We noted in the Week Ahead that this number carried a greater potential to worry the market, than to cheer it. That is because another weak report, on top of the last, would be taken as trend setting, bothering equities and firming bond prices.
Instead, today’s release for March, +2.5% was nearly double expectations, and the prior month was revised to a small gain (vs - 0.9%). There was but modest market reaction.
Durable Orders are notoriously volatile, flying in every which direction month to month.
Perspective: Trend is key and we see that these hard goods orders have risen 29.8% since bottoming in Mar/09. This is pretty good news, although the level is still 16% below its Dec/07 peak.
And the key non-defense capital goods shipments component, the proxy for capital spending, is slightly above the Q4 average. We can assume then that capital spending expanded modestly in Q1.
Robert Craven
Instead, today’s release for March, +2.5% was nearly double expectations, and the prior month was revised to a small gain (vs - 0.9%). There was but modest market reaction.
Durable Orders are notoriously volatile, flying in every which direction month to month.
Perspective: Trend is key and we see that these hard goods orders have risen 29.8% since bottoming in Mar/09. This is pretty good news, although the level is still 16% below its Dec/07 peak.
And the key non-defense capital goods shipments component, the proxy for capital spending, is slightly above the Q4 average. We can assume then that capital spending expanded modestly in Q1.
Robert Craven
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