Housing Not So Rousing, Saudis Naughty on Oil

How's that recovery coming along?

In housing, not so well, it turns out.

Housing starts fell from 705K in January to 698K, annualized, in February, with much of the new construction boosted in the multi-family, "5 units or more" category (apartments), which implies a couple of things. First, investors seem to believe that single-family home construction is a fading business, and, second, most of lower and middle class Americans cannot meet the current, stringent lending requirements needed to qualify for mortgages, so they will rent instead of own.

That's something of a setback for the "American dream of home ownership" crowd that watches in horror as each month more and more existing homes sell for less than their listed price, even more become vacant eyesores due to bank and tax foreclosures as the economy stumbles along at maybe two percent growth.

Building permits rose to 717K in February from 682K in January, probably due to the unusually warm weather across most of the country, though the apparent contrariness in that metric may be merely stealing from the future and is also the very first step in construction - a long way from completion, which, as people in Las Vegas and elsewhere will contend, often never happens.

With those numbers released before the open as a backdrop, stocks opened sharply lower and remained in the red throughout the session, though the NASDAQ and S&P 500 had interesting intra-day rallies that took them well off their lows into the close.

Oil got shocked down as the Saudis pledged to pump more crude, Iran assured its neighbors that the Strait of Hormuz would remain open and more signs that the Chinese economy is slowing emerged.

Overall, it was a good day for consumers and not such a great one for oil barons and one-percenters, though financial stocks were among the leaders. As usual, volume was weak and maybe just a mirage. Silver continues to slump, now down into a great buying range below support at $32/ounce.

Dow 13,170.19, -68.94 (0.52%)
NASDAQ 3,074.15, -4.17 (0.14%)
S&P 500 1,405.52, -4.23 (0.30%)
NYSE Composite 8,241.27, -56.20 (0.68%)
NASDAQ Volume 1,508,268,500
NYSE Volume 3,656,522,250
Combined NYSE & NASDAQ Advance - Decline: 1753-3806
Combined NYSE & NASDAQ New highs - New lows: 116-40
WTI crude oil: 105.61, -2.48
Gold: 1,647.00, -20.30
Silver: 31.83, -1.12