Andrea Sommermeyer

Market Commentary

At Legacy Mortgage we are constantly seeking ways to enhance our dedication to our clients and real estate partners. Our position as an innovator in the field of real estate finance allows us to help you make informed decisions regarding your customers mortgage financing. We have scoured through the financial reports for the week and we wanted to share the information with you. Please let us know if we can be of further assistance to you and your valued clients.

There are only four pieces of economic news scheduled for release this week and one of them is a highly important inflation reading. We also have another Federal Open Market Committee (FOMC) meeting, which likely will not bring a change to key short-term interest rates. There is a pretty good possibility of seeing a fair amount of volatility in the markets and likely mortgage rates the next several days.

The first report of the week is August's Industrial Production data this morning. This report gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is considered to be moderately important but could cause movement in mortgage rates. Analysts are currently expecting to see a 0.3% decline in production. A higher level of output could lead to higher mortgage rates, while a weaker than expected figure should help push rates slightly lower .

August's Consumer Price Index (CPI) will be released Tuesday morning at 8:30 am ET. The CPI is one of the most important reports we see each and every month. It is considered to be a key indicator of inflation at the consumer level of the economy. There are two readings in the report- the overall index and the core data reading. Current forecasts are calling for no change in the overall reading and a 0.2% rise in the core data reading. A larger increase in the core data would likely lead to higher mortgage rates Tuesday, while a smaller increase would be good news.

The FOMC meeting will adjourn at 2:15 PM Tuesday. There is little debate about a possible change to key short-term interest rates at this meeting. The overwhelming consensus is that there will be no change to rates at this meeting. However, the post-meeting statement could very well lead to volatility during afternoon trading as investors dissect it in an effort to find the Fed's expected next move . The wild card is how the markets react to the statement. If we see significant weakness in stocks, the bond market may benefit as a safe-haven from the volatility. This could lead to lower mortgage rates Tuesday afternoon and Wednesday morning.

August's Housing Starts report will be released early Wednesday morning. This report will probably not have much of an impact on the bond market or mortgage rates. It gives us a measurement of housing sector strength and mortgage credit demand, but is usually considered to be of low importance to the financial markets.

Late Thursday morning, the Conference Board will release its Leading Economic Indicators (LEI). This index attempts to measure economic activity over the next three to six months. If it estimates an increase in activity, the bond market will probably fall and mortgage rates will rise slightly. If it shows weaker than expected readings, the bond market may rally and mortgage rates should fall. Current forecasts are calling for a 0.2% decline from July's reading.

Overall,we expect to see some pressure in bonds tomorrow as investors prepare for Tuesday's events. Tuesday will most likely be the most important day of the week with the CPI release and the FOMC meeting. If the CPI eases inflation concerns and the Fed statement doesn't reveal any negative surprises, we will most likely see mortgage rates move lower for the week.

The only thing that my daughter wanted for her birthday this year was a trip to the water park. Happily we all went on Saturday to Tie Breaker Park in Hopkinsville, KY. I must say we had a blast. I think I enjoyed it more than the kiddos did. It is a small park perfect for all ages. I would think that some of the Teens may find it a bit lame BUT for my kids ages 10, 9, and 8. It was perfect. I could just about see them all over the park no matter where they were, the water only goes up to 3 ft 6 inches so it took away most of my worries of being able to keep my girls safe. They had several lifeguards on duty as well, which made me feel more at ease allowing the girls freedom to roam for a few minutes at a time. This allowed time for my husband and I to enjoy the day, talking and playing on the water-slides as well. We all spent hours splashing around in the cool refreshing water and I must say at a very reasonable price. Admission is around $9 per person, if you are a military family it is even cheaper. This is one place I would recommend to take your kids, it is a great family outing that won't blow your budget. For more information go to http://www.tiebreakerpark.com . Your kids will thank you, and you may actually get a bit of peace and fun for yourself!

At Legacy Mortgage we are constantly seeking ways to enhance our dedication to our clients and real estate partners. Our postition as an innovator in the field of real estate finance allows us to help you make informed decisions regarding your customers mortgage financing. We have scoured through the financial reports for the week and we wanted to share the information with you. Please let us know if we can be of further assistance to you and your valued clients.

There are several important pieces of economic news scheduled to be released this week, but two stand out above the others. There are a total of five reports scheduled for release, so it could be considered a fairly active week. There is no relevant data due out today, so expect the stock markets to help drive bond trading and mortgage rates.

The first piece of data is the release of April's Retail Sales data early Tuesday morning. This is an extremely important report for the financial markets as it measures consumer spending. Since consumer spending makes up two-thirds of the U.S. economy, this data can have a pretty significant impact on the markets. Current forecasts are calling for no change in sales from March to April. A weaker than expected level of sales should push bond prices higher and mortgage rates lower Tuesday. However, a larger increase could fuel bond selling and lead to higher mortgage rates.

Wednesday's only relevant report is April's Consumer Price Index (CPI). It is similar to next week's PPI report, but measures inflationary pressures at the more important consumer level of the economy. Its results will be watched closely and can lead to significant volatility in the bond market and mortgage pricing. Current forecasts are calling for increases of 0.2% and 0.3% respectively in the overall index and the core data readings. The core data is the more important of the two since it excludes more volatile food and energy prices.

April's Industrial Production is Thursday's only relevant news. It measures manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is expected to show a 0.2% decline in production, indicating that manufacturing activity is slowing. A larger decline in output would be good news for the bond market and mortgage rates because it would indicate that the manufacturing sector is weaker than expected.

There are two pieces of data due to be posted Friday. April's Housing Starts is the first and is the least important of the two. This data measures housing sector strength and mortgage credit demand by tracking new permits and actual starts of new home construction. It is expected to show a decline in new starts from March's readings. But, since this report is not considered to be of high importance to the bond market, it likely will have little impact on mortgage rates unless it varies greatly from forecasts.

The last report of the week is May's preliminary reading to the University of Michigan's Index of Consumer Sentiment. This index measures consumer willingness to spend and usually has a moderate impact on the financial markets. It is expected to show a reading of 63.0, which would be a slight increase from last month's final reading. If it shows a decline in consumer confidence, bond prices will likely rise. This should lead to mortgage rates moving slightly lower Friday.

Overall, it likely will be a moderately active week for mortgage rates. Besides the week's important economic news, look for the stock markets to be a major influence on trading. We suspect we will see a fair amount of volatility in stocks, which should affect bond prices. Significant stock weakness should translate into bond gains and lower mortgage rates. However, if the major stock indexes rally, we could see mortgage rates move higher as a result. Keep in contact with your mortgage professional this week for updated rates.

Market Commentary

At Legacy Mortgage we are constantly seeking ways to enhance our dedication to our clients and real estate partners. Our position as an innovator in the field of real estate finance allows us to help you make informed decisions regarding your customers mortgage financing. We have scoured through the financial reports for the week and we wanted to share the information with you. Please let us know if we can be of further assistance to you and your valued clients.

"While cleanup continues in the wake of four tornadoes that struck Clarksville early Saturday morning, some questions remain unanswered.

Among them: what will be done with the Wilma Rudolph Pavilion at Fairgrounds Park, which was destroyed by an F1 tornado that touched down just after 12:40 a.m. Saturday.

City Chief of Staff Jim Durrett said there are no current plans to rebuild the pavilion, but added that the next month should solidify details about the multi-purpose pavilion's future.

"It's kind of premature," Durrett said of rebuilding plans. "We're still in the recovery mode trying to get the building cleaned up and the park cleaned up."

Durrett said the pavilion was built in the early 1980s and had a unique structure, featuring wooden construction with laminated beams.

Durrett said some of those beams ended up on Highway 48/13 as 110 mph winds ravaged the open-air structure." - The Leaf Chronicle

I personally feel that they should look into building an even better structure than what was out there. The pavillion held tons of outdoor activites. Boxing matches, Parties, Festivals, and a Circus or two. I have nothing against the Pavillion it was a great place and I have taken my family there multiple times but I feel that a "convention center" of sorts would be better utitlized. We have a lot of very cold or very hot or rainy days that, although the pavillion was covered, made it unusable. I think that in the early 1980's when it was built it served Clarksville very well. But as most of you know Clarksville has grown tremendously since 1980 and I think could use something a bit better. What do you think?

I would like to know your opinion of what you would like to see Clarksville re-build there. Would you like a new pavillion rebuilt? A new building of sorts, or something completely different?