Morning Economic News - October 28, 2008

The big news Monday was from the housing market. New home sales rose 2.7% in September, adding extra validity to the reported rise of 5.5% in existing home sales. This was the first month where both numbers rose this year, the best indicator yet that the housing market is nearing a bottom - news which should help ease concerns about mortgage backed securities.

Tuesday Japan's stock market recovered most of Monday's loss, with the Nikkei average rising 6.41%. The Hang Seng index rose more than 12%. At the time of writing [4:37 AM Eastern time], the dollar is up more than 2% against the yen and down against the euro and the pound. Oil is up 26 cents while natural gas is down a penny.

New Home Sales - September 2008

• Annual Sales Rate (Seasonally Adjusted): 464,000


• Monthly Change: Up 2.7%


• Median Sales Price: $218,400

Bargain Hunters Shrink Glut of Homes

Lower home prices are luring some buyers back into the U.S.
housing market, but foreclosures and a weakening economy are likely to
keep downward pressure on prices.

ECB's Trichet Signals a Rate Cut

Trichet signaled in a notably direct statement that the ECB is likely to cut its key rate next week.

New-Home Sales Jump 2.7%

New-home sales increased by 2.7% last month as inventories
declined and builders slashed prices to their lowest level in four
years.

Europe Faces `Huge Threat' as Meltdown in Emerging Economies Hurts Exports The European economy's close ties to
emerging markets are turning from a blessing to a curse.

Bank of England Says Global Downturn, Emerging Markets Pose Stability Risk The Bank of England said the world
economic downturn and turbulence in emerging markets pose
heightened risks to Britain's financial stability.

German Consumer Confidence Unexpectedly Rises After Decline in Oil Prices German consumer confidence
unexpectedly rose for a second month as a drop in oil prices left
households with more money to spend.

Consumer Confidence in U.S. Probably Slumped This Month as Stocks Plunged U.S. consumers probably turned more
pessimistic in October as stocks plunged and banks shut off
credit, raising the risk spending will tumble, economists said
before reports today.

Japan Sept retail sales -0.4 pct year/year

US Sept new homes sales up; inventory, prices fall

Chicago Fed Midwest factory index falls to 5-yr low