Tuesday's bond market has opened in well in positive territory even though this morning's economic data showed results that weren't so favorable for bonds. The stock markets are relatively calm considering this important data could have led to a sizable rally in stocks. The Dow is currently up 15 points while the Nasdaq has gained 5 points. The bond market is currently up 17/32, which should improve this morning's mortgage rates by approximately .250 of a discount point. The Commerce Department reported early this morning that retail level sales rose 0.4% last month, slightly exceeding analysts' forecasts. In addition, if more volatile auto-related transactions were excluded, sales rose 0.6%. That was twice what analysts had expected and indicates consumers spent much more in August than many had thought. You couldn't tell by the reaction this morning, but this was actually bad news for bonds and mortgage rates. The larger than expected increases indica te that consumers are spending more, which fuels economic activity. Still, a positive day in the bond market is a good day for mortgage rates. Fortunately, traders weren't too concerned about the data.

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