Quotes of the Day

Like I said in this morning’s log entry, for the moment, bad data will be good news for stocks.

This morning’s hugely important ISM Manufacturing Index came in at a “disappointing” (assuming you prefer a strong economy) 51.2, yet again declining from the previous month, while missing economists’ expectations. And, yes, the Dow went from essentially flat to up 200 points as I type.

And, of course, I’ll highlight the fundamental problem expressed in the report’s featured respondents’ commentary below:


“General business trends are continuing to show signs of weakness resulting from tariffs and cost impacts of importing and exporting.” (Electrical Equipment, Appliances & Components)

“Business is strong mostly due to seasonality. Tariffs surcharges are now being passed through to all customers. Labor is tight, putting pressure on wages costs.” (Furniture & Related Products)

“All aspects of business remain strong, but we’re starting to see the frictional effect of tariffs on exports.” (Plastics & Rubber Products)

“We are a third-tier supplier to [a major aircraft manufacturer], and it appears its production slowdown of [an aircraft] is having a direct effect on our slowing orders.” (Miscellaneous Manufacturing)

“Business has slowed, but it is still steady and expected to pick up next month.” (Machinery)

“There is a drop in demand for steel products, which has had a major impact on steel prices and the domestic scrap market.” (Fabricated Metal Products)

“The economy is holding steady. All the uncertainty seems to be priced in accordingly, and supply plans are consistent throughout 2019. Business conditions improving yet still facing headwinds in foreign exchange, commodities, and certain direct materials.” (Food, Beverage & Tobacco Products)

“[Automotive] sales continue to decline, and forecasts have been reduced due to softer predicted demand. Attention to product cost — not sales price — is increasing.” (Transportation Equipment)

“Weakness in end markets accelerating rapidly. Continuing to reduce production based on weakening demand and declining current orders.” (Chemical Products)

China tariffs continue to be a concern. The uncertainty of future tariffs involving China, Canada, and Mexico is also a concern. China tariffs for electronic parts are averaging 17 percent.” (Computer & Electronic Products)

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