INFO THAT HITS US WHERE WE LIVE... Last week, Pending Home Sales took their place at the top, hitting their highest level since April 2010, when folks were rushing to close before the homebuyer tax credit expired. April Pending Home Sales, based on signed contracts for existing homes, were up 0.3% over March and up 10.3% over last year, according to the National Association of Realtors (NAR). Their chief economist predicts, "Total existing home sales are expected to rise just over 7%, to about 5 million this year."The NAR's economic honcho also feels that in 2013, "Because of inventory shortages, higher home sales will push up home values to the highest level in five years." Those values appear to be well on their way up. Evidence? The latest S&P/Case-Shiller 20-City Composite index was up 10.9% in March compared to a year ago, the highest annual home price gain since 2006. In addition, all 20 cities tracked registered annual increases and all showed monthly gains for the fifth month in a row!BUSINESS TIP OF THE WEEK... Ask your clients how you could improve. Requesting their input helps you upgrade products and services and makes clients feel more invested in your brand. It's a win-win. >> Review of Last WeekUP MONTH ENDS DOWN... Stocks were down again for the week, yet all three major indexes ended up for the month: the Dow up 1.9%, the S&P 500 up 2.1%, and the Nasdaq up 3.8%. The Dow saw its sixth straight monthly gain and the S&P 500 its seventh, the longest monthly win streak since the one that ended in September 2009. All three indexes are also up solidly for the year. Dragging things down last week were a lower GDP-2nd Estimate (2.4%), flat Personal Income, and a drop in Personal Spending, all missing expectations.But the good economic data was quite good. Pending Home Sales and the Case-Shiller Home Price Index showed housing recovering. Consumer Confidence and Michigan Consumer Sentiment both beat estimates, reflecting a more optimistic mindset among Americans. The Chicago PMI index indicated strong expansion for Midwest manufacturing. Core PCE Prices confirmed inflation is under control. So why did stocks dip for the week? Analysts say some investors are now afraid the economy is strengthening too quickly. Go figure. The week ended with the Dow down 1.2%, to 15116; the S&P 500 down 1.1%, to 1631; and the Nasdaq down 0.1%, to 3456. While stocks slipped, bonds plunged, as positive economic data made investors worry the Fed might soon slow its bond-buying program that's kept prices up and interest rates down. The FNMA 3.5% bond we watch ended the week down .97, at $103.21. In Freddie Mac's Primary Mortgage Market Survey, national average mortgage rates were up from both the week before and a year ago. But they're still at attractive levels, so the Mortgage Bankers Association saw applications for purchase loans up a seasonally adjusted 3%.DID YOU KNOW?... A service is an economic activity that is intangible, not stored, doesn't result in ownership, and is consumed at the point of sale. This week's ISM Services index measures the health of this business sector. >> This Week's Forecast FACTORIES OK, FED OBSERVATIONS, A FEW MORE JOBS... This week's ISM Index should show factory activity barely expanding in May, while ISM Services is forecast to report stronger growth for that sector. The Fed's Beige Book reveals anecdotal economic info from Fed Districts across the country. Experts expect a tone of cautious optimism. Nothing new there.Friday it's the always important Employment Report. Economists think that new Nonfarm Payrolls in May will stay in the modest range we've been seeing. This job growth isn't outpacing workforce growth, so the Unemployment Rate should remain at 7.5%>> The Week's Economic Indicator CalendarWeaker 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 June 3 - June 7 DateTime (ET)ReleaseForConsensusPriorImpactMJun 310:00ISM IndexMay50.950.7HIGHTuJun 408:30Trade BalanceApr-$41.1B-$38.8BModerateWJun 508:30Productivity - Rev.Q10.6%0.7%ModerateWJun 510:00ISM ServicesMay53.553.1ModerateWJun 510:30Crude Inventories6/1NA3.0MModerateWJun 514:00Fed's Beige BookJunNANAModerateThJun 608:30Initial Unemployment Claims6/1347K354KModerateThJun 608:30Continuing Unemployment Claims5/252.960M2.990MModerateFJun 708:30Average WorkweekMay34.534.4HIGHFJun 708:30Hourly EarningsMay0.2%0.2%HIGHFJun 708:30Nonfarm PayrollsMay164K165KHIGHFJun 708:30Unemployment RateMay7.5%7.5%HIGH>> Federal Reserve Watch Forecasting Federal Reserve policy changes in coming months... Economists see no signs the Fed will touch its super low Funds Rate at the next FOMC meeting a couple of weeks away. The central bankers want to see unemployment down to 6.5%, which doesn't look likely 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 Jun 190%-0.25%Jul 310%-0.25%Sep 180%-0.25%Probability of change from current policy:After FOMC meeting on:Consensus Jun 19 <1%Jul 31 <1%Sep 18 <1%UIE

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