Steven Wood Sales Quotations

Unless there is a quick rebound in sales, this suggests further weakness in production and declines in inventories over the months ahead.

Retail sales have slowed over the last six months in response to the slower pace of job creation, higher rates, and increased volatility in the stock market. Indeed, in the past two years there has been tight relationship between the Nasdaq and retail spending, suggesting further spending weakness in coming months.

Manufacturing is still mired in a deep recession. Although vehicle production has stepped up to try to maintain a low-cost financing induced sales explosion, the rest of the industrial sector is hurting badly.

Wholesalers had been struggling with bulging inventories through the winter and spring, ... However, plunging sales had largely thwarted their efforts. July's improvement is a welcome respite in this struggle.

While the auto sector appears to have corrected its inventory overhang, other sectors have not been nearly as successful, particularly high tech, ... As business sales slow, it will be even more difficult to bring inventories into line.

There are a few tentative hints -- higher new orders, a drop in the inventory-to-sales ratio -- that the period of maximum weakness has likely passed. Although further declines in output are anticipated, the rate of decline should gradually diminish.

These data indicate that wholesale deliveries to retailers are falling quickly, responding to the slowing pace of retail sales. However, deliveries from manufacturers and imports have not slowed as sharply. Unless retail sales revive, wholesalers will continue to cut their orders from manufacturers and imports, maintaining the downward pressure on the factory sector.

Any slowing in sales will reveal moderate overbuilding.

Although the level of sales is still relatively high, the solid growth of the past three years has been arrested, helping the Fed's efforts to slow the pace of economic growth. However, mortgage rates have declined over the last six weeks, so further substantial weakness may not be forthcoming.

Although the fundamentals have deteriorated builders have been cautious, so there is no imbalance of unsold new homes. Therefore, as long as new home sales are maintained near current levels, housing construction can also continue near these levels.

Although inventory rebalancing is well underway, weak sales and elevated inventory-to-sales ratios will keep downward pressure on industrial production and manufacturing employment, ... This situation is unlikely to improve until spending accelerates.

Importantly for the Fed, the pace of real consumer spending slowed in March, and combined with early forecasts for lower vehicle and retail sales for April, suggests there is some scope for slower growth in the second quarter,

Housing fundamentals are deteriorating. Mortgage rates have been flat since the beginning of the year. Job creation and income growth has slowed. Equity markets have plunged over the past year. And consumer confidence has tumbled. Moreover, mortgage applications have trailed off. All of these suggest that home sales should weaken over the next several months.

Housing fundamentals are deteriorating, ... Mortgage rates have been flat since the beginning of the year. Job creation and income growth has slowed. Equity markets have plunged over the past year. And consumer confidence has tumbled. Moreover, mortgage applications have trailed off. All of these suggest that home sales should weaken over the next several months.

Home sales should weaken over the next several months.