Arlington, TX

Last week's full economic news calendar led to some wild days, especially on Friday, as you can see in the chart below. But this week's economic calendar is significantly calmer, with only a few low to mid-impact reports in store, including the Institute of Supply Management (ISM) Report on Monday, Pending Home Sales on Wednesday, and Initial Jobless Claims on Thursday. Go to http://www.tombrewerjr.com/for more information.

If the news of the week tends toward being negative for the economy, Stock prices may suffer in response, and money could flow right into Bonds, which would cause home loan rates to improve. Additionally, Stocks have been in rally mode lately, and might be due to take a breather. While the coming week's economic reports aren't expected to be movers and shakers like the headlines from last week, count on me to be keeping a close watch on the market and staying in the know on your behalf in this very volatile environment.

"KNOWLEDGE IS POWER." It's a phrase used by many, and last week was an important one to be in the know, as Bonds and home loan rates were affected by many big newsmakers and market shakers. Bonds and home loan rates found some improvement in the early part of the week, leading into the Fed's big announcement on Wednesday of another .25% cut to the Fed Funds Rate. Typically, Bonds and home loan rates react poorly to Fed cuts, due to the increase in economic activity that lower Fed rates can cause, which turns into higher inflation. However, the Fed's Policy Statement hinted that the present rate-cutting cycle may be nearing an end. As a result, Bonds and home loan rates reacted favorably to the Fed's action. Go to http://www.tombrewerjr.com/ for more information.

However, speaking of inflation, the Fed's most favored measure of it - the Core Personal Consumption Expenditure Index - arrived on Thursday, showing core inflation at 2.1%, just a whisker above the Fed's desired range for inflation of 1 to 2%. This read wasn't great news for inflation-sensitive Bonds...but the resulting market action was nothing, compared to what happened when the Jobs Report arrived on Friday morning.

Talk about a real mover and shaker...the Jobs Report brought word of 20,000 jobs lost in April, which was better than market expectations of 75,000 jobs lost. Initially, Stocks rallied higher and Bonds worsened dramatically, as the headlines were so much better than had been anticipated. But when the details of the report were unpacked, showing prior months worsening revisions - as well as a sobering realization that 20,000 jobs lost is still lousy news - the markets quickly reversed direction, helping Bonds and home loan rates improve once again. Another ultra volatile week - and when the dust settled, home loan rates improved by about .125% overall.

DID YOU KNOW THAT IN PARTS OF THE COUNTRY WHERE HOUSING VALUES HAVE REACHED A PLATEAU OR DECLINED...HOMEOWNERS MAY BE PAYING TOO MUCH IN PROPERTY TAXES? CHECK OUT THIS WEEK'S MORTGAGE MARKET VIEW FOR SOME POWERFUL KNOWLEDGE THAT COULD SAVE YOU HUNDREDS - OR EVEN THOUSANDS - OF DOLLARS A YEAR!

After last week's relatively slow economic news calendar, things will heat up this week with several events that have the potential to move the market. On Wednesday, the Fed will announce their interest rate decision...and then the very next day, the Fed's most favored gauge of inflation will be released, the Personal Consumption Expenditure Index (PCE). It will be interesting to play armchair quarterback to the Fed's decision, and watch what the inflation numbers reveal! And let's not forget, on Friday we will see the important Jobs Report, where early estimates are for a net loss of 80,000 jobs. Go to http://www.tombrewerjr.com/for more information.

"IN THE SPRING, I HAVE COUNTED 136 DIFFERENT KINDS OF WEATHER. AND THAT WAS JUST INSIDE OF 24 HOURS." Mark Twain. And Bonds have certainly weathered all kinds of days this spring, with this past week being no exception. Bonds did enjoy some high times starting with Monday's move to the upside after National City Corporation announced they would be receiving a $7 Billion cash infusion. This move suggests that investors are seeing value in the battered financial sector, and perhaps are feeling that there is a bottom being reached in the credit crunch.

In other headlines, Existing Home Sales met expectations, but New Home Sales numbers for March were worse than expected, possibly due to the large increase in the costs for materials needed to construct a home. But then there was a change in climate on Friday, as inflation news from around the World created some strong adverse headwinds for Bonds and home loan rates. Overall, home loan rates ended the volatile week unchanged to slightly higher. Go to http://www.tombrewerjr.com/for more information.

Now is still a good time to take advantage of historically low home loan rates before more inflation talk pushes them higher. I'm always here to help advise you, your friends, and your colleagues...no matter the season!

SPRING ISN'T JUST THE SEASON FOR CRAZY WEATHER...IT'S ALSO THE PERFECT TIME FOR SPRING CLEANING. CHECK OUT THIS WEEK'S MORTGAGE MARKET VIEW FOR SOME GREAT SPRING CLEANING TIPS AND ADVICE!

After last week's barrage of economic news, the calendar will quiet down this coming week. However, we will get a good look at the housing market via the Existing Home Sales Report on Wednesday, and the New Home Sales Report on Thursday - as well as a read on Durable Goods Orders.

What are those "durable goods" anyways? Simply put, they are items that are durable, or made to last longer than three years, such as cars, furniture, electronics, appliances, business equipment, games, cameras, etc. This report shows a good measure of consumer and business consumption and buying behavior, and depending on the health of the report, could bring some activity to the volatile financial markets. Go to http://www.tombrewerjr.com/ for more information.

As you can see, Bond prices ended the week with a move higher from a "floor of support" at the 200-day Moving Average...but are now headed back towards an overhead "ceiling of resistance" which could stop their progress higher. Remember that when Bond prices move higher, home loan rates move lower...and vice versa. If the news of the coming week isn't Bond-friendly enough to help them bash their way through the overhead ceiling, Bond prices and home loan rates may worsen once again.