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Pisani: Why it IS a Meltup

Cynics will note that ever since Mr. Volcker and Mr. Bernanke have been testifying, the market has drifted lower.

Regardless. There are a number of positive factors behind today's modest move, which — given that the S&P 500 is up twelve out of fourteen days — can only be described as a meltup:

1) the Moodys upgrade of Ford.

2) the Hartford Financial and Discover announcement that they would repay TARP money earlier than expected, with HIG expected to price a common stock offering tonight.

The Street is of the belief that companies will be able to raise the necessary money to strengthen their capital positions, whether they are banks or insurance companies or REITs or home builders.

3) The February Producer Price Index (PPI), which showed that inflation is not a threat, which helps the doves on interest rates .

Finally, a sobering report from Fannie Mae.

Is housing the Achilles heel of this recovery? Fannie Mae puts out a monthly economic report, and the March report contained a sobering headline: "Housing Setback Underscores Fragile Recovery."

The key sentence: "Unfortunately, despite the high hopes associated with the extended and expanded homebuyer tax credit, housing activity appears to have faced a setback that went beyond the impact of adverse weather conditions."

They temper these remarks by noting that, "We currently view the housing setback to be a temporary one, and continue to expect activity to rebound later in the year but at a lower trajectory than previously projected."

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