WED data preview

2:51PM Economic Data Preview :
Housing starts at 8:30 ET and building permits at 8:30 ET fill out the econ calendar tomorrow and will be closely watched indicators, particularly after printing above consensus in their prior read. On Jan 19, the better than expected read on both indicators pushed the housing group higher despite the Dow dropping -88.82 points, the Nasdaq falling -32.45 points and the S&P slipping -11.35 points. Not surprising, the positive economic data provided homebuilding and REITS with intraday strength but intensified selling interest in late trading left the housing group as the only major sector standing in positive territory. The market is looking for home construction to show a slip in Jan after the biggest one month gain in seven years, market consensus is for a rise in housing starts of 1925K (prior 2004K) and a 2000K rise in building permits (prior 2032K). New home starts had a record year in 2004, and continued strength is forecasted for 2005 but is not expected to set a new record high. For a preview of the Industrial Production and Capacity Utilization data, see 13:46 comment.