Anniemac
Inside Track

Market Update from Our CEO- 06.13.16

 

Daily Quote: “Some men see things as they are and say why. I dream things that never were and say why not.” George Bernard Shaw

Fun Fact Of The Day: The average Game of Thrones episode costs $6 million to make. That's two to three times what a typical network or cable show costs per episode (Breaking Bad episodes cost around $3 million, early Big Bang Theory cost $2 million).  

Senseless:  Our thoughts and prayers go out to all of those who lost their lives and whose families have forever been torn apart by the senseless shooting in Orlando this weekend.  I have to think, as a Nation, we’re better than this but in this instance it just doesn’t seem so.  Something has to change.    

Don’t Be Seduced By This Rally

I don’t know of too many other people who have been more bullish on our operating environment, housing or the interest rate complex than me these past 8 months so this is not a change of tune…it’s simply a word to the wise.  Don’t you think it odd that the same people who say a tightening by the Fed is imminent and the economy is finally getting stronger find themselves recanting that sentiment with the passing of just one weak Jobs report?  Arguably these people are intelligent and if not they’re at least well-educated (and well-paid).  So what gives?  What gives is that we’ve never, ever, in the entire history of modern global economics, been where we are today.   

What Does This Mean For Mortgage Participants?   

Simple…it means that even the smartest of the smart are guessing at what they should say, how they should hedge their positions, and what the current ”natural rate” of growth is both here in the US and around the world.   So when rates rally hard don’t assume that’s here to stay or it’s going to continue to go lower.  Sure…rates could go possibly lower from here but there is a higher probability that short-run volatility will cause rates to both rise and fall – and perhaps in violent fashion. 

I am boring you with this because, as many of you have read from me before, there is an asymmetric relationship between mortgage rates and borrower happiness.  A borrower is less happy getting a call from you saying you got them a 1/8th lower in rate than they are frustrated when you call them saying their new rate is an 1/8th higher.  Our job is NOT to play the interest game.  Our job is SERVICE and as part of that service we guide that borrower through the most complicated financial transaction they will most likely ever be a part of.  Want to become a bond trader?  Great…just don’t do it here.  Lock your loans when you have a qualified borrower and a complete submission.  

 

Economic News/Activity:

A fairly important week on the economic front beginning with Retail Sales tomorrow.  Here’s a quick look at the week ahead compliments of our good friends at FNMA:

Date

Time

Event

 

Survey

Prior

6/14/2016

6:00

NFIB Small Business Optimism

May

93.5

93.6

6/14/2016

8:30

Import Price Index MoM

May

0.80%

0.30%

6/14/2016

8:30

Import Price Index YoY

May

-6.00%

-5.70%

6/14/2016

8:30

Retail Sales Advance MoM

May

0.30%

1.30%

6/14/2016

8:30

Retail Sales Ex Auto MoM

May

0.40%

0.80%

6/14/2016

8:30

Retail Sales Ex Auto and Gas

May

0.20%

0.60%

6/14/2016

8:30

Retail Sales Control Group

May

0.30%

0.90%

6/14/2016

10:00

Business Inventories

Apr

0.20%

0.40%

6/15/2016

7:00

MBA Mortgage Applications

10-Jun

--

9.30%

6/15/2016

8:30

PPI Final Demand MoM

May

0.30%

0.20%

6/15/2016

8:30

PPI Ex Food and Energy MoM

May

0.10%

0.10%

6/15/2016

8:30

PPI Ex Food, Energy, Trade MoM

May

0.10%

0.30%

6/15/2016

8:30

PPI Final Demand YoY

May

-0.10%

0.00%

6/15/2016

8:30

PPI Ex Food and Energy YoY

May

1.00%

0.90%

6/15/2016

8:30

PPI Ex Food, Energy, Trade YoY

May

--

0.90%

6/15/2016

8:30

Empire Manufacturing

Jun

-4

-9.02

6/15/2016

9:15

Industrial Production MoM

May

-0.20%

0.70%

6/15/2016

9:15

Capacity Utilization

May

75.20%

75.40%

6/15/2016

9:15

Manufacturing (SIC) Production

May

-0.10%

0.30%

6/15/2016

14:00

FOMC Rate Decision (Upper Bound)

15-Jun

0.50%

0.50%

6/15/2016

14:00

FOMC Rate Decision (Lower Bound)

15-Jun

0.25%

0.25%

6/15/2016

14:00

Fed Summary of Economic Projections

 

 

 

6/15/2016

16:00

Total Net TIC Flows

Apr

--

-$98.3b

6/15/2016

16:00

Net Long-term TIC Flows

Apr

--

$78.1b

6/16/2016

8:30

Revisions: Current Account

 

 

 

6/16/2016

8:30

Current Account Balance

1Q

-$124.3b

-$125.3b

6/16/2016

8:30

Initial Jobless Claims

11-Jun

270k

264k

6/16/2016

8:30

Continuing Claims

4-Jun

2140k

2095k

6/16/2016

8:30

Philadelphia Fed Business Outlook

Jun

1.3

-1.8

6/16/2016

8:30

CPI MoM

May

0.30%

0.40%

6/16/2016

8:30

CPI Ex Food and Energy MoM

May

0.20%

0.20%

6/16/2016

8:30

CPI YoY

May

1.10%

1.10%

6/16/2016

8:30

CPI Ex Food and Energy YoY

May

2.20%

2.10%

6/16/2016

8:30

CPI Index NSA

May

240.357

239.261

6/16/2016

8:30

CPI Core Index SA

May

247.033

246.574

6/16/2016

8:30

Real Avg Weekly Earnings YoY

May

--

1.30%

6/16/2016

9:45

Bloomberg Economic Expectations

Jun

--

44.5

6/16/2016

9:45

Bloomberg Consumer Comfort

12-Jun

--

43.5

6/16/2016

10:00

NAHB Housing Market Index

Jun

59

58

6/17/2016

8:30

Housing Starts

May

1150k

1172k

6/17/2016

8:30

Housing Starts MoM

May

-1.90%

6.60%

6/17/2016

8:30

Building Permits

May

1145k

1116k

6/17/2016

8:30

Building Permits MoM

May

1.30%

3.60%

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Denver, CO, 80210

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