The Khamis Team Market Newsletter

Mortgage Market Commentary

While headlines proclaimed rising mortgage rates, last week ended with rates trending downward with money moving into US bond markets. A round of political drama in Italy, uncertainty about the US-North Korean summit, and a Fed that seems comfortable with its current path all contributed to easing in mortgage rates. The latest minutes from the Fed revealed some uncertainty as to whether inflation will remain close to 2%, and even if it does go over, the Fed appears to be willing to let it ride for a period of time. Housing news was unfortunately weak, with tight inventories, increasing prices, and upward trending mortgage rates all contributing to fewer new or existing home sales.

If the various international challenges aren’t enough drama for rates, this week’s slate of massively critical economic reports will be. We’ll get insights into consumer moods, inflation, jobs, and last quarter’s GDP. With the economy currently appearing to be running near its “potential,” a week of weak economic reports, coupled with more international uncertainty, could bring rates back down.

This Week's Top Economic Reports and Events

Report/Event	Date	Prior	Est	Impact
Consumer Confidence	5/29	128.7	127.5	Significant
Unless we see Confidence vary more than a 0.5 from expectations, we may see markets looking to other news for early week guidance.
GDP - 2nd Estimate for Q1	5/30	2.3%	2.3%	Significant
With the 2nd quarter not accelerating as quickly as previous years, an increase of over 2.4% could help boost mortgage rates upward.
PCE Prices (core)	5/31	0.2%	0.1%	Significant
If core PCE prices pull back to 0.1%, validating the Fed’s concerns about inflation’s durability, we could see rates trending downward.
Nonfarm Payrolls	6/1	164K	190K	Significant
Job creation continues to be good but has softened a bit. If we see an unexpected increase of more than 210K jobs, rates are likely to rise.
ISM Manufacturing Index	6/1	57.3	58.0	Significant
If all of the week’s news shows the economy running near its potential, an increase in this index will only create a little upward pressure on rates.

Quick Article

Best Markets for Flippers

With home flipping coming back into vogue and home-flipping activity hitting an 11-year high, an analysis of data reveals thatNashville, TN is the hottest market for flippers. Music City, USA saw 4.1% of total home sales were homes that were flipped for an average profit of $87,200! Fresno, CA, Palm Bay, FL, North Port, FL, and Baton Rouge, LA rounded out the top five. However, number seven, Los Angeles shows a top average profit of $169,400 per flip!

Weekly Trivia Question and Answer

What was the name of the investment con that promises unreal returns, but only pays off early investors with money from later investors?

AnswerPonzi scheme

Learn Morehttps://en.wikipedia.org/wiki/Ponzi_scheme

Bonehead of the Week 

A “creating great odds for a conviction” bonehead award goes to Wendy Klinker in Fort Myers, FL. We all know that your odds of winning games of chance favor the house. However, Klinker, a convenience store clerk, found she could up her odds of winning scratch lottery tickets to 100% by pre-scratching the cards. She kept the winners and sold the losers. A customer who grew tired of losing closely examined a new card. Police then found a video of Klinker’s scam and 83 losing tickets ready for sale.

Worth Remembering Quotation 

There can be no happiness if the things we believe in are different from the things we do.

Freya Madeline Stark