Last Week in Review: The Stock market takes a hit...and the latest read on US employment was a surprise!

Forecast for the Week: The economic calendar is thin this week, but some heavy hitters arrive on Friday.

View: Avoid these financial pitfalls that can strain even the strongest relationship!

Last Week in Review

"YOU'RE RIDING HIGH IN APRIL AND SHOT DOWN IN MAY..." Just like the old Sinatra tune "That's Life," the Dow Jones Industrial Average traded as high as 11,258 in mid-April - but May wasn't quite so good for Stocks, as the Dow lost 8% in May, suffering its worst one-month decline in 70 years. In the end, May was quite a slippery month all the way around, dominated by headlines of Greece and Oil...and so far in the first week of June, it hasn't been much different. But one important economic report that managed to break through the news from across the globe was the official Jobs Report, which came in far worse than most estimates. The bad news pressured Stocks lower on Friday - and with the money flowing out of Stocks and into Bonds - helped home loan rates see a bit of unexpected improvement on Friday. As you can see in the chart below, the headline number in the Jobs Report showed 431,000 jobs created in May. On the surface, this would seem like a very good thing, but that number was not only well below the 500,000 that were expected, but also was primarily made up of temporary census workers hired by the government. In fact, 411,000 of the 431,000 hires were exactly this - temporary census workers who are certainly glad to have a job, but who will join the ranks of the unemployed once again when the 2010 Census has been completed. ----------------------- Chart: U.S. Nonfarm Payrolls (By Month) The headline job creations number that you hear about in the media comes from the business or Establishment Report, also known as Current Employment Statistics...and it can be misleading, as it includes something called the "birth-death ratio," which is a model or estimate of businesses created or closed within a given month, and based on historical data, supposedly foretells how many jobs were created or lost as a result. And this estimating method can be very highly inaccurate, particularly during times of changes in business cycles and the economy, such as we are going through presently. But even the Household Survey - which previously showed 1.1 Million jobs created over the past three months - showed 35,000 jobs lost during May. This is important because the Household Survey or Current Population Survey (CPS) may be a more accurate reading, since actual households are contacted. Additionally, this is the survey that gives us the Unemployment Rate. Overall, the Jobs Report was disappointing, but at least there still were some modest job creations. Additionally, average hours worked did improve, which is a good sign. And the Unemployment Rate did drop from 9.9% to 9.7%. So a bit of good news was found in the Report, and as Sinatra might say. "You Can't Take That Away From Me." DESPITE SIGNS THAT THE ECONOMY IS STABILIZING, THERE ARE STILL UPS AND DOWNS THAT IMPACT THE MARKETS AND INDIVIDUAL CONSUMERS. THOSE FLUCTUATIONS CAN BE PARTICULARLY CHALLENGING FOR NEWLYWEDS TRYING TO COMBINE INCOMES, EXPECTATIONS, AND BUDGETS. CHECK OUT THE MORTGAGE MARKET GUIDE VIEW BELOW FOR 6 TIPS THAT CAN DECREASE TENSION AND INCREASE HARMONY IN A MARRIAGE.

Forecast for the Week

After a full load of economic reports last week, we'll see a little breathing room this week. In fact, we won't see the first major economic report until the Beige Book is released on Wednesday. The Fed's Beige Book - officially known as the Survey on Current Economic Conditions - contains anecdotal information on the current economic and business conditions. Although some people consider the Beige Book to be a lagging report, it can serve as a helpful indicator of the Fed's policy decisions. It reflects data from bank reports, as well as interviews with key business contacts, economists, market experts, and other sources. We'll also see the Balance of Trade report on Thursday. Remember, a negative balance of trade - or a deficit - occurs when imports surpass exports. The US merchandise trade balance has been in a deficit since the mid-1970s. Initial Jobless Claims will also be reported on Thursday. It does appear that over the past few weeks Jobless Claims have shown some stabilization...and while it isn't getting much better; at least it isn't getting much worse. The markets will be watching to see if that trend continues this week. The week wraps up on Friday with the Consumer Sentiment Index and Retail Sales for May. Retail Sales will be the big economic report of the week. In last month's report, Retail Sales doubled expectations and marked the seventh consecutive monthly increase. The report can be volatile from month to month, but the recent string of improving reports does signal that the consumer is starting to spend more money. In addition to those reports, the Treasury Department will auction off $70 Billion in 3- and 10-Year Notes and 30-Year Bonds. It will be interesting to see how these auctions perform with yields at very low levels. 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. As you can see in the chart below, Mortgage Bonds have been extremely volatile since May 6, when the "Flash Crash" occurred. Overall, Bonds and home loan rates ended the week slightly better than when they began. But the Bond market's good fortune may not last very long - so be sure to give me a call if I can help explain the current rate situation and how it might benefit you. ----------------------- Chart: Fannie Mae 4.5% Mortgage Bond (Friday, June 4, 2010)

The Mortgage Market View

Six Money Mistakes of Newlyweds

By Erin Burt
Kiplinger.com

Whether you're planning a walk down the aisle soon or you've already gotten hitched, watch out for these financial pitfalls that can strain even the strongest marriage.

Four words no one wants to hear soon after his or her wedding day: "We made a mistake."

I'm talking about financial choices - not your choice of spouse. Unfortunately, many newlyweds set themselves up for failure soon after they say "I do." If you bring bad money habits to the marriage or fail to come up with a plan to merge your financial lives, you could potentially doom your relationship to money trouble - and endless arguments. Not exactly "happily ever after."

However, nothing says "I love you" like the desire to start your marriage on the right financial foot (roses, schmoses). Here are six common pitfalls that trip up new couples. Steer clear of these, and you'll decrease the money tension and increase the harmony in your new life together.

1. Keeping money secrets

Money is one of the most common sources of arguments in a marriage, so it's best to simply avoid the subject altogether, right?

Wrong! Some of the most heated arguments stem from failing to discuss financial backgrounds, expectations and attitudes from the start. Communication is key to the survival of any relationship, and bearing your financial soul to your partner is no exception.

Ideally, you want to have this conversation before walking down the aisle. After all, there are good marital surprises ("Didn't I tell you I'm a gourmet chef?") and bad surprises ("Didn't I tell you I have $20,000 in credit card debt?"). Full disclosure is in order here - and that includes your shoe fetish or gambling habit. For tips on what to discuss, see Ten Questions to Ask Before Saying 'I Do.'

2. Not having a budget

Now that you're settling into your new life together, it's time to discuss the b word. No, not baby. Budgeting. You're merging two spending habits and two saving habits into one household. So even if you had a budget when you were single (pat on the back), you've got to make a new one with your husband or wife to include his or her income, debts and monthly expenses. That will help to ensure you have enough money left over for that other b word - Bahamas.

Use our budget worksheet to start. Your first step is to write down your fixed expenses - such as your rent, car payment, insurance premiums and student loan payments. You should also make a habit of contributing to your savings or investments as if you were paying a fixed bill each month. Then write down your flexible expenses, such as utility and phone bills, transportation costs, groceries, trips to the ATM, and miscellaneous purchases. Track your actual spending for a couple of months to see where your money really goes, then find the spending leaks and plug them. Building a budget is a great way to set common spending and saving goals, identify problems, and work together to fix them.

3. Giving one person the financial reins

The honeymoon's over, and it's time to get down to the nitty-gritty of the daily finances. Who will physically pay the bills, monitor the investments and crunch the taxes? One person may be more inclined toward these tasks, or you may decide to split the responsibility or trade off each month.

There's nothing wrong with letting one person take over the family finances, as long as both partners are okay with that decision. But that doesn't mean the other partner should be excluded. It's important for each person not only to feel involved in the big financial decisions but also to have an understanding of the day-to-day finances. You each need to know all your different account information, passwords and bill due dates in case anything were to happen to the other person. And no matter how you divide the responsibility, it's a good idea to have a regular "money date" each month or so to make sure each of you is in the loop. You should go over your budget, review your savings progress and discuss upcoming expenses together. How's that for keeping the romance alive?

Also, if you choose to combine your finances after you wed, make sure that major purchases and savings accounts are held in both of your names so that each of you has equal access and can maintain a credit rating. You don't want to find out in the event of a divorce that your name wasn't actually on the car title or savings accounts.

4. Dragging debt down the aisle

What's his is hers, and what's hers is his. Whether you decide to combine your finances or maintain a separate approach, if one of you brought debt into the marriage, it becomes a problem for both of you. You'll need to work together to come up with a plan to pay it off. However, you should never officially commingle your debt. Doing so could hurt the credit score of the other partner and make it difficult for one or both of you to get credit later. Keep existing credit-card and loan accounts in the original holder's name.

If you can help it, it's best to avoid beginning your marriage in the red. Many newlyweds make the mistake of going too far into debt to pull off the wedding of their dreams, go on an exotic honeymoon, or buy brand-new furniture and appliances for their home. Before you dig too deep, you should sit down together to determine which expenses are necessary and which are worth a splurge - and come up with a plan to pay for it all before you spend it.

5. Sweating the small stuff

Marriage is about compromises and simply letting some things slide. So she squeezes the toothpaste tube from the middle, and he doesn't pick up his socks. Big deal. You'll both soon learn to pick your battles and save your energy for issues that really matter.

That goes for picking your money battles, too. I remember my first financial argument with my husband. We had been married two weeks, and we were doing our grocery shopping together. He wanted to buy the brand-name chocolate chips, and I felt strongly that we should save 75 cents and go with the off-brand chips. After a lengthy and heated exchange, we divided up the rest of the shopping list so that we wouldn't have to look at each other for the rest of our outing. Then we drove home in a huff. Lesson learned: Never go grocery shopping when you're hungry, tired and irritable. Oh, wait. Financial lesson learned: Don't sweat the small stuff. Was the argument really worth 75 cents? No way.

Of course, if all the little stuff is adding up to a big drain on your finances and causing you to live beyond your means, bring it up at your next money date and work together to find ways you can both cut back. (Ah, there's that compromise idea again.) But take note: It's important that you build a little "mad money" into your budget for each person to spend at his or her own discretion. (Can you imagine asking your spouse for permission every time you wanted to buy a cappuccino and a muffin, or grab a drink with some friends after work?) But as far as the big stuff goes, make it a rule to consult the other on major purchases. You don't want to come home and unexpectedly find a brand-new Mercedes in the driveway, and the bill that goes with it.

By the way, I now go grocery shopping alone. We decided as a couple it's what's best for our marriage.

6. Failing to plan for an emergency

No one likes to think about bad things happening, but in all the excitement of your engagement, planning your wedding and moving in together, it's easy to overlook this important aspect of financial planning. One of the best gifts you and your spouse can give each other is financial security and protection from life's storms.

First, assess your emergency stash of cash. Every couple should have enough money available to cover from three to six months worth of living expenses. You never know when the car will break down, one of you will lose a job or you'll have an unexpected medical bill. Learn more about how to build your financial foundation and where to keep the money.

Then, you need to make sure you have adequate insurance coverage, including health, auto, renters or homeowners, and possibly life insurance. Learn more about the types of insurance everyone should have, and how to get the appropriate coverage.

Did you get married without a prenuptial agreement? It's not too late to protect the financial interests each partner brought to the marriage. Consider drafting a post-nup with your lawyers. Plus, make sure you each have written a will to divide your assets in the event of your death.

See Also: Secrets to Marital and Money Bliss, 10 Questions to Ask Before Saying 'I Do', A Primer on Prenups

Reprinted with permission. All Contents c 2010 The Kiplinger Washington Editors. www.kiplinger.com.

Economic Calendar for the Week of June 07 - June 11

Your 2010 Money Calendar

Key dates to bookmark for the year ahead.

By Jessica L. Anderson, Associate Editor of Kiplinger's Personal Finance magazine.

JANUARY

1 - Parents of college-bound high school seniors: Fill out Free Application for Federal Student Aid (FAFSA).
4 - First trading day of 2010.
7 - Set financial goals, update your budget and resolve to pay off holiday debt (see "Four Ways to Trim Your Spending").
8 - Convert traditional IRA to a Roth; income limits for conversions are gone.
15 - Estimated federal taxes for the fourth quarter of 2009 are due.
20 - Consult with a financial planner: Your Money Bus stops in Greensboro, N.C.
21 - Seniors: If you're over 70½, talk to your IRA administrators about resuming regular required minimum distribution payments.
26 - Federal Open Market Committee meets to review interest rates.

FEBRUARY

2 - Think taxes: Your 1098, 1099 and W-2 statements should arrive by today. Finish gathering tax documents and put them in a folder for later.
4 - Your Money Bus stops in Charleston, S.C.
7 - Billions of dollars in bets will be riding on Super Bowl XLIV.
12 - Investors: Standard & Poor's 500-stock index has gone down 15 of the past 18 years on the day before Presidents Day weekend. You could pick up some cheap shares.
15 - Presidents Day. Before you hit the sales, take our quiz to find out what kind of spender you are.
22 - New credit-card rules go into effect.
22 - Your Money Bus stops in Palm Beach, Fla.

MARCH

1 - Shoulder season starts today and runs through May. Look for bargains on travel.
3 - Keep an eye out for proxy forms. They'll let you vote on shareholder issues without being present at the annual meeting.
6 - Think taxes: Assign value to stuff you donated to charity if you itemize deductions.
9 - Your Money Bus stops in Birmingham, Ala.
14 - Daylight Savings Time begins. Spring forward.
15 - Deadline to empty your 2009 health-care flexible spending account (if your plan allows the 2½-month grace period).
16 - Federal Open Market Committee meets to review interest rates.
19 - Triple Witching Day for the stock market: Contracts for stock-index futures, stock-index options and stock options all expire together. Brace for volatile trading.

APRIL

1 - It's Financial Literacy Month. Take the Kiplinger quiz on your financial know-how.
1 - Seniors: Deadline for taking your first required minimum distribution from IRAs and other retirement accounts.
2 - Your Money Bus stops in Cleveland.
3 - Prepare your income-tax return this weekend.
12 - First-quarter earnings announcements for the Dow Jones industrials begin with Alcoa.
15 - File your tax return or request an extension. Estimated federal taxes for the first quarter are due.
16 - Expect a big tax refund? Adjust your withholding.
22 - Earth Day. Save money and the planet by switching to compact fluorescent bulbs.
27 - Federal Open Market Committee meets to review interest rates.

MAY

1 - Berkshire Hathaway annual shareholders meeting, in Omaha. Treasury announces semiannual I-bond rates.
2 - Mother's Day is May 9. Find a gift deal at www.dodtracker.com.
6 - Your Money Bus stops in Fort Worth.
11 - Celebrate the 100th anniversary of Glacier National Park. A visit to one of the 58 national parks is a great idea for an inexpensive summer getaway.
12 - Book a tune-up for your air-conditioning or sprinkler system before summer sets in.
19 - Start planning your summer vacation (use a booking site such as Kayak.com).
27 - College-bound high school grads: Complete student-loan applications, including those for federal Stafford loans and federal PLUS loans for parents.
30 - Use your tax refund to pay down credit-card balances or seed an emergency fund.

JUNE

1 - Investors: The stock market historically dips the week after Memorial Day. Look for cheap buys.
3 - Your Money Bus stops in San Diego.
7 - Recent college grads: Consolidate student loans. Make a money-smart plan for what to do with your graduation cash (start an IRA, create an emergency fund).
12 - Shop for Father's Day on June 20.
15 - Estimated federal taxes for the second quarter are due.
17 - Your Money Bus stops in Portland, Ore.
21 - Investors: Dow down 17 of the past 19 years-don't sell this week.
22 - Federal Open Market Committee meets to review interest rates.

JULY

2 - Midyear financial checkup: Update the goals you set in January and rebalance your portfolio, if necessary.
4 - Independence Day. Break free from debt by tallying up what you owe and making a plan to pay it off.
7 - Your Money Bus stops in Colorado Springs.
12 - Second-quarter earnings announcements for the Dow Jones industrials begin with Alcoa.
21 - Reshop your auto insurance (www.insweb.com), homeowners coverage (www.accucoverage.com) and life insurance (www.accuquote.com).
26 - If you're over 50, find out about long-term-care insurance: Take our quiz to learn more.

AUGUST

1 - Shop early for an end-of-the-model-year car deal. You'll get the best combination of price and selection as dealers clear inventory.
3 - This is the month for statewide sales-tax holidays for back-to-school shopping. Find out whether your state has one.
5 - Your Money Bus stops in Omaha.
9 - Investors: Prepare to hunker down. From 1988 to 2005, August was the worst month for the Dow and the S&P 500.
10 - Federal Open Market Committee meets to review interest rates.
24 - Investors: Look for the market to gain strength. The end of the month has been strong for the past five years.
26 - Renegotiate the rate on your credit card.

SEPTEMBER

1 - Fall marks open-enrollment season for employer health-insurance plans. Review your options, even if you can keep the same coverage.
2 - Start scouting for deals for holiday travel. Wednesday is the cheapest day to fly, with the exception of the Wednesday before Thanksgiving.
3 - Investors: Watch for stock-market instability. Triple-digit Dow moves are commonplace leading up to Labor Day.
9 - Your Money Bus stops in Milwaukee.
15 - Estimated tax payments for the third quarter are due. Deadline for submitting corrections to your FAFSA.
21 - Federal Open Market Committee meets to review interest rates.
30 - Your Money Bus stops in Washington, D.C.

OCTOBER

1 - If you're self-employed, deadline to establish a Simple IRA.
2 - Financial Fitness Workshop, in New York City.
7 - Third-quarter earnings announcements for the Dow Jones industrials begin with Alcoa.
8 - If you've lost money on a Roth IRA conversion, you can still recharacterize. Contact your Roth sponsor ASAP.
15 - Deadline to file your tax return if you requested an extension in April.
21 - Get Smart About Credit Day. Buy your FICO scores at www.myfico.com.
22 - Investors: Look for good buys on depressed stocks; October has marked the end of 11 post-World War II bear markets.

NOVEMBER

1 - Treasury announces semiannual I-bond rates. Buy candy on the cheap after Halloween.
2 - Federal Open Market Committee meets to review interest rates.
7 - Daylight Savings Time ends.
8 - New college grads: First student-loan payments are due this month.
15 - Open enrollment begins for Medicare Part D and Medicare Advantage plans, and continues through December 31. (See "Choose the Right Medicare Plan for Your Needs".)
17 - Investors: Time to sell? The Dow has been up 13 of the past 16 years in the week before Thanksgiving.
24 - Log on to www.gottadeal.com to plan your Black Friday/Cyber Monday shopping strategy.
29 - Cyber Monday: Save on sales at most online retailers.

DECEMBER

1 - Investors: Before you buy a mutual fund in a taxable account, check the fund's Web site for its ex-dividend date and purchase shares after that date to avoid a tax bill.
5 - Make year-end donations to a charity or your alma mater and lock in a tax deduction (see "Five Ways to Check a Charity").
13 - End of 2010 is your last chance to make energy-efficient home improvements and get a 30% tax credit up to $1,500 (deadline: December 31).
14 - Federal Open Market Committee meets to review interest rates.
18 - Best time of the year to buy a computer-deals range from 15% to 50% off, or you could score a free printer or software package.
31 - Deadline for taking annual required minimum distributions from your retirement accounts, setting up a solo 401(k) plan and enrolling in a Medicare prescription-drug plan.