As we've noted before, last month's housing numbers are far from being the basis for any bullish assumptions going forward. However, some analysts seem to be using it as a springboard on finding other signs of hope; the boys over at Danske Bank have a bullish view and take the housing numbers in a much more positive light.
Additionally, they're expecting the ISM numbers to really take off. Their model seems to be a bit bullish historically, but if the ISM numbers underperform by the historical margins it's still a huge gain. We hope they're right but are expecting them to be wrong.
An Interesting piece on consumer demand; U.Michigan's consumer survey for March (57.3) basically shows a slight increase in demand (+1.0) but still below a trailing 6MMA (58.0). As with the housing piece, this is likely to be a temporary increase before the number returns to February levels or even lower. As a group, consumers seem positive about legislation's effect on the general economy but are mixed on it's effect on their personal financial situation. Additionally, consumers have not yet been seduced by the deeply discounted prices out there - savings are still a priority for most; this has to be disheartening news for the Treasury which has been battling deflation as a silent enemy.
The financial situation of consumers is dismal. “The fewest consumers in the history of the survey reported that their finances had improved during the past year, with an all-time record number mentioning that their incomes had declined in the past year,” Curtin said. Moreover, consumers anticipated the smallest annual income gains ever recorded—just 0.2%, down from 2.5% a year ago. Consumers favored saving a greater share of their incomes than they have in the past. “Higher savings intentions were reported by four-in-ten consumers, and half of all consumers reported that they intended to reduce their debt during the year ahead,” Curtin added.
With consumers expecting more unemployment and recession for at least the rest of 2009, ZH thinks this is a case where perception is going to become reality.