By Carlos Guillen

After days of worrying about the political instability in Greece, Investors have momentarily taken a break and are looking at some positive signs of growth here at home. With retail sales continuing grow, manufacturing data gaining momentum, and inflation remaining flat, investors appear to have gained some confidence that the U.S. economy may push forward despite a slowing China and a stagnant euro zone.

Perhaps serving as an encouraging sign that the U.S. economy is holding strong was that manufacturing in the New York region expanded in May, indicating that factories are still driving the expansion. According to The Federal Reserve Bank of New York, Empire State Manufacturing increased to 17.1 this month, up from 6.6 in April, landing nicely higher than the Street's estimate of 8.4. Given that a reading above zero indicates economic expansion, today's reading helps to add some credence to the notion that growth in the region is still alive. Manufacturers in the U.S. got a boost as auto sales have been running at the fastest pace in four years, lifting demand for goods from glass and machinery to sound systems.

Also a bit encouraging today was data from the Commerce Department that conveyed that retail sales increased in line with expectations. Retail sales increased slightly by 0.1 percent in April, landing in line with Street's estimate of 0.1 percent but lower than the 0.7 percent posted in the prior month. During April, sales of clothing was softer since consumers had already done plenty of shopping driven by the warmer than seasonal weather early in the year. Given the importance of consumer spending, as it represents 70 percent of gross domestic product, the continuing growth in retail sales is still encouraging. With consumer confidence still inching higher, jobs still slightly increasing, and gasoline prices slowly retreating, consumption growth looks to be on its way to give GDP support this quarter. The continuing strength in consumer demand at the moment raises the odds that the world's largest economy will weather the effects of a stagnant economy in Europe and slower economic growth in China.

In all, stocks are responding positively to the macroeconomic data from here at home. So far with inflation holding flat the odds are that the Fed will keep interests rates low as planned, at least until late 2014. This should keep the backdrop favorable for equities in the short term. At the moment the Dow Jones Industrial Average is holding support, and it is looking like it can recoup some of the losses posted in the last couple of weeks.

Builder Confidence Climbs
By David Urani

The housing market, after taking a bit of a breather in the early part of this year, seems to be back on the upswing judging by a few recent data points. The latest good news comes from the NAHB/Wells Fargo Housing Market Index which surveys home builder sentiment. The index hit 29 for May, which is the best reading since May 2007. That included a reading on traffic of prospective buyers that was the best since April 2007 and a reading on present conditions that matched the highest point since May 2007.

In the meantime issues on the banking side reportedly continue to weigh on sales, including lack of credit access for both builders and consumers, and appraisals that don't match up with selling prices. Nevertheless the observations on traffic are encouraging as the spring selling season gets into gear and the latest evidence suggests that the housing recovery has not in fact stalled as previously feared.