Durable Goods Orders Implications
By Yaser Anwar, CSC of Equity Investment Ideas
Durable goods orders slipped 0.3 percent in May, after a sharp 4.7 percent drop in April. The consensus had expected a 0.4 percent rise in durables orders in May. Declines in May were led by a 2.6 percent drop in transportation equipment - primarily non-defense aircraft. Excluding transportation, new orders rebounded 0.7 percent, following a 1.0 percent drop in April.
Nondefense capital goods orders fell 1.9 percent in May after a 6.3 percent drop in April and an 11.6 percent surge in March. Industry categories showing declines in May were: fabricated metal products, 1.3 percent; computers & electronic parts, 1.1 percent; electrical equipment, 0.2 percent; and transportation, 2.6 percent.
Gains were seen in: primary metals, 3.5 percent; machinery, 2.3 percent. Overall inventories rose 0.4 percent in May-the fourth gain in five months. Overall shipments rebounded 2.6 percent while unfilled orders rose 0.6 percent. While new orders for non-defense capital goods were soft in May, shipments were not, rising 2.1 percent.
These shipments point to a healthy gain in producers durable equipment for second quarter GDP. The continued rise in unfilled orders suggests that momentum in manufacturing remains healthy.
This might push stocks lower as it signals the economy is getting weaker but it could also push them higher 'cause traders might believe it wil signal to the Fed that the economy is slowing down and interest rate hikes after June 29 are not needed.
http://www.equityinvestmentideas.blogspot.com/
Durable goods orders slipped 0.3 percent in May, after a sharp 4.7 percent drop in April. The consensus had expected a 0.4 percent rise in durables orders in May. Declines in May were led by a 2.6 percent drop in transportation equipment - primarily non-defense aircraft. Excluding transportation, new orders rebounded 0.7 percent, following a 1.0 percent drop in April.
Nondefense capital goods orders fell 1.9 percent in May after a 6.3 percent drop in April and an 11.6 percent surge in March. Industry categories showing declines in May were: fabricated metal products, 1.3 percent; computers & electronic parts, 1.1 percent; electrical equipment, 0.2 percent; and transportation, 2.6 percent.
Gains were seen in: primary metals, 3.5 percent; machinery, 2.3 percent. Overall inventories rose 0.4 percent in May-the fourth gain in five months. Overall shipments rebounded 2.6 percent while unfilled orders rose 0.6 percent. While new orders for non-defense capital goods were soft in May, shipments were not, rising 2.1 percent.
These shipments point to a healthy gain in producers durable equipment for second quarter GDP. The continued rise in unfilled orders suggests that momentum in manufacturing remains healthy.
This might push stocks lower as it signals the economy is getting weaker but it could also push them higher 'cause traders might believe it wil signal to the Fed that the economy is slowing down and interest rate hikes after June 29 are not needed.
http://www.equityinvestmentideas.blogspot.com/
posted by douglas mcintyre at 9:52 AM
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