Tuesday Market Note: Focus on Housing

It took just two-thirds of one trading day for the investor euphoria over China's yuan announcement to fade.

After U.S. stocks closed lower on the day, Asian shares dropped today on fears that a stronger yuan would slow China's growth, and European stocks have dropped after a 9-session bull run on renewed concerns of the debt crisis spillover.

Today, the focus will be on housing. The National Association of Realtors will release May existing home sales, which are expected to rise 5 percent, to an annual rate of just over 6 million units (from April's 5.77 million annual rate). The data comes as concerns over the administration's mortgage plan ("HAMP") are escalating after the release of the Monthly Housing Scorecard.

The box score on housing looks something like this:

• A bunch of trial modifications were canceled, which portends more foreclosures;

• There are still many who are in loan modification hell; and

• Many of the borrowers in the plan could re-default rate in the coming years.

There's no way around this basic fact: Housing is going to be messy for the foreseeable future.