Forecast for the Week

A jam-packed economic calendar is ahead, plus there will be important meetings overseas regarding Greece’s potential default. Volatility could be rampant.

• Economic data kicks off on Monday with Existing Home Sales, followed by New Home Sales on Tuesday.
• Also on Tuesday, look for Durable Goods Orders, which are orders for items that last an extended period of time.
• On Wednesday, the final reading for first quarter Gross Domestic Product will be closely watched for signs of economic growth.
• Thursday brings Personal Income, Personal Spending, Personal Consumption Expenditures (the Fed’s favorite measure of inflation), and Weekly Initial Jobless Claims.
• Ending the week, look for the Consumer Sentiment Index on Friday.

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 have rebounded in recent days, keeping home loan rates at historically low levels. However, market sentiment can change quickly so I’ll be watching things closely in the week ahead.

Chart: Fannie Mae 3.5% Mortgage Bond (Friday June 19, 2015)

The Mortgage Market Guide View…

Keeping Business Simple

KISS is an acronym for “Keep It Simple, Stupid” and was coined by U.S. Navy engineers in 1960 to stress the importance of building aircrafts that could be repaired on the battlefield by a regular mechanic using only basic tools. Essentially, the KISS principle states that most systems work better when they are simple rather than complex.

The same goes for business, no matter what the industry or niche. If you don’t keep things simple, it’s a recipe for unnecessary stress and, worst case scenario, losing business.

Here are a few ideas on how to keep things simple in your business:

Identify the need you fulfill. Whether you sell homes or financial services, you are fulfilling an emotional or psychological need for your clients that has nothing to do with real estate or Stocks and Bonds. Focus on the top three such needs you fulfill.

Build your plan around serving those needs. This is about limiting yourself. You may have the ability to offer other services that don’t serve the core need of your market, but avoid the temptation to use them if possible. The likelihood of confusing your prospects and customers is too high to justify the value you think you’re creating.

Don’t get too elaborate with systems, especially those that impact customer service. While every business should have processes for every detail of that business, the more common sense they are the better. If yours are intuitive and easy to perform for both staff and clients, they are going to be win-win.

Stay focused. If you’re in business to sell houses or do financial planning, don’t extend your brand to include staging or insurance—or anything else you can think of that might dilute your ability to perform those three core emotional/psychological needs.

As always, feel free to pass these helpful tips along to your team, clients and colleagues!

Economic Calendar for the Week of June 22 – June 26

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