MMG WEEKLY – WHAT ARE THEY SAYING THIS WEEK?

 

 

Forecast for the Week  

Economic data heats up this week…and the news may impact Bonds and home loan rates. Here’s a glance at some important reports to watch:

  • The economic calendar gets interesting on Wednesday when the Retail Sales Report for May is released. The data will give investors a look at how consumer spending is holding up in this choppy economy.
  • Also on Wednesday, Wall Street will get a look at inflation at the wholesale level with the Producer Price Index (PPI).
  • On Thursday, the more closely watched Consumer Price Index (CPI) will be released. If there is any hint of inflation pressures, Bonds and home loan rates could worsen, especially since prices are already near record bests.
  • Weekly Initial Jobless Claims will also be delivered on Thursday.
  • To round out the week, Empire Manufacturing and Consumer Sentiment will be released on Friday.

In addition to those reports, the U.S. Treasury is set to sell $66 billion in notes and Bonds. Bond prices — and as a result, home loan rates — may be impacted according to the demand the auctions see.

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 reach for their best levels ever. I’ll continue to monitor this closely.

Chart: Fannie Mae 3.5% Mortgage Bond (Friday Jun 08, 2012)
Japanese Candlestick Chart

The Mortgage Market Guide View…  

Stolen LinkedIn Passwords are Only Half the Problem

Last week, a high-profile hack resulted in millions of people worrying about the security of their accounts on sites such as LinkedIn, eHarmony, and the BBC.

In response to the situation, LinkedIn deactivated the stolen passwords and sent emails to the owners of those accounts with information on resetting their passwords. By the end of the week, LinkedIn had not been able to identify any actual account break-ins due to the compromised passwords.

But the stolen passwords were just the first problem!

Watch Out for a Second Scam

Soon after the highly publicized hacking, a second attack wave was unleashed on unsuspecting LinkedIn members. The second wave came in the form of a phishing scam. This scam consisted of phony emails that look as if they were sent from LinkedIn. The phony emails include a link that directs users to a phony website that looks like it will reset the LinkedIn password. And, you guessed it, once users put their information into the website, they’re vulnerable all over again!

Don’t Click That Link!

LinkedIn has confirmed that it is sending emails to members whose passwords were compromised, but the company stresses that those emails do NOT include any links. Instead, the company has included specific instructions that need to be followed to reset the password. So if you see an email that looks like it will help you reset your password, don’t bite.

Stay Up to Date

As part of its communication to members, LinkedIn posted some important reminders about best practices for protecting passwords from phishing scams and other malicious scams.

You can read the password best practices on LinkedIn’s blog and follow LinkedIn’s Twitter feed to stay informed on the latest developments of the hack.

Economic Calendar for the Week of June 11 – June 15

Date
ET
Economic Report
For
Estimate
Actual
Prior
Impact
Wed. June 13
08:30
Retail Sales
May
-0.2%
 
0.1%
HIGH
Wed. June 13
08:30
Retail Sales ex-auto
May
0.0%
 
0.1%
HIGH
Wed. June 13
08:30
Producer Price Index (PPI)
May
-0.7%
 
-0.2%
Moderate
Wed. June 13
08:30
Core Producer Price Index (PPI)
May
0.2%
 
0.2%
Moderate
Thu. June 14
08:30
Core Consumer Price Index (CPI)
May
0.1%
 
0.2%
HIGH
Thu. June 14
08:30
Consumer Price Index (CPI)
May
-0.2%
 
0.0%
HIGH
Thu. June 14
08:30
Jobless Claims (Initial)
6/09
375K
 
377K
Moderate
Fri. June 15
08:30
Empire State Index
Jun
13.5
 
17.1
Moderate
Fri. June 15
09:15
Capacity Utilization
May
79.1%
 
79.2%
Moderate
Fri. June 15
09:15
Industrial Production
May
0.1%
 
1.1%
Moderate
Fri. June 15
10:00
Consumer Sentiment Index (UoM)
Jun
77.0
 
79.3
Moderate
 
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