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:
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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.
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.
