The Khamis Team Newsletter week of June 4th 2018

Mortgage Market Commentary

Angst over the political situation in Italy threatened the stability of the Euro, and the announcement of more tariffs, upping the risk of a trade war, left markets wary. For most of last week, money flowed into the relative security of US Treasuries and bonds, pushing mortgage rates downward. However, Friday’s strong employment report reminded markets that the US economy continues to be on solid footing. Mortgage rates returned to Monday’s levels. During the week, GDP was adjusted downward, but only by a tenth, the ISM Manufacturing Index and Consumer Confidence posted respectable gains. Inflation data also seems to be showing fewer signs of easing. Overall, the week’s economic data solidified the near 100% probability that the Fed will raise rates in a few weeks.
Economic data due this week is not as significant, but if the week starts with the ISM Services Index posting a gain rather than the expected loss, we are likely to see rates trending upward for the week. Of course, international pressures and political drama could change the course of rates at any time. 

This Week's Top Economic Reports and Events

Report/Event	Date	Prior	Est	Impact
ISM Services Index	6/5	56.8	58.2	Moderate
After its sister index posted a nice gain, an unexpected increase in this indicator would rev up the level of upward pressure on mortgage rates.
JOLTS – Job Openings	6/5	6.55M	6.54M	Moderate
Employers are beginning to report more and more challenges in finding workers. An increase here could pressure rates up slightly.
International Trade Balance	6/6	-49.0B	-48.8B	Limited
If the gap widens rather than shrinks as expected, we could see some limited upward pressure on mortgage rates.
Weekly Jobless Claims	6/7	221K	225K	Moderate
IF the JOLTS report shows an increase and claims come in better than expected, it will be tough for rates not to be moving upward.
Consumer Credit	6/7	$11.6B	$13.9B	Limited
With recent positive news regarding Consumers, a decrease here would be puzzling but could help slow any increases in mortgage rates.

Quick Article

Headlines Say Housing Prices Up, But Not All
With the drumbeat of stories about rising housing prices, one might be tempted to think that housing prices are rising everywhere. However, as the saying goes, all real estate is local. According to NAR, 27 of the nation’s 350 largest metro areas are seeing price declines. Year-over-year prices have fallen 17.7% in Santa Maria, CA, while Pottsville PA saw an 8.1% drop. Napa, CA fell 6.7%. while Austin, TX and Beckley WA lost 4.3% and 4.2%, respectively.

Weekly Trivia Question and Answer

Jim Henson created a now-famous cast of characters known as The Muppets. What two words did he combine to form the word Muppets?
Answer
The words "marionette" and "puppet" to form the word Muppets?
Learn More
https://en.wikipedia.org/wiki/The_Muppets
Bonehead of the Week 
A “do you see the irony in this?” bonehead award goes to Jonathan Rivera in Hartford, CT. It was time for Rivera to appear in court on a charge of first-degree larceny and tampering with a motor vehicle. The charges stemmed from a recent arrest for stealing a car. Rivera could have decided not to appear, but he headed to the courthouse. Parking agents discovered a stolen car in the courthouse parking lot while scanning license plates, and waited and arrested Rivera as he tried to leave with the stolen car!

Worth Remembering Quotation 

We are all faced with a series of great opportunities brilliantly disguised as unsolvable problems.
John W. Gardner