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Strong Durable Goods Headline Number, Very Weak Between The Lines: "Weak Start To 3Q" Bloomberg's Yamarone

Tyler Durden's picture





 

Once again we get a strong durable goods numbers report at the headline level, but far weaker when one actually reads it instead of just scanning it: with the July Durable goods printing well above expectations, at 4.0%, double expectations of 2.0%, and up from an upwardly revised -1.3%. Ex-transportation, the number was up 0.7%, beating the estimate of -0.5%, virtually unchanged with the previous upwardly revised 0.6%. What is, however, not good is that cap goods non-defense ex aircraft dropped by -1.5%, in line expectations, and a plunge from an upward revised 0.6%: this shows that actual CapEx is plunging. The bulk of the beat comes due to stronger than expected automotive-related production. Futures surge on the news because a continent wide liquidity squeeze is less important than the future channel stuffing of more unsellable cars.

Report sumary from Bloomberg:

  • July durable goods orders rose 0.4% vs est. 2% (range 1% drop to 7.5% gain); June revised to 1.3% drop from 2.1% decline.
  • Ex. transport rose 0.7% vs est. 0.5% drop (range 1.5% decline to 1% rise); prior revised to 0.6% gain from 0.1%
  • Capital goods orders, nondefense, ex. aircraft, parts, down 1.5% vs est. 1.6% decline (range 2.4% drop to 1% increase); prior revised to 0.6% gain from 0.4% drop
  • Weak shipments of non-defense capital goods excluding aircraft “suggests weak start to 3Q,” says Bloomberg economist Rich Yamarone
  • Above est. overall orders due to 43.4% rise in civilian aircraft, motor vehicles orders, says Bloomberg economist Joseph Brusuelas
  • Key question: whether demand for autos will continue through rest of the year given weak macroeconomic environment: Brusuelas

Answer: hell no

 


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Wed, 08/24/2011 - 08:43 | Link to Comment Aductor
Aductor's picture

So this is bullish QE3, or how do I read the equity "market"?

Wed, 08/24/2011 - 08:49 | Link to Comment SheepDog-One
SheepDog-One's picture

+300 - +500 daily gains on the Dow....WHAT QE3? At this rate, the markets will be back over their all-time record highs in a few days, yet traders sit out there expecting Bernank to drop free bags of money to the 'poor ol equities'...for what reason?

Wed, 08/24/2011 - 08:52 | Link to Comment slaughterer
slaughterer's picture

It does not matter where equity markets are when the print button is pushed.   

Wed, 08/24/2011 - 09:14 | Link to Comment SheepDog-One
SheepDog-One's picture

Huh whaaaaa?

Wed, 08/24/2011 - 09:49 | Link to Comment FEDbuster
FEDbuster's picture

Price everything in gold.  Zimbabwe stock exchange (yes there is one) had 200%+ up days during it's hyperinflation, we will have ours, too.

Wed, 08/24/2011 - 09:12 | Link to Comment buzzsaw99
buzzsaw99's picture

good news is bad news, except if it is really bad news then that makes it good news. Got it? RALLY ON!

Wed, 08/24/2011 - 08:43 | Link to Comment HelluvaEngineer
HelluvaEngineer's picture

The algos seem to love it!

Wed, 08/24/2011 - 08:45 | Link to Comment Boilermaker
Boilermaker's picture

Futures soar back to parity.  MISSION ACCOMPLISHED.

Wed, 08/24/2011 - 08:44 | Link to Comment DeadFred
DeadFred's picture

Hurrah for Government Motors! They saved us.

Wed, 08/24/2011 - 08:45 | Link to Comment Iriestx
Iriestx's picture

Boom!  +500 today or bust!

Wed, 08/24/2011 - 08:45 | Link to Comment rubearish10
rubearish10's picture

The Bernanke will look the stuffing data to help justify his magic words on Friday. Seems like that's the direction we're going. Yesterday's housing and RF numbers (bad), today good, but really bad. So, free it up bitchez. I mean Gold Bitchez, opportunity knocks!

Wed, 08/24/2011 - 08:53 | Link to Comment HelluvaEngineer
HelluvaEngineer's picture

fed.gov must be buying cars and crashing them into each other

Wed, 08/24/2011 - 09:14 | Link to Comment SheepDog-One
SheepDog-One's picture

They are, down in the beltway there are all new GM gov vehicles everywhere, I think .gov is buying as many as they can and giving them to the homeless at this point. Everywhere I look are new GM vehicles with a gov sticker on the door.

Wed, 08/24/2011 - 09:17 | Link to Comment HelluvaEngineer
HelluvaEngineer's picture

They will need quite a few more when the weekly Census begins

Wed, 08/24/2011 - 09:45 | Link to Comment FEDbuster
FEDbuster's picture

Maybe Sec. 8 housing should be expanded to provide a car with your free home?  So, you can get "FREE" house, utilities, car, health care, food stamps, cell phone, college education.  The only thing missing was a program to provide free clothing and gasoline (or maybe I just haven't heard of them?).  All of this provided by Uncle Suger from Obama's stash. 

Wed, 08/24/2011 - 13:09 | Link to Comment RockyRacoon
RockyRacoon's picture

Wait til the dealers and GM come to the realization that cars in the pipeline are sunk costs.   Let the discounts begin!

Wed, 08/24/2011 - 09:23 | Link to Comment Larry Darrell
Larry Darrell's picture

Their economic guru Krugman has told them this is the best way to create demand.

 

That or they need to increase the power of HAARP since it didn't provide enough damage yesterday to stimulate massive re-building.

Wed, 08/24/2011 - 08:47 | Link to Comment jkruffin
jkruffin's picture

Awww,  Now Bernanke can't announce his QE3,  say goodnight to stocks and Euro as they plunge into the abyss...

Wed, 08/24/2011 - 08:47 | Link to Comment MoneyWise
MoneyWise's picture

Catch your Gold below, pumpers.. :)

After all you should be happy to get it cheaper.

Wed, 08/24/2011 - 08:48 | Link to Comment somethingelse
somethingelse's picture

oh joy,   we're headed for another skittle-shitting rainbow-riding unicorn day 

Wed, 08/24/2011 - 09:15 | Link to Comment slaughterer
slaughterer's picture

the unicorn today is shitting gold and silver and riding on an iPad

Wed, 08/24/2011 - 08:49 | Link to Comment MoneyWise
MoneyWise's picture

Don't need no QE3, too much liquidity already,
FED has lots of other options on the table,
perhaps intervene (stimulate) Housing market.

Wed, 08/24/2011 - 08:56 | Link to Comment Johnny Lawrence
Johnny Lawrence's picture

Do you enjoy seeing what's happening to our country due to fiscal and monetary policy?

Wed, 08/24/2011 - 09:23 | Link to Comment SheepDog-One
SheepDog-One's picture

No, I dont enjoy seeing the country destroyed on purpose at all! But no one will or has listened anyway since start of TARP, everyone said it was great and would work. But now Im supposed to feel GUILTY or something? Hey I was the one warning about it all along.

Wed, 08/24/2011 - 09:04 | Link to Comment centerline
centerline's picture

Stimulate the housing market?  You mean QE3 disguised as a bailout for main street.  LOL.

Wed, 08/24/2011 - 08:49 | Link to Comment RobotTrader
RobotTrader's picture

 

 

Wow, gold and silver getting destroyed again.

Amazing how paper rules over physical once again.

Wed, 08/24/2011 - 08:53 | Link to Comment WineSorbet
WineSorbet's picture

C'mon Robo, as our resident contrarian, you are getting pretty monotonous with your comments.

Wed, 08/24/2011 - 09:07 | Link to Comment John Law Lives
John Law Lives's picture

Robo hasn't had anything original to say in a long time.  After he stopped posting the nice photos, his posts became bland.  If ZH had an ignore button, Robo would fade away.

Wed, 08/24/2011 - 08:54 | Link to Comment SheepDog-One
SheepDog-One's picture

Paper whore unicorn boy back again....still a bit short of your 'Im all in long here at DOW 12,700 for the 'debt ceiling passage' massive rally' though.

Wed, 08/24/2011 - 09:17 | Link to Comment slaughterer
slaughterer's picture

SH-1, again, you rub Robo's nose in his one fatal call.  It's ok, because we know it is your way of showing your love and admiration for Robo. 

Wed, 08/24/2011 - 09:21 | Link to Comment SheepDog-One
SheepDog-One's picture

ONE 'fatal call'? LOL I can name 50 others easily from his pool of momo picks that have fallen flat! This is just the most recent!

Wed, 08/24/2011 - 13:12 | Link to Comment RockyRacoon
RockyRacoon's picture

Let's hope this call is actually fatal.

Wed, 08/24/2011 - 08:54 | Link to Comment Johnny Lawrence
Johnny Lawrence's picture

Gold down 0.5%.  "Destruction"

Wed, 08/24/2011 - 08:55 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

Yeah... and we miss the hot chick photos that you used to post...

Wed, 08/24/2011 - 08:56 | Link to Comment firstdivision
firstdivision's picture

Which leads me to believe that QE3 is not happening, but buy the dips anyway.

Wed, 08/24/2011 - 09:59 | Link to Comment e_goldstein
e_goldstein's picture

No biggie. The price of silver and gold always goes down before options expire and the bernank gets on its podium. If one can find PM's, it's probably a hell of a buying opportunity.

Wed, 08/24/2011 - 08:50 | Link to Comment props2009
props2009's picture

Gold shorts hit their first target 1830. Check premium trade from yesterday "short Gold 1888 target 1820-30 stop 1913".

http://capital3x.com

Wed, 08/24/2011 - 08:54 | Link to Comment slaughterer
slaughterer's picture

Having a leveraged gold short on during a $100 drop is doing wonders for my paper portfolio.  

Wed, 08/24/2011 - 13:14 | Link to Comment RockyRacoon
RockyRacoon's picture

Ah, the magic word: "Paper"  Don't you know you can't eat paper?

Wed, 08/24/2011 - 08:50 | Link to Comment youngman
youngman's picture

GM should jump to its IPO price right.......
Gold is still a good buy....high or low...look at Europe...
its going to be very quiet this week...they have to have ti very quiet...no MSM will dig deep into anything......

Wed, 08/24/2011 - 08:51 | Link to Comment DefiantSurf
DefiantSurf's picture

More irrational markets, screw this crap, I'm going to play Socom, can somebody text me when its over?

 

Wed, 08/24/2011 - 08:52 | Link to Comment WineSorbet
WineSorbet's picture

No QE3 for you!  Come back, one year.

Wed, 08/24/2011 - 08:58 | Link to Comment SheepDog-One
SheepDog-One's picture

Ben's got himself so cornered, its ridiculous.

On the one hand, every bit of horrible economic news since January has been met with 'bullish for QE3 $2.5 trillion minimum'...markets rally bad news.

On the other hand, now way can Ben let markets tumble now for QE3 fear and panic creation, because any huge drops would set off world wide chain reactions...out of control in a minute.

So markets have baked in a couple trillion QE, and it wont be delivered Friday, no way. Enjoy holding paper over the weekend when the algos fry.

Wed, 08/24/2011 - 09:44 | Link to Comment John Law Lives
John Law Lives's picture

Also keep in mind that Bernanke surely wants to be reappointed.  He just had 3 voting members vote against him re. extending near-ZIRP through 2013.  If he proposes a huge QE3 and creates more dissent, he is hanging himself out to dry.

I don't believe a massive QE3 (in the form of large scale asset purchases) will happen just yet.  We would need a bigger market collapse to generate enough public support for another major round of LSAP.  Another LSAP = surging food and energy prices - which are political killers.

Wed, 08/24/2011 - 08:53 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

Options expiry tomorrow plus Ben talks on Friday...

What is happening in the paper PMs markets is exactly what I expected to happen given the 2 events above...

Monday PMs soar again, shorts get creamed... buying opportunity now...

Wed, 08/24/2011 - 08:55 | Link to Comment slaughterer
slaughterer's picture

Don't you think gold shorts are smart enough to cover before Monday? 

Wed, 08/24/2011 - 08:57 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

Some will, some won't...

If all did the same thing what use would mkts be? If all bet the same horse why would we have horse races?

Wed, 08/24/2011 - 09:09 | Link to Comment MoneyWise
MoneyWise's picture

What shorts? You think it's a wise Idea to take profit
after 20% run in just 2 weeks?
That's what it is,
besides Big guys need to make money, so they'll trim
positions and take profits, then re-enter lower.

Wed, 08/24/2011 - 09:25 | Link to Comment slaughterer
slaughterer's picture

Yes, I think it is wise, I took profits, and I take profits on them taking profits as well. 

Wed, 08/24/2011 - 13:28 | Link to Comment RockyRacoon
RockyRacoon's picture

Paper Trading.   You all deserve what you get.

Wed, 08/24/2011 - 08:53 | Link to Comment John Law Lives
John Law Lives's picture

So much fun.  The markets surge yesterday on the heels of dismal economic data.  Today, the futures surge on "good" economic data.

Battle Bots: A market out of control.

Wed, 08/24/2011 - 08:55 | Link to Comment firstdivision
firstdivision's picture

Well there went the excuse for QE3. They need to generate a crisis in the next two days. Something big has to hit the markets, or QE3 is but a dream.

Wed, 08/24/2011 - 09:00 | Link to Comment SheepDog-One
SheepDog-One's picture

Hardly anyone seeing the big picture here, paper euphoria blinding them to the obvious. Ben cant deliver the QE that has been baked in. Uh oh.

Wed, 08/24/2011 - 08:56 | Link to Comment slaughterer
slaughterer's picture

QE3 is coming to a neighborhood near you on Friday, August 26th!  It is Bernanke's mandate!  He has to stop the Great Depression 2.0 from progressing further!

Wed, 08/24/2011 - 08:59 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

five will get you ten that Ben does not announce QE3...

Wed, 08/24/2011 - 09:10 | Link to Comment SheepDog-One
SheepDog-One's picture

Pump for big JH let down when Ben says 'Yea we'll keep ZIRP and monitor the 10 yr and stand by with our tools in our hands...have a good day bagholder sheeple Ive got caviar stuffed lobster to eat.

Wed, 08/24/2011 - 09:22 | Link to Comment slaughterer
slaughterer's picture

SH-1, you are projecting a ZH-cultivated cynical screen personality onto BB.  In reality, he is entirely sincere in his willingness to "help" the economy.  Remember, all we have is a text from him at JH, and any twist or turn of language in the direction of easing will fire off a Tepper 2.0 "Balls to the Wall" Earthquake, Richter Scale 7.0.  The "JH will disappoint" trade, loaded to the brim with SPY 108 and 110 puts, will unwind at light speed and, in the process, blow a hole in the earth from Wall Street to San Clemente in 15 minutes.

Wed, 08/24/2011 - 10:09 | Link to Comment Village Smithy
Village Smithy's picture

Wow, that was fun to read!

Wed, 08/24/2011 - 09:19 | Link to Comment SheepDog-One
SheepDog-One's picture

What Great Depression 2.0? DOW is up +300 daily now....looks like all is well to me!   

Wed, 08/24/2011 - 08:56 | Link to Comment LoneStarHog
LoneStarHog's picture

Since no one believes government reports, I believe this one, WHY?

Wed, 08/24/2011 - 08:57 | Link to Comment PaperBear
PaperBear's picture

“far weaker when one actually reads it instead of just scanning it”

(sarc) Actually reads something ? Who does something as silly as that ?

Wed, 08/24/2011 - 09:02 | Link to Comment SheepDog-One
SheepDog-One's picture

Computers dont have time to read things.

Wed, 08/24/2011 - 09:02 | Link to Comment Village Smithy
Village Smithy's picture

There will be no QE3 on Friday. Voters do not understand QE. In the best case scenario, if it worked, which it won't, POTUS would get no credit because his teleprompter could not explain to the country what exactly it was he did that improved things. They won't spend billions more on something that will a) backfire and re-ramp the price of oil and push inflation higher and b) won't get votes. Obama will be going back to the "shovel ready" plans. Infact if the market gets too carried away over the next couple of days I am expecting the Fed to interfere with some news to dampen things a little. BB does not want a big cliff dive when he disappoints all the QE3 disciples on Friday.

Wed, 08/24/2011 - 09:07 | Link to Comment SheepDog-One
SheepDog-One's picture

QE has no more Mojo left as it did the first time when the DXY was at 90's....now any talk of printing trillions out of thin air just blows the Keynesian hoopdie to smithereens. 

Gee, did we already forget all the horrible debt problem, downgrades, default....wow so long ago almost 2 weeks! 

But those problems are now in our rear view mirror and we're free to resume printfest? Nope. Not in reality anyway.

Wed, 08/24/2011 - 09:32 | Link to Comment Larry Darrell
Larry Darrell's picture

"They won't spend billions more on something that.........won't get votes."

I completely concur. 

Who really expects Bernake to announce QE3 and steal Obummers thunder???

Obummer has already told the world he is coming in after vacation to announce his "bold new plans" and big porkulus packages.  That wins him the votes.

If the markets rocket higher due to Bernake printing money and main street morons realize that the TOTUS really is a puppet who has no power, that doesn't help keep the ponzi alive.

The Chairprinter will sit this one out, let markets go through a couple of sessions of massive withdrawal, and then let the current white house puppet get some glory.

Wed, 08/24/2011 - 09:01 | Link to Comment centerline
centerline's picture

A long time ago I postulated that QE3 could only be done if sold as the Bailout for Main Street instead of another bailout for Wall Street.  And if done properly, at the right time, most sheeple would welcome it with open arms.

Today, I see an article on Yahoo Finance with some "expert" saying the next round of stimulus should be from the Government and directed at housing.

Damn.

I then went to read some posts, which lately have been very aggressive against Fed action.  There were some - enough to be concerned - that appeared to be taking the bait.

Damn.

Watch out folks.  The next stage of this mess is likely going to be blamed on the politicians - and ultimately the people themselves.  

Wed, 08/24/2011 - 09:04 | Link to Comment SheepDog-One
SheepDog-One's picture

Well theyve blamed the people all along....youre just not SPENDING enough! THATS the only problem in an otherwise perfect Keynesian world!

Wed, 08/24/2011 - 09:07 | Link to Comment centerline
centerline's picture

Or in Krugmans world, maybe I should burn my house down because of the stimulus it would create for the local economy in rebuilding it.

Wed, 08/24/2011 - 09:16 | Link to Comment SheepDog-One
SheepDog-One's picture

Yep! Or a really stimulus-y type thing....world war with space aliens! 

Wed, 08/24/2011 - 09:05 | Link to Comment PulauHantu29
PulauHantu29's picture

This is one of my favorite reports. Capital investment and trade deficits are the two I most value.

 

Thanks!

Wed, 08/24/2011 - 09:53 | Link to Comment John Law Lives
John Law Lives's picture

"Capital investment and trade deficits are the two I most value."

The US has run a net trade deficit (goods and services combined) every single month since January of 1992.

http://www.bea.gov/international/#trade

Amazingly, the elites in the US defend and promote Free Trade at every opportunity.  One has to wonder what their real agenda is...

Wed, 08/24/2011 - 09:43 | Link to Comment virgilcaine
virgilcaine's picture

Sheep is right QE 3 was zirp indefinitely. No new stimulus coming.

Buzz lightyear.. zirp to infinity and beyond.  

Wed, 08/24/2011 - 09:28 | Link to Comment JohnF
JohnF's picture

If you read further in that report, inventories are at the highest levels since 1992. Not good: it means that any impetus that appears will be eaten up by reducing inventories, rather than increasing capacity utilization. Besides, the new orders in July for non-defense aircraft are seriously distorted by order from the Paris Air Show, and desperately need to be seasonally adjusted for that.

In other words, things still suck and flogging will continue until morale improves. If the inventories had fallen, there might be a shimmer of recovery; as such, it is merely a chimera of recovery...

Wed, 08/24/2011 - 10:30 | Link to Comment adr
adr's picture

There is no incenti e to prduce less since the massive corps can just write off the usold inventory to reduce thier tax burden at the end of the year.

The bulls can keep on saying, how can the economy be terrible if corporations keep buying so much inventory. Obviously they expect economic conditions to be better soon, translation bullish.

As long as the government backstops losses then the market insanity will continue.The only thing that wil truly unhinge this market is letting a major bank fail.

Wed, 08/24/2011 - 10:36 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

when i was at the casino yest, i  watched TV for a few minutes *hang dog look*.  one of the screens was (as usual) turned to chinese market news.  one of my chinese buddies sees me and picks up his chips from the baccarat table where he is just abt felted for guessing wrong 3X in a row and is fleeing from self-disgust and a big bowl of tapioca, and sez:  "slewie!  &tc."

after abt 4 tries, i realize he is trying to tell me about "big bux big bux" b/c some round-eyed announcer got shanghaied to china to do a show in english, and they are gonna pay him hugely!  altho i still haven't figure out who the hell he is talking abt

"rilly"? "YES! slewie!"  so i give him a little fist pump & my trademark "origami, BiChez!"reply

he is one of the smartest guys i know

Wed, 08/24/2011 - 11:03 | Link to Comment El Viejo
El Viejo's picture

Are you telling me they raised the debt ceiling for nothin?  Oh the angst.  Oh the humanity!

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