Some encouraging, if somewhat mixed, economic data also contributed to the market’s move. It’s important to note, however, that the majority of good news continues to come from the emerging markets, where growth has resumed. Commodities, especially metals, have moved strongly—the London Metals Index has risen by nearly 16 percent since July 10. The MSCI Emerging Markets Index has climbed 13 percent in the same period, as investors are seeing that growth in emerging markets is likely to be the most robust.

 

Treasuries yields have risen. The yield on the 10-year note, which is used as a benchmark for other interest rates, such as mortgage rates, has gone up 13 percent since July 10, ending at 3.713 at the end of trading yesterday. Given the still fragile state of the housing market, rising rates aren’t necessarily a good thing.  

 

Speaking of housing, according to the S&P/Case-Shiller home-price index, housing prices had their first monthly gain in three years in June. The gain was miniscule (0.5 percent) but this was a gain nevertheless; the rate of increase confirms the fears of the recovery being a very slow and painful one. The cheapest homes sold much better than more expensive ones, and a large percentage of the homes sold were distressed homes, suggesting that bargain hunters, rather than enthusiastic home buyers were behind the rise. The Case-Shiller report came on the heels of last week’s report that sales of existing homes gained for the third straight month and hit its highest level since last October. The better housing data is clearly good news for the economy, but with rising unemployment and shaky consumer confidence (which, as reported today, fell for the second month in a row) are still major obstacles, the housing market is unlikely to recover fast.