Ian Shepherdson Rebound Quotations

Core sales slowed hugely at the end of the year, almost certainly as a result of the cash flow hit caused by the post-Katrina leap in energy prices. This is now over, and sales should rebound strongly in the first quarter.

The underlying trends are still adverse, however, and the deficit will rebound next month.

We think confidence will rebound next month, but in the meantime the odds surely now favor a Fed ease next week,

Nominal spending was held down by a 0.4% energy-induced plunge in the PCE deflator, so real spending rose a hefty 0.7%. A rebound in auto sales after the awful October was largely responsible for this.

This report indicates manufacturing is continuing to rebound from the Asian crisis, which is exactly what the Fed expects.

The rebound in expectations since October is still big enough to signal strong first-quarter consumption, but not a sustained boom.

The renewed strength in home sales reflects lower mortgage rates; we expect rates to dip to a 14-month low this week. The housing rebound will ensure construction sector strength in the first quarter of 2001. No recession here.

The rise in (confidence) is presumably a reflection of the rebound in stock prices and -- though to a lesser extent -- the further cuts in interest rates,