Durable Goods Beat On Surge In Boeing Orders, Capital Goods Orders Ahead Of Expectations
It is oddly appropriate that moments after we reported that capex at Caterpillar (and virtually every other company we have looked at in detail) tumbled by 50% year over year, that the Census Bureau released the latest Durable Goods report. In it we find that unlike previous months, when headline durable goods tumbled because of "harsh weather" in March it apparently not only did it not snow (although the New Homes Sales report may have something to say about that) but the weather so so balmy, that the headline print came in stronger than the expected 2.0%, printing at 2.6%, up from a downward revised 2.1%. The bulk of the margin however was due to Boeing, which reported some 163 new aircraft orders, compared to 74 in February.
Still, even when excluding volatile aircraft orders, the ex-transports number was a solid 2.0%, well above the 0.6% Wall Street had expeted.
So does this translate into actual Capex spending? Well, if one believes the Census Bureau, March capital goods orders non-defense aircraft rose 2.2% above the 1.5% expected, even if actual shipments printed precisely on top of the 1.0% expected.
The reason we say "if one believes" is because while according to government-level aggregate data, CapEx is rising, we have yet to see it in actual numbers. To be sure, once earnings season is completed we will be able to look at actual corporate level data and see if indeed CapEx is growing at the pace the government wants us to believe, or if, like the Fed when reporting loan-level data, it is simply goalseeking numbers that fit its narrative.
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