MMG Weekly 2/15/16

 

Guy R. Vetrano NMLS# 183357
Mortgage Loan Originator
Bay Equity Home Loans
Phone: 480.500.6000 x 6017
Mobile: 602-692-7196
E-fax: 602.532.7304
gvetrano@bayeq.com
www.bayequityhomeloans.com/guy-vetrano

In This Issue  

Last Week in Review: Retail Sales ring up in January.Forecast for the Week: The full economic calendar features key reports from a wide sector of the economy.

View: Propel your success with five smart business podcasts.


Last Week in Review  

“Rainy days seem to wind up sunny, long as you got a little spending money.” Jimmy Buffett. U.S. consumers kept the purse strings loose in January, creating a bright spot in what have been hazy days on the economic front.

January Retail Sales rose 0.2 percent marking the third straight month of strong consumer spending, the Commerce Department reported Friday. Spending may have been fueled by lower prices at the gas pump and the belief that strong employment prospects are here to stay. Consumer spending accounts for more than two-thirds of U.S. economic activity.

In other news, Federal Reserve Chair Janet Yellen recognized the U.S. is progressing toward the Fed’s goal of maximum employment in her semi-annual report to Congress. However, the continued drop in oil prices and the strength of the dollar have negatively impacted the manufacturing sector. Yellen also said foreign economic developments pose risks to U.S. economic growth. Finally, she noted if these factors “prove persistent,” they could “weigh on the outlook” for U.S. economic activity.

So why is this important? Weak economic news normally causes home loan rates to improve while strong economic news normally has the opposite result. Right now, home loan rates remain near historically low levels, helping to create a sunny outlook for homebuyers.

If you or someone you know has any questions about the housing market, current rates or home loan products, please contact me.


Forecast for the Week  

Although the markets are closed Monday in observance of Presidents Day, the rest of the week packs a powerful punch of economic data on manufacturing, housing, wholesale and consumer inflation.
  • In manufacturing, the Empire State Index will be released Tuesday followed by the Philadelphia Fed Index on Thursday.
  • In housing news, the Housing Market Index will be released on Tuesday with Housing Starts and Building Permits coming on Wednesday.
  • Wholesale inflation from the Producer Price Index will be delivered Wednesday, while the Consumer Price Index will be released on Friday.
  • Meeting minutes from the Federal Open Market Committee will be released Wednesday.
  • As usual, weekly Initial Jobless Claims will be released 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 slipped slightly but home loan rates still remain near historic lows.

Chart: Fannie Mae 3.5% Mortgage Bond (Friday Feb 12, 2016)

Japanese Candlestick Chart


The Mortgage Market Guide View…  

5 Smart Business Podcasts As talk-radio for the digital age, podcasts deliver fresh ideas for just about any area of interest, and many are hosted by the brightest minds in their fields. The business podcasts below are no exception, and might be just what you need for your next business breakthrough.

TEDTalks Business
is a collection of favorite TED and TEDx conferences, bringing you insights and inspiration from top innovators, educators, scientists and researchers around the world.

HBR IdeaCast is a feature of Harvard Business Review, offering analysis, advice and business research insights from one of the nation’s top management schools.

Office Hours is hosted by New York Times best-selling author Daniel H. Pink, whose interview roster reads like a Who’s Who of business, including Biz Stone, Malcolm Gladwell, Tom Peters, Harvey Mackay and many others.

Seth Godin’s Startup School guides salespeople, entrepreneurs and managers through building and running their dream business. Godin covers everything from analyzing your competition, to winning advertising, to cash flow management and more.

Inc. Uncensored is hosted by Editor Jim Ledbetter. Each week you’ll get powerful ideas and advice about selling, entrepreneurship, new technology and innovations to help your business grow.

Keep your audio downloads organized with a podcast manager app like Overcast for Apple devices or Player FM for Android devices. And if you just can’t get enough, here are 95 more podcasts to inspire and propel you to success.

Please feel free to pass these helpful tips along to your team, clients and colleagues.

Sources: Inc., Tom’s Guide

Economic Calendar for the Week of February 15 – February 19
Date
ET
Economic Report
For
Estimate
Actual
Prior
Impact
Tue. February 16
08:30
Empire State Index
Feb
-9.9
-19.4
Moderate
Tue. February 16
10:30
Housing Market Index
Feb
60
60
Moderate
Wed. February 17
08:30
Building Permits
Jan
1200K
1232K
Moderate
Wed. February 17
08:30
Housing Starts
Jan
1171K
1149K
Moderate
Wed. February 17
08:30
Core Producer Price Index (PPI)
Jan
0.0%
0.1%
HIGH
Wed. February 17
08:30
Producer Price Index (PPI)
Jan
-0.2%
-0.2%
Moderate
Wed. February 17
02:00
FOMC Minutes
Jan
NA
NA
HIGH
Thu. February 18
08:30
Jobless Claims (Initial)
2/13
274K
269K
Moderate
Thu. February 18
08:30
Philadelphia Fed Index
Feb
-2.9
-3.5
HIGH
Fri. February 19
08:30
Consumer Price Index (CPI)
Jan
-0.1%
-0.1%
HIGH
Fri. February 19
08:30
Core Consumer Price Index (CPI)
Jan
0.1%
0.1%
Moderate

The material contained in this newsletter has been prepared by an independent third-party provider. The content is provided for use by real estate, financial services and other professionals only and is not intended for consumer distribution. 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, 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.
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