Jobs report raises rates

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Michael Magnabousco Corporate Account Executive Vantage Production Phone: 800-963-1900 x 1538 Direct Number 732-528-1538 License: Ask Me About This Service !! mmagnabousco@vantageproduction.com www.vantageproduction.com

In This Issue     Last Week in Review: The Jobs Report for October surprises. Find out what this could mean for home loan rates. Forecast for the Week: The Bond markets are closed Monday in observance of Veterans Day, and the economic calendar is light the rest of the week. View: Holiday gift shopping for colleagues and staff doesn't have to be hectic. Check out these great ideas.   Last Week in Review     Good news comes to those who wait. That was certainly true last week, when the delayed Jobs Report for October came in better than expected. Read on for details. The Jobs Report for October revealed that employers added 204,000 new jobs, well above the 100,000 expected. In addition, the number of job creations for August and September was revised higher by 60,000. The Unemployment Rate ticked up to 7.3 percent from 7.2 percent and was in line with estimates. The Labor Force Participation Rate (LFPR), a measure of how many people are looking for work, fell to 62.8 from 63.2 and remains at 35-year lows. It's important to note that in a recovery, the LFPR should be moving higher, not lower. Overall this was a good report on the surface, but there are still hurdles to jump in the coming months. In other key news, the first of three readings on third quarter Gross Domestic Product (GDP) showed that the U.S. economy expanded by 2.8 percent, up from the second quarter reading of 2.5 percent and well above expectations. The rise was due in part to a buildup in inventories, a pickup in trade, and increased spending by state and local governments. However within the report, consumer spending--the main driver of the U.S. economy--fell to a paltry 1.5 percent, the slowest rate in three years. This is one reason the strong Jobs Report was significant: If consumers aren't confident about their jobs or are out of work or underemployed, spending will continue to be soft. That would not a good sign for the U.S. economy going forward. What does this mean for home loan rates? The Fed's current Quantitative Easing program continues to help keep home loan rates attractive. Remember that the Fed has been purchasing $85 billion in Bonds and Treasuries each month to stimulate the economy and housing market. The Fed has said that its decision regarding when to taper these purchases will be dependent on economic data. If economic data in the coming weeks is strong, like the Jobs Report was, the Fed could discuss tapering its purchases in its December meeting of the Federal Open Market Committee. This could have a big impact on home loan rates heading into 2014. The bottom line is that home loan rates remain attractive compared to historical levels and now remains a great time to consider a home purchase or refinance. Let me know if I can answer any questions at all for you or your clients.   Forecast for the Week     The Bond markets are closed on Monday in observance of Veterans Day while Stocks will be open for a regular session. The rest of the week features just a few economic data points. The light economic calendar this week doesn't kick off until Thursday with Weekly Initial Jobless Claims, which continue to hover near the 340,000 range. Third quarter Productivity will also be released on Thursday. Ending the week, there's news from the manufacturing sector with the Empire State Index on Friday. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond that home loan rates are based on. When you see these Bond prices moving higher, it means home loan rates are improving -- and when they are moving lower, home loan rates are getting worse. To go one step further -- a red "candle" means that MBS worsened during the day, while a green "candle" means MBS improved during the day. Depending on how dramatic the changes were on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning. As you can see in the chart below, Mortgage Bonds plunged Friday after the October Jobs Report came in better than expected. Economic data points in the coming weeks will be especially important to monitor, as they will influence the Fed's decision regarding its Bond purchases--which could impact home loan rates heading into 2014. I'll be watching all the news closely for these details. Chart: Fannie Mae 4.0% Mortgage Bond (Friday Nov 08, 2013)   The Mortgage Market Guide View...       Hectic Holidays? 4 Gift Ideas for Busy Business People Black Friday is just around the corner and after that, the busy holiday season. But just because others are fighting over the "next big thing" on the shelf, doesn't mean shopping has to be hectic or expensive. Instead of racking your brain at the last minute, trying to find that perfect gift to express your appreciation, just try these easy-to-get, inexpensive, but always appreciated gift ideas. Gift Cards Aren't Generic. Anyone who says a gift card is too impersonal has obviously never received one. It doesn't get any more personal than giving someone the opportunity to pick out a gift they will want and use. Gift cards are always well received, and nowadays, offer hundreds of options. Find them at your local grocery or big-box retailer. Chocolate Crazy. Diehard chocolate lovers swoon at the sight of a Godiva label and Godiva.com offers several gift selections for under $25. It's not only a delicious product, but receiving chocolate in a little gold box is nearly as iconic as receiving jewelry in a little blue one! Tickets for Two. For movie fanatics who can't get enough, free tickets are an ideal gift. Combine this with idea number one above, and you've got the perfect "dinner and a movie" evening--and one very appreciative recipient. A Case for Baskets. Putting together a gift basket for someone allows you to tailor the gift precisely to the interests of the person who's receiving it--limitless themes and items will fit practically any budget. Good luck and happy holiday shopping! Economic Calendar for the Week of November 11 - November 15 Date ET Economic Report For Estimate Actual Prior Impact Thu. November 14 08:30 Jobless Claims (Initial) 11/09 NA NA Moderate Thu. November 14 08:30 Productivity Q3 NA 2.3% Moderate Fri. November 15 08:30 Empire State Index Oct NA 1.5 HIGH test test test     The material contained in this newsletter has been prepared by an independent third-party provider. The content is provided for use by real estate, financial services and other professionals only and is not intended for consumer distribution. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, there is no guarantee it is without errors.   As your mortgage professional, I am sending you the MMG WEEKLY because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you.   Mortgage Market Guide, LLC is the copyright owner or licensee of the content and/or information in this email, unless otherwise indicated.   Mortgage Market Guide, LLC does not grant to you a license to any content, features or materials in this email.   You may not distribute, download, or save a copy of any of the content or screens except as otherwise provided in our Terms and Conditions of Membership, for any purpose.     You received this email as a result of your ongoing business relationship with Michael Magnabousco. 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