The futures, up to now, may be indicating the same pattern we've had for the last couple of days. A pop at the open - but will it hold? As a backdrop, we have Beijing saying that they're going to reign in money growth - one way or another.

What do 'ya think we got from housing today?

Answer: 1.52m annualized starts (up , permits down - revised down to 1.57, now 1.43m, way below expectations (down 8.7%) - the sharpest fall in 17 years. And year over year, that "starts" number is still a 16% decline.

The futures didn't like it in general, although the Nasdaq didn't move on the news. We may see a bit of a relief rally in the Nasdaq, at least at the open. The bond has ticked down a bit to 4.69, back into its trading channel, but then rebounded right up to the top - at 4.70. It got just out of the channel yesterday at 4.71; anything over 4.70% is potential trouble as a selloff in the credit markets would indicate a flight out of the US for the credit markets.

Update: 8:17AM, bond now indicated at 4.71%. Back to where we were yesterday. Watch out kids - a rally in the broader markets with a selling-off bond market is unlikely to hold, as real interest rates are determined by the market - not the Fed - and they're ticking up!

Before you cheer the start number, consider carefully what happens when you add supply to a market that already is oversupplied..... what do you think that will do to prices on all those new homes that are now on the market, when you keep "loading the cart" with yet more inventory? Is this the latest incantation of "we'll lose a bit of each sale but make it up with more volume?"

Interesting....

Federated (Macys, etc) reported bad earnings and lowered guidance, citing bad April sales. Yet more cracks in the dam......

The consumer is the whole deal here, and it sure looks like things aren't good. About the only place we're seeing strong spending is in the high end - consumers who are more-or-less immune to economic issues.

We shall see how the day unfolds... the last two days we've seen an up open and then a strong fade into the close. We shall see if this pattern continues and if the technical damage to the internals accumulates further.