Durable Goods Crater On Plunge In Airplane, Manufacturing And Computer Orders: Biggest Miss Since August 2012
And so that the great CapEx spending surge is delayed once more: supposedly to H3 2013 this time. Moments ago the Commerce Department reported the latest Durable Goods numbers which were a total disaster: the headline print plunged by 7.3% on expectations of a -4.0% decline driven by a drop in Airplane orders (to be expected following last month's noted bumper Paris Air show spike as Boeing reported only 90 new plane orders compared to 273 in June). Well, airplanes orders did indeed slide by 52.3%, but it was weakness in Transportation (-19.4%) and Computer (-19.9%) orders as well as Manufacturing (-9.8%) that took the market by surprise. This was the biggest miss to expectations since August 2012.
Excluding transportation, the drop was "only" -0.6%, however with the expectation of a +0.5% increase, and the prior month revised from unchanged to -0.1%, one can see that the expected revenue pick up for the remainder of 2013 in the S&P500 will be merely the latest myth to never take place.
The chart below showing the Year over Year change in headline Durable Goods says it all.
Finally, and what is worse, is that core CapEx in the form of non-defense Capital Goods excluding aircraft orders and shipments both tumbled too, sliding -3.3% (exp. +0.5%) and -1.5% (exp. 0.3%). But don't worry, some guy named David Zervos who works for a high yield trading desk says QE "worked."
The only good news in the above disaster of a report: taper delay advocates will have some more ammo, and the S&P will likely rise as a result of yet another confirmation that "since QEternity never actually worked, more QEternity is needed"
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