Monday, July 30, 2012

Mix of Bad and Good News


In This Issue

Last Week in Review: A mix of news was reported last week. What will it mean for
 home loan rates?
Forecast for the Week: A busy week is ahead, with key reports on inflation, 
the job market, and more. Plus, the Fed meets.
View: “If you don’t have anything nice to say, don’t say anything at all.” Find out 
 why that old adage is a great rule of thumb for social media.
Last Week in Review

“All is well.” Kevin Bacon, in the movie Animal House. And after a string of 
recent negative economic reports, there was some positive news last week...though
 not all positive. Read on for details.
On the positive side last week,
  the Labor Department
 reported that Weekly Initial 
Jobless Claims fell 35,000 in
 the latest week to 353,000, 
much lower than expected. 
Durable Orders rose by 1.6%,
 much higher than expected,
 while Consumer Sentiment 
for July also increased. In
 addition, the first reading 
on Q2 2012 Gross Domestic
 Product (GDP) grew by 1.5%,
 just above expectations. 

However, there was some 
disappointing news: New 
Home Sales fell 8.4% in June,
 while RealtyTrac reported 
that foreclosure activity picked
 up in the first half of 2012 in 125 of 212 metro areas surveyed. However, 129 of
 the cities saw year-over-year declines. 

The real question to ask is whether the news will cause the Fed to act with 
additional stimulus (that is, another round of Quantitative Easing or QE3), 
something they may do if the job market and growth don’t pick up. Remember
 if an official announcement of QE3 is made, Bonds could suffer (as could home
 loan rates, which are tied to Mortgage Bonds) since Stocks would likely rally. But
 at the same time, we live in a complicated world right now. At the end of the day, 
sluggish U.S. economic growth and global uncertainty will likely continue to support
 low home loan rates here in the U.S. 

The bottom line is that now is a great time to purchase or refinance a home,
 as home loan rates remain near historic lows. Let me know if I can answer
 any questions at all for you or your clients.
Forecast for the Week

Chart: Fannie Mae 3.5% Mortgage Bond (Friday Jul 27, 2012)
Japanese Candlestick ChartThis is a key week for economic data, since the ADP Employment Report and the Labor Department's monthly Jobs Report will be released. But those are just two of the influential reports due out this week:
  • The week's calendar is packed and the data begins to be disseminated on Tuesday with Personal Income and Spending.
  • In addition, the Core Personal Consumption Expenditure will be released on Tuesday. Remember: This is the Fed's favorite gauge of inflation, so the markets will be watching it closely.
  • The Case/Shiller Home Price Index will also be released on Tuesday.
  • The hits keep coming on Tuesday with the Chicago Manufacturing Index and Consumer Confidence report.
  • On Wednesday, the ADP Employment Report will be delivered along with the ISM Manufacturing Index.
  • Thursday's weekly Initial Jobless Claims report will set up for Friday's important jobs data.
  • Last, but not least, will be Friday's closely watched monthly Jobs Report, which includes Non-farm Payrolls and the Unemployment Rate.
In addition, the next Federal Open Market Committee (FOMC) meeting is this week, and the statement that will be released on Wednesday could move the markets. 

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond that home loan rates are based on. 

When you see these Bond prices moving higher, it means home loan rates are improving — and when they are moving lower, home loan rates are getting worse. 

To go one step further — a red “candle” means that MBS worsened during the day, while a green “candle” means MBS improved during the day. Depending on how dramatic the changes were on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning. 

As you can see in the chart below, Bonds and home loan rates continue to reach record best levels, though they did falter in the latter part of the week. I’ll continue to monitor this situation closely.
The Mortgage Market Guide View...


Don’t Worry…Tweet Happy
Last week, Greek Olympian Voula Papachristou was removed from her country’s Olympic team. Why? Because she tweeted a racial joke using her personal Twitter account. Papachristou apologized, but the damage had been done. The Greek Olympic Committee stated that Papachristou was "placed outside the Olympic team for statements contrary to the values and ideas of the Olympic movement." 

That’s not the first time an offensive tweet has ended badly for a person or business. 

Remember the Motor City tweet by Chrysler last year? An employee at Chrysler’s social media agency (mistakenly) tweeted a disparaging remark about drivers in Detroit. The problem? Chrysler had just spent $9 million on a Super Bowl ad as well as an “Imported from Detroit” advertising campaign that promoted Detroit and its people. In the end, the employee lost his job…and the social media agency lost its contract with Chrysler, which means the agency lost several million dollars—all because of a tweet. 

While the stakes may not be that high for most people, the fact remains that an offensive tweet can be devastating…and, sometimes, damage cannot be undone. 

So how can you avoid such a problem in the first place? Simple. Just follow the old adage: If you don’t have anything nice to say, don’t say anything at all. 

Admittedly, that can seem a little restricting. But the idea behind it is to tweet the positive. That advice isn’t new in light of the Greek Olympian or Chrysler examples. In fact, an article on Tech N’ Marketing back in 2009 offered similar advice to business people who were navigating what to say and what not to say on Twitter. The article stated: “Just like you would not share extreme political views, sexist, or offensive views of any kind at an office event, so to on Twitter.” 

In other words, if you wouldn’t say it out loud during a business event or meeting, you should think twice about tweeting or retweeting. Just because you read a joke or have a moment of frustration, doesn’t mean you should share it. After all, you may end up offending (and turning away) clients and business associates.

So, instead, tweet about relevant news, answer questions, share tips, and so on. Keep your tweets positive…and Twitter will be a positive experience for you and your business. 

For more tips on using Twitter for business, check out the Ultimate Guide to Twitter Marketing, which features links to numerous topics and articles. 

Economic Calendar for the Week of July 30 - August 03
Date
ET
Economic Report
For
Estimate
Actual
Prior
Impact
Tue. July 31
08:30
Personal Income
Jun
0.4%

0.2%
Moderate
Tue. July 31
08:30
Personal Spending
Jun
0.1%

0.0%
Moderate
Tue. July 31
08:30
Personal Consumption Expenditures and Core PCE
Jun
0.1%

0.1%
HIGH
Tue. July 31
08:30
Personal Consumption Expenditures and Core PCE
Jun
NA

1.8%
HIGH
Tue. July 31
08:30
Employment Cost Index (ECI)
Q2
0.5%

0.4%
HIGH
Tue. July 31
09:45
Chicago PMI
Jul
52.5

52.9
HIGH
Tue. July 31
10:00
Consumer Confidence
Jul
61.0

62.0
Moderate
Wed. August 01
02:15
FOMC Meeting
Jul
NA

NA
HIGH
Wed. August 01
10:00
ISM Index
Jul
49.9

49.7
HIGH
Wed. August 01
08:15
ADP National Employment Report
Jul
125K

179K
HIGH
Thu. August 02
08:30
Jobless Claims (Initial)
7/28
365K

353K
Moderate
Fri. August 03
08:30
Non-farm Payrolls
Jul
100K

80K
HIGH
Fri. August 03
08:30
Unemployment Rate
Jul
8.2%

8.2%
HIGH
Fri. August 03
08:30
Hourly Earnings
Jul
0.2%

0.3%
HIGH
Fri. August 03
08:30
Average Work Week
Jul
34.5

34.5
HIGH
Fri. August 03
10:00
ISM Services Index
Jul
52.2

52.1
Moderate

The material contained in this newsletter is provided by a third party to real estate, financial services and other professionals only for their use and the use of their clients. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is without errors.

As your mortgage professional, I am sending you the MMG WEEKLY because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you.

Mortgage Success Source, LLC is the copyright owner or licensee of the content and/or information in this email, unless otherwise indicated.   Mortgage Success Source, LLC does not grant to you a license to any content, features or materials in this email.   You may not distribute, download, or save a copy of any of the content or screens except as otherwise provided in our Terms and Conditions of Membership, for any purpose.

Equal Housing Lender          

Monday, July 23, 2012

Uncertainty Helps Home Loan Rates


In This Issue

Last Week in Review: Home loan rates continue to reach record best levels,
 as uncertainty here and abroad grows.
Forecast for the Week: The second half of the week heats up, with news on the
 housing market, consumer sentiment, Gross Domestic Product and more.
View: Ever feel like you don’t have enough time to focus on important things at 
the office? Read—and share with your clients, friends, and colleagues—the great
 tip below.
Last Week in Review

They say that every cloud has a silver lining. And despite a slew of disappointing
 economic news last week, home loan rates continue to reach record best levels. 
Read on for details.
The majority of economic 
reports released last week 
added to the uncertainty about
 our economic outlook. Retail
 Sales fell more than expected
 while the NY State 
Manufacturing Index remains at
 relatively low levels. In addition, 
 the National Association for 
Business Economics (NABE) 
reported that the outlook for job 
growth has fallen due to a 
weakening economy. The survey 
revealed that 23% on those polled in July think that US employment will rise over
 the next six months, down from 39% in April. 

But the economic news wasn’t all negative. Inflation at the consumer level remained
 tame in July, while Housing Starts for June increased nearly 7% to 760,000. This
 marks the highest level for housing starts since October 2008. Since home builders
 don't start a house unless they are fairly confident it will sell upon its completion, if 
not before, changes in the rate of housing starts can tell us a lot about demand for 
homes and the construction outlook. 

In other important news last week, Fed Chairmen Ben Bernanke was on Capitol Hill
 delivering his semi-annual testimony before both the Senate and House. He 
confirmed that our economy is weak, uncertainty in Europe is threatening U.S. growth,
 and unemployment is stubbornly high. But perhaps more significant was what 
Bernanke didn’t say: There was no mention or hint of another round of Bond buying 
(known as Quantitative Easing or QE3) at the next Fed Meeting. 

It’s important to remember that rumors or hints of QE3 could help Bonds (and thus
 home loan rates, which are tied to Mortgage Bonds), but once an official 
announcement is made, Bonds and home loan rates could suffer as Stocks would 
likely rally. However, the weak economic data here and the continued problems in
 Europe mean that investors will likely continue to see our Bonds as a safe haven
 for their money…helping home loan rates in the process. 

The bottom line is that home loan rates continue to reach historic lows, 
making now a great time to purchase or refinance a home. Let me know if I can 
answer any questions at all for you or your clients.
Forecast for the Week

Chart: Fannie Mae 3.5% Mortgage Bond (Friday Jul 20, 2012)
Japanese Candlestick ChartAlthough economic news this week is rather light, some key reports will be released…and they may impact the markets and home loan rates:
  • Economic news doesn't begin until Wednesday with data on New Home Sales. Last week, there was some hope that the housing markets were bottoming after a solid Housing Starts report, but those hopes were quickly dashed after the weak Existing Home Sales numbers. So, the markets will be looking to see what this week reveals about the housing market.
  • Thursday we’ll see more housing news in the form of Pending Home Sales.
  • Weekly Initial Jobless Claims will be delivered as usual on Thursday and comes after a big rise in claims last week, which was due in part to seasonal abnormalities.
  • Durable Orders will also be reported on Thursday.
  • The government will release the first reading on second quarter Gross Domestic Product (GDP) on Friday and the report will be critical as to the outlook for the U.S. economy.
  • Finally, Consumer Sentiment for July will be released on Friday as well.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond that home loan rates are based on.
When you see these Bond prices moving higher, it means home loan rates are improving — and when they are moving lower, home loan rates are getting worse.
To go one step further — a red “candle” means that MBS worsened during the day, while a green “candle” means MBS improved during the day. Depending on how dramatic the changes were on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.
As you can see in the chart below, Bonds and home loan rates continue to improve. I’ll be watching closely to see what happens this week.
The Mortgage Market Guide View...


One Day = 1,440 Minutes
By Jason Womack, Author. Productivity Coach. http://amzn.to/bestbetter
Schedule "think" time on your calendar.
Start with blocks of 15 minutes. I recommend you schedule five of these sessions over the next week. Consider starting with just one a day.
There are two goals for this activity:
  • Rarely do you get enough time to focus on one thing while you're at work. To get better at what you do, you MUST practice focusing. I want you to be able to hold your concentration on one topic, idea or problem for extended periods of time. During these focus sessions, you may come up with a new or different solution just because you had "time to think."

  • If you schedule just one 15-minute block of think time a day, you'll be able to do it. (I've seen too many people try to block out an hour or two, only to have "something come up" that pulls them out for half or even all of that time.) 15 minutes...it's short enough to find, and long enough to matter!
Economic Calendar for the Week of July 23 - July 27
Date
ET
Economic Report
For
Estimate
Actual
Prior
Impact
Wed. July 25
10:00
New Home Sales
Jun
NA

369K
Moderate
Thu. July 26
08:30
Jobless Claims (Initial)
7/21
NA

NA
Moderate
Thu. July 26
08:30
Durable Goods Orders
Jun
NA

1.3%
Moderate
Thu. July 26
10:00
Pending Home Sales
Jun
NA

5.9%
Moderate
Fri. July 27
08:30
Gross Domestic Product (GDP)
Q2
NA

1.9%
Moderate
Fri. July 27
08:30
Chain Deflator
Q2
NA

2.0%
Moderate
Fri. July 27
08:30
Consumer Sentiment Index (UoM)
Jul
NA

72.0
Moderate

The material contained in this newsletter is provided by a third party to real estate, financial services and other professionals only for their use and the use of their clients. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is without errors.

As your mortgage professional, I am sending you the MMG WEEKLY because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you.

Mortgage Success Source, LLC is the copyright owner or licensee of the content and/or information in this email, unless otherwise indicated.   Mortgage Success Source, LLC does not grant to you a license to any content, features or materials in this email.   You may not distribute, download, or save a copy of any of the content or screens except as otherwise provided in our Terms and Conditions of Membership, for any purpose.

Equal Housing Lender