April housing starts , at 717,000, were well above expectations and at the highest level since October 2008; March was revised upward as well.

Ugh! It was ugly overnight in Asia — Hong Kong and South Korea down 3 percent, Shanghai down 1.2 percent. Commodities were down across the board.

Yet Europe has been rallying for several hours, as has the U.S. Spain and Italian bond yields are lower, stocks higher. Looks like there has been some profit taking in the fixed income space on the recent rallies.

Don't kid yourself: the market is still on notice. Any headline could reverse things...quickly.

Elsewhere:

1) Speaking of commodities declining — the talk this morning was of BHP Billiton backing away from its capital spending projections. They had been planning to spend $80 billion over five years. No more. The commodity price decline in the past few months has taken its toll.

Cash inflows are down, capital costs are up.

They are going ahead with projects already committed to for this year and next, but it appears that some major projects that were in the works may not happen. We are talking about major projects for development of iron ore and copper, for example.

Still, the company remains bullish on iron ore and copper.

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