MMG WEEKLY – WHAT ARE THEY SAYING THIS WEEK?

Forecast for the Week 

This week’s economic calendar will be chock-full of economic reports that will likely add volatility.

  • In housing news, the S&P/Case-Shiller Home Price Index will be released on Tuesday followed by Pending Home Sales on Wednesday.
  • Tuesday also brings a read on Consumer Confidence, which will be followed by Consumer Sentiment on Friday.
  • Wednesday’s second read on Q2 Gross Domestic Product (GDP) data will be closely watched for any clues as to where the economy is headed after the initial anemic reading of 1.5%.
  • Personal Income and Spending along with the inflation reading Core Personal Consumption Expenditures (PCE) will be delivered on Thursday.
  • Also on Thursday, weekly Initial Jobless Claims will be released.
  • Finally, the Chicago Manufacturing PMI will be released on Friday.

In addition to those reports, it’s important to note that this week will feature low trading volumes in the markets. That’s because the summer is coming to an end and trading desks are on a skeleton crew – which could lead to increased volatility.

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 rallied after rumors of QE3 hit the wires. I’ll be watching closely to see how all of this week’s news impacts the markets.

Chart: Fannie Mae 3.0% Mortgage Bond (Friday Aug 24, 2012)
Japanese Candlestick Chart

The Mortgage Market Guide View… 

Why Use Social Media?

Time is tight. You have a lot to do in any given day. So the big question you face is how to best use your time and resources. And that makes a lot of business people wonder if social media is really the best use of their time.

Recently, the McKinsey Global Institute produced a report that helps answer that question.

In preparing the report, the McKinsey Global Institute assessed the growth and impact of social technologies, as well as analyzed the ways in which social technologies create value. Among their interesting findings are the following statistics:

  • 90% = That’s the percentage of companies reporting a business benefit from social media.
  • 1/3 = That’s the share of consumer spending that could be influenced by social media.
  • 80% = That’s the percentage of online users who interact with social networks regularly.

In addition, the report listed the top ways that social technologies can add value. Those benefits included:

  • Deriving customer insights
  • Marketing communication and customer interaction
  • Generating and fostering sales leads
  • Providing customer care and service
  • Improving collaboration and communication

Why are those benefits so important? As the report states: “People derive great personal satisfaction from the relationships they are able to maintain, the information they can glean, and the communities they form through their use of social technologies.”

You can check out the full report on the McKinsey Global Institute website. But the bottom line is that whether you’re networking with referral partners, interacting with potential clients, or simply providing customer support, social networking can play a huge role in your success. And no matter what level you are currently using social media, there’s always room for improvement.

After all, the report concluded: “While 72 percent of companies use social technologies in some way, very few are anywhere near to achieving the full potential benefit.”

So take a look at your use of social media…and find areas for you to take advantage of the benefits that await you.

Economic Calendar for the Week of August 27 – August 31

Date
ET
Economic Report
For
Estimate
Actual
Prior
Impact
Tue. August 28
09:00
S&P/Case-Shiller Home Price Index
Jun
NA
-0.7%
Moderate
Tue. August 28
10:00
Consumer Confidence
Aug
NA
65.9
Moderate
Wed. August 29
08:30
Gross Domestic Product (GDP)
Q2
NA
1.5%
Moderate
Wed. August 29
08:30
GDP Chain Deflator
Q2
NA
1.6%
Moderate
Wed. August 29
10:00
Pending Home Sales
Jul
NA
-1.4%
Moderate
Wed. August 29
02:00
Beige Book
Aug
Moderate
Thu. August 30
08:30
Personal Consumption Expenditures and Core PCE
YOY
NA
1.8%
HIGH
Thu. August 30
08:30
Personal Consumption Expenditures and Core PCE
Jul
NA
0.2%
HIGH
Thu. August 30
08:30
Personal Spending
Jul
NA
0.0%
Moderate
Thu. August 30
08:30
Personal Income
Jul
NA
0.5%
Moderate
Thu. August 30
08:30
Jobless Claims (Initial)
8/25
NA
NA
Moderate
Fri. August 31
09:45
Chicago PMI
Aug
NA
53.7
HIGH
Fri. August 31
10:00
Consumer Sentiment Index (UoM)
Aug
NA
73.6
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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