The May Durable Goods data released moments ago (which like in previous instances will almost certainly be revised downward subsequently but is enough to trigger kneejerk momentum response algos) was better across the board, printing at a 3.6% increase in May on expectations of a 3.0% rise, down from an upward revised 3.6% in April. Virtually all of the pick up in new orders was due to a surge in Boeing orders, which recorded 232 new plane orders, of which however half were orders (funded by still cheap credit) for planes still in the design phase. Stripping away volatile orders for transports (of which non-defense aircraft and parts exploded by 51% in May), the remaining durable goods orders posted a far more modest 0.7% increase, which too beat expectations of an unchanged print. Will today be the day when good economic news are finally bad market news? Stay tuned.
Looking at pure CapEx, there was a glimmer of hope with non-defense capital goods ex-aircraft orders and shipments both posting a modest bounce, of 1.1% and 1.7%, beating expectations of an increase of 0.5% and 0.8% respectively. More credit-funded future demand pulled into the present, or real economic recovery? Yet another question that we won't know the answer to thanks to the Fed's misallocation of resources.