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) This 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

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