Archive for category: Recent News

For the week of July 22nd, 2013 – Vol. 11, Issue 29

>> Market Update

QUOTE OF THE WEEK… “If you fell down yesterday, stand up today.” –H.G. Wells, British author

INFO THAT HITS US WHERE WE LIVE… There was a bit of falling down in the home building market last week, as June Housing Starts and Building Permits registered disappointing declines. Housing Starts dropped 9.9% to an 836,000 unit annual rate, versus the 958,000 predicted. New Building Permits sank 7.5%, to a 911,000 annual rate, well short of the 1 million pace forecast. But the dip in starts was mostly due to multifamily units, as single-family starts edged down a miniscule 0.8% for the month, and are still up 11.5% versus a year ago. Permits for single-family homes are up 24.6% over a year ago.

We also need to note that home building is weather dependent. June was exceptionally wet, with 18 states in the South and East experiencing rain totals for the month that were among their 10 highest on record. Wet ground makes it hard to move dirt and lay foundations, driving down the number of starts. Finally, John Paulson, whose Paulson & Co. hedge fund made a pile betting against subprime mortgages, now says that as an investment, you can’t beat buying a house. Check out his complete explanation here: http://buzz.money.cnn.com/2013/07/17/john-paulsons-housing/?iid=HP_River.

BUSINESS TIP OF THE WEEK… Start the day focused on you. Beginning with your emails lets others direct what you’ll achieve. For the first hour, avoid emails and key on what you need to accomplish today.

>> Review of Last Week

MIXED MESSAGES… Economic data has been delivering mixed messages for quite some time, and last week corporations and Wall Street joined in. Financial companies reported strong Q2 earnings growth, sending the Dow up 0.5% and the S&P 500 up 0.7% to close the week at another record high. But earnings reports weren’t too terrific in the tech sector, so the Nasdaq dropped for the week. Following the same mixed message theme, Moody’s upgraded its outlook on our country’s Triple-A credit rating from negative to stable, while Detroit became the largest city in U.S. history to file for bankruptcy. You got that?

Meanwhile, mixed economic data had Retail Sales up for June, but less than expected, and Housing Starts and Building Permits dropping for the month. On the plus side, New York Empire Manufacturing beat estimates, while the Philadelphia Fed Index surprisingly spiked to its highest reading since March 2011, showing strong manufacturing growth in those regions. The Fed’s latest Beige Book noted “modest to moderate” growth. New weekly jobless claims unexpectedly dropped by 24,000, to 334,000, the fewest since early May.

The week ended with the Dow up 0.5%, to 15544; the S&P 500 up 0.7%, to 1692; and the Nasdaq down 0.3%, to 3588.

The negative economic news sent enough investors to the safe haven of bonds to push prices up. The FNMA 3.5% bond we watch ended the week up 1.02, to $101.10. National average mortgage rates eased for the week ending July 18, according to Freddie Mac’s Primary Mortgage Market Survey. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up to the minute information. The Mortgage Bankers Association’s Purchase Loan Index was up 1% for the week ending July 12 and up 5% over a year ago.

DID YOU KNOW?… This week’s University of Michigan Consumer Sentiment Index is based on a monthly survey of 500 households. Sentiment is seen as a precursor to increasing or slowing consumer demand. The preliminary report is on the second Friday, the final on the fourth.

>> This Week’s Forecast 

HOME SALES CLIMB, DURABLE GOODS OK, CONSUMERS FEELING BETTER… Not a super packed week for economic data, but we will get a good look at the housing recovery. All should be fine on that front. Existing Home Sales are forecast up in June, and they’re now solidly above the 5 million unit annual rate threshold. New Home Sales are also expected to edge ahead in June, to a 481,000 unit annual rate.

Durable Goods Orders are predicted up for June, although not by as much as the month before. This report tracks the purchases of a range of large ticket items, from washing machines to jet aircraft. The final reading of the University of Michigan Consumer Sentiment Index for July should reveal consumers continuing to feel better about things economic.

>> 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 July 22 – July 26

>> Federal Reserve Watch 

Forecasting Federal Reserve policy changes in coming months… Last week, Fed Chairman Bernanke told Congress he expects the Fed Funds Rate to remain at its super low level for quite some 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:

For the week of July 8th, 2013 – Vol. 11, Issue 27

>> Market Update,,,
QUOTE OF THE WEEK… “A will finds a way.” –Orison Swett Marden, American writer and physician

INFO THAT HITS US WHERE WE LIVE… The collective will of everyone working in the housing market has certainly found the way to a housing recovery. More evidence of this came last week when a leading data and analytics firm reported that nationwide, home prices in May jumped 2.6% for the month and 12.2% since last year. That was the highest annual increase for their home price index in more than seven years. Their CEO commented, “…pent-up demand and continued low interest rates are fueling strong demand…. We expect that trend to continue to drive up prices throughout the balance of the summer months.”

But we do need to watch those interest rates. Friday, the chief economist at a real estate listings site pointed out, “Today’s strong jobs report makes it more likely that the Fed will start reducing its bond purchases later this year, rather than waiting longer.” Observers worry this tapering of the Fed’s bond buying could push mortgage rates up, although they would still be at historically attractive levels. That same economist also pointed out, “Rising rates won’t derail the housing recovery. They’re rising alongside a strengthening economy.”

BUSINESS TIP OF THE WEEK… Experts say only 20% of what we do each day produces 80% of our results. So during your workday, take note of and cut out all the things that don’t matter. They’ll have a minimal effect on your overall productivity.

>> Review of Last Week
JULY 5 FIREWORKS… Wall Street enjoyed an extra day of pyrotechnics, as Friday’s stronger than expected June Employment Report ignited a stock rally that left the three major indexes ahead two weeks in a row. Trading volume was low, with many players gone for the holiday weekend, but the good economic feelings were certainly valid. In June, nonfarm payrolls increased by 195,000, well above consensus expectations. Plus, April and May numbers were upwardly revised, adding 70,000 more jobs than had first been reported. In addition, hourly earnings were up a big 0.4% and aggregate earnings up 0.6%, which augers well for future consumer spending.

That good June Employment Report still wasn’t perfect, as the Unemployment Rate held at 7.6%. However, the “unrounded” 7.557% figure shows we’re heading in the right direction. Other glitches appeared in the form of a wider than expected $45 billion trade deficit for May and a drop in the ISM Services index for June, although it still registered expansion for the sector. The ISM index of manufacturing had a better story to tell, rebounding back into expansion territory after May’s contraction. Also upbeat, Continuing Unemployment Claims fell by 54,000, to 2.93 million.

The week ended with the Dow up 1.5%, to 15136; the S&P 500 up 1.6%, to 1632; and the Nasdaq up 2.2%, to 3479.

Friday’s Employment Report started a selling spree in bonds on concerns the improving economy will cause the Fed to begin tapering bond purchases sooner, depressing bond prices. The FNMA 3.5% bond we watch ended the week down 2.83, at $98.31. National average mortgage rates fell for the week ending July 3, according to Freddie Mac’s Primary Mortgage Market Survey. But this was before Friday’s jobs report sent bond prices south, which will edge rates up. Mortgage rates can be extremely volatile, so check with your mortgage professional for up to the minute information. Of course, rates are still at attractive levels.

DID YOU KNOW?… May’s wider trade deficit was mostly due to a $4.4 billion increase in imports, led by consumer goods. This gain shows the resilience of U.S. purchasing power, for both consumers and businesses.

>> This Week’s Forecast
JOBLESS CLAIMS, INFLATION HOLDING, CONSUMERS HAPPIER, WHAT THE FED SAID… Another quiet-ish summer week, economic data wise. Following the June Employment Report surprise, the coming Initial and Continuing Unemployment Claims reports shouldn’t contain any shockers, but are expected to remain at the lower levels we’ve been seeing. Wholesale price inflation for June, measured by the Producer Price Index (PPI), is predicted to stay within Fed guidelines.

Consumers, whose spending is vital to the economy, are forecast to be feeling a little better according to the July Michigan Consumer Sentiment Index. Wednesday, the Fed will release the FOMC Minutes from their June 19 meeting. These will be scoured for signs of how soon the central bank may begin tapering its bond purchases.

>> 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 July 8 – July 12

>> Federal Reserve Watch 

Forecasting Federal Reserve policy changes in coming months… No matter how soon the Fed begins to taper their bond buying program, economists do not expect the central bank to touch its super low Funds Rate until well into 2014. 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:

6 Steps to Making an Effective Elevator Pitch

An “elevator pitch” is a quick but compelling description of what you do and the unique value you offer. This pitch could be delivered to a captive listener in the time it takes an elevator to get to the lobby. Selling yourself succinctly also can come in handy at restaurants, business receptions, and industry gatherings.

But if you’re like most professionals, you probably haven’t taken the time to sit down and compose your elevator pitch. When these opportunities come along, most people just wing it. OK, you know what you do and why people hire you. But go deliver this off-the-cuff pitch to a friend and see how you do. Chances are, you’ll stumble. That’s normal. Unless your business is marketing, marketing yourself doesn’t come naturally.

Here’s how to put together a simple but effective elevator pitch you can deliver with ease.

1. Remember, attention spans are very short.
The overall goal in composing an elevator pitch is to make your points in quick sound bites. Imagine you’re on TV. If you need to, you can always add a point or two later.

2. Begin with one sentence that says who you are.
For example, “I’m a CPA who specializes in small businesses.” Or “I’m a real estate agent covering the greater Springfield area.”

3. In the next sentence, summarize what you do in two or three key points.
This could be something like, “I take care of everything for an organization from keeping the books and preparing tax returns to improving their cash flow.”

4. Rehearse those two sentences.
The two sentences you’ve just composed constitute your opener. Practice them until they sound spontaneous and natural.

5. Articulate your unique, compelling story.
If the person you’re talking to seems interested or, even better, asks you to elaborate, you now can go into what makes you stand out from the competition. If you can, put these points into a little narrative, like: “I set up a separate site for each client that shows everything we’re working on. This speeds our work together and lets clients take advantage of new opportunities faster, so they can jump ahead of their competition.” Don’t forget to marry features of your work with client benefits.

6. Open the door at the close.
Before you each go your separate ways, be sure to close, but leave the door open. Pull out a fresh business card from your wallet and say something like, “Hey, it was great to meet you. Listen, here’s my card, I’d like to stay in touch.” If it feels appropriate, try something like, “Would you mind if I followed up with you in the next few weeks. I’d like to find out more about what you do, maybe over coffee or breakfast.”

The goal of an elevator pitch is to start a relationship, the foundation of most business transactions. You might do business together, or refer business to each other. Don’t get discouraged. If the other person doesn’t give you her card, just look up her contact info online. Then email an article or blog post that might be helpful, as a way to follow up. If you don’t get an immediate response, be patient. Let some time pass before you ping her again.

Take these steps and you’ll fine tune an elevator pitch that will widen your network of prospects and partners. Why not take a few minutes now and start jotting down ideas. Here’s to your success pitching your business in elevators and everywhere else, as you keep putting together your best year ever…. Enjoy a great month!

For the week of June 17th, 2013 – Vol. 11, Issue 24

>> Market Update 

QUOTE OF THE WEEK… “The greatest weapon against stress is our ability to choose one thought over another.” —William James, American psychologist and philosopher

INFO THAT HITS US WHERE WE LIVE… Here are two thoughts that should relieve some stress for those of us working in the housing market. Fannie Mae’s May 2013 National Housing Survey reported that the share of American’s who think now is a good time to sell and the share of those who think now is a good time to buy spiked sharply from April to May. 40% of respondents think it’s a good time to sell, up from 30% the month before, the largest gain in the survey’s 3-year history. And 76% of respondents think it’s a good time to buy!

They also reported that respondents expect home prices to go up 3.9% in the next 12 months, another record high for the 3-year survey. Later in the week, Fannie Mae’s Mid-Year Outlook predicted housing starts should be up 25% and home sales up 7% for the year. Their economists also feel that any mortgage rate increases are unlikely to trip up the recovery, since affordability remains near historical highs. An online listing site estimated rates could rise to 10.5% on a 30-year fixed-rate mortgage with 20% down payment before it’s more affordable to rent than to buy.

BUSINESS TIP OF THE WEEK… Attack your most challenging tasks early in the day when you’re most fresh. Save any busy work you have for the afternoon when your energy may slump a little. 

>> Review of Last Week

STOCKS FALL ON FED FEARS… Last week investors got nervous that the Fed may begin tapering its bond buying program at this week’s meeting, from the current $85 billion a month rate. The program has helped keep stock prices up and interest rates down, so traders see any tapering as a negative and their fears sent all three stock indexes south for the third week out of the last four. The Fed’s bond buying will end when the economy or inflation picks up, so better than anticipated May Retail Sales and hotter than expected PPI producer prices kept many people skittish in the markets.

But wait. There was also evidence the economy is a long way from recovery. The manufacturing sector reported that Industrial Production was flat in May and factory Capacity Utilization dropped for the month. Then the University of Michigan Consumer Sentiment Index dipped more than expected in the preliminary June report. Lastly, continuing unemployment claims went up by 2,000. But on a better note, initial weekly jobless claims fell by 12,000, to 334,000.

The week ended with the Dow down 1.2%, to 15070; the S&P 500 down 1.0%, to 1627; and the Nasdaq down 1.3%, to 3424.

There was enough weakness in stocks and the economic data to send investors back into bonds, pushing up prices after six weeks of declines. The FNMA 3.5% bond we watch ended the week up .10, at $103.16. National average mortgage rates edged up again, but are still at historically attractive levels. As evidence of that, demand for purchase loans was up 5% for the week, and up 6% from a year ago, according to the Mortgage Bankers Association.

DID YOU KNOW?… Analysts feel mortgage rates could rise if the Fed stops its bond buying program. But last week, FOMC member James Bullard said, “…surprisingly low inflation readings may mean the Committee can maintain its aggressive program over a longer time frame.” 

>> This Week’s Forecast 

NO INFLATION, NO RATE CHANGE, MORE HOME BUILDING, MORE HOME SALES… The closely watched Consumer Price Index (CPI) is expected to show no huge move up for May. The FOMC Rate Decision on Wednesday should leave the Fed Funds Rate untouched. The policy statement will of course be examined for any indications of future Fed moves, as well as for the central bank’s overall take on the state of the economy.

On the housing front, analysts predict May Housing Starts will move ever closer to an annual rate of one million units. While more new homes are going up, more Existing Home Sales are being closed. That number is forecast to hit the 5 million unit annual rate for May.

>> The Week’s Economic Indicator Calendar

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

Economic Calendar for the Week of June 17 – June 21

>> Federal Reserve Watch 

Forecasting Federal Reserve policy changes in coming months… Economists don’t see the Fed touching the super low Funds Rate at this week’s FOMC meeting. The Fed is waiting for a 6.5% unemployment rate or a serious spike in inflation. 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:

For the week of June 3, 2013 – Vol. 11, Issue 22

>> Market Update 

QUOTE OF THE WEEK… “There is always room at the top.” –Daniel Webster, American statesman and senator

INFO THAT HITS US WHERE WE LIVE… Last week, Pending Home Sales took their place at the top, hitting their highest level since April 2010, when folks were rushing to close before the homebuyer tax credit expired. April Pending Home Sales, based on signed contracts for existing homes, were up 0.3% over March and up 10.3% over last year, according to the National Association of Realtors (NAR). Their chief economist predicts, “Total existing home sales are expected to rise just over 7%, to about 5 million this year.”

The NAR’s economic honcho also feels that in 2013, “Because of inventory shortages, higher home sales will push up home values to the highest level in five years.” Those values appear to be well on their way up. Evidence? The latest S&P/Case-Shiller 20-City Composite index was up 10.9% in March compared to a year ago, the highest annual home price gain since 2006. In addition, all 20 cities tracked registered annual increases and all showed monthly gains for the fifth month in a row!

BUSINESS TIP OF THE WEEK… Ask your clients how you could improve. Requesting their input helps you upgrade products and services and makes clients feel more invested in your brand. It’s a win-win. 

>> Review of Last Week

UP MONTH ENDS DOWN… Stocks were down again for the week, yet all three major indexes ended up for the month: the Dow up 1.9%, the S&P 500 up 2.1%, and the Nasdaq up 3.8%. The Dow saw its sixth straight monthly gain and the S&P 500 its seventh, the longest monthly win streak since the one that ended in September 2009. All three indexes are also up solidly for the year. Dragging things down last week were a lower GDP-2nd Estimate (2.4%), flat Personal Income, and a drop in Personal Spending, all missing expectations.

But the good economic data was quite good. Pending Home Sales and the Case-Shiller Home Price Index showed housing recovering. Consumer Confidence and Michigan Consumer Sentiment both beat estimates, reflecting a more optimistic mindset among Americans. The Chicago PMI index indicated strong expansion for Midwest manufacturing. Core PCE Prices confirmed inflation is under control. So why did stocks dip for the week? Analysts say some investors are now afraid the economy is strengthening too quickly. Go figure.

The week ended with the Dow down 1.2%, to 15116; the S&P 500 down 1.1%, to 1631; and the Nasdaq down 0.1%, to 3456.

While stocks slipped, bonds plunged, as positive economic data made investors worry the Fed might soon slow its bond-buying program that’s kept prices up and interest rates down. The FNMA 3.5% bond we watch ended the week down .97, at $103.21. In Freddie Mac’s Primary Mortgage Market Survey, national average mortgage rates were up from both the week before and a year ago. But they’re still at attractive levels, so the Mortgage Bankers Association saw applications for purchase loans up a seasonally adjusted 3%.

DID YOU KNOW?… A service is an economic activity that is intangible, not stored, doesn’t result in ownership, and is consumed at the point of sale. This week’s ISM Services index measures the health of this business sector. 

>> This Week’s Forecast 

FACTORIES OK, FED OBSERVATIONS, A FEW MORE JOBS… This week’s ISM Index should show factory activity barely expanding in May, while ISM Services is forecast to report stronger growth for that sector. The Fed’s Beige Book reveals anecdotal economic info from Fed Districts across the country. Experts expect a tone of cautious optimism. Nothing new there.

Friday it’s the always important Employment Report. Economists think that new Nonfarm Payrolls in May will stay in the modest range we’ve been seeing. This job growth isn’t outpacing workforce growth, so the Unemployment Rate should remain at 7.5%

>> The Week’s Economic Indicator Calendar

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

Economic Calendar for the Week of June 3 – June 7

>> Federal Reserve Watch 

Forecasting Federal Reserve policy changes in coming months… Economists see no signs the Fed will touch its super low Funds Rate at the next FOMC meeting a couple of weeks away. The central bankers want to see unemployment down to 6.5%, which doesn’t look likely any time soon. 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: