News from Overseas Helps Stocks...and a Special Video View

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Phil Jensen Mortgage Director AmeriFirst Financial Phone: 602-692-7445 Fax:: Phil@JensenTeam.com www.JensenTeam.com

In This Issue           Last Week in Review: News from "over there" helps Stocks over here. Forecast for the Week: Manufacturing and inflation news heat up the headlines... and could rock rates. View: What do you need to know about your gas and electric bills? Special Video View!           Last Week in Review           "Over there... over there..." The old patriotic song hit it on the head, in terms of what has been driving market action lately... news from overseas. In the absence of US economic reports last week, Stocks received some help from headlines "over there." Late last week, the European Central Bank (ECB) left interest rates at a record low - which wasn?t really a surprise, given the sharp economic slowdown and uncertainty in Europe. But in a separate briefing, ECB Executive Board member Juergen Stark stated that "the worst of the sovereign debt crisis seems to be over." He went on to say that tensions within the financial markets have "calmed down" as the enormous $442 Billion collection of one-year loans by the ECB went without any problems. Although the Stock market may benefit from such calming commentary, the reality is the worst may not be over yet. In fact, rumors are surfacing that Italy may be the next country to reveal debt problems - making this a story to continue watching. ----------------------- European Central Bank and Stress Test News Helped Stocks There was also a lot of talk overseas last week about bank stress tests - and the positive buzz helped Stocks around the globe move higher. Similar to what took place in the US a couple of years ago, these stress tests may provide some transparency and help differentiate which financial institutions are strong - so they're not lumped in with some of the more troubled ones. Although the official reports will not be released until July 23rd, French Finance Minister Christine Lagarde indicated last week that the final results will show that European banks are "solid and healthy." When stress tests were conducted on the US banks, the positive results helped boost financial Stocks nearly 40% over the following several months. It is possible that favorable results from the European stress tests could bolster confidence in the Eurozone, which would unwind some of the trading activity that has taken place during the past two months - that being the flood of money out of Europe into the US and purchasing our debt securities and Bond instruments, including Mortgage Bonds. If this starts to reverse, home loan rates will worsen... and this can happen very quickly. I?ll be watching this closely - but if you have been waiting to get in touch regarding taking advantage of still-historic low home loan rates... don?t wait! ECONOMIC NEWS FROM EUROPE ISN'T THE ONLY HOT STORY THAT DESERVES YOUR ATTENTION. THE TEMPATURE HAS SOARED LATELY ACROSS THE US, SCORCHING THE NATION AND PROMPTING MANY PEOPLE TO REVIEW THEIR ENERGY USE - AND ITS IMPACT ON THEIR BUDGET. CHECK OUT THE SPECIAL MORTGAGE MARKET GUIDE VIDEO VIEW BELOW TO LEARN HOW YOU CAN PERFORM A HOME ENERGY AUDIT.           Forecast for the Week           Last week's economic calendar was very light; but this week, we?ll see the exact opposite as reports flood the headlines near the end of the week. Along with more news coming from overseas... the week's action could cause home loan rates to change trend. Bond prices have been rocketing higher with home loan rates moving lower... but history tells us that a reversal is in store - it's just a matter of when. On Wednesday, we?ll see the Retail Sales figures for June, as well as the Meeting Minutes from the past Fed meeting. Although the Fed hasn't made any major policy changes as of late, the meeting minutes are still closely watched by the markets for any stray comments or discussion on matters such as inflation or the "extended period" language regarding rates. Things heat up on Thursday with a number of reports on manufacturing and inflation. The Philadelphia Fed Index and the Empire State Index will both be released Thursday morning - giving us a detailed look at the manufacturing sector. We'll also see the latest reports on Capacity Utilization and Industrial Production, as well as the Producer Price Index (PPI), which measures inflation at the wholesale level. The day after the PPI is reported, we?ll see the Consumer Price Index (CPI), which measures inflation at the consumer level. Remember, inflation is the archenemy of Bonds and home loan rates, so it will be important to see what these reports reveal. We'll also see the weekly Initial Jobless Claims report on Thursday morning. Last week's number came in better than expected and showed an improvement over the previous report, which gave the financial markets a glimmer of hope. It also gave Bond investors an excuse to take a little profit off the table - since Bonds have been priced for perfection, and any blip in the economic data is providing reason to preserve profits. In addition to those reports, the Treasury Department will auction $69 Billion this week. The auctions will consist of $35 Billion in 3-year Notes on Monday, $21 Billion in 10-year Notes on Tuesday and $13 Billion in 30-Years on Wednesday. The good news is, the $69 Billion total represents the lowest offering in a year - and when this "low" figure was announced last week, it helped Bond prices improve. 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. And as you can see in the chart below, Mortgage Bonds have been inching higher - helping home loan rates move lower - and making this an ideal time to review your current loan or purchase a new home! If you or someone you know wants to see how these rates might help your situation, please call me today. Even if you aren't sure if you can refinance or buy - get in touch, and let's discuss the possibilities. Such unbelievable low rates will not last forever. ----------------------- Chart: Fannie Mae 4.0% Mortgage Bond (Friday, July 9, 2010)           The Mortgage Market Guide View...           Home Energy Audit

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