Sure, there are several earnings reports coming that are going to shake, rattle, and roll, the market this week, including Morgan Stanley (NYSE: MS) and Goldman Sachs (NYSE: GS), but what about those all important economic releases? Last week, the consumer price index was revealed for May and showed a monthly increase of .6% as energy was HOT once again, and the overall transportation costs rose the most since November 2007. Core inflation was up only .2% and investors liked the number as it calls for the continuation of a "Fed-Pause," which helped the dollar move up for the week.

New Residential Construction (permits) popped last month on an unexpected increase of the multi-family housing starts. Think about it for a minute and you will quickly realize that as families are losing their homes due to the deteriorating economic conditions, they still need live somewhere. So, the increase of 326,000 permits for multi-family housing makes perfect sense. But, don't be fooled by the fact that these are still mixed into the totals and have skewed the overall stats upwards.

Still, the reports have shown difficult conditions as the total starts have hit lows last seen in 1991. Before that, the lows of this level were seen in 1974. Economists over at Economy.com are looking for housing starts to drop again in May down to 985 million. Since the economy has become the real story (aside from the oil horror show), housing is vitally important, as it is really a proxy for the financial fortitude of the average family. Realize that if they are not buying homes, it is because they don't have the funds, cannot get credit and do not have confidence in their financial future.