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Pulling away from the Fed, let’s take a look at the housing market.  The National Association of Home Builders shows that new construction continues to be very strong in the absence of existing homes available for sale.  Sure Housing Starts are down 2.6% from last month, but last month showed a monster 11% increase from the month before.  Rest assured that the 1.246 million new homes being built per year is above market expectations.  And it looks like the trend will continue: Housing Permits rose 4.5% to a 1.285 million unit pace, which is the highest figure in over a year.  Leading the way though is multi-family dwelling construction (apartment buildings), which rose 19.8% from just last month.

Another sector of the economy doing very well is manufacturing.  The Philly Manufacturing Index rose a whopping 20 points to 43.3, soaring above expectations to the strongest reading since the Reagan era in 1984.  Again it appears that the threat of higher taxes on foreign business activities is helping to revitalize a sleepy sector.

After being beaten down over the last seven days, mortgage bonds are attempting to rebound this morning–keeping rates steady for now.