MMG WEEKLY – WHAT ARE THEY SAYING THIS WEEK?

 

 

Forecast for the Week  

This week’s economic calendar is light, but there’s another potential development to monitor. Here’s what to watch this week:

  • ISM Services will be released on Tuesday. This report shows how the service sector is holding up. Remember, individuals employed in this sector produce services rather than products.
  • The only other report of significance will be the weekly Initial Jobless Claims report on Thursday. This week’s data will come after last week’s rise in claims, which signaled that the labor market continues its malaise.

In addition to those reports, one of the big questions this week will be where investors decide to park their money. Will it shift from the safe haven of Bonds into riskier assets? With economic data getting weaker week-by-week, can the rally in Bonds continue?

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, weak economic data and the drama in Europe helped Bonds and home loan rates reach record best levels. I’ll continue to monitor this situation closely.

Chart: Fannie Mae 3.5% Mortgage Bond (Friday Jun 01, 2012)

Japanese Candlestick Chart

The Mortgage Market Guide View  

Home Inventory Made Easy:

Send This Link to Clients and Friends

Here’s a great idea you can pass on to your clients, friends, and family members — whether they’ve owned a home for decades or are just settling into homeownership.

Imagine the nightmare of having a home damaged or destroyed. Then, to make matters worse, imagine trying to remember all of the home’s contents for insurance and replacement purposes. Many thousands of Americans find themselves in that situation every year.

Now’s the time to make sure that doesn’t happen!

Here’s how…

Homeowners can create a home inventory list with ease thanks to FREE access to the Insurance Information Institute’s “Know Your Stuff” software, which is available at www.knowyourstuff.org. The software is user friendly…available as an app…and even provides free secure storage online so users can be sure their inventory is accessible in the event that their home is damaged.

After a quick setup, users can create a name for each room in their home — kitchen, living room, family room, master bedroom — and begin adding items. A drop down list is even available with the most common household items as well as the specific information required by insurance companies, in case a claim needs to be filed. Want to add a picture or a receipt for a large ticket item? No problem, just upload the image.

Once the home inventory is completed, it’s a good idea to have the homeowner’s insurance agent review the list to make sure the home has sufficient coverage.

Economic Calendar for the Week of June 04 – June 08

Date
ET
Economic Report
For
Estimate
Actual
Prior
Impact
Tue. June 05
10:00
ISM Services Index
May
53.0
 
53.5
Moderate
Wed. June 06
08:30
Productivity
Q1
0.7%
 
-0.5%
Moderate
Wed. June 06
02:00
Beige Book
May
 
 
 
Moderate
Thu. June 07
08:30
Jobless Claims (Initial)
6/2
375K
 
383K
Moderate

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