Aug

29

In This Issue…

 

Last Week in Review : The Fed remains optimistic but vague, despite concerns and anticipation in the markets!

Forecast for the Week : Watch out for the big topics of housing, inflation and employment

View : Increase your intelligence and stay mentally active with these 3 tips!

 

Last Week in Review

 

I’m goin’ to Jackson. See if I care .” – Johnny Cash. Last week, Fed Chair Ben Bernanke headed to Jackson Hole, Wyoming…and the markets certainly cared! The big news of the week was Bernanke’s speech at the Federal Reserve Bank of Kansas City Economic Symposium at Jackson Hole. Here’s what happened – and, more importantly, what it means to Bonds and home loan rates.

Bernanke Remains Optimistic. Bernanke focused on the near-term and long-term economic situation, but his message was optimistic, stating that regardless of “the crisis and the recession, the U.S. economy remains the largest in the world.” He stated that the Fed expects “a moderate recovery” to continue and even strengthen as the country goes forward.

Easy on the talk of “Easing.” Despite the market’s concerns over the slowing economic recovery, Bernanke didn’t discuss any details about the measures that the Fed may use to help get the recovery back on track – which means there was no mention of a third round of Quantitative Easing (QE3). Instead, he stated that the Fed would continue to consider such options at its upcoming September meeting. He did, however, re-iterate that “The Fed has a range of tools that could be used to provide additional monetary stimulus.” Additionally, he ended his speech by saying: “The Federal Reserve will certainly do all that it can to help restore high rates of growth and employment in a context of price stability.”

Right back where we started. It’s interesting to note that last year when Bernanke spoke at Jackson Hole he talked about the likelihood of QE2. That speech sent both the Bond and Stock markets into a rally mode. Amazingly, the Stock market is very close to levels seen last August, which means that Stocks have given up virtually all of the gains seen from the enormous rally sparked by QE2.

Anticipation and disappointment. Stocks traded higher early last week in anticipation of Fed Chairman Ben Bernanke’s big speech on Friday at Jackson Hole, Wyoming. With the economy slumping and Stock prices falling in recent weeks, there was a growing feeling that the Fed is willing do something that would signal to the markets that they are willing to help more if needed.

After Bernanke’s speech – and his reluctance to discuss QE3 – Stocks dropped slightly, signaling investor’s disappointment in having to wait longer to see what steps the Fed may take. By late Friday, however, volatility reared its head again, as Stocks attempted to rally and Bonds gave up some of their gains.

With the Fed pushing off any meaningful discussion of its policies and options until the September meeting, this story is sure to continue impacting the markets. Until we hear exactly what the Fed will do, the markets will be forced to speculate and anticipate…which could mean more volatility. For now, the situation looks beneficial for people looking to purchase a home or refinance, as home loan rates remain near historic lows. But things can change quickly, so now is the time to take a look at the options available.

 

Forecast for the Week

 

This week heats up again with the big topics of housing, inflation and employment taking center stage:

  • The week starts off Monday morning with reports on Personal Spending and Personal Income, as well as Pending Home Sales.
  • On Monday, we’ll also see the Personal Consumption Expenditures (PCE) Index, which is the Fed’s favorite gauge of inflation. Remember, inflation is the archenemy of Bonds and home loan rates, so this will be an important report to watch.
  • Manufacturing reports will also hit this week. On Wednesday, we’ll see the Chicago PMI, which reports on manufacturing in Chicago and is a good indicator of overall economic activity. Then on Thursday, we’ll see the ISM Index, which is the king of all manufacturing indices and is considered the single best snapshot of the factory sector.
  • The big topic of the week will be employment. First up is the ADP National Employment Report on Wednesday, which measures non-farm private employment, followed by another round of Initial Jobless Claims on Thursday. In last week’s report, Initial Jobless Claims were reported higher than expected. This leading indicator of the labor market shows us that things remain weak.
  • Finally, the busy week culminates with the highly anticipated monthly Jobs Report on Friday. This report features new data regarding job growth and the unemployment rate – needless to say, this report can be a big market mover!

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.

As you can see in the chart below, the markets have continued their volatility. But Bonds and Home loan rates were able to finish the week strong.

That means that home loan rates are still at some of the most attractive levels we’ve seen in history. If you know someone in considering purchasing a home or refinancing, it’s an ideal time for them to review their options and see how they can benefit. All they have to do is call or email me to get started.

Chart: Fannie Mae 3.5% Mortgage Bond (Friday Aug 26, 2011)

 

The Mortgage Market Guide View…
 

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.

In the unlikely event that you no longer wish to receive these valuable market updates, please USE THIS LINK or email: curtis@kcmortgageplanner.com

If you prefer to send your removal request by mail the address is:

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.

Certified Mortgage Planner, Curtis Schartz, Home loan, Interest Rate, Interest Rates, kansas city, lees summit, lower interest, lower rates, Mortgage, mortgage backed securities, no cost refinance, overland park, Pulaski Bank, purchase, rate, Rates, Refinance, shawnee

Aug

23

Mortgage Market Guide – Featured Charts.

Certified Mortgage Planner, Curtis Schartz, Home loan, Interest Rate, Interest Rates, kansas city, lees summit, lower interest, lower rates, Mortgage, mortgage backed securities, no cost refinance, overland park, Pulaski Bank, purchase, rate, Rates, Refinance, shawnee

Aug

22

Mortgage Market Guide – Featured Charts.

Curtis Schartz, Certified Mortgage Planner with Pulaski Bank Lee’s Summit, Overland Park, Kansas City

Aug

16

In This Issue…

Last Week in Review: Volatility was the name of the game, with steep selloffs in Stocks and whipsaw trading. How did Bonds and home loan rates fare?
Forecast for the Week: With housing news, manufacturing news, and inflation news, plus the continued credit crisis in Europe, more volatility could be in store.
View: Still trying to understand the implications of Standard & Poor’s downgrade of the United States’ credit rating? Check out the key points below.
Last Week in Review

“Where do we go from here?” That question from Alicia Keys’ song was one many traders were probably asking, after a week where we saw a massive and historic selloff in Stocks and rallies in safe-haven instruments like Treasuries and Gold. What happened and what does all of this mean for Bonds and home loan rates? Read on for details.
Standard and Poor’s downgrade of the United States’ credit rating from AAA to AA+ late Friday, August 5th led to an especially volatile week, with the Dow Jones Industrial Average falling over 600 points and the S&P 500 Index experiencing its worst day since December 1, 2008-and that was just on Monday! The extreme volatility continued through the week, including Tuesday after the Fed released their Policy Statement, which was rather downbeat on the economy. In fact, Fed Chairman Ben Bernanke said, “Economic growth so far this year has been considerably slower than the Committee had expected.”
So where does our economy go from here?
The incoming economic data will be under a microscope, as global markets try to decipher if the US (and the world) is slipping back into a recession, or just experiencing a slow patch. If economic reports here in the US show even modest strength and an improvement from the recent weak news, Stocks could retrace some lost ground, which would come at the expense of Bonds and home loan rates. We saw some of this happen late last week, after Initial Jobless Claims fell below 400,000 for the first time in weeks and Retail Sales for July had their biggest increase in four months.
That being said, the current and ongoing concerns out of Europe should continue to provide a safe haven bid into the US Bond market… and this will help Bonds and home loan rates. But as you can see, with so many if’s, about the only thing we can be sure of is more volatility.
Wherever we go from here, the key takeaway is that RIGHT NOW, home loan rates remain near some of the best levels we’ve ever seen. If you’ve been thinking about buying or refinancing a home, give me a call or send me an email to learn how you can take advantage of this situation. Or forward this newsletter on to someone you know who may benefit.
Forecast for the Week

A slew of economic reports this week could give us a hint as to where we’re heading. Look for:
• Housing news with July’s Housing Starts and Building Permits Report on Tuesday and July’sExisting Home Sales Report on Thursday.
• Inflation news with the Producer Price Index, which measures inflation at the wholesale level, on Wednesday, followed by Thursday’s Consumer Price Index. Inflation readings are important to watch right now, as a deflationary or low inflation environment will support low home loan rates.
• Manufacturing news with Thursday’s Philadelphia Fed Index.
• Thursday also brings another weekly Initial and Continuing Jobless Claims Report. Last week’s Initial Claims came in at 395,000, below the crucial 400,000 level which signals real improvement in the labor market.
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.
As you can see in the chart below, Bonds and home loan rates reached some of their best levels last week, and still remain at great levels even with all the volatility. Let me know if you have any questions at all about whether you can benefit from this situation.

———————–
Chart: Fannie Mae 3.5% Mortgage Bond (Friday Aug 12, 2011)

The Mortgage Market Guide View…

The Downgrade and Home Loan Rates
Standard & Poor’s (S&P) downgrade of the United States’ credit rating from AAA to AA+ was historic-and Stocks have certainly been volatile since the downgrade.
But US Bonds and home loan rates haven’t been crushed by the news. If you’ve heard questions about the downgrade and home loan rates, keep the following points in mind:
• Despite the downgrade, there are a number of factors that bode well for US Bonds and home loan rates.
• S&P is currently the only credit rating agency that has downgraded the United States.
• Both credit rating agencies Moody’s and Fitch have maintained the United States’ AAA rating.
• More importantly, the ongoing credit crisis in Greece and other parts of Europe means that US Bonds are still considered one of the safest places to invest.
The bottom line is that home loan rates remain near their historic best levels, but about the only thing that is certain in the markets right now is the volatility. If you know someone who has been thinking about buying a home or refinancing, call or email today to get started.

————————–
Economic Calendar for the Week of August 15-19, 2011
Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.
Economic Calendar for the Week of August 15 – August 19
Date ET Economic Report For Estimate Actual Prior Impact
Mon. August 15 08:30 Empire State Index Aug -0.4 -3.76 HIGH
Tue. August 16 08:30 Housing Starts Jul 608K 629K Moderate
Tue. August 16 08:30 Building Permits Jul NA 624K Moderate
Tue. August 16 09:15 Capacity Utilization Jul 77.0% 76.7% Moderate
Tue. August 16 09:15 Industrial Production Jul NA 0.2% Moderate
Wed. August 17 08:30 Core Producer Price Index (PPI) Jul 0.2% 0.4% Moderate
Wed. August 17 08:30 Producer Price Index (PPI) Jul NA -0.4% Moderate
Thu. August 18 08:30 Jobless Claims (Initial) 8/13 400K 305K Moderate
Thu. August 18 08:30 Consumer Price Index (CPI) Jul 0.2% -0.2% HIGH
Thu. August 18 08:30 Core Consumer Price Index (CPI) Jul 0.2% 0.3% HIGH
Thu. August 18 10:00 Existing Home Sales Jul 4.87M 4.77M Moderate
Thu. August 18 10:00 Philadelphia Fed Index Aug 1.0 3.20 HIGH
Thu. August 18 10:00 Index of Leading Econ Ind (LEI) Jul 0.2% 0.3% Low

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 trusted advisor, 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.

In the unlikely event that you no longer wish to receive these valuable market updates, please USE THIS LINK or email: curtis@kcmortgageplanner.com

If you prefer to send your removal request by mail the address is:

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.

Certified Mortgage Planner, Curtis Schartz, Home loan, Interest Rate, Interest Rates, kansas city, lees summit, lower interest, lower rates, Mortgage, mortgage backed securities, no cost refinance, overland park, Pulaski Bank, purchase, rate, Rates, Refinance, shawnee