They say that no news is good news. And while that may be true, last week two economic reports were good news. Read on to learn what happened…and how home loan rates were impacted.
Last Thursday, Initial Jobless Claims come in at 381,000. Not only was this lower than expectations, the number was a nine-month low, signaling that the labor market is slowly improving. Then on Friday, Consumer Sentiment reached a six-month high, rising above expectations to 67.7. These aren't the only economic reports here in the US that have improved in recent weeks, which gives us reason for some optimism when it comes to our economy. But how the Eurodrama plays out may determine which way the fragile US economy goes next.
And it was a big week in Europe, with the European Central Bank (ECB) holding a policy meeting on Thursday and the two-day European Union Summit on Thursday and Friday. Before the Summit even began, rating firm Standard & Poor's put 15 of the 17-nation Euro currency bloc on a downgrade review, citing "continuing disagreements among European policy makers on how to tackle" the Euro debt crisis.So what were the results of the EU Summit? Leaders agreed to a new, tighter "fiscal integration" across the Eurozone. This means that a new treaty will be drafted, setting guidelines such as annual budget deficits being limited to three percent, and failure to meet guidelines like these would automatically spark disciplinary procedures. As expected, Germany was the winner in this negotiation as they demanded a tighter fiscal union in lieu of firing up the printing press and buying troubled sovereign debt.
So what does all of this mean for home loan rates here in the US? It's important to remember that when our economy is struggling and economic reports are less favorable, our Bond Market usually benefits as investors seek a safe haven for their money. And since home loan rates are tied to Mortgage Bonds, our home loan rates are sometimes at their best when our economy is struggling. In a way it makes sense...in times of economic struggle, good home loan rates can help kick start our economy in other areas.
- The Retail Sales report for November will give the markets some insight as to how the holiday shopping season is treating retailers when it is reported on Tuesday.
- Weekly Initial Jobless Claims will be delivered on Thursday and the markets will be looking to see if the number remains near last week's nine-month low.
- Inflation will be reported on the wholesale level in the form of the Producer Price Index (PPI), which will be released on Thursday. That report will be followed by the Consumer Price Index (CPI) on Friday. Inflation has remained relatively low in the past year and the Federal Reserve feels that it will remain stable in the longer-term.
- Manufacturing reports from the Empire State Index and the Philadelphia Fed Index will also garner attention when reported on Thursday.
In addition to those reports, the Fed will hold its FOMC meeting on Tuesday - and it's the last meeting for 2011. No change is expected to the benchmark Fed Funds Rate.Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.
3 Easy Gift Ideas
Shopping for the people who are close to you isn't very difficult. But shopping for a business associate, a party host or hostess, or your boss can be more difficult. In those cases the following gift ideas can help.
The Gift in a Basket. While they may seem passé, gift baskets are the ultimate in unique gifts. One reason is that a gift basket can include almost anything. The trick to making it great as well as unique is to find out the recipient's favorite hobby - whether it's golf, cooking, jogging or whatever. Give the basket a personalized theme by filling it with a variety of inexpensive items relating to the hobby.
The Gift of Greenery. While freshly cut flowers make for a very nice host or hostess gift, potted plants can be even better. Every time the recipients look at their plant, they will most likely think of you.
The Gift of Relaxation. We all work hard. That's why the gift of relaxation is so appreciated. And a prepaid massage is a great way to go. Beneficiaries of this gift can experience incredible relaxation, while also allowing their overworked muscles to receive a little TLC. Better still, this gift works for both men and women. And, it can fit into almost any budget - depending on whether you want to purchase a massage for a half hour or an hour.Happy holidays to you and yours this season. And remember to give yourself a gift by spending time with the ones you love.