MMG WEEKLY – WHAT ARE THEY SAYING THIS WEEK?

Forecast for the Week 

The economic calendar heats up this week, with several important reports:

  • The economic calendar kicks off on Monday with the New Home Sales data for May. This comes after last week’s weaker than expected Existing Home Sales data. Pending Home Sales will be released Wednesday.
  • Consumer Confidence will be delivered on Tuesday, followed by Consumer Sentiment on Friday. These reports will gauge how the consumer is holding up in a weakening economic environment.
  • Another look as to how the consumer is doing will be Wednesday’s Durable Goods report, which measures products lasting at least three years, such as washing machines and dishwashers.
  • Gross Domestic Product (GDP) will be reported on Thursday for the final reading of the first quarter of 2012.
  • Weekly Initial Jobless Claims will also be reported on Thursday and have remained stubbornly high.
  • Last but certainly not least is Friday’s Personal Income and Spending data, which will be released along with the closely watched Core Personal Consumption Expenditure (PCE) report. The Core PCE is the Fed’s favorite gauge of inflation.

In addition, the Treasury will sell $99 Billion total in 2, 5 and 7 year T notes this week and the results could impact trading.

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, Bonds and home loan rates remain near record best levels. I’ll continue to monitor this situation closely.

Chart: Fannie Mae 3.5% Mortgage Bond (Friday Jun 22, 2012)

Japanese Candlestick Chart

The Mortgage Market Guide View… 

Exercise Your Brain

Forgetting names or important details never feels good…be it in a personal or professional setting. The key is to stay mentally active. Here are some great tips you can share with your clients, referral partners, and family members that can help keep their memory in tip top shape:

1. Memorize Something New. Memorizing almost anything is one of the best exercises you can give your brain. Start small by memorizing your shopping list or daily schedule, or you can take it to another level by learning a musical instrument or a new language. Doing any of these exercises can potentially lead to quick and substantial improvement in memory, which will be helpful both personally and professionally.

2. Get a Hobby. Whether you choose something like gardening, bird watching, or flying model airplanes, taking on any new hobby is good for mental stimulation as well as overall mood. Look for activities you really enjoy and that allow you to learn and have fun, simultaneously. All of these traits are components to living a happy and rewarding life, and remaining mentally sharp.

3. Challenge Yourself. Daily patterns can be the enemy of mental sharpness. It’s one thing to keep a schedule or to plan out daily events. What we’re talking about is having the exact same routine, nearly every day. Falling into rigid patterns promotes mental passivity, or the opposite of stimulation. So try mixing things up a bit. Challenge yourself by participating in new activities. Join a softball league, a reading club, or even a theater group. At the very least, play around with your daily schedule.

The brain is a complex organ, able to create new connections between nerve cells when it is properly stimulated. Those connections lend themselves to optimal brain function, increased intelligence, and improved memory. The above tips will help people notice a difference in their memory in no time.

Economic Calendar for the Week of June 25 – June 29

Date
ET
Economic Report
For
Estimate
Actual
Prior
Impact
Mon. June 25
10:00
New Home Sales
May
NA
343K
Moderate
Tue. June 26
10:00
Consumer Confidence
Jun
NA
64.9
Moderate
Wed. June 27
08:30
Durable Goods Orders
May
NA
0.0%
Moderate
Wed. June 27
10:00
Pending Home Sales
May
NA
-5.5%
Moderate
Thu. June 28
08:30
GDP Chain Deflator
Q1
NA
1.7%
Moderate
Thu. June 28
08:30
Gross Domestic Product (GDP)
Q1
NA
1.9%
Moderate
Thu. June 28
08:30
Jobless Claims (Initial)
6/23
NA
NA
Moderate
Fri. June 29
08:30
Personal Income
May
NA
0.2%
Moderate
Fri. June 29
08:30
Personal Spending
May
NA
0.3%
Moderate
Fri. June 29
08:30
Personal Consumption Expenditures and Core PCE
May
NA
0.1%
HIGH
Fri. June 29
08:30
Personal Consumption Expenditures and Core PCE
YOY
NA
1.9%
HIGH
Fri. June 29
09:45
Chicago PMI
Jun
NA
52.7
HIGH
Fri. June 29
10:00
Consumer Sentiment Index (UoM)
Jun
NA
74.1
Moderate
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.
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