Jobs Report Surprises and Pixar's Rules for Business

In This Issue

Last Week in Review: The Fed meeting and the Jobs Report for July headlined  a big news week - find out what happened. Forecast for the Week: After last week’s full economic report calendar, this  week slows down, with just two reports ahead. View: Ever wish you were better at public speaking? Learning to tell a good  story is a key ingredient...and there are some great tips below!

Last Week in Review

Survey says.... And last week, several important economic reports were released.  Read on to find out what they said — and what they mean for home loan rates. Last Friday, the Labor  Department reported that  163,000 total jobs were  created in July with  172,000 private gains  offsetting modest government  losses. And that wasn’t the  only good news we saw last  week. Consumer Confidence  jumped to 65.9 in July, which  was the best reading since  April and above expectations.  The July increase stopped  a 4-month streak of declining  readings. In addition, the  Personal Consumption and  Expenditures Index (PCE),  the Fed’s favorite read on  inflation, also came in tame.  There was some negative news within the Jobs Report. The Unemployment  Rate ticked up to 8.3% and downward revisions to the prior two months  erased 6,000 jobs from what was previously reported. Also, the Labor Force  Participation Rate decreased, and there was no pickup in hours worked.  So what do these reports mean for our economy...and for home loan rates?   Perhaps the bigger question to ask is: Is any of this news good enough to  keep the Fed from doing another round of Bond buying (known as Quantitative  Easing or QE3)? After last week’s meeting of the Federal Open Market   Committee (FOMC), the Fed said that economic activity decelerated somewhat   over the first half of this year, but they also stopped short of announcing  plans for additional stimulus at this time.  Remember that if the Fed opts for more stimulus, the goal of QE3 will be to  promote a stronger economic recovery. And once an official announcement  is made, Bonds (and therefore home loan rates, which are tied to Mortgage  Bonds) could suffer as Stocks would likely rally. However, there are many  uncertainties on the horizon which should also support Bonds and home  loan rates, including the ongoing drama in Europe.  The bottom line is that home loan rates remain near historic lows and  now is a great time to consider a home purchase or refinance. 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 Aug 03, 2012)   After last week's fireworks, the markets will be searching for clues as to what direction investors and traders will follow. Economic news doesn't begin until Wednesday with the first look at 2nd quarter Productivity but it shouldn't be any kind of major market mover. On Thursday, weekly Initial Jobless Claims will be released. 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 have moved a bit from their record best levels, but still remain near historic bests. I’ll continue to monitor their movement closely.

The Mortgage Market Guide View...

Storytelling: Using Pixar’s Rules in Business Telling a good story isn't always easy. But learning to tell a good story is imperative for leadership and business in the 21st century.  In fact, Daniel Goleman sheds some light on this in the opening paragraph of his book, Primal Leadership. Goleman writes: "Great leaders move us. They ignite our passion and inspire the best in us." And as author, speaker, agent for social change, and catalyst Kevin Carroll says, one of the main ways leaders move us is through their ability to tell stories.  As Carroll explains, leaders have to communicate varieties of information and announcements to people. And the best leaders have learned to attach meaning to the information they communicate, so their listeners become invested in what they have to say.  The bottom line: Storytelling helps great leaders reach people, inspire people, and galvanize people around an idea so that the idea becomes a reality.  Need some storytelling help? Turn to the pros: Pixar! Recently, storyboard artist Emma Coats tweeted Pixar’s rules of storytelling.  Even better… PBJpublishing.com created an infographic of Pixar's 22 storytelling rules. Check it out for help improving your storytelling in business situations! Economic Calendar for the Week of August 06 - August 10 Date ET Economic Report For Estimate Actual Prior Impact Wed. August 08 08:30 Productivity Q2 NA -0.9% Moderate Thu. August 09 08:30 Jobless Claims (Initial) 8/4 NA NA Moderate

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