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Off To A Good Start

Housing starts were below expectations, but futures still rose as some are saying jobless claims were not as bad as expected.

Is the rally in bank stocks over?JP Morganbeat on top and bottom line handily, and the stock is only up fractionally pre-open. Goldman is down since its earnings are out; Wells Fargo has moved sideways since it pre-announced.

Still, as I noted yesterday, there's no denying that more traders are viewing the glass as half-full. This morning Bank of America-Merrill Lynch released their monthly Fund Manager Survey: optimism about growth is at the highest level since 2004. Bullishness toward China is at a 6-year high, and traders have begun moving back toward more cyclical sectors, particularly tech.

"The consensus has shifted from apocalyptically bearish to reluctantly bullish," Michael Hartnett, co-head of international investment strategy said. "But it's important to note that asset allocators are still underweight equities, indicating they have yet to fully embrace the idea of a new bull market."

Elsewhere:

1) The good news for JP Morgan is that they beat on large gainsin investment banking, proprietary trading, growth in deposits and checking accounts, and higher mortgage refinancing volumes.

More good news: capital and reserves "enable us to withstand an even worse economic scenario than we face today." Read: we're gonna pass the stress test.

Talk on the Street is that they will be able to repay the $25 billion in TARP money this year and not have to raise outside capital.

The bad news is that consumer credit trends and commercial real estate were poor, and they did boost loan reserves by $4 billion.

These trends are not good, but they may be particularly bad for regional banks. JP Morgan at least has an investment bank that allows them to boost reserves; regionals wont have that benefit.

Bottom line, is that banks that have capital market operations are potentially in better shape than those who do not.

2) Despite a slight earnings miss, Nokia is rising 13 percent in pre-market trading after the mobile handset maker said it expects Q2 industry volumes to be flat or rise slightly from the first quarter.

Additionally, while it expects industry volumes to fall 10 percent this year, it predicts that the bulk of the decline will occur in the first half.

Furthermore, in an interview on Bloomberg, the CFO stated that he saw "some nascent signs of relative stability" in the marketplace.

3) Earnings for Harley-Davidson a penny short of estimates, but the stock is soaring 9 percent pre-open after it reaffirmed its full-year shipment forecast.

More importantly, while the motorcycle manufacturer saw its U.S. retail sales fall 9.7 percent from a year ago, the CEO was "encouraged" that the rate "declined less in the first quarter than in the prior two quarters.

3) China reported first quarter GDP growthof 6.1%, the slowest pace since the fourth quarter of 1999 but about in line with forecasts. The stimulus plan appears to be having some effect. Chinese stocks are at their highest level since August.

4) Struggling from "a rapid weakening in passenger demand" in the first quarter, Southwest Airlines' third straight quarterly loss fell a couple cents below the street's expectations. While capacity cuts will continue, the low-cost airline also announced that it will reduce its staff headcount via a voluntary retirement program.

5) REIT General Growth Propertiesdown 42% after filing for Chapter 11 bankruptcy protection. The nation's second biggest mall owner hopes to restructure some its debt and will continue to explore strategic alternatives.

6) IPO debuting today: Language instruction software maker Rosetta Stonepriced 6.25 million shares at $18 per share, above the expected range of $15 to $17. The company will trade at the NYSE under ticker "RST."

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