The durable goods report for December was extremely strong. The headline rise of 1.3 percent was decent, but some of the underlying statistics were even more impressive.

Strong December durable goods and the upward revision to November show that perhaps there isn't enough monetary restraint after all.

The question is -- and this is why the market hasn't reacted too negatively to the durable goods report -- is whether businesses ... will continue to spend given the risks to consumer spending posed by high energy prices.

Durable goods was June data, and what we really care about is July data, ... There is also this bearish impulse to the market, because people are looking ahead to next week.

The 1.9 percent December year-over-year rise in the core personal consumption expenditure index reflects a stable and modest inflation rate. That would support the idea that the Fed can stop raising rates soon.

The gains were uneven, however, with small declines in clothing and electronics, a decent 0.7 percent rise for general merchandise and a huge leap for non-store retailers. Provided January holds up -- surveys suggest so far, so good -- the overall holiday season will have been pretty good.