INFO THAT HITS US WHERE WE LIVE... It was certainly important to understand the details of last week's Existing Home Sales report. The headline numbers showed June Existing Home Sales were down a disappointing 1.2%, to a 5.08 million annual rate. But other details were encouraging. Existing Home Sales are up 15.2% over a year ago. The median price of an existing home rose and is now up 13.5% from a year ago. Sales are near their highest levels since November 2009, when they were spiked by the big home buyer tax credit. Existing home sales remain above the 5 million a year threshold, a very decent place to be.

No need to dig into the details of New Home Sales to see success. New single-family home sales shot up 8.3% in June, to a 497,000 annual rate, their highest level since May 2008. These sales are now up a humongous 38.1% versus a year ago. The median price of a new home also gained for the month and is now up 7.4% from a year ago. For those worried about how the recent uptick in mortgage rates would affect sales, this first look at purchase contracts signed in June shows no impact. The FHFA index of prices for homes financed with conforming mortgages was up 0.7% in May, up 7.3% over a year ago.

BUSINESS TIP OF THE WEEK... Learn all you can about the people you want as clients. Check into their social networks and blogs. Then when you get together, you can offer them something meaningful and create immediate rapport.
>> Review of Last Week
TWO UP, ONE SIDEWAYS... The Dow and Nasdaq stock indexes both closed the week marginally ahead, while the S&P 500 essentially went sideways, off less than half a point. These tepid performances reflected the wary mood of investors, as corporate earnings reports were mixed, surprising both to the upside and the down. Wall Street may also have been cautiously looking ahead to this week, packed with market-moving items, including Q2 GDP, another Fed meeting, and the July Employment Report. This isn't to say investors aren't still hopeful, as the Dow and S&P 500 are up 19% on the year and the Nasdaq is up 20%!

The economic data reported during the week continued to deliver mixed messages. June Durable Goods Orders beat expectations, but when the volatile transportation sector was excluded, the number missed estimates, coming in flat. New Home Sales were up for June, but Existing Home Sales dipped. Continuing unemployment claims slid below the 3 million threshold, but new weekly jobless claims edged up to 343,000. Happily, on Friday, the University of Michigan Consumer Sentiment Index blew past analyst predictions.

The week ended with the Dow up 0.1%, to 15559; the S&P 500 flat, at 1692; and the Nasdaq up 0.7%, to 3613.

The bears were back in control of the bond market, as the light week of economic data was positive enough to nudge prices down. The FNMA 3.5% bond we watch ended the week down .82, to $100.28. Freddie Mac's Primary Mortgage Market Survey for the week ending July 25 showed national average fixed mortgage rates easing for the second week in a row. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up to the minute information. The Mortgage Bankers Association's Purchase Loan Index was off 2% for the week ending July 19, but up 6% over a year ago.

DID YOU KNOW?... This week's Employment Report is released by the Commerce Department, one of 15 departments in the executive branch of the federal government. Commerce looks after a wide range of U.S. economic and business activities.
>> This Week's Forecast
PENDING HOME SALES AND GDP SLIDE, THE FED MEETS, JOBS HOLD... What an action packed week if you're into economic data (like we are). Pending Home Sales should be down a tad for June, and the Advanced GDP reading for Q2 is forecast to show economic growth even slower than it's been. We'll see what the Fed says about that, coming out of their FOMC Rate Decision meeting on Wednesday.

The week ends with the July Employment Report, expected to register 188,000 new Nonfarm Payrolls, as job creation holds to a moderate pace. The Unemployment Rate is predicted to inch down to 7.5%. Inflation should be OK, according to Core PCE Prices, and manufacturing should show growth in the ISM Index and Chicago PMI. Enough data for you?
>> The Week's Economic Indicator Calendar
Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.

Economic Calendar for the Week of July 29 - Aug 2
DateTime (ET)ReleaseForConsensusPriorImpact
M
Jul 2910:00Pending Home SalesJun-1.7%6.7%Moderate
Tu
Jul 3010:00Consumer ConfidenceJul81.681.4Moderate
W
Jul 3108:30GDP - AdvancedQ21.1%1.8%Moderate
W
Jul 3108:30GDP Chain Deflator - AdvancedQ21.2%1.2%Moderate
W
Jul 3108:30Employment Cost IndexQ20.4%0.3%HIGH
W
Jul 3109:45Chicago PMIJul51.551.6HIGH
W
Jul 3110:30Crude Inventories7/27NA-2.825MModerate
W
Jul 3114:00FOMC Rate Decision7/310%-0.25%0%-0.25%HIGH
Th
Aug 108:30Initial Unemployment Claims7/27345K343KModerate
Th
Aug 108:30Continuing Unemployment Claims7/202.995M2.997MModerate
Th
Aug 110:00ISM IndexJul51.550.9HIGH
F
Aug 208:30Average WorkweekJul34.534.5HIGH
F
Aug 208:30Hourly EarningsJul0.2%0.4%HIGH
F
Aug 208:30Nonfarm PayrollsJul175K195KHIGH
F
Aug 208:30Unemployment RateJul7.5%7.6%HIGH
F
Aug 208:30Personal IncomeJun0.5%0.5%Moderate
F
Aug 208:30Personal SpendingJun0.4%0.3%HIGH
F
Aug 208:30PCE Prices - CoreJun0.2%0.1%HIGH

>> Federal Reserve Watch
Forecasting Federal Reserve policy changes in coming months...Even if the Fed's bond purchases start to taper, Chairman Bernanke has stated they won't raise the super low Funds Rate until unemployment drops to 6.5%, a level not expected any time soon. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.
Current Fed Funds Rate: 0%-0.25%
After FOMC meeting on:Consensus
Jul 310%-0.25%
Sep 180%-0.25%
Oct 300%-0.25%

Probability of change from current policy:
After FOMC meeting on:Consensus
Jul 31 <1%
Sep 18 <1%
Oct 30 <1%