“WELL, SHAKE IT UP, BABY, NOW…TWIST AND SHOUT…” (JOHN LENNON) And while Traders were braced for a “shake-up” with the big Jobs Report on Friday, they really weren’t prepared for the “twist”. Let’s take a closer look. The Jobs Report has the ability to influence trading for days and weeks to follow, so the market was on the edge of its seat Friday morning waiting for the number of new jobs created during May. About 180,000 new jobs were expected…but the number arrived at only 78,000, the lowest number since August 2003. Normally this downward miss would help propel Bonds higher and help home loan rates improve – but there was a twist.

First, the prior months huge number of job creations was confirmed with no downward revisions, showing that although the numbers may bounce around, the job market is very much alive and well – averaging a beefy 180,000 new job creations per month. Other components of the Report showed that the rate of unemployment is also at very low levels, and hourly wages are increasing, indicating potential for wage pressure inflation. And yet another twist – the team at the Fed made comments that were all over the board last week about the possibilities of inflation ahead…and the markets don’t like uncertainty. Overall, Bonds and home loan rates bounced around over the course of the week, but ended the week close to where they started.

AND SPEAKING OF THE “TWIST”…EVER FEEL LIKE YOUR CREDIT CARD COMPANY IS TWISTING YOUR ARM ON PAYMENTS? WELL GET READY TO SHOUT…YOUR PAYMENTS MAY DOUBLE SOON. DON’T MISS THIS WEEK’S MORTGAGE MARKET VIEW.

The coming week will be a quiet one news-wise, with only two economic releases on the docket, neither of which are likely to move the markets significantly. While Traders may take a “pause that refreshes” and reflect upon the happenings of last week, they will be watching technical signals for clues on trading. News and conditions that drive changes in the market such as inflation, the Jobs Report or geopolitical events are called “fundamentals”…and when there is a lack of fundamentals to drive market action, Traders rely on “technicals”, meaning they watch charts for patterns, past prices, moving averages, trading volume and the like to make their trading decisions.

The chart below shows a technical look at how Mortgage Bonds have been moving higher in recent months, meaning home loan rates have been going increasingly lower. But although the trend has been towards improvement, can the ride continue? The red “candles” indicate a day that Bonds closed lower than they opened – so notice the long red candle on the very right, showing Friday’s weak close. This may mean a reversal, which can happen fast…so it pays to be very cautious as home loan rates could pivot back higher in a hurry.

WHAT’S IN YOUR WALLET? If it’s a stack of charge cards and you are one of the 70% of Americans that are carrying credit card balances, get ready for some unpleasant surprises.

It’s not bad enough that credit card interest rates are typically high and always non-tax deductible…but now, minimum payments are going up.

What’s behind the move? Pressure from Washington and guidelines from the new Bankruptcy Abuse and Consumer Protection Act of 2005 are causing credit card issuers to increase the minimum payment required by 50 to 100%. Washington has seen many consumers get further and further into debt, enticed by minimal payment requirements with little thought as to how long it will actually take to pay the debt back. Soon to be seen on credit card statements, full disclosure of how long it will take to repay the debt based on making the minimum payment.

And like a parent giving a child medicine, the new changes may not taste very good going down, but the results may be beneficial in the long run for the individual. Total interest paid will be cut by nearly 80% and the time to repay will be slashed by nearly 70%. However, there may be some negative consequences to this change, as some consumers will find the payment adjustment hard to swallow. The retail sector of the economy may be affected as well, as consumers may be less likely to purchase due to the increased minimum payment required when charging it.

With long-term interest rates at very attractive levels, many consumers are choosing to clean the slate by consolidating all debt within a home refinance. Another solution could be to utilize a home equity line of credit, but as always, consult your mortgage and tax professionals for the best alternatives and solutions that meet your needs.

After last week’s power-packed economic calendar, Traders will get to relax with only two reports scheduled for release this week. On Thursday, the weekly Initial Jobless Claims report is set for release followed by Friday’s Balance of Trade report.

Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.

For the week of June 6 – June 10