Provided to you
by
Lee McLain
Contents
Lee McLain
First Federal Bank
Office #816-245-4220
Cell #816-728-7700
lee@kcmetrohomeloans.com
NMLS: 680316
• Weekly Review: week of February 2, 2015
• Mortgage Rate Forecast with Chart
• Economic Calendar - week of February 9, 2015
• Federal Reserve FOMC Meeting Schedule
• Road Signs - Color, Color On The Wall, Which Is Fairest Of Them All This 2015?
Weekly Review
After getting off to a disappointing start to the New Year in January, equities surged
higher during the first week of February while bond prices tumbled and yields rose. The
largest market moves took place last Tuesday and Friday.
Tuesday, equity markets were supported by news that progress was being made between
Greece and its lenders in restructuring Greece’s debt. The stock market was also
boosted by a decline in the U.S. dollar and surging crude oil prices that rose 6% higher to
over $52 a barrel. With oil back above the psychologically important $50 per barrel mark,
energy sector stocks led the broader stock market higher triggering significant selling in
the bond market.
On Friday, a strong January Employment Situation Summary (Jobs Report) sent bond prices
cascading lower and yields higher. The Labor Department reported the addition of 257,000
jobs in January, marking the 12th consecutive month that Non-farm Payrolls had exceeded the
200,000 mark, a level normally associated with a sustainable decline in the unemployment
rate. The consensus forecast had been for an increase of 235,000 new positions.
Furthermore, November and December’s jobs numbers were revised significantly higher with
November Nonfarm Payrolls revised to 423,000 from an initially reported 353,000 while
December Nonfarm Payrolls were revised to 329,000 from 252,000 while Nonfarm Private
Payrolls were revised to 320,000 from 240,000. The Unemployment Rate edged up from 5.6%
to 5.7%, in part because the labor force participation rate increased by 0.2% to 62.9%. This is
viewed as a positive development as it suggests more people are now actively looking for
work.
Also, there was a significant 0.5% jump in Average Hourly Earnings, and this exerted a
negative influence on the bond market even though 0.2% of this gain in earnings can be
attributed to an increase in the minimum wage in 20 states that went into effect on January 1 of
this year. The consensus forecast called for a 0.3% gain in Earnings following December’s
deflationary number of -0.2% that had sparked a sharp drop in bond yields. The prior worries
about wage disinflation were unwound in the bond market on Friday, plus the robust labor
report provided the Federal Reserve with a stronger case for raising interest rates “sooner
rather than later” and this weighed heavily on the bond market.
For the week, the FNMA 3.0% coupon bond lost 132.8 basis points to end at $102.14 while the
10-year Treasury yield increased 27.8 basis points to reach 1.96%. Stocks ended with the
NASDAQ Composite gaining 109.16 points, the Dow Jones Industrial Average adding 659.34
points, and the S&P 500 increasing 60.48 points.
To date for 2015, and exclusive of any dividends, the NASDAQ Composite has gained 0.18%,
Dow Jones Industrial Average has added 0.01%, and the S&P 500 has lost 0.17%. The
national average 30-year mortgage rate rose from 3.55% to 3.72% while the 15-year mortgage
rate increased to 3.02% from 2.95%. The 5/1 ARM mortgage fell to 3.12% from 3.13%. FHA
30-year rates held steady at 3.25% and Jumbo 30-year rates increased to 3.75% from 3.58%.
Mortgage Rate Forecast with Chart
The FNMA 3.0% coupon bond ($102.14) lost 132.8 basis points during the past week while the
stock market recorded significant gains. The technical picture for bonds looked favorable a
week ago, but the bond’s sharp decline last Tuesday generated a new sell signal from a
negative stochastic crossover and it was all “downhill” from there with stronger economic
news. The bond tried to stabilize on Wednesday and Thursday, but was hit with a major
negative catalyst in the form of a blockbuster employment report on Friday. The favorable jobs
news sent the bond’s price in a free-fall below support provided by the 25-day moving average.
This level now becomes nearest overhead resistance. The next primary support level is now
the 50-day moving average at $101.74. The slow stochastic oscillator is no longer
“overbought,” but there is considerable room to the downside before it becomes “oversold” so
it is possible we could see further bond price erosion this coming week with slightly higher
interest rates.
Chart: FNMA 30-Year 3.0% Coupon Bond
Economic Calendar - for the Week of February 9
This week the economic calendar highlights weekly Crude Oil Inventories on Wednesday; Initial
Jobless Claims and Retail Sales on Thursday; and the University of Michigan’s Consumer
Sentiment Index on Friday. Economic reports having the greatest potential impact on the
financial markets this coming week are highlighted in bold.
Date
Feb 10
Feb 10
Feb 11
Feb 11
Feb 11
Feb 12
Feb 12
Feb 12
Feb 12
Feb 12
Feb 13
Feb 13
Feb 13
Time
ET
10:00
10:00
07:00
10:30
14:00
08:30
08:30
08:30
08:30
10:00
08:30
08:30
10:00
Event /Report /Statistic
Wholesale Inventories
JOLTS - Job Openings
MBA Mortgage Index
Crude Oil Inventories
Treasury Budget
Initial Jobless Claims
Continuing Jobless Claims
Retail Sales
Retail Sales ex-auto
Business Inventories
Export Prices ex-ag.
Import Prices ex-oil
Michigan Consumer Sentiment
For
Dec
Dec
02/07
02/07
Jan
02/07
1/31
Jan
Jan
Dec
Jan
Jan
Feb
Market
Expects
0.2%
NA
NA
NA
285K
2405K
-0.5%
-0.5%
0.2%
NA
NA
98.5
Prior
0.8%
4.972M
1.3%
6.333M
-$10.3B
278K
2400K
-0.9%
-1.0%
0.2%
-1.2%
-0.1%
98.1
Upcoming Federal Reserve FOMC Meeting Schedule
March
17-18 (Tuesday-Wednesday)*
April
28-29 (Tuesday-Wednesday)
June
16-17 (Tuesday-Wednesday)*
July
28-29 (Tuesday-Wednesday)
September
16-17 (Wednesday-Thursday)*
October
27-28 (Tuesday-Wednesday)
December
15-16 (Tuesday-Wednesday)*
January
26-27, 2016 (Tuesday-Wednesday)
* Meeting associated with a Summary of Economic Projections and a press conference by the Chairman.
Road Signs – Color, Color On The Wall, Which Is Fairest Of Them All This
2015?
By Desare A Kohn-Lask
Every year, there is or there are certain colors which stand out from the rest of the paint palette.
Before 2014 comes to a close, professionals whose works are associated with the exterior and
interior beauty of the house gave their predictions as to which paint color would be the fairest
this 2015. Here are some colors worth-mentioning in this short list.
Marsala
The Pantone Color Institute has elected the color Marsala as the color of 2015. It is known as
Pantone 18-1438 by the codes. According to Leatrice Eiseman, the institute's executive
director, the color enriches our mind, body, and soul. It is a subtly seductive shade, one that
draws us into its embracing warmth.
The color, due to its versatility fits into many applications including that of beautifying a house.
The drama it brings because of its richness and warmth. When used in interior spaces of the
house, it can very well be paired off with other colors especially those that are neutral. It can go
pretty good with amber and umber and even golden yellows and teals. Imagine the very rich
designs in terms of wall colorizing that this color of the year can bring into your house.
Taking its cue from the wines, Marsala is also very fit for use on particular home spaces like the
kitchen and dining room. It is seen ideal in tabletops as well as great choice when it comes to
the color of home appliances which shall fill the functionality of the gastro hubs of the house.
Proving its diversity, it is not only fit for splashing the walls. The color is also an ideal choice
when it comes to imparting elegance into home accessories like floor rugs, carpets, and other
upholstered parts of the house. It can even bring class to the living room and entertainment
rooms.
As 2015 opens up, we can expect paint makers as well as makers of appliances and home
accessories to capitalize on the elegant warmth that Marsala can bring as the color of the year.
As with the previous colors of the year, home owners can also expect that new trends in home
design and renovation are to spring up from the color.
If you like to welcome 2015 with warmth, beauty, and elegance - you can opt to breathe new life
into your house using the seductive color known as Marsala. Give in to its temptation!
Click here to see the color.
Desare Kohn-Laski is a proud realtor and experienced Military Relocation Professional in
Florida. She is a real estate broker who is knowledgeable and familiar of the South Florida real
estate market. Her areas of services include Broward County, Palm Beach County & MiamiDade County. For more information, hop on to skyelouisrealty.