Seven weeks into the New Year and market participants are still looking for signs of stability in the U.S. and global economies. At best, the U.S. economic data released in recent weeks has been mixed: for the most part, the data on housing, manufacturing, and employment in January and early February is still decelerating to the downside. On the other hand, readings on weekly retail sales, weekly mortgage applications and homebuilder sentiment in January and early-to-mid February have beaten expectations and have stabilized somewhat. Thus, it is probably too soon to sound the "all clear" on the U.S. economy just yet, and at this point we (and most market observers) would simply settle for a sustainable deceleration in the pace of the decline economy.

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