Two Views On Market Drivers

by cnbc.com staff
Wednesday, 27 Dec 2006 | 4:47 PM ET

Half empty -- half full.

Two investment sages shared their predictions with “Closing Bell”: Jim Paulsen, chief investment strategist at Wells Capital Management, and Bob Milliken, director of fixed income portfolio investments at BB&T Asset Management.

Fuel For A Rally
A look at today's housing numbers and the data's impact on the markets, with James Paulsen, Wells Capital Management Chief Investment Strategist; Bob Millikan, BB&T Asset Management Director of Fixed Income Portfolio Investments and CNBC's Bob Pisani

Paulsen spoke with CNBC’s Bob Pisani about the stimuli that drove the market through the end of this year. He noted surprisingly good job-creation numbers and falling gasoline prices, “on top of the constant”: liquidity that “hasn’t dried up.” He enthused that “most of these things are still in force” as we enter the new year. Paulsen sees “really strong evidence” that housing is bottoming, citing such indicators as leveling lumber prices.

Milliken, on the contrary, does not believe the housing market has bottomed. He cautions that “a few months of data isn’t a trend,” and advises sector rotation – though he did not specify which sectors he prefers. Milliken predicts interest rates will be lower in six months or so – but “will be back up” by the end of 2007.