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Record Durables Drop Follows Record Boeing-Driven Surge; Ex-Transports In Line
What goes up must come down. The saying applies not only to aircraft, but aircraft orders. As a reminder, last month the volatile nondefense aircraft order category soared by 318%, leading to a 22.6% increase in headline Durable Goods, a record monthly swing courtesy of Boeing conducting its own "subprime for flying clunkers" program which sent airplane orders to an all time high. And now that the bumper airplane order month is over, with all orders purchased on credit gobbled up by yield-starved investors of course, the anticipated drop took place, with durable goods sliding by a record 18.2%, a fraction worse than the -18.0% expected.
And the year over year change:
So volatile transport grouping aside, here is how the core data acted:
- Durable goods ex transports: 0.7%, essentially in line the expected 0.6% print, with the previous month revised from -0.8%, or the worst drop of 2014, to -0.5%
- Capital Goods shipments non-defense ex aircraft, i.e., actualized CapEx: 0.1%, Exp. 0.5%, last revised from 1.5% to 1.9%
- Capital Goods nondefense ex-aircraft, i.e., projected CapEx: 0.6%, Exp. 0.4%, last month revised from -0.5% to -0.2%
And visually:
Judging by the market's complete non-response to either this or last month's durable goods report, it is quite clear that the market is far less focused on still non-existant real CapEx growth, and is far happier to reward the use of leverage to fund stock repurchases, i.e., instant stock pops, instead of long-term growth.
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Todays BS
http://money.cnn.com/2014/09/25/investing/zero-hedge-wall-street-blog-fi...
CNBC actually had a guy that said something like the economy is doing great, there isn't any other place to put cash but the stock prices can't go up forever because at some point valuations matter. The hosts of course didn't respond and moved quickly to a chart showing everything heading to infinity.
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Don't VIX me, bro!
They Fear Yoou
So are you saying all that demand pulled forward by Boeing by the potential demise of the IM bank has consequences?
Bullcrap. It's a one off issue that won't be repeated. Now get those algos ramped bitches. S&P 2000 is within easy reach if only you try.
/sarc
"Long term growth" is an old timey approach to bitness. Just BTFD and screw the rest, onward and upward, there is no gravity.
All we need is MOAR!
Meanwhile, MarketWatch implores, "Why you should look past 18% slide in durables data"
Just shut up and buy.
Muppet power!!!!
To infinity and beyond! The numbers are made up and meaningless. It will all fall apart only when nobody expects it. Low volatility, lots of Fed happy talk. Investors all feeling invincible, certain the Fed will always stand behind the markets. Every fund manager seen as a genius for doing nothing more than riding the Fed market push higher. Everyone all in. Then the smart and very rich people will sell to the greedy fools and sit back and laugh. It is that way every time. The cracks in this egg shell economy will appear first in Silicon Valley and will lead a general decline across America and then the world. The inflated property values in many areas will again correct, this time even more forcefully. Car sales will plunge, and more layoffs. Unfortunately for the bears it is the damn timing which is so tough to call and the ride up was so painful.
Today is as good as it gets.
It gets as good as today is.