Forecast for the Week

A packed economic calendar is in store this week. Plus, the Fed meeting could cause volatility in the markets.

• Housing news kicks off the week with Pending Home Sales on Monday, followed by the S&P/Case Shiller Home Price Index on Tuesday.
• Durable Goods Orders will also be released on Tuesday.
• We’ll get a read on how consumers are feeling with Consumer Confidence on Tuesday and the Consumer Sentiment Index on Friday.
• Thursday’s reports feature Weekly Initial Jobless Claims and the first reading on Q3 Gross Domestic Product.
• Friday brings Personal Income, Personal Spending, Personal Consumption Expenditures (inflation index), the Employment Cost Index, and Chicago PMI (a regional manufacturing report).

In addition, the Fed’s next two-day meeting of the Federal Open Market Committee begins Tuesday, with the Monetary Policy Statement being released on Wednesday. Investors will be watching closely to see if the Fed fully tapers its ongoing Bond-buying program. This announcement has the potential to create volatility in the markets.

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 on which home loan rates are based.

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, Mortgage Bonds remain near 18-month highs, helping home loan rates reach 18-month lows. I’ll continue to monitor them closely.

Chart: Fannie Mae 3.5% Mortgage Bond (Friday October 24, 2014)

The Mortgage Market Guide View…

3 Steps to Becoming an Expert

Peter Economy, management expert and co-author of the bestselling book, “Managing for Dummies,” says the secret to being more valuable at your job, revitalizing your career, or getting paid more is simple–become an expert. He recommends the following three steps to get there:

Step 1. Understand what you’re interested in. What you already know can put you within short reach of being an expert in your field (if you aren’t one already). This is the least time-intensive route. But if what you’re already doing no longer interests you, you must find something inspiring enough to make learning feel effortless.

Step 2. Focus on one thing at a time. Learn too many things at once and you’ll be overwhelmed and probably fail. Don’t move on to the next subject of your expertise until you feel comfortable with the one you’re working on now.

Step 3. Practice makes perfect. There’s no such thing as an overnight expert. Be willing to invest the time for:

• Studying. Reading, taking courses, attending training or seminars, watching videos, hiring a mentor, and learning from other experts are all great avenues.
• Applying. Getting practical experience will help you go deeper, work out the kinks, and fully explore your field of expertise.
• Presenting. Documenting your findings with a journal or blog will help you understand even more facets of your expertise. If at all possible, write or speak about your trials and resolutions, teaching others about your journey.

Please feel free to pass these tips along to your team, clients and colleagues.

Source: Inc.com

Economic Calendar for the Week of October 27 – October 31

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