MMG Weekly 2/5/18

Guy R. Vetrano NMLS# 183357
Senior Loan Officer
Bay Equity Home Loans
Phone: 480.500.6000 x 6017
Mobile: 602-692-7196
gvetrano@bayeq.com
www.vetranoteam.com

In This Issue  
Last Week in Review: Job growth was solid in January but wage growth brought the biggest surprise.

Forecast for the Week: The economic calendar slows down this week with just a few reports on deck.

View: These great social media ideas for February will help you stay connected to clients and referral partners with ease.


Last Week in Review  
“All shook up.” Elvis Presley. The Jobs Report, inflation news and the Fed meeting were a recipe for volatility in the markets this past week.

Employers added 200,000 new jobs in January while the November and December figures were revised lower by a total of 24,000 jobs, the Bureau of Labor Statistics reported. The Unemployment Rate remained at 4.1 percent. The big news within the report was a rise in annual wage growth, which surged 2.9 percent from January 2017 to January 2018. This was the biggest increase since June 2009. Wages had been stagnant, and the unexpected rise is a key metric for the economy. Overall, this was a solid report.

Inflation remained somewhat tame in December, while Personal Income and Spending matched expectations. The Fed’s favorite inflation gauge, Core Personal Consumption Expenditures, was unchanged at 1.5 percent year over year. The month-over-month reading saw a 0.2 percent rise, which was expected. The core reading excludes volatile food and energy prices.

The Fed met and, as expected, made no changes to its benchmark Fed Funds Rate. This is the rate banks use to lend to each other overnight and it does not directly impact home loan rates. The Fed did note that while inflation continued to run below the 2 percent threshold it aims for, it believes inflation should evolve to rise in the next 12 months.

Inflation is always a key factor to monitor as it reduces the value of fixed investments like Mortgage Bonds and impacts the home loan rates tied to them.

Though Mortgage Bonds have worsened and home loan rates have risen recently, rates remain historically attractive.

If you or someone you know has questions about home loans or home loan rates, please contact me. I’m always happy to help.


Forecast for the Week  
After last week’s full economic calendar, just two reports are ahead this week.
  • The ISM Services Index will be released on Monday.
  • As usual, look for weekly Initial Jobless Claims on Thursday.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve. In contrast, strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond on which home loan rates are based.

When you see these Bond prices moving higher, it means home loan rates are improving. When Bond prices 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 are 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, Mortgage Bonds have fallen in recent days. Home loan rates have increased but remain near historic lows.

Chart: Fannie Mae 3.5% Mortgage Bond (Friday Feb 02, 2018)
Japanese Candlestick Chart

The Mortgage Market Guide View…  
4 Meaningful Social Media Content Ideas for February

Social media is one of the most useful tools for keeping clients and prospects engaged, demonstrating your expertise and expanding influence in your market. But coming up with things to post isn’t always easy! Here are a few ideas to help inspire your social media activity this month.

Share the love leading up to Valentine’s Day by posting copies of recent thank you notes or letters of appreciation you’ve received from clients. Consider tagging them and include a sincere reply. Make sure to get permission before posting anyone’s name, though.

Speaking of Valentine’s Day, why not review a few local restaurants or recommend fun activities that your followers might consider for February 14 with the people they love. Give your recommendations the first week of the month, so they have plenty of time to plan or make reservations.

Random Acts of Kindness Week is the second full week of February. Invite followers to share their experiences on the giving or receiving of these gestures of good will in the community.

Keep an eye on local news making sure to regularly spotlight or congratulate teams, school athletes and other local groups for their efforts.

Stay tuned next month for more great social media content ideas.

Economic Calendar for the Week of February 05 – February 09
Date
ET
Economic Report
For
Estimate
Actual
Prior
Impact
Mon. February 05
10:00
ISM Services Index
Jan
NA
55.9
Moderate
Thu. February 08
08:30
Jobless Claims (Initial)
2/03
NA
230K
Moderate
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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.
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