Asian stocks took their cue from the U.S. markets, though the rise was not as buoyant and European shares are currently trading mixed. Yesterday, U.S. stocks staged a rally that finally held; stocks jumped over 2 percent across the board. The Dow rose 213 points, up 2.1 percent to 10,404; the S&P 500 was up 2.35 percent to 1,115; and the NASDAQ soared 2.76 percent to 2,305.

But U.S. futures are slipping Wednesday. Earnings from FedEx met expectations for last quarter, but future revenue fell short and housing data was a bust.

Housing starts were just released and the numbers were worse than expected. Starts fell 10 percent to a 593,000 annual rate in May, the lowest level this year. Also worrisome: building permits, a sign of future construction, unexpectedly declined to a one-year low. We shouldn't have been surprised after yesterday's plunge in the NAHB homebuilder index, but worries are mounting that the housing market could see a rough second half of the year, which could prompt yet another tax credit to be enacted.

The Producer Price Index, a measure of inflation on the wholesale level, fell 0.3 percent, while the core rate, which excludes food and fuel, increased by 0.2 percent. Investors watch the PPI to see if there are any signs that producers could pass on rising costs to consumers.

Industrial Production data will be released, with forecasts ranging from a 0.8 percent-1 percent increase in May, while capacity utilization is expected at 74.5 percent.

In the category of "I'm shocked, shocked to find that gambling is going on here!": the Office of Congressional Ethics is investigating eight lawmakers who held fundraisers within 48 hours of a major House vote on regulatory reform or received substantial donations from business people with a financial stake in the bill.

Regulatory reform wimp-out move of the day: Chris Dodd and Barney Frank stripped out any meat from ratings agency reform legislation. So maybe Warren Buffett is right: while companies like Moody's, Fitch and S&P are cash cows, investors would be wise to do like Warren and ignore the ratings.

---

This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.

---

Here's a smattering of topics that have been coming in lately. If you have financial questions, go here and I'll help you out!

Dear Jill,

I recently got married and my wife has $25,000 in student loans, with interest rates ranging from 4-5%. I've never had any debt and its freaking me out. Here's my question: should we pay down these loans before we start saving for a house? Thanks-John

First of all, try not to freak out too much about the loans. It's not credit card debt, it was for her college and ostensibly, your wife got a good education, which allowed her to land whatever job she has. Additionally, the interest rate is reasonable, so hopefully you can pay it down quickly.

Continue »

This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.

---

Lately, it seems like most of investors' attention has been overseas-news out of Europe and China has been the main driver of market action. This week, we turn our attention to the US. While talking about the day ahead with CBS3, I highlighted housing and inflation data. Housing is likely to slow after the expiration of the home buyer tax credit and inflation should remain tame, providing the Fed with the freedom to keep interest rates at 0-0.25%.

Continue »

U.S. stock futures are trading a bit higher this morning after yesterday's disappointing day. After the best weekly performance in four months, stocks couldn't keep the momentum going, despite positive comments from a Fed official.

Some analysts thought the reversal was attributable to Moody's downgrading of Greece's credit rating to junk status. Huh? Pretty much everyone in the world seems to understand that Greece is one big, fat junk bond, so Moody's ridiculously late announcement appears to be yet another reason that ratings companies should be put to their death.

The official reconciliation process between Senate and House for financial regulatory reform will kick off today. Here's a great chart that puts both bills side by side and here's a quick regulatory reform cheat sheet.

Areas to watch include: Blanche Lincoln's derivatives trading rules (which some have suggested are behind recent market tumble), the Volcker Rule, which would force banks to separate their risky ventures from the more vanilla ones; and of course, the Consumer Financial Protection Agency, an in independent agency that oversees companies that offer financial products or services that have a "material impact on a consumer."

---

"How can the economy lift off under the massive weight of huge public and private debt burdens? Why is it reasonable ... to expect more consumer spending at a time when surveys show widespread pessimism and growing fear of unemployment?"

— Jan. 2, 1992 Wall Street Journal, 9 months after the end of the 1990-91 recession, and moments before the start of the massive bull market of the 1990s.

This quote is particularly interesting after last week's Congressional testimony by Fed Chief Bernanke. Lawmakers grilled Bernanke about the deficit, and investors wondered how in the world stocks could rise under the weight of burgeoning global deficits.

And it's not just sovereign nations in Europe that are carrying a load — U.S. consumers still have a mound of debt.

According to the Wall Street Journal: "As of the end of March, the average U.S. household's total mortgage, credit-card and other debt stood at 122% of annual disposable income, meaning it would take a bit more than 14 months to pay it all off if everyone stopped spending money on anything else. That sounds like a lot, but it's better than it was before: At its peak in the first quarter of 2008, the debt-to-income ratio stood at 131%. Economists tend to see 100% as a reasonable level, so we're almost a third of the way there."

Continue »

This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.

---

As mortgage rates drop to the lowest level this year (and pretty close to historic lows), you may be thinking that you absolutely, positively must buy something NOW.

I'm a big proponent of buying a home when the time is right in your life, but sometimes, renting still makes sense. Check out this conversation from NYC's newest and coolest urban planning project, the Highline.

---

This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.

---

I woke up this morning to find that Asian stocks rallied and European shares are trading higher in the aftermath of the US stock market's boffo performance yesterday. (US stock futures are treading water currently.) I discussed the catalysts for the surge with CBS3:

After a stream of bad news from across the Atlantic, investors found solace when the European Central Bank (ECB) increased its economic growth forecast to 1% for this year, higher than the previous estimate of 0.8%.

Continue »

Last Updated at 8:45 a.m. ET

Asian stocks rallied and European shares are trading higher in the aftermath of the US stock market surge yesterday. The catalyst for the move was positive economic data from Europe, China and the U.S. , all of which gave investors confidence that the recovery is on track. The Dow gained 273 points, or 2.8% to 10,172, while the NASDAQ and S&P 500 saw similar gains.

After a stream of bad news from across the Atlantic, investors found solace when the European Central Bank (ECB) increased its economic growth forecast to 1 percent for this year, higher than the previous estimate of 0.8 percent.

Chinese exports grew by 48.5 percent, the most in 6 years, a sign that the fastest-growing major economy will continue to fuel the global recovery. Still, there is a concern that the country is overheating--today, a new report said that China's consumer price index (CPI) rose 3.1 percent in May, to a 19-month high. The government's official inflation limit is 3 percent.

Domestically, there was a tiny bright spot on the nation's employment front. The Labor Department said initial jobless claims dropped by 3,000 to 456,000 last week and continuing claims declined to 4.46 million, the lowest since December 2008.

The Fed reported that U.S. household net worth is now down $11.4 trillion dollars from the peak in 2007, but up $6.3 trillion from the low point in the first quarter of 2009.

Today, the focus will be on the May Retail Sales report, which showed a decline of 1.2% from the previous month. The report was worse than expected, and futures started trading lower upon the release.

Finally, as a government panel doubled the estimated amount of oil spilling into the gulf to 25,000-30,000 barrels a day, investors are watching to see whether BP cuts its dividend.

---

Global stocks are trading mostly higher in pre-market activity, following a lackluster session in the US.

Asian shares gained ground after investors viewed a better-than-expected Chinese export report as a sign that growth would resume after the European debt crisis. And speaking of Europe, stocks firmed after the Bank of England kept its benchmark interest rate at 0.5%, where it has been since March 2009.

Today investors will keep an eye on BP shares, which have lost half of their value since the April 20th oil rig disaster and subsequent spill. Talk of potential bankruptcy increased, though many contend BP has the wherewithal to withstand the financial costs (estimated to be as high as $35 billion) associated with the Gulf spill.

On the economic front, there will be the first release of weekly jobless claims since last Friday's terrible report and investors will absorb the most recent data on foreclosures. RealtyTrac said that April foreclosure filings, which include default notices, scheduled auctions and bank repossessions, decreased 3% from April to 322,920 and increased by less than 1% from a year ago. While down, the number remained above 300,000 for the 15th month.

Finally, there are reports of a new pending SEC investigation into Goldman Sachs. Like the SEC's Abacus case, this one centers on a synthetic CDO called Hudson and was mentioned in this 2009 NY Times article. No charges have been filed. The story comes on the heels of the FCIC's document request.

---

This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.

---

When I can invoke Mel Brooks, it's a good day. Remarks from German Chancellor Angela Merkel reminded me of the legendary character Frau Blucher, (played by the wonderful Cloris Leachman) the much-maligned, truth-speaking caretaker in "Young Frankenstein,"  who inspired spontaneous neighs from nearby horses.

For years, there was an urban myth that the reason that the horses neighed was that "Blucher" meant "glue" in either German or Yiddish...and you know horses and glue.

Continue »

Stocks sagged after a report from the Fed and negative comments from German Chancellor Angela Merkel about the European bailout.

After holding the 10,000 level for most of the day, the Dow lost 40, closing at 9,899. The NASDAQ fell 11 points to 2,158, and the S&P 500 gave up 6 to 1,055.

In her discussion of Germany's 80 billion euro cuts in spending over the next four years, Merkel said that lessons from the debt crisis must be learned. Fears that Europe's largest economy was pulling back underscored investor fear of a European slowdown that could spread globally.

Domestically, Fed Chair Ben Bernanke told a congressional subcommittee that while the U.S. economy should grow by 3.5 percent this year and more next year, the recovery is unlikely to spur enough jobs to put a dent into the unemployment rate or the federal deficit.

Continue »

U.S. stocks are trading slightly higher in premarket activity, after a late day rally saved the Dow and S&P 500 from another down day. Yesterday, the Dow gained 123 points to 9939; the S&P 500 was up 11 and a half to 1062, while the NASDAQ lost three points to 2170, on concerns of the tech sector's exposure to the weakening European economy.

Today, European stocks are up, while Asian markets were mixed--the Chinese stock market increased by nearly 3%, but Tokyo was down 1%.

Small business owners are slowly gaining confidence in the economy. The National Federation of Independent Business poll found that optimism among the group rose 1.6 points in May to 92.2, the best reading since September 2008. Still, job creation and capital expenditure remained mired at recession levels.

Today, Fed Chairman Ben Bernanke takes center stage to testify before the House Budget Committee, giving investors an excuse to focus on the US economy, rather than the problems in Europe. He'll likely be questioned about a Treasury department report, that predicts that US debt will rise to $19.6 trillion by 2015, or 102% of GDP (from $13.6 trillion or 93% this year).

Later in the day, the Fed will release its Beige Book on the economy, which provides a summary of economic conditions across the 12 Fed districts.

Also on Capital Hill, there will be a number of hearings about the oil industry: the Senate Natural Resources Committee holds a hearing on increased safety measures; the Senate Committee on Environment and Public Works holds a hearing on the liability cap for big oil, and the House Transportation and Infrastructure Committee holds a hearing on liability limits and whether they should be changed for Deepwater Horizon and future events.

---

This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.

---

My first job on Wall Street was as a gold options trader on the floor of the COMEX in the late 1980s. It was then that I realized the power of a metal that has very little use except for jewelry ... and to provide some semblance of calm for investors. But gold went out of fashion in the 1990s as investors were happy to dump the yellow metal for the technology stocks.

When I was managing money in the early 2000s, I recall that one of the most "aggressive" purchases that I made for my clients was gold at a price of about $300. Clients rarely questioned trades, but when they saw GLD appear in their accounts, I sure did hear about it. I tried to explain that I thought that gold would be a great long-term hold, not because I am a gold bug but because gold represents security in an insecure world.

Continue »

This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.

---

The Federal Reserve reported that consumer credit increased by nearly $1 billion in April to $2.44 trillion. In the same report, there was a substantial revision to March's results -- from a rise of $2 billion to a drop of $5.4 billion. The stock market tanked on the news because the data suggest that Americans aren't yet secure enough to borrow and ultimately to spend freely.

Continue »