Tuesday, February 28, 2006 - 4:15 pm MST

[Adam in CO]

Fourth quarter GDP was revised higher with the economy growing at a 1.6% rate instead of the 1.1% rate in the advance estimate. Consumer, capital and government spending were stronger than first reported with upward revisions to inventories and exports. Even with the upward adjustments, this was still the slowest pace of growth in three years. Economy-wide inflation was also revised higher to a 3.3% rate from 3.0% originally.

Consumer confidence fell 5.1 points to 101.7% in February as consumers weighed higher gas prices and higher interest rates this month. Consumers remain fairly optimistic. Barring any tumultuous events confidence is expected to remain range-bound at current levels this year.

Existing home sales fell 2.8% in January to 6.56 million at the low end of estimates. But December sales were revised higher to a rate of 6.75 million from 6.60 million originally estimated. Weakness was concentrated in the Northeast, Midwest and West while rebuilding efforts after the hurricanes boosted activity in the South. The inventory of homes for sale jumped 4.6% to 2.5 million, its highest level since 1986. Inventory levels translate into 5.2 month's supply at the current sales pace. Despite increasing inventories and slowing sales home prices remained elevated with median prices up 13.1% and average prices gaining 9.1% over the past year. Home sales are trending lower from peak levels reached in 2005 related to higher rates, decreased affordability and spent-up demand. Despite recent declines, housing market activity remains fairly healthy but is expected to continue trending lower with a significant slowing in sales by mid-year.

The Chicago purchasing managers index fell to 54.9% in February from 58.5% in January. Manufacturing activity in the Chicago region continued to expand this month but at a much slower pace. Regional manufacturing data (this report combined with one from New York and Philadelphia) suggests national manufacturing activity slowed modestly this month as well. Expect a decline in tomorrow's ISM index.



Stocks swooned today with the Dow losing grasp of 11000 on weaker-than-expected economic data and cooler growth expectations from Google. Reports of slowing home sales, declining manufacturing activity and less optimistic consumers broke investors' confidence in solid economic conditions. Along with weaker economic conditions investors still have to contend with an inverted yield curve and more rate hikes by the Fed. The Dow dropped 104.14 to close at 10993.41. The NASDAQ was down 25.79 to 2281.39.

MARKETS CLOSING CHANGE
DJIA 10993.41 -104.14
S&P500 1280.66 -13.46
RUSSELL 2000 730.64 -9.99
NASDAQ 2281.39 -25.79
SECTORS - GAINERS & LOSERS
Specialty Retailers +0.03%
Internet -5.09%



Sagging economic indictors from housing, manufacturing and consumers breathed new life into Treasuries today as investors speculated about a pause in Fed rate hikes after March if weak data continue. Treasuries rose for the first day in four on oversold conditions. Higher yields attracted buyers into the bond market with the 10-year note gaining 12/32 to 99-19/32 to yield 4.54%.

SECURITY YIELD CHANGE
2-Year Note 4.68 -0.05
5-Year Note 4.59 -0.06
10-Year Note 4.54 -0.05
30-Year Treasury Bond 4.50 -0.05



After a disappointing round of economic data today, tomorrow brings a fresh batch that is expected to be more upbeat. Look for personal income, construction spending, vehicle sales and the ISM manufacturing index.

For the week ending 02/23/06

RATE LATEST CHANGE FEES
30-Yr Fixed (FHLMC) 6.26 -0.02 0.6
15-Yr Fixed (FHLMC) 5.89 -0.02 0.6
1-Yr Adj (FHLMC) 5.32 -0.04 0.7
3-Mo Libor (FNMA) 4.82 0.00 n/a



RATE LATEST CHANGE
Fed Funds 4.50 0.00
Prime Rate 7.50 0.00
Fed Discount 5.50 0.00
11th District COF 3.296 0.00

[Adam in CO]

Fourth quarter GDP was revised higher with the economy growing at a 1.6% rate instead of the 1.1% rate in the advance estimate. Consumer, capital and government spending were stronger than first reported with upward revisions to inventories and exports. Even with the upward adjustments, this was still the slowest pace of growth in three years. Economy-wide inflation was also revised higher to a 3.3% rate from 3.0% originally.

Consumer confidence fell 5.1 points to 101.7% in February as consumers weighed higher gas prices and higher interest rates this month. Consumers remain fairly optimistic. Barring any tumultuous events confidence is expected to remain range-bound at current levels this year.

Existing home sales fell 2.8% in January to 6.56 million at the low end of estimates. But December sales were revised higher to a rate of 6.75 million from 6.60 million originally estimated. Weakness was concentrated in the Northeast, Midwest and West while rebuilding efforts after the hurricanes boosted activity in the South. The inventory of homes for sale jumped 4.6% to 2.5 million, its highest level since 1986. Inventory levels translate into 5.2 month's supply at the current sales pace. Despite increasing inventories and slowing sales home prices remained elevated with median prices up 13.1% and average prices gaining 9.1% over the past year. Home sales are trending lower from peak levels reached in 2005 related to higher rates, decreased affordability and spent-up demand. Despite recent declines, housing market activity remains fairly healthy but is expected to continue trending lower with a significant slowing in sales by mid-year.

The Chicago purchasing managers index fell to 54.9% in February from 58.5% in January. Manufacturing activity in the Chicago region continued to expand this month but at a much slower pace. Regional manufacturing data (this report combined with one from New York and Philadelphia) suggests national manufacturing activity slowed modestly this month as well. Expect a decline in tomorrow's ISM index.



Stocks swooned today with the Dow losing grasp of 11000 on weaker-than-expected economic data and cooler growth expectations from Google. Reports of slowing home sales, declining manufacturing activity and less optimistic consumers broke investors' confidence in solid economic conditions. Along with weaker economic conditions investors still have to contend with an inverted yield curve and more rate hikes by the Fed. The Dow dropped 104.14 to close at 10993.41. The NASDAQ was down 25.79 to 2281.39.

MARKETS CLOSING CHANGE
DJIA 10993.41 -104.14
S&P500 1280.66 -13.46
RUSSELL 2000 730.64 -9.99
NASDAQ 2281.39 -25.79
SECTORS - GAINERS & LOSERS
Specialty Retailers +0.03%
Internet -5.09%



Sagging economic indictors from housing, manufacturing and consumers breathed new life into Treasuries today as investors speculated about a pause in Fed rate hikes after March if weak data continue. Treasuries rose for the first day in four on oversold conditions. Higher yields attracted buyers into the bond market with the 10-year note gaining 12/32 to 99-19/32 to yield 4.54%.

SECURITY YIELD CHANGE
2-Year Note 4.68 -0.05
5-Year Note 4.59 -0.06
10-Year Note 4.54 -0.05
30-Year Treasury Bond 4.50 -0.05



After a disappointing round of economic data today, tomorrow brings a fresh batch that is expected to be more upbeat. Look for personal income, construction spending, vehicle sales and the ISM manufacturing index.

For the week ending 02/23/06

RATE LATEST CHANGE FEES
30-Yr Fixed (FHLMC) 6.26 -0.02 0.6
15-Yr Fixed (FHLMC) 5.89 -0.02 0.6
1-Yr Adj (FHLMC) 5.32 -0.04 0.7
3-Mo Libor (FNMA) 4.82 0.00 n/a



RATE LATEST CHANGE
Fed Funds 4.50 0.00
Prime Rate 7.50 0.00
Fed Discount 5.50 0.00
11th District COF 3.296 0.00

[KenP]

Thanks Amanda.

Google brought the suck today.

[DRTYFN]

I thought he was going to say he had just sat down in the theater to watch BrokeBack Mt. again.