By Carlos Guillen

After a rather strong start to today's trading session, which came mostly as a result of some encouraging comments from Greece, equity markets have been retreating and are now in negative territory as macroeconomic data from here at home came in under consensus estimates.

Greece, once again, for only God knows the nth time, has announced that it is close to reaching a deal to solve its immediate debt issue. It has been reported that Greek Prime Minister Lucas Papademos said negotiators had made "significant progress" in talks to strike a restructuring deal on government debt and aimed to have a definitive agreement by the end of this week. How reliable this is is anybody's guess, but for a short period of time it gave equity markets a nice lift early this morning, which countered rather negative employment data from the euro-zone.

Unemployment data from the euro-zone also indicated that the region is currently experiencing the highest level of unemployment, at a rate of 10.4 percent, since June 1998, or before the introduction of the euro. On the positive side, German unemployment dropped more than economists forecasted to a two-decade low in January, bolstering economic growth as the euro region's fiscal crisis prompted companies from Spain to Greece to cut jobs. On the negative side Italy's jobless rate rose to the highest in eight years in December as austerity measures meant to fight the debt crisis inadvertently pushed the region's third-largest economy toward a recession. According to national statistics institute Istat, Italian unemployment climbed to 8.9 percent, the highest since the data series began in January 2004, from a revised 8.8 percent in November; the Street had estimated 8.7 percent. Even more concerning, however, was that Spain reached a new high of 22.9 percent in November and December.

So while the market was able to brush off the rather poor euro-zones jobs data, it was not able to ignore unfavorable economic data from here at home. Indications that the U.S. economy may be cooling were evident in Chicago PMI results as orders and employment slowed, indicating last quarter's pickup in growth will not be sustained into 2012. But there was more, as consumer confidence unexpectedly dropped in January, adding more evidence that the U.S. economy will grow at a much slower growth; more on this below.

Tuesday's Disappointing Data Roundup
By David Urani

The Case Shiller home price index was down 0.7% month to month seasonally adjusted in November, which was a quicker decline than the expected 0.4% drop. Once again this represents new lows for the current cycle, indicating the pricing environment is as soft as ever. That being said, it does reflect some seasonal slowness. Nevertheless, there continues to be little indication from the data that a turnaround is in store. 18 out of 20 regions declined during the month, with Phoenix and Charlotte being the only gainers. Atlanta was far and away the weakest market, down 5.0% month to month non-adjusted, and remains the weakest year over year with an 11.7% drop.

If we can take a positive out of the reading, it's that while the Case Shiller index is perhaps the most reliable pricing indicator, it also lags by a couple of months. In fact, you could also take into account the fact that it follows deals that were closed in November, with prices that may have been agreed upon in a prior month. In that sense, the data may not have caught up to some of the demand improvements seen later in the year. Nevertheless, it seems clear that prices remain stubborn and that we continue to have a long way to go to get the market back on track.

The next piece of disappointing data came from the Chicago PMI which posted a decline down to 60.2 in January from 62.2 in December. The report was somewhat weak all around, with new orders, production and employment all going south. The worst part may have been order backlogs, which were down in negative territory (below 50 indicates contraction) at 48.3 from 57.3 in the previous month. The various regional manufacturing indices (including Philly Fed and Empire State) had been looking good up to now, and this casts a little bit of doubt going into tomorrow's ISM number.

Finally, the Conference Board threw a curveball with a weak consumer confidence reading of 61.1 for January, which fell from 64.8 in the previous month and was below the 68.0 consensus estimate. That was a surprise result, particularly after the University of Michigan sentiment index had already shown a solid gain for the month. It makes you wonder who to believe.

Looking at the components, it was clear that consumers still felt okay about the future, as expectations were down modestly to a fairly good level of 76.2. It was consumers' perception of present conditions that really took a wrong turn, falling to 38.4 from 46.5. According to the survey people felt a little better about employment, but are disappointed with current business conditions and pay.