the week ended 7/3 came in at 4.681 million which was higher than the 4.4 million expected.  The June Producer Price Index expected to drop .1%, dropped .5% and excluding food and energy increased .1% which matched expectations.  The July Empire State (NY) manufacturing index expected to come in at 18.0, dropped to 5.08 (anything over 0 still signals expansion).  Industrial Production for June was expected to be unchanged and it came in slightly higher at up .1%.  June Industrial Capacity Utilization came in at 74.1% just slightly under the 74.2% expected.  The July Philadelphia Fed survey expected to come in at 10.1, came in at 5.1.