By Carlos Guillen

So far this week equities have continued to slowly pull back after hitting resistance last Friday. So far earnings season is bringing rather mixed results with some strong surprises as that brought by Apple last night, which beat estimates by a large margin on both revenue and earnings. Nonetheless, equity markets in general continue to be concerned with the Greek debt situation, and some discouraging comments from the European Central Bank (ECB) were putting some pressure on the market this first half of trading; however, Fed comments are helping to offset these pressures.

Earlier today, the ECB said it remained firmly opposed to any restructuring of its Greek bond holdings as the debt was acquired for monetary policy purposes. This sentiment was also shared with German officials who rejected suggestions by the International Monetary Fund to take losses on Greek debt holdings. While the ECB faces pressure to join private-sector investors in taking losses on Greek debt, it sees this as potentially damaging to confidence in the institution if these losses were to take place. Moreover, the general concern is that any increase in the costs generated by the ECB to reach a deal with Greece will cut the funds available to help other indebted euro zone nations. This sentiment coupled with the failure to reach a deal between Greece and private investors to take a significant write-down to debt is adding pressure to markets around the world today. Granted, the equities are not trending sharply lower, but still they have been sliding in bits and drabs over the last three trading sessions. When this slow down trend will end is anybody's guess at the moment, but for whatever it is worth, the Greek government said it hopes to complete talks on a deal with its private creditors as early as this week.

On the home front, pending home sales were a bit soft, coming in a bit worse than expected, but nonetheless still indicative of sustained stabilization of home demand; more on the topic below.

While markets began the day sliding lower into the red, comments from the Fed have brought some green into the picture. Investors are currently being encouraged that the Fed has indicated that it will leave interest rates at extremely low levels until 2014, which is a bit longer than what they had expected by approximately half a year. Also encouraging was that the Fed expects to maintain inflation tamed at or below normal run rates, which gives it room to act in case the situation in Europe gets out of hand. The Fed also expects GDP growth of about 2 percent for the full year, creating more cushion from falling into recession territory.

Big Apple
By David Urani

By now you've heard about the impressive results out of Apple. Well, I dug up a few stats that show you just how much of a juggernaut this company has become:

* As of today, it traded up almost 7% to surpass Exxon Mobil as the most valuable company by market cap
* With 37.04 million iPhone sales during the quarter, it likely surpassed Samsung as the world's largest smartphone manufacturer
* iPads outsold all desktop PCs in 4Q and represent 17% of the PC market.
* Cash position of $97.6 billion is roughly the size of Bulgaria's annual GDP (at purchasing power parity)

Pending Homes

Pending home sales (contracts signed for new homes) for December were up 5.6% year over year, but showed a 3.5% drop month to month. All regions were down except for the Midwest. The real spoiler for the month was an 11% drop in the west, although it should be noted that the previous month had shown an unusually large spike in the west so this looks more like a correction than a true decrease. The NAR has cited delayed contracts as potentially causing volatility in the numbers.

The market had been expecting a 1% drop, so this month's miss isn't a deal breaker although of course we would have liked to have seen better. Yet, the fact remains that if you exclude the previous month, this was still the best reading since April 2010.

The housing stocks are acting okay though today and are mostly trading to the upside. Of course the president noted last night, as many have been suspecting, that he is going to try to push through some more housing aid. Like the tax credit and the HAMP program, one would have to really doubt any new plan will make a big difference in the grand scheme. The latest idea is short on details, but in a nutshell it looks like it would be another refinancing plan that would set underwater but responsible borrowers with lower interest rates. Basically, it just looks like the president wants to make it easier to refinance as consumers currently tend to run into a lot of red tape.

Not a game changer, but at this point it's starting to look like the housing market doesn't really need outside help from the government. I think what we are seeing now is that after a protracted downturn, home sales finally found a natural floor and are steadily climbing back up again. In reality, any refinancing plan would act more as a stealth stimulus check to select homeowners rather than a kick start for the housing market. And you also have to take into account that this Administration has already tried to push refinancing without a lot of success so one has to wonder how successful it would be. The President made a side comment about banks owing consumers back for a deficit of confidence, so it sounds like we could expect to see the Feds try to strong arm the banks again into making new loans.