Markets Dance Around Mixed News

In This Issue

Last Week in Review: There was a mix of good and bad economic news last week, but how did Bonds and home loan rates react? Forecast for the Week: The second half of the week heats up, with important housing and manufacturing news. View: Social media is a big part of success today, and Twitter is one of the biggest sites around. Be sure to check out the great tips below.

Last Week in Review

They say it takes two to tango.... And Stocks and Bonds have been tangoing for investment dollars, as the economic reports continue to deliver mixed results. Read on for details. Several reports last week delivered good news for our economy. The headline Retail Sales number came in at 0.8%, much higher than expectations. Building Permits jumped to their highest level in four years and Consumer Sentiment also improved, coming in higher than expectations. In addition, inflation at the consumer level was tame. This is typically a good sign for Bonds, as inflation hurts the value of fixed investments like Bonds...which means tame inflation is also good for home loan rates since they are tied to Mortgage Bonds. It is important to note that the Producer Price Index did show that inflation at the wholesale level was higher than expectations. However, not all the news was rosy for our economy. Despite the improvement in Building Permits, Housing Starts came in worse than expected. There was also negative news on the manufacturing front, from both the Philadelphia Fed Index and the Empire Manufacturing Index, the latter being reported at a dismal -5.85 versus the 5.0 expected. This was the first contraction in the Index in nine months. So how did all of this news impact Bonds and home loan rates? Typically, if the economic reports are good, Stocks go higher because the economy is improving. Meanwhile, weak economic news usually helps Bonds and home loan rates, as investors move their money out of Stocks and into safer investments like Bonds. But recently, Stocks have been improving even when there is weak economic news, as negative news gives the Fed cause to provide additional stimulus for the economy (known as Quantitative Easing, or QE3). However, there are still many factors that should help Bonds and home loan rates remain near their historic best levels. Many experts believe we are in or near a recession, plus there is continued uncertainty out of Europe. This will likely add to the safe haven trade into our Bond market, helping home loan rates in the process. 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 3.0% Mortgage Bond (Friday Aug 17, 2012) Housing and manufacturing news will be front and center in this week’s economic reports: Existing Home Sales and New Home Sales will be released on Wednesday and Thursday, respectively. Initial Jobless Claims will be released on Thursday as usual. Last week’s data came in slightly below expectations, which helped bring the average over the past month to the lowest level since late March. However, the number was still too high, and it remains a stark reminder that the US economy isn’t out of the woods yet. Finally, this week rounds out with manufacturing news in the form of the Durable Goods Orders Report on Friday. Durable Goods Orders are considered a leading indicator of manufacturing activity. So the markets will be watching this report, especially after last week’s Philadelphia Fed Index and Empire State Index readings. In addition to those economic reports, the Meeting Minutes from the latest Federal Open Market Committee (FOMC) meeting will be released on Tuesday. This report is sure to garner some attention—not only because it kicks off the week’s news, but also because the markets are looking for any insight as to whether the Fed will come through with another round of Quantitative Easing (or QE3). 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 away from some of their best levels but they are still near historic lows. I’ll be watching closely to see what happens this week.

The Mortgage Market Guide View...

Get More Retweets Starting Today If you use social media sites like Twitter, you know that one of the best ways to spread your message is to create a message that other people will actually spread for you. The question is: How do you do that? Chris Sturk of Mequoda recently published a post on the top ways to get more retweets. You can read the entire post for more details, but here are a few important highlights: Use “retweet” rather than “RT”—studies have shown that “retweet” is 23% more likely to work. Don’t use more than three hashtags per tweet—if you use more, your tweets may not be retweeted because they look like spam. Tweet during active times of the day (from 8 am to 7 pm)—be sure to factor in time zones that you’re targeting if you have a national or global strategy. Those are just three of the tips that Sturk offers, but they’re three tips that can help increase your retweets without completely reworking your social media strategy. Economic Calendar for the Week of August 20 - August 24 Date ET Economic Report For Estimate Actual Prior Impact Tue. August 21 02:00 FOMC Minutes 7/31 Moderate Wed. August 22 10:00 Existing Home Sales July NA NA 4.37M Moderate Thu. August 23 08:30 Jobless Claims (Initial) 8/18 NA NA NA Moderate Thu. August 23 10:00 New Home Sales July NA NA 350K Moderate Fri. August 24 08:30 Durable Goods Orders July NA NA 1.3% 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.

Jobs Report Surprise and How to Save on Back-to-School Electronics

In This Issue

Last Week in Review: It was a volatile week in the markets. Find out what happened  to home loan rates. Forecast for the Week: This week's calendar is jam-packed, with news on inflation,  manufacturing, retail sales, and more. View: Have any clients or colleagues doing back-to-school shopping? Or in the  market for electronics yourself? Read (and pass on) the great tips below.

Last Week in Review

"Where do we go from here?" - Alicia Keys. And after a volatile week in the  markets, you may be wondering where Bonds and home loan rates go from here.  Read on for details. There were only  two economic  reports released  last week, and the  news from them  was mixed.  Productivity rose  1.6% in the 2nd  quarter of 2012.  Higher productivity  signals that  companies are  squeezing more out  of their current  employees and  may not add  workers, which could slow job growth. There was a bit of good news on the labor front,  though, as Initial Jobless Claims came in below expectations, declining to 361,000.  Also of note, the Fed's Eric Rosengren stated that the current U.S. economic outlook  calls for another round of Bond buying (known as Quantitative Easing, or QE3).  Remember that once an official announcement about QE3 is made, Bonds and home  loan rates could suffer as Stocks would likely rally.  So where do Bonds and home loan rates go from here? While Bonds and home  loan rates worsened last week due to some optimism out of Europe and a better than  expected Jobs Report for July, there are many reasons why Bonds and home loan  rates should have better weeks ahead. There is evidence of a weakening  economy here in the U.S. For example, the expectations component of the University  of Michigan Consumer Sentiment Report came in at 65.6 in July, the lowest reading of  2012.  In addition, the ongoing problems in Europe and the upcoming election this fall  will bring uncertainty...and Bonds (and therefore home loan rates, which are tied to  Mortgage Bonds) typically benefit from uncertainty, as investors see Bonds as a safe  haven for their money. Technical trading levels will also be an important factor to  watch closely in determining what happens next with Stocks, Bonds, and home loan rates.  The bottom line is that now is a great time to consider a home purchase or  refinance, 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 Aug 10, 2012) The markets will have a lot to chew on this week, especially given the packed economic calendar. On Tuesday, we will be able to gauge how the consumer is holding up when Retail Sales are released. On the inflation front, the Producer Price Index (or wholesale inflation) will also be delivered on Tuesday, while the Consumer Price Index will be released on Wednesday. Over in the manufacturing sector, the Empire State Index will be reported on Wednesday with the Philly Fed Index set to be released on Thursday. Housing Starts and Building Permits will be closely watched when the data is reported on Thursday. Also on Thursday, we'll get another read on weekly Initial Jobless Claims. Last but not least, Consumer Sentiment will be reported on Friday. In addition, Stock movements will be watched closely. If Stocks continue to rise, it could keep pushing the Bond markets lower--and, in turn, push home loan rates higher. 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 continued to move from their record levels, but still remain near historic bests. I’ll continue to monitor their movement closely.

The Mortgage Market Guide View...

How to Save on Back-to-School Electronics Follow these six tips to cut costs on computers, phones and other devices for students. By Cameron Huddleston, Kiplinger.com Among the most-expensive items on many families' back-to-school shopping lists are electronics, such as computers, tablets, MP3 players and smart phones. According to a National Retail Federation survey, families are expected to spend about $218, on average, on these items during the back-to-school shopping season this year. That might cover the cost of smaller items, such as phones, but families will have to shell out more if they want to buy laptop computers or certain tablets. However, there are ways to keep the cost of electronics under control. Jon Rettinger, president of gadget review site TechnoBuffalo, offers these tips: Shop online. Shopping online makes it easy to compare prices from several retailers. And there are plenty of sites that do the bargain hunting for you by scouring the Web for the best deals. Our favorite deal site, dealnews.com, has a page devoted to the best computer deals. Other sites that feature deals on computers and other tech items include MacMall.com (Apple products), Offers.com, Shopping.com and Shopzilla.com. Monitor daily deals. You can find deeply discounted computers and other items on daily deal sites that specialize in tech products, such as RedTag.com and Woot.com. These sites feature just one product a day, but both offer e-mail alerts so that you don't have to monitor the sites each day. Set up price alerts. If you want to buy a particular tech product (not just the lowest-price computer, for example), sign up for price alerts so that you can receive an e-mail when the price on that product changes. There are a number of price alert sites that track electronics, such as Gazaro, PriceSpider and PricePinx. Buy refurbished. You can save a lot by purchasing refurbished tech items, which are used but restored to like-new condition and usually have a one-year warranty. Among the sites where your can find refurbished computers, tablets and other products are Apple.com, BestBuy.com, CompUSA.com, Dell.com, Newegg.com and Walmart.com. Take advantage of trade-in programs. One way to pay less for a new tech item is to trade in a used item. A number of retailers, including Best Buy, Circuit City and Radio Shack, have trade-in programs that offer cash, a gift card or credit for the value of a used item that can be applied toward the purchase of a new item. Avoid extras. Just say no to tech support and retailers' extended warranties, Rettinger says. Your credit card might offer an extended warranty (see How Credit Cards' Extended Warranty Coverage Stacks Up). Or Rettinger suggests buying extended warranty coverage through SquareTrade.com, which offers warranties 40% to 60% cheaper than retailers' warranties. Another extra that he says to avoid is Microsoft Office Home & Student edition ($120) because you can use Google Docs for free. Reprinted with permission. All Contents ©2012 The Kiplinger Washington Editors. Kiplinger.com. Economic Calendar for the Week of August 13 - August 17 Date ET Economic Report For Estimate Actual Prior Impact Tue. August 14 08:30 Retail Sales Jul NA -0.5% HIGH Tue. August 14 08:30 Retail Sales ex-auto Jul NA -0.4% HIGH Tue. August 14 08:30 Producer Price Index (PPI) Jul NA 0.1% Moderate Tue. August 14 08:30 Core Producer Price Index (PPI) Jul NA 0.2% Moderate Wed. August 15 08:30 Empire State Index Aug NA 7.4 Moderate Wed. August 15 08:30 Core Consumer Price Index (CPI) Jul NA 0.2% HIGH Wed. August 15 08:30 Consumer Price Index (CPI) Jul NA 0.0% HIGH Thu. August 16 08:30 Jobless Claims (Initial) 8/11 NA NA Moderate Thu. August 16 08:30 Housing Starts Jul NA 760K Moderate Thu. August 16 08:30 Building Permits Jul NA 755K Moderate Thu. August 16 10:00 Philadelphia Fed Index Aug NA -12.9 HIGH Fri. August 17 10:00 Consumer Sentiment Index (UoM) Aug NA 72.3 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.