Rebound in Durable Goods Orders Boosts Equity Futures
New orders for durable goods came in well above even the most optimistic expectations in May. Led by gains across the board, new orders increased by 1.8% for the second month in a row, in stark contrast to expectations for a 0.5% decline. Forecasts had ranged from -2.0% to +1.0%.
Futures on the Dow Jones Industrial Average were higher by nearly 75 points after the release, while the S&P 500 and Nasdaq also point to a higher open.
The advance adds some credential to the argument that the economy could recover in the coming months, as May’s gain marks the third increase in the past four months.
John Herrmann, president of Herrmann Forecasting, said he revised his Q2 GDP estimate to -0.71% from -1.52% based on the release.
“Again, we look for the U.S. economy to enter a recovery in 3Q-2009 (+1.15%) and in 4Q-2009 (+2.68%),” he said.
Nondefense capital goods excluding aircraft, a proxy for business investment, rebounded 4.8% in the month after declining 2.9% in April. Compared to last year the index is down 24.0%.
Meantime, defense-related capital goods advanced 7.4%.
The gains in new orders were broad. Excluding transportation, new orders increased 1.1%; excluding defense, orders were still up 1.4%.
Shipments, however, declined for the 10th straight time with a 2.1% fall in May, marking the longest downward streak since the index began in 1992.
Similarly, unfilled orders were down for the eighth consecutive month with a -0.3% print in May. Inventories fell for the fifth straight month with a 0.8% drawback.
All Content Copyright © 2003 – 2009 Brown House Media, Inc. All Rights Reserved.nReproduction in any form without permission of MortgageNewsDaily.com is prohibited.
Leave a Comment
By John Gittelsohn August 24, 2020, 4:00 AM PDT Some of the largest real estate investors are walking away from Read More...Late-Stage Delinquencies are Surging
Aug 21 2020, 11:59AM Like the report from Black Knight earlier today, the second quarter National Delinquency Survey from the Read More...Published by the Federal Reserve Bank of San Francisco
It was recently published by the Federal Reserve Bank of San Francisco, which is about as official as you can Read More...