Ricky Khamis's Blog: Last Week in Review and Forecast For The Week | Ricky Khamis Arizona

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Last Week in Review and Forecast For The Week | Ricky Khamis Arizona

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Ricky Khamis
President Team Growth
Amerifirst Financial, Inc
Phone:  480-359-7908
Fax: (480) 907-1451
License: NMLS173141
ricky@ApprovingAZ.com
www.ApprovingAZ.com
  In This Issue 
     
 

Last Week in Review: Many communities are still ree ling from Superstorm Sandy, while the week also began and ended with important economic news.

Forecast for the Week: Between the elections and the ongoing cleanup from Superstorm Sandy, news outside the markets may take center stage this week.

View: Check out four innovative ways to improve your productivity, and then share these ideas with your clients, colleagues, and friends.

 
     
  Last Week in Review

     
 

"What do we live for, if it is not to make life less difficult for each other?" George Eliot. The events surrounding Superstorm Sandy certainly put this sentiment into perspective, as many communities continue to recover from last weeks storm.

There was also some important economi c news to note last week. The biggest news came on Friday, with the Jobs Report for October showing 171,000 new jobs created, with a healthy 184,000 private job creations being offset by modest government job losses. Adding to the good news were some upward revisions to the prior two months reports, adding a net 84,000 jobs to what had been previously reported.

The Unemployment Rate held steady at 7.9% as expected, and the more important Labor Force Participation Rate (LFPR) improved by a tick. The LFPR calculation is quite simple. If you are 16 years old and not in the military, then you either have a job or you don't. The ratio of people "participating" or working is then compared to the total population. All in all this was a pretty good report and, on the heel of the modest improvement in Initial Jobless Claims, shows that the labor market is still improvingslowly, but improving.

And the other big economic story from last week: inflation as measured by the Core Pers onal Consumption Expenditure (the Feds favorite measure of inflation) remained tame last month. This is significant because inflation is the arch enemy of Bonds and home loan rates (which are tied to Mortgage Bonds), since it reduces the value of fixed investments like Bonds. Remember, though, that one of the goals of the Feds latest round of Bond buying (known as Quantitative Easing or QE3) is actually to increase inflation. This is an important story to monitor in the weeks and months ahead.

The bottom line is that home loan rates remain near historic lows, making now a great time to consider a home purchase or refinance. Let me know if I can answer any questions at all for you or your clients.

 
     
  Forecast for the Week 
     
 

A slow week of economic reports comes at a time when news stories beyond the markets will be ta king center stage:

 

  • The week starts off Monday morning with the ISM Services report, which measures the non-manufacturing sector. Leading up to this weeks report, the ISM Services Index has seen three consecutive monthly increases and came in at its highest level since March in the last report.
  • On Thursday, well see the weekly Initial Jobless Claims report.
  • Friday ends the week with a preliminary read on Consumer Sentiment for November.

 

In addition to those reports, two news stories will take center stage. First, the nation will continue to focus on helping the East Coast clean up and recover from the devastation of Hurricane Sandy.

Second, the presidential election will undoubtedly overshadow much of the news early in the week. One issue that will be important to watch after the election is how long it takes elected officials to shift back to the impending fiscal cliff that the country is headed towards. Remember, th e United States mounting debt was a huge topic over the last year or so. But, as the election neared, much of the debt talk was silenced, as politicians from both major parties decided to wait and see what the leadership will look like after the election. After all, any approach to the problem will be impacted by who controls Congress and which party is in the White House.

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 d uring 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 rebounded after their initial reaction to the optimistic Jobs Report and they remain near their historic lows. Ill be watching closely to see what happens this week.

Chart: Fannie Mae 3.0% Mortgage Bond (Friday Nov 02, 2012)
Japanese Candlestick Chart
 
     
  The Mortgage Market Guide View... 
     
   
     
 

Pushups for Your Brain

Improving brain function is not just a fad for MENSA aspirants anymore, it's big news and the scientific community involved means business. Here are four innovative ways to test your own brain function, and help improve your cognitive ability and workplace productivity. Be sure to check them out and share them with clients, colleagues, and friends.

Psychometrics measures cognitive performance in areas like reaction time, executive function, and verbal learning. First, you take a battery of tests to see your current cognitive performance; then you introduce and track a new behavior, called "interventions" to understand whether it helps or hurts your thinking. The intervention can include changes to work routine, diet, even what time you drink coffee or smoke a cigarette.www.quantified-mind.com/about

Brain Training involves playing simple games that build your memory, problem solving abilities, and other cognitive functions that are critical to professional work environments. www.lumosity.com

Neurofeedback tools require users to wear an EEG headband with small sensors that track brain waves. The devices are wireless and create real-time analytics with your PC or smartphone, measuring how deeply you focus on any given job task, helping you monitor and minimize distraction and stay in a productive state longer.www.axioinc.com/the-product.html

Nudgers are mobile apps or online tools that ping you with reminder questions such as, "When was the last time you drank a glass of water?" or "Did you take a walk today?" Behavioral researchers have lo ng realized people often don't do what they say they want to do. Nudgers can be one way to make sure you keep your New Year's resolution, or any other new habit you'd like to build. www.beeminder.com

Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.

Economic Calendar for the Week of November 05 - November 09

Date
ET
Economic Report
For
Estimate
Actual
< td>
Prior
Impact
Mon. November 05
10:00
ISM Services Index
Oct
NA
 
55.1
Moderate
Wed. November 07
03:00
Crude Inventories
Sep
NA
 
-2.045M
Low
Thu. November 08
08:30
Jobless Claims (Initial)
11/03
NA
 
363K
Low
Fri. November 09
09:00
Consumer Sentiment Index (UoM)
Nov
NA
 
82.6
Low
     

 

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.

Mortgage Market Guide, LLC is the copyright owner or licensee of the content and/or information in this email, unless otherwise indicated.   Mortgage Market Guide, LLC does not grant to you a license to any content, features or materials in this email.   You may not distribute, download, or save a copy of any of the content or screens except as otherwise provided in our Terms and Conditions of Membership, for any purpose.

 

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Ricky Khamis
NMLS 173141 | LO-0911814 | CA-DOC173141
Branch Manager | Corporate Office
Arizona and California CE Instructor

Email: Rick@amerifirst.us

480-344-1900 office
602-758-7425 mobile
480-339-1615 fax

AMERIFIRST FINANCIAL, INC.
NMLS 145368 

1550 E. McKellips Rd, Suite 117
Mesa, AZ 85203
480-344-1900
1-866-276-12974
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Amerifirst Financial Disclosure-  The opinions expressed here are the personal opinions of Ricky Khamis.  Content published here is not read or approved by Amerifirst Financial before it is posted and does not necessarily  represent the views and opinions of Amerifirst Financial.

Comment balloon 0 commentsRicky Khamis • November 05 2012 08:42AM

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