April Durable Goods Bounce On Defense Orders; Machinery Goods Drop Most Since February 2013; CapEx Slides 1.2%

Tyler Durden's picture

Another month, another indication that the spike in "harsh unweathering" took place in the last month of Q1 and momentum slowed down entering the balmy Q2.

Moments ago the Commerce Department released Durable Goods data which came in far stronger than expected, printing at a 0.8% sequential bounce on expectations of a -0.7% drop. However, indicating that there was more than meets the headline was the barely unchanged print in Durable goods Ex Transports, which rose just barely, printing at 0.1%, in line with the 0.0% expected. In other words, the headline spike was entirely due to volatile components and sure enough to the Commerce Dept, the Defense capital orders (perhaps because the world is preparing for war?) soared by 13.1%, the most since December 2012. Helping this was the 70 new airplane orders reported by Boeing, higher than expected but still lower than the 163 bumper orderbook from March. And now the bad news: Machinery orders, that real indicator of core economic activity, bumped by 2.9% - this was the biggest slide since February 2013.

Finally, those looking for a stable core capex rebound will have to wait one more month: after a hefty upward revision to March data, which rose by 2.1% compared to the 1.0% reported previously, April saw a 1.2% drop, well below the -0.3% expected. Then again, less capex is great news for shareholders - it simply means more cash is available for stock buybacks, which as everyone knows is the most bullish available capital allocation option available to CEOs.

The breakdown:

Durable Goods:

 

Durable Goods ex Transports:

 

Capital Goods Orders nondefense ex Aircraft:

 

And Machinery orders monthly change:

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
JustObserving's picture

Meanwhile bullish news for Apple owners - also bullish for durable goods, bearish for paperweights:

"Multiple iPhone/iPad/Mac users in Australia are reporting their devices being remotely locked and a ransom demand being made to get them unlocked again. However, unlike PC ransomware, the vector of attack here seems to be Apple's iCloud service with the attacker getting to a database of username/password credentials associated with the accounts. It is unclear if the database was one of Apple's or the hacker is simply using the fact that people reuse the same password for multiple accounts and is using data stolen from another source. Apple is yet to respond, but there has already been one report of the issue affecting a user in the UK."

http://it.slashdot.org/story/14/05/27/1241220/australian-iphone-and-ipad...

Headbanger's picture

Fuck Apple and fuck the cloud bullshit too!

intric8's picture

Tell em headbanger. Fuck all invasive, privacy compromising technology.

Has anyone considered that these damn ipad apps can easily be recording your finger prints because they are constantly touching the pad? FB too, zuckerburg has the intimate details of nearly every person on earth.

MWizard's picture

3 ways to become a frustrated trader. 1. Try to become a perfect trader. 2. Try to never lose. 3. Plan to make a specific amount of money in a specific period of time. Using any of these method will make you frustrated but you can do it only on your own risk. https://www.youtube.com/watch?v=e6fZYR8_j5I 

mayhem_korner's picture

 

 

Believing any of those are attainable - absent having access to the game-programmers - is your fatal flaw.  Trading as a means of wealth accumulation is a fool's errand.

LawsofPhysics's picture

Is that why Jamie is "richer than you?"

flyingpigg's picture

re "3 ways to become a frustrated trader."

 

4. going short equities

 5. going short sovereign bonds 

Colonel Klink's picture

The only thing durable in this eCOnomy seems to be the fraud.

Tabarnaque's picture

Don't forget the manufacturing of bombs. That's been very durable for quite a few decades.

q99x2's picture

Time to open a machine shop and hire illegal aliens.

Dr. Engali's picture

Between the fact that they tend to run into buildings, catch fire, or disappear, I'm surprised that people still order Boeing planes. 

yogibear's picture

Currency wars turns into shooting wars. When a leader turns into a war hawk they gain popularity.

Magooo's picture

WAR - what is it good for?

 

More durable goods orders?

mayhem_korner's picture

 

 

War converts durable goods into perishable ones.  Which increases the demand for perishable-durable goods.  It's quite efficient, really.

LawsofPhysics's picture

Exactly.  Put those "durable" goods down-range and let me show you something...

Broken windows and dead bodies will "fix" everything.  Can I have my Nobel prize now?

youngman's picture

I wonder when China quits buying US Airplanes....what will happen...the trade war is starting..just like in the 1930s

Tabarnaque's picture

The Chinese just made a big order for Russian airplanes...

oklaboy's picture

which one do you wan t to fly in?

Whoa Dammit's picture

What exactly is a durable good anymore? Appliances last about 3 years. Cars, under constant recall, don't last for long off of the lot (and in the off chance they do, there is always the Mercedes tree hitting app for that). Clothes should be durable, but seem to be made of giant sheets of Viva paper towels these days rather than real cloth.

So I guess that leaves us with plastic shopping bags and aluminum beer cans as our durable goods.

Tabarnaque's picture

Maybe it's any kind of good that chains you to a long term loan!

Whoa Dammit's picture

Gasoline and groceries ? ;-).

LawsofPhysics's picture

That which cannot be sustained, won't be.  Hedge accordingly.

TideFighter's picture

Channel-stuffing $500,000 APC's into small town police forces... 

dobermangang's picture

"Government figures show that state income tax collections nationwide slipped 0.4% in the first quarter, the first drop since the end of 2009, according to the Nelson A. Rockefeller Institute of Government. But the decline is magnified in some states."

http://taxprof.typepad.com/taxprof_blog/2014/05/state-income-tax-revenue...

Less disposable income equals less spending.

 

 

Tabarnaque's picture

And less tax collected means bigger gevernment deficit.

Global Hunter's picture

Bullish, declining capex means more capital for share buybacks?

SoDamnMad's picture

Hey youngman

I saw an article on a new Chinese small jet and it looks like a short MD-80.  Maybe the Chinese will buy the Sukoi 100; the same model that flew into a mountain in Asia and another landed "wheels up".

optimator's picture

Stronger than expected?  The insiders knew, that's why the futures were up.

Dr. Engali's picture

Where have you been? The 'market' has nothing to do with fundamentals. All the years I've been doing this durable goods has never moved the market.

highwaytoserfdom's picture

"I wonder when China quits buying US Airplanes IBM Servers, Cisco routers, GM cars kentuckey fried chicken....what will happen...the trade war is starting..just like in the 1930s "     don't worry WE ARE WIEMAR...  Ya thinks we might skip the war and get right to Neurenburg...  Nah   NATO fighters... Wait wait    Military Industrial fascist vs  the Corporatist consumer debt fascist?      NO WORRY BERNAKE WROTE THE BOOK..  and did take $250,000 for dinner with ...........  Someone said victors write history... two bad  because we have a couple of winners (not complement) here.

young turk's picture

appliances lasting 3 years my frig from Sears only lasted one. They are getting what they deserve karmas a bitch

 

Tinky's picture

Though somewhat OT, here's what the "liberal" economist Dean Baker has to say about Airbnb in the Guardian today:

"Insofar as Airbnb is allowing people to evade taxes and regulations, the company is not a net plus to the economy and society – it is simply facilitating a bunch of rip-offs. Others in the economy will lose by bearing an additional tax burden or being forced to live next to an apartment unit with a never-ending parade of noisy visitors, just to cite two examples."

Here's the full piece (of crap), if you can stomach it:

http://www.theguardian.com/commentisfree/2014/may/27/airbnb-uber-taxes-r...

Oldwood's picture

Capex is dead. Just like inventory is dead. It is pointless to invest in anything that can't be liquid in 24 hours. Speaking to a business broker a while back and we are talking business valuations. I'm explaining to him about how much equipment we have invested in and he immediately retorts that that investment is worthless, actually a liability. He explains to me that the only thing people investing in a business want to pay for is the goodwill, the market. Machinery and even employees represent costs that are recurring. Machinery has to be replaced, it wears out or becomes obsolete.

People are lined up here daily speaking of investment, when in reality they are speaking of bets. An investment is something you are invested in. An idea, a plan, a design. None of which are in anyway liquid. Our economy will die if true investment fails to take place. Bets only redistribute wealth. Investments create wealth. We are consuming and redistributing without any creation. We are eating our seed corn, planting nothing to replace it.

Denial of reality is as strong here on ZH as anywhere else. But go ahead, place your bets. You will probably end of rich...in a dead world.

LawsofPhysics's picture

"Machinery has to be replaced, it wears out or becomes obsolete."  -  Bullshit, only if that machinery is being used.  People on the other hand, do just wear out, even if they are not being put to work...

 

Please, the entire ponzi planet has forgotten the meaning of such things as "wealth", "money", "investment" or "collateral".

Fuck the usless paper-pushers.  nothing but short-sighted fucking middlemen anyway.