MMG Weekly 6/13/16

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: Fed Chair Yellen accentuates the positive … and the less-than-positive.

Forecast for the Week: A packed economic calendar is ahead. Plus, investors wait for word from the Fed.

View: Alternatives to PowerPoint? Check out four below.


Last Week in Review  

“Every silver lining’s got a touch of grey.” Grateful Dead. In her speech to the World Affairs Council of Philadelphia, Fed Chair Janet Yellen pointed out the “considerable progress” made toward the Fed’s goals of maximum employment and price stability. However, mixed news at home and uncertainty abroad cannot be ignored.

Yellen noted that while the labor market has made tremendous strides, unemployment still weighs heavily on some demographic groups and payroll gains have been smaller this spring. Then there’s oil. Savings at the pump have helped amp up consumer spending and confidence, but the impact on business hiring and production has been devastating. Across the globe, “sizable” uncertainties also cloud our success, including economic recovery in China and Britain’s potential exit from the European Union.

So, why are Yellen’s remarks important? When the Federal Open Market Committee considers the state of our economy and monetary policy at its June 14-15 meeting (particularly changes to the benchmark Fed Funds Rate, which is the rate banks use to lend money to one another), investors take notice. Any clues about future rate changes can cause volatility in the Stock and Bond markets. When Mortgage Bonds benefit, home loan rates tend to improve and vice versa.

On the housing front, home prices continue to rise. Data analytics firm CoreLogic reported that home prices rose 6.2 percent from April 2015 to April 2016, while month-over-month saw a 1.8 percent gain. “Low mortgage rates and a lean for-sale inventory have resulted in solid home-price growth in most markets,” said Dr. Frank Nothaft, chief economist for CoreLogic. This trend may level out, though, he noted, with expected gradual rises in interest rates and more homes available on the market.

For now, home loan rates remain near historic lows. If you or anyone you know would like to hear more about home loan rates or products, please give me a call.


Forecast for the Week  

As the Federal Open Market Committee debates the state of the U.S. economy at its June 14-15 meeting, they’ll be swimming through a sea of recent releases on inflation, manufacturing and more.
  • The packed economic calendar begins Tuesday with Retail Sales.
  • Inflation readings from the Producer Price Index will be released Wednesday followed by the Consumer Price Index on Thursday.
  • Regional manufacturing data will come from Wednesday’s Empire State Index and the Philadelphia Fed Index on Thursday.
  • Housing data rounds out the week with the Housing Market Index delivered on Thursday as well as Housing Starts and Building Permits on Friday.
  • As usual, weekly Initial Jobless Claims will be reported Thursday.
  • The Fed’s monetary policy statement will be released Wednesday at 2:00 p.m. ET.
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 posted positive gains recently, keeping home loan rates near historic lows.

Chart: Fannie Mae 3.0% Mortgage Bond (Friday Jun 10, 2016)

Japanese Candlestick Chart


The Mortgage Market Guide View…  

4 Presentation Alternatives to PowerPoint

If you’ve ever wondered if there were alternatives to PowerPoint that don’t come preloaded on your office computer’s software package, you’re in luck! Check out these four options:

Google Slides allows easy real-time collaboration with others. Built-in themes, hundreds of fonts and the ability to easily embed video or animations make this an attractive option. And, it’s free!*

Prezi replaces traditional slides with a zoomable “canvas” to help visually show relationships between the big picture and the details. And if you’re stuck for ideas, you can search Prezis made by others for inspiration. As low as $5 per month for individuals. Free trial available.*

ClearSlide helps salespeople present a beautiful slide deck to anyone, anywhere in the world without software downloads, complex login procedures or incompatibility issues that could interrupt your pitch and cost you the sale. Monthly fees are based on the number of users. Free trial available.*

Haiku Deck has been described as “Instagram for your slides.” You input your ideas and with a series of themes, filters and over 40 million free stock images to choose from, you can create a more visually memorable presentation. A limited free option is available.*

If you’re looking for an alternative to PowerPoint, check out these options for your next presentation!

*Prices available at time of writing.

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

Economic Calendar for the Week of June 13 – June 17
Date
ET
Economic Report
For
Estimate
Actual
Prior
Impact
Tue. June 14
08:30
Retail Sales ex-auto
May
NA
0.8%
HIGH
Tue. June 14
08:30
Retail Sales
May
NA
1.3%
HIGH
Wed. June 15
08:30
Producer Price Index (PPI)
May
NA
0.2%
Moderate
Wed. June 15
08:30
Core Producer Price Index (PPI)
May
NA
0.1%
Moderate
Wed. June 15
08:30
Empire State Index
Jun
NA
-9.0%
Moderate
Wed. June 15
02:00
FOMC Meeting
Jun
NA
0.37%
HIGH
Thu. June 16
08:30
Philadelphia Fed Index
Jun
NA
-1.8
HIGH
Thu. June 16
08:30
Jobless Claims (Initial)
6/11
NA
NA
Moderate
Thu. June 16
08:30
Core Consumer Price Index (CPI)
May
NA
0.2%
HIGH
Thu. June 16
08:30
Consumer Price Index (CPI)
May
NA
0.4%
HIGH
Thu. June 16
10:00
Housing Market Index
Jun
NA
58
Moderate
Fri. June 17
08:30
Housing Starts
May
NA
1172K
Moderate
Fri. June 17
08:30
Building Permits
May
NA
1116K
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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