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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:

 

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Tue, 05/27/2014 - 08:56 | 4797954 JustObserving
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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...

Tue, 05/27/2014 - 09:17 | 4798016 Headbanger
Headbanger's picture

Fuck Apple and fuck the cloud bullshit too!

Tue, 05/27/2014 - 09:43 | 4798085 intric8
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.

Tue, 05/27/2014 - 08:56 | 4797956 MWizard
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 

Tue, 05/27/2014 - 09:07 | 4797987 mayhem_korner
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.

Tue, 05/27/2014 - 09:25 | 4797988 LawsofPhysics
LawsofPhysics's picture

Is that why Jamie is "richer than you?"

Tue, 05/27/2014 - 10:37 | 4798261 flyingpigg
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re "3 ways to become a frustrated trader."

 

4. going short equities

 5. going short sovereign bonds 

Tue, 05/27/2014 - 08:57 | 4797958 Colonel Klink
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The only thing durable in this eCOnomy seems to be the fraud.

Tue, 05/27/2014 - 09:09 | 4797992 Tabarnaque
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Don't forget the manufacturing of bombs. That's been very durable for quite a few decades.

Tue, 05/27/2014 - 08:58 | 4797967 q99x2
q99x2's picture

Time to open a machine shop and hire illegal aliens.

Tue, 05/27/2014 - 09:09 | 4797968 Dr. Engali
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Between the fact that they tend to run into buildings, catch fire, or disappear, I'm surprised that people still order Boeing planes. 

Tue, 05/27/2014 - 08:59 | 4797969 yogibear
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Currency wars turns into shooting wars. When a leader turns into a war hawk they gain popularity.

Tue, 05/27/2014 - 08:59 | 4797971 Magooo
Magooo's picture

WAR - what is it good for?

 

More durable goods orders?

Tue, 05/27/2014 - 09:05 | 4797980 mayhem_korner
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War converts durable goods into perishable ones.  Which increases the demand for perishable-durable goods.  It's quite efficient, really.

Tue, 05/27/2014 - 09:25 | 4797994 LawsofPhysics
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?

Tue, 05/27/2014 - 09:02 | 4797976 youngman
youngman's picture

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

Tue, 05/27/2014 - 09:11 | 4798000 Tabarnaque
Tabarnaque's picture

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

Tue, 05/27/2014 - 09:25 | 4798037 oklaboy
oklaboy's picture

which one do you wan t to fly in?

Tue, 05/27/2014 - 09:06 | 4797986 Whoa Dammit
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.

Tue, 05/27/2014 - 09:13 | 4798003 Tabarnaque
Tabarnaque's picture

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

Tue, 05/27/2014 - 09:53 | 4798111 Whoa Dammit
Whoa Dammit's picture

Gasoline and groceries ? ;-).

Tue, 05/27/2014 - 09:27 | 4798039 LawsofPhysics
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That which cannot be sustained, won't be.  Hedge accordingly.

Tue, 05/27/2014 - 09:09 | 4797991 TideFighter
TideFighter's picture

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

Tue, 05/27/2014 - 09:11 | 4797998 dobermangang
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"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.

 

 

Tue, 05/27/2014 - 09:17 | 4798013 Tabarnaque
Tabarnaque's picture

And less tax collected means bigger gevernment deficit.

Tue, 05/27/2014 - 09:12 | 4798002 Global Hunter
Global Hunter's picture

Bullish, declining capex means more capital for share buybacks?

Tue, 05/27/2014 - 09:13 | 4798006 SoDamnMad
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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".

Tue, 05/27/2014 - 09:15 | 4798009 optimator
optimator's picture

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

Tue, 05/27/2014 - 09:33 | 4798053 Dr. Engali
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.

Tue, 05/27/2014 - 09:16 | 4798011 highwaytoserfdom
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.

Tue, 05/27/2014 - 09:17 | 4798014 young turk
young turk's picture

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

 

Tue, 05/27/2014 - 09:19 | 4798021 Tinky
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...

Tue, 05/27/2014 - 09:33 | 4798054 Oldwood
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.

Tue, 05/27/2014 - 09:53 | 4798106 LawsofPhysics
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.

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