Stephen Stanley Quotations

We're in a pretty quiet time of the year. We've been pretty directionless today. Oil hasn't been doing much.

We're in a pretty quiet time of the year, ... We've been pretty directionless today. Oil hasn't been doing much.

We know from low inventory levels that they're going to have to rebuild inventories as economy strengthens,

One-year inflation expectations spiked from 3.1 percent to 4.6 percent, by far the highest reading since 1990,

But certainly the market should be focused on the core number, since that's what the Fed looks at. We're looking for an 0.2 percent increase, which wouldn't cause a big reaction in the market.

Barring an abrupt weakening in the economy, the Fed will continue to hike rates at a measured pace for the foreseeable future.

If inflation doesn't accelerate much from here, and the Fed just raises rates a little more, we might see something like the end of the 1990s again. But if the Fed has to really ramp up to fight inflation, it's going to be a much worse environment than investors realize.

If it didn't happen in the first quarter, it's going to have to happen at some point. If consumer spending or investment spending was a lot weaker than expected, it'd be a lot more troublesome.

If what we see in these surveys is truly the case, then there will be a clash in the boardroom as these two decide how best to move the company forward.

If the economy keeps growing at a faster pace, the Fed may need to boost rates for longer than what markets are currently expecting. I think that's what the stock and bond markets are reacting to right now.

Katrina is a little bit different because you're also threatening the energy system. We're still trying to figure out exactly where we are on that. The near-term implications are pretty extreme.

It is a little early to eulogize the housing sector. Look for any deterioration in starts, sales, etc., to be more gradual than the weather-depressed December starts tally would suggest.

I think the next really big number for the market is next Friday's retail sales figures. Up until Friday, investors are going to be focused on oil prices, the earnings, and to an extent, the election.

It is never a happy day for the Fed when GDP is revised down and inflation is revised up.

January auto sales were clearly much better than expected. We are on a pace to see a month-to-month increase in the seasonally adjusted sales pace, perhaps to around 17.7 million units or so.

Ironically, with all this strength, the net effect of these data on the fourth-quarter GDP number could be flat or possibly even marginally negative. This is because durable goods inventories were flat, which should more or less offset the positive influence of the stronger-than-anticipated December shipments figures. For first quarter GDP, however, these data are unambiguously positive.

Some of the strength in building permits and claims may be weather-related and so this number probably won't be repeated, but there's been a strong recovery in the index since the hurricanes and by and large we're seeing that in the economy as a whole.

It is definitely clear that (housing) is one area where you will see less growth,

Today's report should convince most market participants that the March softness in the data was primarily a one-month phenomenon. Sounds like a recipe for continued 25 basis-point rate hikes for the foreseeable future.

We know that a flood of Katrina-related claims is coming. The magnitude and the timing are uncertain, but the figures will clearly be boosted sharply very soon.

We are seeing some improvement in foreign economies, but the imports are just so much bigger than exports you would have to have a big slowdown in U.S. demand to really make a difference. I don't expect to see any big improvement in the near term.

The overall manufacturing sector is doing OK with the exception of autos. We continue to see recovery in the industries that were hit by the hurricanes, and then on top of all that it was a cold December.

We still do not look for the core CPI to accelerate rapidly, but it is likely to be persistently firmer going forward. At a minimum, core consumer price inflation will be firm enough to keep the Fed on edge and raising interest rates.

There is more bad news to come in May. Gasoline will be up sharply, and tobacco will be up.

The question is, How much of this feeds through all the way down the production process? Do companies end up having to swallow the cost increases or can they pass it through?

The factory sector appears to have begun the year on a solid note, no doubt bolstered by the surge in new orders seen at the end of last year.

We have been quite skeptical throughout January because data tend to be erratic around the holidays and the turn of the year.

This report is huge in the big picture, ... With the election over and this good news on jobs we could at last see an unleashing of animal spirits in the economy.

When both exports and imports are surging, that is generally a sign that the economy is in very good shape. These figures strike me as yet another sign that activity entering 2006 was on a solid footing, not about to slow down substantially, as the consensus believes.

We think the economy will grow stronger for longer than the market and the Fed do. We look for substantial further tightening to be required.

The question now is what impact the hurricane has on the economy and for how long.

While housing demand will probably continue to moderate from the torrid pace seen in the last few years, housing starts should remain well-supported in the coming months, as builders' backlogs remain near record levels and rebuilding along the Gulf Coast will eventually boost activity.

When the economy's weak, there's always a potential competitor who will undercut you on price, but when everybody's doing decent business, there's not as much urgency on the pricing front. When consumers are mostly employed and their incomes are going up, they're more inclined to accept some price increases.

We've had this pattern of strong month, weak month lately. May numbers were weaker and the expectation is for June numbers to be stronger.

There is no signal that the Fed is nearing the end (of its tightening cycle), and that's been the one consistent thing.

What really got everyone's attention was the decline in the unemployment rate.

What stock investors probably need to be thinking about now is 'what are profit margins doing?'. A little inflation wouldn't be so bad for the stock market, for Corporate America, but it wouldn't be good for the economy or the consumer.

We expect productivity growth to moderate, and compensation gains and unit labor costs to pick up. Just another piece of the puzzle that points toward more Fed tightening than the market currently expects.

This speaks to very robust underlying momentum in the economy, which is one of the reasons why the Fed will have to keep going.

We are still on track for a blowout quarter.

Fed officials will remain watchful for a reacceleration in unit labor costs, especially with anecdotal evidence and an upturn in average hourly earnings growth suggesting that wage pressures may be picking up.

Fed officials have made clear that their heightened inflation concerns are related more to the outlook than the present situation. Thus, inflation fears have intensified even as core measures of prices have been exceedingly well behaved.

There's a game of chicken going on with traders wanting to go short but too afraid of month-end demand to risk it. Anyway, nobody wants to be short in a holiday week when anything might happen geopolitically.

It would represent a bit of a shift from a macroeconomic focus to a banking/regulation focus.

The stock market has been pretty stubbornly hewing to the idea that the economy is slowing down and the Fed may stop soon. So to the extent that people perceive the statement as a little more hawkish, it's maybe upsetting.

The still-massive swing in the pace of stockpiling in the second quarter sets the stage for an explosive third quarter.

Productivity rises could be more modest going forward, since hours worked should grow faster as job losses caused by the hurricanes are reversed. Fed officials will remain watchful of a reacceleration in unit labor costs.

A few weeks ago, the market was looking for a hike in March and May, but there have been some data points recently that have thrown May into question.

Oil is playing a positive role for stocks and the bond market today. Also, the markets are coming off a rough stretch, which makes this bounce pretty understandable.

The bottom line is that, excluding the hurricane, to the best that we can tell, job growth continues to be good, as was made clear by the upward revisions to the previous two months.

A lot of people were hoping June was a fluke and that employment would bounce back, but two in a row is pretty tough to write off. I think market investors are now more worried about the corporate and economic outlook.

The report follows the recent pattern of strong growth and no inflation.

The relatively moderate figures for current conditions should be weighed to some degree against robust expectations for the six-month outlook.

There is sufficient upbeat news on the economy to convince the FOMC to tighten. If the economy warrants a rate hike, the Fed would be doing a great service by delivering.

A stronger-than-expected payroll figure may lead a lot of analysts and investors to rethink their views on the

It is still far too soon to say how the economy will respond to Katrina, but so far, so good. Things are improving so far about as quickly as could be expected.

Consumer spending numbers continue to be very good and manufacturing continues to surprise to the upside, which all suggests the economy has a lot of momentum right now.

The minutes kind of fed into the sentiment in the market right now that the Fed is closer to done. The minutes threw lighter fuel on that one.

The numbers were considerably more moderate than we and others had expected. We have gotten back to pre-hurricane numbers. (But), I don't view this as the beginning of a sustained downturn.

The big picture is still that 10-year yields are up 100 basis points (1 percentage point) in basically a month, so to see a 5- or 10-basis-point pullback is not a big deal. It's just a wiggle on the charts, ... You will get wiggles here and there, and whether it's driven by surprises in economic data, or in geopolitics, oil prices or stocks is anyone's guess.

The big picture for the consumer still looks good.

The best way to summarize the message is

It's certainly an interesting time as we bump up against levels we haven't seen in quite some time.

The U.S. economy is simply stronger than that of most of our trading partners and modest currency movements have proven insufficient to remedy the balance.

Not only will the market be surprised if we get to a 4.25 funds rate at the end of year, but 4.25 is by no means going to be the end. You're going to see a significant backup in yields to reflect that.

The labor market is very healthy, with both jobs and wages advancing at a nice clip. This means that households will have plenty of cash to support consumption in 2006.

The labor market is the linchpin of our economic forecasts, because income growth is going to sustain the consumer.

The labor market appears solid heading into 2006, which could have bolstered the confidence reading in January.

The jobs numbers were definitely on the soft side, and so stocks are down.

The inventory change now suggests growth this quarter is likely to have a 3.0 handle on it rather than 4.0.

The ISM manufacturing index moderated significantly in December, moving from torrid to healthy territory.

The Fed is, if anything, more concerned about inflation than they are about a growth slowdown.

The Fed will have to take rates beyond neutral to a somewhat restrictive pace. Today's data totally supports that view of the world and should...eliminate any doubts about the near-term course of monetary policy.

The Fed can not be comfortable with the pace at which the labor market is moving to/through full employment. Let the wage acceleration begin!

The consumer never really missed a beat, and now attitudes are beginning to catch up to reality. Once again, watch what they do, not what they say.

The consumer is doing quite well. The job market is doing quite well.

In terms of monetary policy right now, most people expect the Fed to tighten during the next two or three meetings, but it's foggy beyond that. Greenspan didn't really say much to clarify, either in his comments or in the question period. He was appropriately non-committal, and so there's been little reaction from stocks.

I just don't think the consumer is going to roll over on the back of a cooling sector.

Clearly, reports of the housing market's demise have been greatly exaggerated.

Clearly, Fed officials are more worried about the threatening things that they see (energy spike, eroding slack, etc.) than the benign core consumer price index readings.

He's thinking about legacy building at this point and the one thing he doesn't want to do is leave at the top of an immense bubble and have it burst soon after he leaves. He kind of touched on it yesterday in relation to the housing market.

Gasoline prices are coming off nicely in February, so the Michigan figure is almost certain to rise within the next month or two.

However, we are reaching a point on the calendar when the data should be settling down and there is no indication that the number of new filers is poised to move back to the 310,000 to 340,000 range that prevailed in 2005 prior to the hurricanes.

I do not expect to see the Fed let its guard down on inflation any time soon even though the worst fears of energy pass-through have not come to pass.

Heading into 2006, the fundamentals for business spending in equipment and software look solid. Firms will need to invest more to meet demand.

The unemployment report, for once, was essentially as expected in November. The employment situation seems to have pretty much worked through the job losses associated with the hurricanes. Now, we wait for those jobs to be recovered over the next 3 to 6 months.

The FOMC minutes provided further affirmation to a bond market that continues to see the glass as half full.

The employment number will be the key for the stock market next week.

The indicators of prices ... are beginning to point more clearly toward inflation pressures.

The idea that the Federal Reserve is close to being done with interest rate hikes has certainly benefited the bond market, and stocks have benefited as well.

The economy is clearly strong right now, and that's what these numbers reflect. In the short term, there's a risk people will pull back on spending, but that depends on how long gas prices stay high, and so far there's not much evidence the consumer is slowing down.

The economy is clearly advancing nicely right now and it will in our view take more than a 5% funds rate to slow it down.

The economy has a lot of momentum. The consumer continues to do well because of the improving labor market, and businesses have a lot of cash and are getting more confident about deploying it.

The economy retains ample momentum early in 2006.

The 'economy is weakening' crew will have a field day with this report. But until we see two weak numbers in a row, I am absolutely unconvinced. . . . Disappointed? Definitely. Changing our big picture view? No.

The economy is still growing at an above trend pace and with slack in labor and product markets all but fully absorbed, inflation pressures will begin to gradually build this year.

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.

The crux of the statement was unchanged (from the last meeting). They said that policy remains accommodative, but that the central bank will respond to changes as needed. That's been the mantra since the tightening period began last June.

The crux of the statement was unchanged (from the last meeting), ... They said that policy remains accommodative, but that the central bank will respond to changes as needed. That's been the mantra since the tightening period began last June.

The case for continued rate hikes has become, if anything, more compelling since Katrina.