News for Prescott AZ - AmericanTowns.com

Monday, June 07, 2010

Inside Lending Newsletter From Theron Wall

 

 

Inside Lending from Theron Wall

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Theron Wall

Theron Wall
Branch Manager
3615 Crossings Dr, Suite A
Prescott, AZ 86305
Phone: (928) 778-7167
Mobile: (928) 533-7473
Fax: (928) 445-5308

Wallick & Volk Mortgage

For the week of June 7, 2010 – Vol. 8, Issue 23

>> Market Update 

INFO THAT HITS US WHERE WE LIVE  The National Association of Realtors (NAR) reported the Pending  Homes Sales index rose in April for the third month in a row, registering a 6% increase over the upwardly revised March figure. This index measures the number of homebuyers signing purchase contracts. April Pending Home Sales hit their highest level since October 2009 and are UP 22.4% year-over-year. Like Existing and New Home Sales the week before, a good part of the gain was put to the tax credit expiration that required a signed contract by April 30. The NAR also forecast new home sales will be UP 18.5% for the year.

April construction increased 2.7%, its fastest gain in a decade. This includes commercial, government, and home construction. Home improvements led the residential gain, but new single-family homes were up as well, showing increased confidence among home builders. 

>> Review of Last Week

SUMMER SLUMP... Summer fun starts with Memorial Day but the holiday-shortened trading week ended with a slump in stocks on Friday. This was driven by concerns that Hungary may default on its debt, followed by the May Employment Report, whose payroll numbers were lower than expected and had investors selling off big time. The Dow lost over 300 points on the day and all three major indexes were down for the week.

The facts did not actually justify such extreme investor reaction. No U.S. bank has major exposure to European debt and Europe accounts for only a minor percentage of our export business. Yes, the employment report showed a headline payroll number below expectations, with the private sector adding just 41,000 jobs. But the average workweek went from 34.1 to 34.2 hours. If hours per worker had remained the same, that extra labor demand would have created 315,000 more private sector jobs. For the moment, employers are clearly preferring to meet rising labor needs with more hours for existing workers, rather than new hires. Ignored in all the negative hoopla was the DROP in the unemployment rate to 9.7%, which beat expectations.

Before Friday's market slide, other economic data had sent stock prices up. We had the great Pending Home Sales gain covered above. The ISM Manufacturing index continued to show strength in that sector, hitting levels not seen since 2004, while the ISM Services index showed non-manufacturing business at its highest level in almost four years. And final Q1 productivity came in at a 2.8% annual growth rate, UP 6.1% from a year ago.

For the week, the Dow ended down 2.0%, to 9931.97; the S&P 500 was down 2.3%, to 1064.88; and the Nasdaq was down 1.7%, to 2219.17.


Bonds blasted skyward on Friday fueled by the goulash coming out of Hungary, then boosted further by the lower than expected payroll numbers. The flight to safety benefited the FNMA 30-year 4.5% bond we watch, which closed UP 66 basis points for the week, ending at $102.69. National average mortgage rates held at their historic levels for another week, according to Freddie Mac's weekly survey. 

>> This Week’s Forecast

CONSUMERS WEIGH IN... This is a fairly quiet week for economic data, but we'll have a good look at the consumer's participation in the recovery with Friday's May Retail Sales. The June Michigan Consumer Sentiment index will follow. Expectations are for continued improvements in these numbers. Initial and Continuing Unemployment claims will also be watched closely given last week's jobs report. Thursday's April Trade Balance will show us the strength of U.S. business in the global economy.

>> The Week’s Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.

Economic Calendar for the Week of June 7 – June 11

 Date

Time (ET)

Release

For

Consensus

Prior

Impact

W
Jun 9

10:30

Crude Inventories

6/5

NA

–1.90M

Moderate

Th
Jun 10

08:30

Initial Unemployment Claims

6/5

450K

453K

Moderate

Th
Jun 10

08:30

Continuing Unemployment Claims

5/29

4.600M

4.666M

Moderate

Th
Jun 10

08:30

Trade Balance

Apr

–$41.2B

–$40.4B

Moderate

F
Jun 11

08:30

Retail Sales

May

0.3%

0.4%

HIGH

F
Jun 11

08:30

Retail Sales ex-auto

May

0.1%

0.4%

HIGH

F
Jun 11

09:55

Univ. of Michigan Consumer Sentiment Index

Jun

74.8

73.6

Moderate

F
Jun 11

10:00

Business Inventories

Apr

0.5%

0.4%

Moderate

 

>> Federal Reserve Watch   

Forecasting Federal Reserve policy changes in coming months  With jobs still not enthusiastically joining the rest of the recovery, most economists now feel we'll be in a low-rate environment for a considerable period of time. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.

Current Fed Funds Rate: 0%–0.25%

After FOMC meeting on:

Consensus

Jun 23

0%–0.25%

Aug 10

0%–0.25%

Sep 21

0%–0.25%


Probability of change from current policy:

After FOMC meeting on:

Consensus

Jun 23

     2%

Aug 10

     5%

Sep 21

     12%

 

This e-mail is an advertisement for Theron Wall. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice, or a commitment to lend. Although the material is deemed to be accurate and reliable, there is no guarantee of its accuracy. The material contained in the newsletter is the property ofWallick & Volk Mortgage and cannot be reproduced for any use without prior written consent. It is designed for real estate and other financial professionals only. It is not intended for consumer distribution. The material does not represent the opinion of Wallick & Volk Mortgage. BK 0018295

 

This is not the opinion of Brad Bergamini, Realty Executives Northern Arizona or any of its affiliates.  This post is for informational purpose only and is not guaranteed and does not render as legal advice.  Buying and selling Real Estate in Arizona or Prescott Arizona is a serious task and should be consulted with personally with Realtor or Real Estate Attorney.  Please visit my website for contact information

http://bradbergamini.com

 



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