Morning Economic News - December 10, 2008

The Pending Home Sales Index fell, but there were two positive notes: the index ended up 2.4 points (2.8%) higher than expected and the previous month's index was revised upward. The reported drop was 0.7 points, but the drop from the initial September number was only 0.3%. Though the market seemed to repeat the pattern of shrugging off good news from the housing market again Tuesday, the picture was muddled by both a less than crystal clear housing improvement, other events and some natural profit taking. A good report on mortgage applicaionts Wednesday could be powerful fuel for the stock market.

Overnight trading points to an upward trend in the roller coaster, with US stock market futures up just under 1%, Asian stocks trading higher for both the Nikkei and Hang Seng indexes, and oil futures up more than 3%. The dollar is up against the yen, down against the Canadian dollar, euro and pound. [1:10 AM Eastern]

Yesterday's Economic Numbers

Pending Home Sales - October 2008

• Pending Home Sales Index: 88.9


• Monthly Change: Down 0.7


• Yearly Change: Down 1%

Japan’s Leading Index plunged 2.5%

• Leading Index: Down 2.5%


• Coincident Index: Down 0.5%

Bank of Canada drops rates 3/4 percent

• US Federal Reserve Federal Funds Rate: 1%


• US Federal Reserve Discount Rate: 1.25%


• Bank of Canada Overnight Rate: 1.5%

What I'm Reading

Fed Weighs Debt Sales of Its Own

The Federal Reserve is considering issuing its own debt for
the first time, a move that would give the central bank additional
flexibility.

Bernanke's GM Rejection Aimed at Trying to Define Fed Bailout Boundaries More than a year into the credit
crisis, Federal Reserve Chairman Ben S. Bernanke is still trying
to establish how far he’s willing to go to aid troubled
companies.

World Bank Cuts East Asia Growth Forecasts, Sees 'Hard Times' for Region East Asian economies will probably
expand at the slowest pace in eight years in 2009 as easing
export demand and declining investment and consumer spending
portend “hard times” for the region, the World Bank said.

U.K. Economy May Be Shrinking at Fastest Pace Since 1990, Institute Says The U.K. economy may contract at the
fastest pace since 1990 in the current quarter as the recession
intensifies, the National Institute for Economic and Social
Research said.

South Korean Unemployment Rate Climbs to 3.3% as Economy's Expansion Slows South Korea’s jobless rate rose for
the first time in seven months in November as fewer people got
jobs in manufacturing, construction, shops and restaurants.

Singapore Economy to Shrink in 2009 as Output, Exports Fall, Survey Shows Singapore’s economy will probably
shrink next year for the first time since 2001 as manufacturing
output and exports contract and consumer pare spending, a
central bank survey showed.

Japan Machine Orders Fall 4.4% as Global Slump Prompts Makers to Retrench Japanese machinery orders fell in
October as the deepening global recession choked off demand for
the country’s cars and electronics.

Japan's Core Machinery Orders Fall 4.4% in October: Table of the Day Japanese machinery orders, excluding
shipbuilding and utilities, fell 4.4 percent in October from September,
seasonally adjusted, the Cabinet Office in Tokyo said.

China wholesale inflation slumps; flags deflation risk

BEIJING, Dec 10 (Reuters) - China's wholesale price
inflation collapsed in November, undershooting expectations by
a wide margin and raising the risk that the once-sizzling
economy could find itself mired in deflation before long.