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.