INFO THAT HITS US WHERE WE LIVE Housing was more affordable in November than at any time in the last 40 years. So it should come as no surprise that Existing Home Sales were UP 5.6% for November, bringing them to an annual rate of 4.68 million, a tad above the expected 4.65 million rate. Sales were up for single-family homes, although down for condos and coops, and all regions of the country registered gains.
The median price increased to $170,600 in November (not seasonally adjusted) and that figure is UP 0.4% over a year ago. The FHFA index of prices for homes bought with conforming mortgages also was up 0.7% in October (seasonally-adjusted), its first gain since May. The months' supply dipped to 9.5, with a decline in overall inventories.
Thursday saw new single-family home sales UP 5.5% for November, to a 290,000 annual rate, a little short of expectations. The months' supply of new homes dropped to 8.2 from October's 8.8 level. The new homes inventory is now down to 197,000, 65.6% off its 2006 peak, and the lowest inventory level going back to 1968. The median selling price went up to $213,000, after dipping under $200,000 in October.
>>> Review of Last Week
MAKE THAT FOUR IN A ROW... Not everyone got an early start on the holiday break last week, as enough enthusiastic investors showed up on Wall Street to push stocks higher for the fourth week running. There were plenty of economic reports for traders to react to and the news was fundamentally positive.
The main negative note was struck with November Durable Goods Orders, which declined 1.3%, a bigger drop than expected. But that was the overall number. When you took out the volatile transportation component, orders were UP 2.4% and that was well above the gain that had been forecast. The final number for Q3 GDP was revised up from 2.5% to a 2.6% annual rate, but this was a tad less than expected. Nonetheless, the economy is expanding and the feared "double dip" recession is no longer a concern for economists.
In other good news, Personal Income was UP 0.3% in November and Personal Spending UP 0.4%. Looking at inflation, PCE prices were up only 0.1% for the month and up just 1.0% from a year ago. Core PCE prices, excluding food and energy, were up only 0.1% for the month and up just 0.8% from a year ago. This puts zero pressure on the Fed to raise the Funds Rate to head off inflation. Both initial weekly jobless claims and continuing claims dropped again, though still not to the levels they should be.
For the week, the Dow was UP 0.7%, to 11,573; the S&P 500 was UP 1.0%, to 1,257; and the Nasdaq was UP 0.9%, to 2,666. (Note: we've dropped the decimals and rounded the indexes to their nearest whole numbers.)
The bond market remained volatile. Gains earlier in the week were later given up. Nonetheless, the FNMA 30-year 4.0% bond we watch ended down only 5 basis points for the week, closing at $98.17. Freddie Mac's weekly survey of conforming mortgages had average fixed-rate mortgage rates easing slightly from their recent moves up. Rates are still historically low, but people who want to purchase or refinance should probably not drag their feet.
>>> This Week’s Forecast
CONSUMERS GAIN CONFIDENCE... It's another four-day week of economic activity, but quieter than the one just ended. The last week of the year will give us readings in key areas. Tuesday's Consumer Confidence will tell us how hopeful people are, and that number is projected to go up a healthy two points. Manufacturing in a key region will be measured by Thursday's Chicago PMI, which is expected to remain at its current level, showing solid expansion.
The housing market will be gauged again with Thursday's Pending Home Sales for November. This is expected to be down slightly, indicating a falloff in closings for January and February. We also want to watch weekly and continuing jobless claims, which should keep dropping. The markets will be closed Friday, New Year's Eve.
We wish you and yours a Happy 2011, a healthy and prosperous New Year!
>>>> 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 December 27 – December 31:
>>> Federal Reserve Watch
Forecasting Federal Reserve policy changes in coming months Things may be looking up a bit, but the Fed is not yet convinced. They still expect to keep the Fed Funds Rate at its super low level for an "extended period." A strengthening economy or the threat of inflation, of course, could start the rate back up. 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%:
Probability of change from current policy:
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© 2010 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender.
INFO THAT HITS US WHERE WE LIVE Last Thursday it was good to see that Housing Starts picked up for November, rising 3.9% for the month to an annual rate of 555,000 units. This beat expectations and was especially gratifying because all the gain came from a 6.9% increase in single-family starts. These have now been up three out of the last four months.
Multi-family starts were down for the fourth month in a row, but these are very volatile on a monthly basis. In fact, the 12-month moving average for multi-family starts is still trending higher, up 5.9% compared to a year ago. The demand for multi-unit residences should continue to grow, which is why some observers foresee a large rebound in multi-unit construction in the new few months. Although there are still excess housing inventories, they are falling quickly and experts expect them to drop further, even with a home building recovery.
>>> Review of Last Week
THREE IN A ROW... Investors sent stocks higher for the third straight week on Wall Street. The markets weren't exactly on fire, as volumes were low, which is typical for this time of year, and investors remain guardedly optimistic, which has been their attitude since last month's elections. As happens so often, the week's festivities were driven by the economic headlines and there certainly were plenty to ponder.
The consumer appears to be showing up for the holidays, as retail sales went up 0.8% in November, up 1.2% excluding autos. Including revisions to September and October numbers, overall sales were up 1.5% for the month. Retail is now UP 7.7% over a year ago, and sales are up at a 12% annual rate for the past five months! On the worrisome side, the November Producer Price Index (PPI) showed wholesale inflation up 0.8%, although the Consumer Price Index (CPI) rose a benign 0.1%. Consumer prices are up 1.1% over a year ago, which is good, but wholesale prices are up 3.5% for the year, which isn't so good if you want to keep inflation in check and interest rates down.
The jobs recovery is key to the housing rebound, so it was good to see new unemployment claims falling again last week, to 420,000. This beat expectations and was the second lowest number this year for weekly claims, which have now fallen three times in the last four weeks. The Philadelphia Fed index showed manufacturing continues to grow in that region, as it was up nicely for December. Likewise, the Empire State index showed New York manufacturing coming back strong in December after last month's dip. November Industrial Production rose above expectations and capacity utilization showed factories at their highest volume levels since October 2008.
For the week, the Dow was UP 0.7%, to 11491.91; the S&P 500 was UP 0.3%, to 1243.91; and the Nasdaq was UP 0.2%, to 2642.97.
With investors feeling more upbeat about the economy, money flowed into stocks and out of the bonds that fund most mortgage loans. The FNMA 30-year 4.0% bond we watch ended down 78 basis points for the week, closing at $98.22. This inched mortgage rates higher once again. Freddie Mac's weekly survey of conforming mortgages had the average 30-year fixed-rate mortgage rate up for the fifth week in a row. Rates are still historically low, but people looking to purchase or refinance should be aware that the low-rate party may soon be over.
>>> This Week’s Forecast
HOUSING, INFLATION AND THE OVERALL ECONOMY... This week we get to see how the economy is coming along in some key areas. We track the housing recovery with Wednesday's Existing Home Sales and Thursday's New Home Sales, both expected to be up a bit for November. Continuing the theme of a steady if slow recovery, the third estimate of GDP should show the overall economy growing at a 2.7% annual rate, up from the prior 2.5% estimate. Again, a slower rate of growth than economists would like to see, but growth nonetheless.
Thursday brings more inflation readings, with both Personal Spending and Core PCE Prices expected to remain under control. The final December reading on University of Michigan Consumer Sentiment may be up a small amount, while November Durable Goods Orders may be down a tad. The markets will be closed Friday.
Happy Holidays to you and yours during this joyous season!
>>> 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 December 20 – December 24:
>>>Federal Reserve Watch
Forecasting Federal Reserve policy changes in coming months The policy statement from last week's FOMC meeting indicated the Fed is not yet convinced the economy is on solid ground. Analysts therefore expect the Fed Funds Rate to stay at its super low level for an "extended period." Inflation, or a stronger economic recovery, could of course start the rate back up. 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%:
Probability of change from current policy:
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© 2010 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender
INFO THAT HITS US WHERE WE LIVE Last week was short, but still managed to squeeze in two reports on our favorite topic. Wednesday's New Home Sales for October were down 8.1% from the month before, at an annual rate of 283,000. A slight upward move in these numbers had been forecast. The inventory of new homes edged up to 8.6 months, higher than the 6 month's supply level everyone would like to see.
But Tuesday, October Existing Home Sales came in with a way smaller decline – down just 2.2% from September and in line with expectations. The National Association of Realtors (NAR) reported the annual sales rate at 4.43 million homes. Actual sales, year to date, are 4.15 million, down 2.9% from the same period a year ago. The NAR's chief economist feels that sales activity appears to be "off the bottom and attempting to settle into normal, sustainable levels." He expects steady improvement to levels "above 5 million by spring of next year." The median existing home price edged down a little to $170,500 and is down only 0.9% from a year ago. The months' supply of existing homes dipped to 10.5 from September's 10.6 reading, as inventories declined overall.
>>> Review of Last Week
A TURKEY FOR WALL STREET... Unfortunately, Thanksgiving week turned out to be a turkey for stock market investors. Stock prices went down following renewed concerns over European debt and North and South Korea lobbing shells at each other across their border. Even though one trading day registered a 150-point gain thanks to some encouraging economic news, three out of the four days were downers, so the Dow and the S&P 500 ended lower for the week, while the Nasdaq eked out a miniscule gain.
With European debt, there are once again fears of contagion, which negatively affected stock markets there and around the world. While Ireland works its bailout with the European Union and the International Monetary Fund, worries about Portugal and Spain re-surface. On the home front, a negative Durable Goods Orders reading for October was offset by an upwardly revised 5.0% gain for September. The fall-off in New Home Sales was similarly balanced by Existing Home Sales coming in as expected, covered above.
Encouraging indicators also included Q3 GDP (gross domestic product) getting an upward revision from its initial estimate, to a 2.5% annual growth rate. Improvements in consumer spending and exports drove the solid move up. Initial jobless claims held at under 450,000 for the third week in a row, now down to 407,000. Finally, University of Michigan Consumer Sentiment surged to 71.6, more than two points above consensus expectations.
For the week, the Dow was down 1.0%, to 11092.00; the S&P 500 was down 0.9%, to 1189.40; but the Nasdaq was UP 0.7%, to 2534.56.
The bond market benefited from the flight to safety caused by events in Europe and Korea, but there was enough good economic news to put bond prices under pressure. The FNMA 30-year 4.0% bond we watch ended down 8 basis points for the week, closing at $101.09. National average rates for fixed-rate mortgages barely moved last week, according to Freddie Mac's survey of conforming mortgage rates. They are still at historically low levels.
>>> This Week’s Forecast
MORE JOBS, SAME UNEMPLOYMENT RATE... The month ends tomorrow, so Friday brings the November Employment Report and everyone will be looking for signs of hope on the jobs front. Experts predict we'll have another monthly gain in payrolls, although the 130,000 jobs predicted won't be enough to move the unemployment rate down. A jobs recovery is key to the housing recovery, but we're not quite there.
Thursday's Pending Home Sales report for October will give us an idea about existing home sales a couple of months out. No one expects a surge just yet. Manufacturing, however, is forecast to continue its steady expansion, with both Chicago PMI and the ISM Index well north of 50. The ISM Services read also shows growth in the nonmanufacturing sector. Observers are expecting a slight hike in November Consumer Confidence, always a good thing.
>>> 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 November 29 – December 3
>>> Federal Reserve Watch
Forecasting Federal Reserve policy changes in coming months Economists expect the Fed Funds Rate to remain low while the Fed continues its $600 billion bond buying program through the first half of next year. A surge in inflation or in the economic recovery could of course change that. 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%:
Probability of change from current policy:
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© 2010 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender.
INFO THAT HITS US WHERE WE LIVE The Commerce Department reported last Wednesday that Housing Starts dropped 11.7% in October. This put them at a seasonally adjusted annual rate of 519,000, their lowest level in 18 months. But most of the fall off came from a 43.5% decline in multifamily construction, a volatile part of the market. Single-family building, accounting for more than 80% of all starts, was off just 1.1%, to 436,000 units. And September single-family starts were revised UP to a 2.1% gain. Meanwhile, Building Permits, which reflect builders' views of the future, were UP 0.5% to 550,000, another hopeful sign.
National average mortgage rates edged up in both Freddie Mac and Mortgage Bankers Association (MBA) weekly reports. The MBA felt rates rose because of "stronger economic data and lingering uncertainty regarding the structure and impact of the Fed's QE2 program." This Fed plan to buy $600 billion in bonds in a second round of quantitative easing was supposed to push rates down, stimulating the economy by making borrowing more affordable. But some investors fear QE2 will spark inflation, which pushes mortgage bond prices down and mortgage rates up. People looking to buy or refinance should probably not drag their feet waiting for lower rates that may never happen.
>>> Review of Last Week
FLAT... The week on Wall Street saw a big drop in stock prices Tuesday, followed by a big gain on Thursday, but when all was said and done, the week ended virtually flat for all three market indexes. This, however, was a big improvement over the prior week's big declines for all the indexes.
Negative influences on the proceedings included the drop in Housing Starts covered above, along with the unexpected rise in mortgage rates after the start of the Fed's bond buying program. But once you got past those items, you had to go overseas to find more downers, which were basically continuations of last week's concerns. Investors don't like Chinese inflation threatening a rise in interest rates over there, or the increasing possibility of a bailout for the Irish banks.
But back over here, we did have some goodies going on. Retail sales were UP 1.2% in October, following a September gain that was upwardly revised to 0.7%. Could other positive economic surprises be on the way? Inflation came in tame, with the Consumer Price Index up just 0.2% for October and Core CPI up only 0.6% year-over-year, the smallest inflation increase in the index's history, dating back to 1957! Initial jobless claims held at under 450,000 for the second week in a row, still too high but showing that the labor market is better than it's been. The General Motors IPO gave back over $13 billion of the money taxpayers put in to prevent a GM bankruptcy.
For the week, the Dow was up just 0.1%, to 11203.55; the S&P 500 was flat, up only a fraction of a point, to 1199.73; and the Nasdaq was also flat, down a fraction of a point, to 2518.12.
The bond market had an up and down week of it, with prices under pressure on some issues at the end. The FNMA 30-year 4.0% bond we watch ended down 89 basis points for the week, closing at $101.17. This downward action in mortgage bond prices sent national average rates for fixed-rate mortgages up a tad for the week, as mentioned above.
>>> This Week’s Forecast
TWO PACKED DAYS... Thanksgiving shortens the week, so a slew of economic reports get packed into Tuesday and Wednesday. We start with Second Estimate Q3 GDP, expected to edge up from the preliminary reading. Existing Home Sales for October should show a slight drop in the annual rate. Also Tuesday, the Minutes of the FOMC meeting of the Fed on November 3, could give more insight into the economic recovery.
Wednesday kicks off with Core PCE Prices, expected to inch up a tad, but still within the Fed's comfort zone for inflation. No need for them to curtail their QE2 bond-buying! Durable Goods Orders are forecast down a little for October, while Initial Unemployment Claims for the week should remain at their currently lower levels. Happily, New Home Sales for October are projected up a tad and let's hope the experts have that right.... Happy Thanksgiving!
>>> 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 November 22 – November 26
>>> Federal Reserve Watch
Forecasting Federal Reserve policy changes in coming months With last week's CPI readings showing inflation very mild indeed, economists expect the Fed Funds Rate to stay low as the Fed continues its $600 billion bond buying program through the first half of next year. 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%:
Probability of change from current policy:
---------------------
© 2010 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender.
No matter what your business, having a website is key to growing it. But to get your online marketing rolling, you have to start driving traffic to the site. Here are some things you can do to expand your online exposure.
First, for a little motivation, Google yourself. Put your name inside quotation marks in the Search box and see what comes up. If there's not much there, here's how to boost those results.
Start a Blog. This is just your own take on the things you know about that relate to your services and, most importantly, to the needs of the people you want to reach. There are many free blog platforms you can go with: ActiveRain, Google Blogger, RealTown, Wordpress.com.
• Focus blog content on things that will interest your audience
• Include keywords that relate to your business and where it operates
• Include in each post a photo and links to other resources
• Use widgets and key plug-ins for social networks, email sign up and links
Get a Second Blog Platform. This is for sharing news and events posted elsewhere. You can comment on these things in your blog, but you can't simply cut and paste info from other online sources – it violates copyright law. Check out amplify.com and posterous.com, for a start.
Engage Google. Here are a few things to do:
• Make your Google Profile complete, with links to your sites, blogs and social media profiles
• Use Google Reader to keep up with your industry and do ongoing research
• For timely info and news, set up Google Alerts on yourself, your company, your competition
• Check if the Google Merchant Center might be a good place to promote your business
Fine-Tune Your Facebook. Make sure your profile has a photo and keywords that relate to you and your business. Brand your page with your name like this: facebook.com/johndoebusinessexpert. Brand your business page like your website or blog (there's a fee). Look into Marketplace for promoting what you have to offer. Use RSS to get blog posts to your business page. Tab your other social media, videos, business page.
Leverage LinkedIn. Complete your profile. Get involved in Questions and Answers. RSS your blog to the site. Post books you like. Get yourself a dozen professional recommendations. Add a resume with career accomplishments.
Don't Forget YouTube. Set up a YouTube channel and profile for your business, then post videos on items of interest to your audience. Incorporate visual elements and stay under two minutes. Upload the videos to your blog and share on Facebook, LinkedIn and Twitter.
Tweak Twitter. Your 140-character profile needs dead-on focus and a link to your blog or site. Use a photo or avatar. And don't sell – just give links to more information.
All this does take time to set up at the beginning and then work every day. But expand your online presence, and you may very well expand your overall business.
10 reasons to buy
People who are thinking about buying in today's market should check out this piece from the Wall Street Journal.
Have a great month!
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© 2010 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender.
INFO THAT HITS US WHERE WE LIVE The National Association of Realtors (NAR) reported that home prices stayed essentially flat in the third quarter compared to the same time frame a year ago. This price stabilization is encouraging, given that sales of existing homes in the period did drop compared to both the prior quarter this year and to the same quarter a year ago. Of course, both those time periods saw buyers rushing in to take advantage of the federal tax credits.
On the mortgage front, national average mortgage rates dipped again according to Freddie Mac's weekly survey. This was considered by most experts to be the result of the Federal Reserve's recent announcement of their second round of "quantitative easing," dubbed "QE2." This is the plan in which the Fed will buy up to $600 billion in Treasuries from now till the end of June next year. Not surprisingly, mortgage applications spiked up 5.8% for the week for both purchase and refinance loans, according to the Mortgage Bankers Association.
>>> Review of Last Week
COULDN'T MAKE IT SIX... The broadly based S&P 500 stock market index was up five weeks in a row, but just couldn't score that sixth up week. In sympathy, the Dow and the Nasdaq indexes also dropped for the week as Wall Street investors passed over some of the positive economic reports, preferring instead to dwell on the negative news.
Things to worry about now have an international flavor, beginning with, once again, guess what, European sovereign debt. This time the speculation was that Ireland couldn't afford to bail out its financial sector, so the European Union might have to step in. Another continent away, there were fears China will raise its interest rates to tame its growing inflation. Here in the U.S. we had tech bellwether Cisco trimming profit projections for the rest of its fiscal year.
Meanwhile, those sensing a quickening of the pace of recovery latched onto news of September's shrinking trade deficit, which featured a $0.5 billion increase in exports, always a nice thing to see. Best of all was the report that new unemployment claims dropped 24,000 for the week, to 435,000. This is the first weekly reading for jobless claims since the recession began that was below 440,000, not using any statistical or seasonal biases to get there. Some analysts saw this drop in initial claims as an encouraging sign that hiring could soon pick up.
For the week, the Dow was down 2.2%, to 11192.58; the S&P 500 was also down 2.2%, to 1199.21; and the Nasdaq dropped 2.4%, to 2518.21.
The week in the bond market closed with prices under pressure. Most observers put this to rising Chinese inflation because no matter where it originates, inflation drives bond prices down. The FNMA 30-year 4.0% bond we watch ended down 113 basis points for the week, closing at $102.06.
Nonetheless, as mentioned above, national average rates for fixed-rate mortgages hit historic lows, according to Freddie Mac's weekly survey of conforming loans.
>>> This Week’s Forecast
A BIT OF EVERYTHING... In contrast to last week, we get wall-to-wall economic reports this time around. Monday's October Retail Sales are expected to reveal a slight increase in the consumer's participation in the recovery. We'll get manufacturing in the New York region on Monday (expected down) and in the Philadelphia region on Friday (expected up) with Industrial Production and Capacity Utilization (both up a tad) in between. Inflation is forecast up a trifle but well under control in both Wednesday's Consumer Price Index (CPI) and Tuesday's Producer Price Index (PPI).
Also on Wednesday, we'll see how home builders were feeling in October, with Housing Starts and Building Permits expected to remain at their modest levels. Thursday's Leading Economic Indicators (LEI) Index is forecast to show the recovery still slowly inching forward.
>>> 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 November 15 – November 19
>>> Federal Reserve Watch
Forecasting Federal Reserve policy changes in coming months The Fed's $600 billion worth of Treasury purchases are slated to continue through the first half of 2011. Experts say the Fed Funds Rate should stay at its rock bottom level during that time, as long as inflation remains tame. 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%:
Probability of change from current policy:
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© 2010 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender.
Who stages their homes? Owners who want to sell in less time for more money, that's who. A recent study of realtors reported that 91% recommend sellers have their homes staged before showing them. Here's what to do:
Check the curb appeal. Mow the lawn, rake the leaves, shovel the snow. Don't go crazy with landscaping but consider a potted or hanging plant as you approach the front door. Clean the front door, railing and deck. It's cheaper than painting and will tell you if painting is needed.
Clear out the clutter. Take one room and closet at a time and remove everything you don't use or won't need in the next few months. Donate it to charity, let a friend re-use it or rent a storage space for things you really can't part with.
Edit the furniture. Many rooms look better minus one piece of furniture. If you see that's the case, put the extra easy chair in storage along with your clutter.
Paint to please. Walls that need to be painted should be done in neutral colors. And yes, walls with strong or vibrant colors need to be painted.
Nix what you notice. Walk up stairs, down halls and into every room and see what draws your eye. Chipped paint, old nail holes, peeling wallpaper. These are all buyer turn-offs. Fix them.
Hire a handyman. Have a professional tackle any of your bigger issues such as stuck closet doors, dripping faucets, re-facing the kitchen cabinets and updating the countertops.
Keep it clean. If you can, hire a professional service to make the place spotless. Then take a half hour each day to keep it that way.
Light, air and flowers. Before your home is shown, open all curtains, turn on some lights and air it out for 10 minutes. Fresh flowers are a nice touch in a couple of places.
If you still think your home could look better, consider hiring a professional home stager. Many sellers find staging services are worth it.
The Fed and mortgage rates
The Federal Reserve, our nation's central bank, recently announced they'll be buying $600 billion worth of Treasury bonds from now till the end of June 2011. Some say this may lower mortgage interest rates. Others feel the Fed's actions could cause rates to edge up. Several forecasts expect higher mortgage rates by the end of next year.
People looking to buy or refinance should keep in mind that we already have historic, incredibly low interest rates. The fact is, there may never again be a better time to purchase or refinance a home than right now.
10 reasons to buy
If you or someone you know is thinking about buying a home in today's market, check out this piece from the Wall Street Journal.
As always, feel free to contact us about any matters relating to home financing or refinancing.... Have a great day!
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© 2010 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender.
INFO THAT HITS US WHERE WE LIVE Last Friday the National Association of Realtors (NAR) reported that their gauge of Pending Home Sales dropped 1.8% in September from an upwardly revised August reading. The pending sales index reflects signed contracts. Since it typically takes a few months to get from contract to closing, this reading forecasts actual existing home sales toward the end of this year.
The NAR's chief economist made an insightful point: "We've added 30 million people to the U.S. population over the past ten years, but sales are where they were in 2000, so there appears to be a sizable pent-up demand that could come to the market once the economy gathers momentum." Other analysts commented that "decade low mortgage rates and near record highs in affordability should help stabilize sales in the near term, however it will take meaningful improvement in the labor market to drive housing going forward."
>>> Review of Last Week
UP WE GO AGAIN... Stock market investors pushed the Dow UP to its highest level since September 8, 2008, which was just before the economy headed south. In fact, all the major market indexes registered two year highs last week, as Wall Street reacted to the midterm elections on Tuesday, the Federal Reserve's announcement on Wednesday, and the October Jobs report on Friday.
The week began on a bit of a sour note, with September Personal Income down 0.1% and Personal Spending up only 0.2%, both missing expectations. But consumer inflation was up just 0.1% for the month and up 1.4% over a year ago. Core inflation, excluding food and energy, was up only 1.2% from a year ago, well within Fed guidelines. October ISM Manufacturing and ISM Services indexes were both UP, beating expectations and showing business growth.
Tuesday's election results were expected, with Republicans taking the House and Democrats keeping control of the Senate despite losing six seats to Republicans. Wednesday the Fed announced their second round of quantitative easing (QE 2). The Fed will be purchasing $600 billion in long-term Treasury securities from now till the middle of next year to help further stimulate the economy. The big upside surprise was Friday's employment report. 151,000 new jobs were created in October, versus the mere 60,000 expected. The private payroll gain was 159,000, which puts the private sector up by more than 100,000 jobs for each of the last four months. Unfortunately, the workforce increase kept the unemployment rate at 9.6%.
For the week, the Dow was UP 2.9%, to 11444.08; the S&P 500 ended UP 3.6%, at 1225.85; and the Nasdaq was UP 2.9%, to 2578.98.
It was a movable feast last week in the bond market, with prices moving up on the Fed's announcement, then pulling back with the unexpectedly positive jobs report. Nonetheless, the FNMA 30-year 4.0% bond we watch ended UP 17 basis points for the week, closing at $103.19.
According to Freddie Mac's weekly survey of conforming loans, national average rates for fixed-rate mortgages remain at historic lows, even lower than predicted for this time frame.
>>> This Week’s Forecast
QUIET TIME... What a change from last week. No economic reports on Veteran's Day Thursday and the rest of the week is fairly sedate. Wednesday, we'll want to keep an eye on Initial Weekly and Continuing Unemployment Claims, although they're forecast to stay pretty much where they've been. This is still not at a level that will start reducing the Unemployment Rate, which is the good news we need for the housing recovery. The week will close out with preliminary November Michigan Consumer Sentiment, expected to rise just a bit.
>>> 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 November 8 – November 12
>>> Federal Reserve Watch
Forecasting Federal Reserve policy changes in coming months The Fed has said their quantitative easing Treasury purchases can continue through the first half of 2011. So economists expect the Fed Funds Rate to stay at its rock bottom level during that time, unless inflation becomes a problem, which it hasn't up till now. 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%:
Probability of change from current policy:
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© 2010 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender.
INFO THAT HITS US WHERE WE LIVE Last week's big rush of housing news began on Monday with Existing Home Sales for September UP 10% from the month before. The annual rate hit 4.53 million. This was the second straight monthly gain after July's record low following the expiration of the tax credits. The national median price for existing homes is now at $171,700, down 2.4% from a year ago. Unsold inventory dropped 1.9% from the prior month to a 10.7 months' supply.
Tuesday, the S&P Case-Shiller home price indexes came in weaker for August, also seen as a result of the expiration of the tax credits. The 10-city index was down 0.1% for the month and the 20-city index off 0.2%. The Federal Housing Finance Agency's monthly house price index showed U.S. home prices falling 2.4% from August a year ago and 13.7% off their April 2007 peak. This index only tracks the prices of homes purchased with mortgages sold to or guaranteed by Fannie Mae or Freddie Mac.
Wednesday, New Home Sales for September were UP 6.6%, coming off record lows in July and August. The seasonally adjusted annual rate was 307,000, which is down 21.5% from a year ago. Good news came with the median new home price rising 3.3% from the year before, now at $223,800. The supply also came in at 8 months, with the actual number of unsold new homes the lowest it's been since 1968.
>>> Review of Last Week
FLAT WEEK, UP MONTH... Investors on Wall Street kept things in check last week, leaving the Dow down by a whisker, the S&P 500 dead flat, and the tech-heavy Nasdaq up a modest 1.1%. Observers felt traders were awaiting this week's midterm elections and then Wednesday's Fed meeting statement regarding its next round of quantitative easing to spur growth. For the month, stocks did quite nicely with the S&P 500 up 3.7%; the Dow up 3%, its best October since 2006; and the Nasdaq up 5.9%, its best October in seven years.
In the week's economic news, a plus always seemed to come with a minus. For example, Consumer Confidence was up in October, but it still remains at historically low levels. This is occurring over a year since the economy transitioned from recession to recovery, at least as measured by overall growth. Durable Goods Orders were up 3.3% in September, but it all came from aircraft and parts. Exclude those, and orders were down 0.8% for the month.
It was somewhat encouraging to see weekly jobless claims dropping for the third straight week. This put them at their lowest level since July, but still in troublesome territory above 400,000. Finally, the advanced estimate of Q3 GDP came in at 2.0% annual growth. This was in line with expectations and shows the economy is in fact growing. But 2% is well below the growth rate economists say we need to make a significant dent in the unemployment rate.
For the week, the Dow was down 0.1%, to 11118.49; the S&P 500 ended flat, at 1183.26; but the Nasdaq was UP 1.1%, to 2507.41.
Bond prices dipped for a good part of the week, then rebounded, but not quite enough. The FNMA 30-year 4.0% bond we watch ended down 10 basis points for the week, closing at $103.02. National average mortgage rates for most mortgages remain at historically low levels. A cautionary note: the Mortgage Bankers Association predicts rates of 30-year fixed-rated mortgages will begin rising next year.
>>> This Week’s Forecast
HEARING FROM THE FEDS, WAITING FOR THE JOBS... There are plenty of economic reports to ponder this week, but two items stand out. The Fed will be meeting on Wednesday and while no one expects the Fed Funds rate to go up, everyone will be looking for indications of when the Fed will start its second round of quantitative easing (QE-2) and how much money will get thrown into the system. The other point of interest will be the October jobs report on Friday. The forecast is for payrolls to be up by 45,000 jobs, which isn't very many, but at least it's a positive number, though the unemployment rate is predicted to hold at 9.6%.
Highlights of the remaining economic news include the PCE inflation reading expected to stay at 0.4%, and ISM predicted down a little, though still showing manufacturing expanding. The week ends with Friday's Pending Home Sales for September, forecast to be up 0.5%, a good thing but not quite as good as August's hike of over 4%.
>>> 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 November 1 – November 5
>>> Federal Reserve Watch
Forecasting Federal Reserve policy changes in coming months Economists agree that the Fed Funds Rate will stay at its rock bottom level for quite some time. Inflation could change that, of course, but experts feel that's quite a way down the road. 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%
Probability of change from current policy:
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© 2010 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender.
Social media may be all the rage, but recent studies suggest only 1% of all transactions originate from social media. So if your marketing could use an extra push, it may be time to revisit good old email marketing. For many people, email is still their main means of business communication.
In addition, marketing experts tell us email newsletters are one of the best ways to stay in contact with clients and prospects and a great tool for both generating and converting leads. But to make sure your emails perform to the utmost, here are 12 keys to creating exceptional email campaigns.
1. Get permission. Always ask people to opt in. Make it easy to sign up -- and easy to opt out, with an opt out link at the end of every email. After 12 months, ask subscribers if they want to continue.
2. Keep the frequency reasonable. Once a week is probably about right. If you have a great idea for a daily email, great. Just let recipients know up front that you'll be sending them something every day, then let them opt in. And once you decide on a schedule, stick to it. Experts say you should reach out to your readers at least twice a month.
3. Respect people's privacy. Put a short, simple email privacy statement on your opt-in form and link it to a full privacy statement on your web site.
4. Design for deliverability. Put your company name in the "from" line. Make the "subject" line a real grabber -- 50 characters or less. Use attention-getting text and colors, rather than images, so the reader can get a good idea of your email even if images are disabled. Put the offer, call to action, newsletter contents -- the important information -- at the top of the email.
5. Check to see that it's all getting through. Send a sample email to an account on each of the major email providers -- AOL, Earthlink, Gmail, and Yahoo! Check out how your format looks in Outlook. Again, avoid images in the header and make sure all the response links work.
6. Test. Refine your efforts for better results by testing different subject lines, offers, deployment dates and times, and different segments of your list. Testing is also a great way to come up with new ideas.
7. Define your value proposition. Give your subscribers a good reason to open your emails. Focus on your unique value proposition. Concentrate on how your information or offer will directly benefit the recipient.
8. Segment your list. If you can come up with targeted messages for different parts of your list, you'll usually get better response and conversion rates.
9. Personalize if you can. This isn't just putting their name at the top. It's about creating content that addresses the recipient's specific interests, needs, and behaviors. You don't always have this information and it takes more work to personalize the content, but it can be very effective to deliver a very targeted message that hits all of the prospect's hot buttons.
10. Get mobile, get social. In today's wireless environment, emails are frequently viewed on mobile devices. So check to see how your emails appear on the popular smart phones. And don't forget to leverage your social media presence by using it to invite opt-ins to your email offerings.
11. Survey your readers. To make sure you continue to deliver value, survey recipients every so often to find out their needs and interests. Then make adjustments to stay in touch with what your subscribers are looking for.
12. Stand out from the crowd. People will look forward to hearing from you if you always have something valuable to say. Keep the information concise and useful. Send "alerts" with news that engages the recipient. The "secret" to exceptional email campaigns is always great content!
For a new way to jump start your business, try good old email marketing. Follow these simple rules, stick with it, and you may very well get exceptional results.... Have a great month!
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© 2010 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender.
INFO THAT HITS US WHERE WE LIVE Last week saw September Housing Starts UP 0.3% to an annual rate of 610,000 units, well ahead of the expected 580,000 unit pace. Even better, starts are UP 4.1% over a year ago. Interestingly, the September gain was totally driven by a healthy 4.4% rise in single family starts, while multi-family starts dropped 9.7%. But multi-family starts are volatile month to month, and are actually up 100.0% compared to a year ago, while single family starts are off 10.8% during the same time frame.
Builders remain cautious, as new Building Permits for September dropped 5.6%, to a 539,000 annual rate. This number of course reflects plans for builder activity a few months out. Nonetheless, the National Association of Home Builders (NAHB) reported builder confidence rose in October for the first time in five months. This brings it to a level not seen since June. The NAHB's chief economist feels the new home market is now past the quiet period that followed the expiration of the home buyer tax credits and the summer slowdown in the economy.
>>> Review of Last Week
UP WITH VOLATILITY... It was not a quiet week on Wall Street, with a big move down in stock prices, which then came back up. But the markets did close up four out of the five days, so the week ended with all three major indexes ahead once again. Investors focused on a pile of pretty good corporate earnings results, but there were some less than stellar economic reports to get through too.
Industrial Production was off 0.2% in September, below estimates, though production is up at a 4.9% annual rate for the last six months. Capacity Utilization also dipped down to 74.7% for September, although it's still 6.5 percentage points above the low it hit back in June 2009. Countering these figures, the Philadelphia Fed Index for manufacturing in that region was back into positive territory. Leading Economic Indicators were up 0.3% for the month and weekly jobless claims fell a bit, though they're still well above 400,000.
The good news came in corporate earnings, with more than 100 S&P 500 companies reporting including 12 of the Dow components. The financials did well, with 21 out of 27 reporting better than expected earnings per share. In the tech sector, Apple and IBM also did nicely in the earnings department. Coca-Cola, Caterpillar, and airlines also showed gains. Even though the recovery has slowed, the vast majority of public companies continue to make good profit numbers.
For the week, the Dow ended UP 0.6%, to 11132.56; the S&P 500 was also UP 0.6%, to 1183.08; and the Nasdaq was UP 0.4%, to 2479.39.
Trading ranges in the bond market didn't go too wide, as investors stayed interested enough to keep prices up. The FNMA 30-year 4.0% bond we watch ended UP 12 basis points for the week, closing at $103.12. Freddie Mac's weekly survey showed national average mortgage rates for most mortgages remaining at historically low levels.
>>> This Week’s Forecast
NOTHING SCARY... As we head into Halloween this week, it looks like nothing too frightening will be reported on the economic front. Monday's Existing Home Sales are projected up for September, just like September New Home Sales are expected to report come Wednesday. Friday, we get the Advanced Q3 GDP numbers, which economists are forecasting to be modestly positive.
Consumer Confidence on Tuesday and Michigan Consumer Sentiment on Friday are both projected to be up a tiny bit. Friday's Employment Cost Index should continue with modest growth, while the Chicago PMI is predicted to show a small decline in manufacturing in that region of the country.
>>> 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 October 25 – October 29
Forecasting Federal Reserve policy changes in coming months As economists debate how big the second round of quantitative easing (QE-2) will be, they're all in agreement that the Fed Funds Rate will stay at its rock bottom level for quite a bit more 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%:
Probability of change from current policy:
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© 2010 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender.
