Market commentary

Durable Goods Orders were released this morning and showed weaker activity than the expected 3.0% increase over June levels. Instead, Durable Goods Orders were only up 0.3% and Ex-Transportation they were down 3.8%. There is no silver lining inside the report.
The Commerce Department reported new home sales fell 12.4% in June, another disappointment in the housing sector. Hope that August would bring a respite from the negative economic data has not materialized, driving investors to the perceived safety of fixed income, particularly U.S. Treasuries. It will be difficult for the short maturities to rally, however, yields on the 30 year bond and 10 year note are falling, flattening the yield curve. The yield on the 10 year note has fallen below 2.50%, trading at 2.46%. Prices for mortgages have improved between .125% and .25%.