Forecast For The Week
A slew of economic reports are set for release this week, and investors and traders will be watching the data closely for any signs of an economic slowdown:
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 continue to hover near record best levels. I’ll stay on top of this week’s news to monitor how Bonds and home loan rates are impacted.
Chart: Fannie Mae 3.5% Mortgage Bond (Friday Apr 27, 2012)
The Mortgage Market Guide View
Cinco de Mayo: The Story You May Not Know
In a few days, well mark the celebration known as Cinco de Mayo. Although many people have heard of this celebration, most people don’t realize that the event being commemorated may have actually played an important role in shaping the United States that we know today.
Feel free to share the interesting facts below with clients and friends in the coming days! You may surprise them with what you’re about to read.
What Does Cinco de Mayo Commemorate?
Many people believe that Cinco de Mayo is the day that recognizes Mexico’s independence from Spain. To set the record straight, that conquest happened on September 15th, 1810. Cinco de Mayo, on the other hand, celebrates an event that took place over 50 years later.
On May 5, 1862, the Mexican cavalry, under the command of Texas-born General Zaragosa, defeated the French at the battle at Puebla, a city 100 miles east of Mexico City.
The French army, having not suffered a defeat in nearly 50 years, landed in the port of Vera Cruz and headed toward the capital city with a specific mission. Fearless of any opponent, the French sought to overthrow the capitol and gain control of Mexico, even bringing along a Hapsburg prince to oversee the would-be empire.
Cinco de Mayos Connection to the United States
The goal of France’s leader, Emperor Napoleon III, was to gain proximity to the US in hopes of supplying the Confederate Army in their fight against the North. He had a vested interest in sustaining the division within America.
To America’s benefit, the undersized Mexican cavalry used their knowledge of the terrain to defeat the powerful French army. This victory enabled the northern states to build the greatest army in the world at that time.
Fourteen months later, the North soundly defeated the Confederate Army in the battle at Gettysburg, thus ending the civil war. Union troops were subsequently rushed to the Texas/Mexican border to help expel the French from Mexico.
For this reason, Cinco de Mayo is celebrated in both countries. More importantly, it’s a great occasion to honor freedom and liberty.
Economic Calendar for the Week of April 30 – May 04
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